Ivan Ermokhin, Researcher at the Gaidar Institute’s International Best Practices Analysis Department, spoke to Nezavisimaya Gazeta about the factors currently holding back innovation in small and medium-sized businesses in Russia.
According to the expert, one of the main constraints remains the limited availability of financing. High interest rates on loans reduce companies’ ability to raise funds for innovative projects. Under these conditions, businesses are increasingly forced to finance development using their own resources, the volume of which is also shrinking due to rising costs of raw materials, fuel, and electricity.
Ivan Ermokhin noted that this problem is not unique to Russia. According to the OECD report "Financing SMEs and Entrepreneurs 2026", the cost of borrowing for small and medium-sized enterprises remains high in many countries, banks continue to impose strict requirements on borrowers, and traditional lending instruments are ill-suited for financing innovative projects and startups.
“The limited availability of financing for innovation among small and medium-sized businesses is not just a Russian problem. The OECD report shows that high borrowing costs and strict lending conditions persist in many countries, and traditional debt instruments are not effective enough for financing innovative projects, especially for small companies and startups. Furthermore, government support for innovation is often concentrated around established research centers and large companies, which widens the gap between market leaders and other market participants. These findings are also relevant to Russia. Market uncertainty and a shortage of skilled workers place additional pressure on SMEs’ innovation activities,” emphasized Ivan Ermokhin.