RIC

The Russia Innovation Collaborative

Building the Perm Innovation Ecosystem

The Russia Innovation Collaborative has designed programs

to nurture and support innovation and accelerate the migration of ideas from the

lab to practical commercial application.

Russia is currently undertaking a program of modernization of its economy, with a particular focus on fostering technological innovation.

Despite the strength of intellectual resources and very strong basic science, Russia has not been successful at developing clusters of

innovation.

Massachusetts is one of the world-leading clusters of innovation. It has a well-developed public-private relationships that contributes to the

success of the innovation ecosystem.

The focus of the Russia Innovation Collaborative is to connect key institutions and stakeholders in Russia with those in Massachusetts and throughout the US with the goal of increasing economic wealth

Russia Innovation Collaborative: Mission

Introduction

• The Russia Innovation Collaborative (RIC) is a limited liability company registered in the Commonwealth (state) of Massachusetts with its office in Boston, Massachusetts in the Cambridge Innovation Center, across the street from MIT.

• RIC has three inter-related lines of business:– Consulting to Russian regional governments on policies to promote

innovation and action plans to implement those policies.– Building cooperative programs between U.S. and Russian universities

(primarily national research universities) to facilite innovation.– Tech transfer and market entry for private companies.

Introduction

• Daniel Satinsky – Background:– Business lawyer for 15 years– Graduate of Fletcher School of Law & Diplomacy– Former President, U.S.-Russia Chamber of Commerce of New England,

Inc.– Participant in 4 start-up companies– Consultant to Russian software companies in U.S. market entry– Co-author Yaroslavl Roadmap 10-15-20, innovation policy study done

by New York Academy of Science– Contributor to Modern Russia (www.modernrussia.com)

Introduction

• Cynthia Bouthot – Background:– Head of Innovation and R&D Programs for the British Government for the

past 2 years– Consul, Head of UK Trade & Investment for 6 years– 15 years industry experience in global operations:

• Global Lead of Business Readiness for EMC’s $200 million ERP implementation and

• Director of Industry Practice for Benchmarking Partners• International Finance and Auditing at Honeywell Bull

– BS from Boston College’s Carroll School of Management with a major in Finance and a Masters degree in International Economics and Finance from Brandeis University

– Mentor for Boston University’s Kindle Management program– Founder of 3 start-up companies

The Russia Innovation Collaborative Innovation Ecosystem Development Model

Perm’s Phase 1 Project

Innovation Ecosystem Development: Innovation Assessment

• Review key strengths of the region

• Define priority sectors vis-à-vis key counterparts and global market potential

• Evaluate competitive position nationally and internationally

• Identify key innovation ecosystem stakeholders

• Determine if innovation project is a go or no-go

Innovation Ecosystem Development:Ecosystem Mapping

• Map region’s capabilities against innovation ecosystem

• Interview key stakeholders in each ecosystem area, including entrepreneurs, VC’s, academics, large business, SME’s and government policy makers

• Determine ‘AS-IS’ reality, highlighting existing gaps

• Determine ‘TO-BE’ aspirations through interviews and analysis of what is possible

Innovation Ecosystem Development: Innovation Action Plans

• The difference between the AS-IS reality and the TO-BE Aspirations is the innovation gap

• Compile and prioritize key gaps between as-is and to-be

• Build teams of stakeholders to construct action plans (teams will be called I-team ‘innovation teams’)

Innovation Ecosystem Development: Innovation Implementation

• Assign cross-functional innovation teams to each action item

• Manage and implement action items

Innovation Ecosystem Development:Training and Education

• Build educational campaigns for key stakeholders including academics, scientists, entrepreneurs and government officials

• Convene networking groups and other forum for consistent sharing of information between stakeholders

Innovation Ecosystem Development:Marketing and PR

• Build marketing and PR campaigns based on innovation strengths

• Promote region to possible collaborators and inward investors

• Continue to link region’s innovation cluster to innovation clusters throughout the world

