State Secretary and Russian Deputy Minister of Economic Development Oleg Fomichev said development institutes should be clearly tied to the goals and objectives that the government assigns them. “There are government programmes and industry strategy programmes, and the development institutes should be the key player. The role and their influence on the sphere which they are developing should be specified. For now this isn’t the case. Institutes exist autonomously with rare exception”, the deputy minister said.

The expert said the corruption component should be excluded. “There should corporate governance standards and salary restrictions in all development institutes”, Fomichev said. “We have a lot of development institutes, almost in each region, and several thousand legal entities. Development institutes include a plethora of corporations, funds and associations. Each one has a goal, mandate, area of activities and its own financing. They need to be viewed in the context of the sphere for which they were established”, he said.

Co-chairman of the All-Russia Public Organization Delovaya Rossiya Anton Danilov-Danilyan listed the main problems of development institutes. “Government development institutes have a number of problems, above all the results of previous activities, sometimes chaotic. This goes beyond the mandates that they were assigned. Sometimes these mandates were not applied to business at all, but to different government programmes”, the expert noted. Danilov-Danilyan drew attention to the fact that numerous institutes do not have high-quality expertise and they have no real idea of what they are doing. In addition, one of the barriers for the successful activities of institutes is their excessive bureaucracy caused by constant inspections and heavy pressure, which diminish effectiveness. As a result, it’s difficult for business to select the right development institute for its project. Danilov-Danilyan came up with three main issues that currently need to be resolved: attaching an institute to a federal government authority or viewing it as a complex subject to a single development administration; creating new institutes for each new objective or reaching out to existing ones, assigning them an additional functionality; how to interact with development institutes at the federal and regional level.

Nevertheless, progress can already be seen in the activities of development institutes, for example the Industrial Development Fund has already signed ten agreements with similar regional funds and three projects have already been launched. Danilov-Danilyan believes that development institutes need to have maximum transparency and monitoring of their projects since the actual development institutes are established in order to eliminate market failures.

Development institutes often have problems regarding the long time it takes them to review applications. For example, such complaints have frequently been made against Vnesheconombank, where the timeframe for reviewing an application takes two years. Vnesheconombank Deputy Chairman Nikolaш Tsekhomsky spoke about what the bank plans to do to resolve this problem and the challenges it faces.

“We want to seriously shorten the two-year period. There is an ambitious goal of six months. We need to respond more quickly and make our strategy and policy more transparent”, he said. Vnesheconombank has currently developed a five-year strategy in which the main features are: a clearly defined focus, transparency and improved interaction with business. “We need to find common ground with development institutes, commercial banks as well as private and international investors”, Tsekhomsky added. He explained that development would take place in five areas: industry – changes to the structure of the economy; infrastructure in which a major role has been allotted to public-private partnerships; innovations and the new digital economy; a focus on exports in projects; and the transition of military-industrial complex companies to civilian production.

Maxim Lyubomudrov, a representative of a young development institute – the SME Corporation – spoke about the results that his organization has already achieved. “I think we have accomplished significant results and had success in numerous areas as well as increased the volume of guaranteed support as part of the national guarantee system”, he said. “Based on last year’s results, the volume of guaranteed financial support received by SME exceeded RUB 172 billion. A lot has been done in terms of systematizing work with major buyers. The volume of procurements from SME increased to RUB 1.511 trillion last year”.

The next step in the Corporation’s work is to further develop the business navigator. “We put a lot of effort into establishing the business navigator and will devote next year to its promotion”, said Lyubomudrov, a member of the Management Board and Deputy General Director of the SME Corporation.

Skolkovo Foundation Chairman of the Board Igor Drozdov provided insight into one of the most significant aspects in the activities of development institutes – project selection. He spoke about the selection criteria and types of projects as well as whether these criteria should be made more stringent or liberalized, noting that it should be an individual approach.

Institute of Financial Business Development CEO Ildar Shaikhutdinov emphasized that problems exist in the protection of intellectual property at development institutes. “When funding their business, corporations and development funds should above all pay attention to the risks that they could incur from the loss of the technologies that they are developing”, he said.

Summarizing the discussion, Oleg Fomichev stressed the importance of cooperation and interaction between all structures and said that development institutes cannot serve as a replacement for the market.