STEPAN ZEMTSOV: “IT IS FEASIBLE TO ORIENT GOVERNMENT SUPPORT TOWARDS COMPANY OPERATING IN THE PROMISING INDUSTRIES”

The sector of fast-growing companies (FGC) in Russia is slowly gaining in efficiency, according to Kommersant. Overall, Russia’s FGC sector remains small compared with the developed countries. Stepan Zemtsov, senior researcher at the Gaidar Institute’s Innovation Economics Department, believes that it would be feasible to focus government support on the companies operating in those industries that correspond to Russia’s long-term development priorities.

“It is professional venture investors who can efficiently select companies with growth potential. After the professional community has picked some fast-growing companies and invested its money in them, the government can get involved with its support tools,” the expert added.

The government has not yet announced its plans for general support of high-performing companies; so far, the authorities are ready to launch targeted sectoral measures (including in the IT sector and the radio-electronic industry). Meanwhile, the sources of growth for efficient enterprises are likely to be exhausted soon, as the post-lockdown surge in demand is already receding, and the government needs to stimulate and support business growth in that sector.

Since the activity of fast-growing companies involves perpetual market entry of new products and development of new technologies, the most popular government support tools among these companies are considered to be subsidies (co-financing) of R&D costs and grants earmarked for these purposes.

“While today such companies have opportunities for successful growth, and they can ensure growth with their own funds or loans, it is by no means easy for them to find the money needed to funds their R&D projects,” said Stepan Zemtsov.