Academic Excellence

Innovation Ecosystem

Venture Capital

Thriving knowledge based sectors

Tech transfer and commercialization Serial Entrepreneurs

Public and Seed Funding, grants and

loans

Best Practice Innovation Ecosystems

Government / Policy

Industry Associations and

Networking Groups

University Innovation

Big Business and Small Business

relationship

Academic Excellence

Perm’s AS-IS Innovation Ecosystem

Venture Capital

Thriving knowledge based sectors

Tech transfer and commercializationSerial

Entrepreneurs

Public and Seed Funding, grants and

loans

Perm’s Innovation Ecosystem

Government / Policy

Industry Associations and

Networking Groups

Best Practice Exhibited Gaps to Best Practice Exist Significant Gaps and Failures Exist

AS-IS and GAP Analysis

University Gaps

• Small number of students exposed to knowledge about entrepreneurship• Narrow focus on teaching students, rather than including Post-Grads and Professors in business or

entrepreneurship education• Inability to structure scientific research on business basis (weak understanding of markets or commercial

applications)• Missing conceptual understanding of basis of business and university cooperation in innovation process

(traditional contract research does exist where university plays following role)• Insufficiently developed connections and understanding of international research directions• Lack of knowledge of foreign business curriculum and consistent contact with innovative Russian businesses• Lack of clarity on purpose and expectations from incubators• Perm’s universities appear to be focused on the Incubator as the one answer to bringing entrepreneurship into

universities rather than creating multiple programs and schemes to educate and stimulate activity • Competition for scarce federal and regional funds among competing universities and RAS institutes• Problem of ‘me-first’ pursuit of funding that inhibits cost and function-sharing cross-institutional cooperation• Lack of physical facilities for student gathering to exchange ideas• Lack of consistent and long-term curriculum development that includes integration with business in the

innovative, knowledge-based sectors• No course work on innovation in large enterprises• Lack of consistent interaction with businesses engaged in innovation• Lack of differentiated strategy for academic/research collaboration and commercial innovation development

Large and Small Business Gaps

• Lack of global competition in Perm prevents incentive to innovate• Market mechanisms are not working freely and a a result there are limited incentives for large companies

to innovate internally or look outside to smaller companies for innovation• Large companies are not using open innovation and therefore blocking the fundamental supply/demand

relationship with small companies; Market failure in the relationship between big business as demand and small business as supply

• No clear route to market for Perm’s new projects; Funding seems to be small and early stage and no clear path for future funding

• New Russian companies do not benchmark against global competitors (which is needed even if addressing only the Russian market first)

• No mechanisms for small business to liaise with universities; No apparent funding to encourage a business to work with the universities via funding or “innovation vouchers”

• Appropriate government support structures do not appear to support big/existing business modernization and/or innovation. Current schemes appear focused on new business

• Lack of government programs to encourage or spur collaboration between big business and small business• Lack of good news stories and examples of how careers in small / entrepreneurial companies are attractive;

and current success stories appear to be exceptions rather than the rule.• Lack of systemic processes; successes are opportunistic rather than systematic• Perm’s investment agency does support business by bringing international companies and R&D shops into

Perm and helping Perm companies make links internationally (R&D collaborations, licensing deals, and new routes to market)

• Lack of consistent missions of Perm companies and key stakeholders traveling to international markets to develop new relationships and understand routes to market

• Perm’s sector focus priorities (Biotech, ICT, Energy, etc) are not clearly based on existing strengths and capabilities as expressed during university and industry interviews

• Sector focus areas are not defined in a way to show detailed capability based on existing industrial capability, university strengths and differentiation from competitors such as: Remediation technologies (water, soil, etc), Utilization of Waste materials and super toxics, Biotesting and Diagnostics, Plant biology and organic chemistry, Nano materials and polymers

• No clearly stated set of incentives and grants to support entrepreneurs, start-ups, existing companies and FDI target companies

• Mechanisms are not in place to enable meaningful data to be collected on the value of grants/funding, as well as dissemination of key propositional differentiators

• High taxes and costs of credit for big and small companies are sited as barriers for growth• Perception is that Perm lags similar regions of Tomsk and Ekaterinberg. Need to determine if this is

perception or truth and make appropriate changes (real programs or PR)• Perm’s investment agency does not appear focused on key international targets nor focused on the three

key goals of an agency: to create a new wave of high value investment into Perm, to promote the integration of Perm technology into world markets through professional representation and to develop a positive brand image for Perm and for its scientific and business resources

Government Gaps

Serial Entrepreneurs

• No existence of or culture supporting serial entrepreneurs• No mechanism/network in place that enables the coalescing of an entrepreneurial community, including

tech transfer and commercialization support systems• Lack of awareness of existing entrepreneurs in the community• Lack of on-going engagement in entrepreneurship teaching and curriculum; Lack of consistent

entrepreneurship training at each university• Lack of supporting tax, grants and inward investment incentives and support for serial entrepreneurs• Limited public/Seed Funding, grants and loans for serial entrepreneurs• No early stage educational programs for young children to learn entrepreneurship• No apparent incentives to encourage entrepreneurs to work with the universities via funding or

“innovation vouchers 

Tech Transfer and Commercialization

• Patent filing and in particular international patent filing is a missing skill set in the Perm Innovation ecosystem

• Local, rather than global, expertise in commercialization and intellectual property• Lack of understanding of how to create IP products or services from academic’s work• Lack of local resources to evaluate technology for market and assist with business expertise• ‘Old school’ scientist do not understand a personal benefit of commercialization nor do they understand

the benefit for their students and as a result, they cannot teach or mentor their students in these areas.• No technology transfer or commercialization education or training programs geared towards faculty• Some Perm prize competitions appear to be narrowly focused and difficult to penetrate making it difficult

for innovative companies or technologies to participate• Academic publishing of scientific work does not appear to be taking place internationally and therefore the

peer review process and understanding of international findings and competitors is limited.  

VC and other Funding Sources

• Lack of a ‘menu’ of tax incentives focused on each phase of a start-up’s life cycle.• Funding seems to be small and early stage and no clear path for future funding• Venture Capital industry is underdeveloped• Limited public/Seed Funding, grants and loans• Lack of private funded IT investment in the region. As a result, highly innovative and fast growing ICT

companies are more likely to encounter difficulties in raising finance• Lack of sophisticated Business Angels network• There is no clear support to identify and promote a range of other sources of finance for growth, including

dept as well as equity funding

Innovation Gaps, Innovation Teams and Action Plans

Identified Gaps

Short Term Issues

Medium Term Issues

Long Term Issues

Cross Functional Innovation

teams

Action plans

DRAFT Gap Summary

Short Term

• Lack of clarity on Incubators and over- reliance as the one answer to brining entrepreneurship into universities rather than creating multiple programs and schemes to educate and stimulate activity

• Each university is creating its own incubator / tech transfer center without having the scale to support• No clearly stated set of incentives and grants to support entrepreneurs, start-ups, existing companies and FDI

target companies• Patent filing, especially international patents are a missing skill-set in the innovation process• Business plan and prize competitions are not easy to access and not leading to a clear path of

commercialization• Lack of consistent missions of Perm companies and key stakeholders traveling to international markets to

develop new relationships and understand routes to market

Medium Term

• No consistent course work or curriculum on entrepreneurship, technology transfer and other business training to a broad range of students and focus only on students rather than post-docs and professors

• Lack of systematic international relationships at the government, university and business levels• Lack of government programs to spur collaboration between big business and small business, and university

and business• Perception that Perm lags Tomsk and Ekanterinburg• Perm’s investment agency is not focused on international targets, promoting FDI into Perm and helping Perm

companies understand international routes to market

Long Term

• Lack of global competition prevents incentive to innovate• Market failure in relationship between big business as demand and small business as supply and for large

companies to innovate internally – complete lack of open innovation mentality• Lack of serial entrepreneurs and culture of entrepreneurship

The Implementation Process – Taking Action and Getting Results!

Lack of consistent missions of Perm companies and key stakeholders traveling to international markets to develop new relationships and understand routes to market

ACTION PLAN:Conduct a mission of Perm

companies and key stakeholders to Boston to

develop international relationships

Cross functional

teams

Each university is creating its own incubator / tech transfer center without having the scale to support

ACTION PLAN:Create one overarching

technology transfer center to support all university and institute commercialization

and have each university focus on educational

programs and curriculum