We recently attended the Rusnanotech 2009 conference in Moscow, a massive forum and exposition put on by Russian state-owned technology investment fund Rusnano.
The event opened with a flourish: Russia’s President Dmitri Medvedev gave an opening address, in which he announced his government’s firm intention to remake the Russian economy more innovative and technology-based. His vision was of a Russia in which emerging technologies in energy, information technology, infrastructure, and medicine played a stronger role. This vision would unfold even as the economic crisis that dealt such a blow to Russia’s resource extraction industries begins to abate.
“Our post-crisis economy must be based on knowledge, on new technology, not on the raw material potential of Russia,” Medvedev declared. Medvedev touted Rusnano’s plans to spend 318 billion rubles ($10.9 billion) through 2015 to help that vision become a reality. Also, the President didn’t shy away from citing what he views as the obstacles to high technology in Russia, including conservatism of incumbent firms — “business has not been proactive enough” — concerns about corruption, and the need for legal frameworks to support entrepreneurship and guarantee a long-term market for new technologies.
Medvedev and Rusnano’s CEO Anatoly Chubais both cited Rusnano’s goal of boosting the output of nano-enabled products in Russia to 900 billion rubles ($31 billion) — by which point we anticipate $2.5 trillion in nano-enabled products worldwide.
However, Rusnano takes a much broader view of its mission than its “nano-focused” brand would imply. Indeed, clients should view Rusnano’s role as supporting emerging technology in Russia in general, not just as what’s usually defined as “nanotechnology.”
Witness, for instance, its investment in polysilicon producer Nitol (see the May 1, 2008 LRSJ and September 10, 2009 LRSJ — client registration required). This will likely prove solid moves given the solar industry’s demand for low-cost polysilicon, and Nitol’s access to cheap electricity that can allow cost-effective production. But it doesn’t qualify as something that we, or most observers, would consider nanotech.
Walking the exhibition floor at the event, we spoke to a diverse range of firms seeking investments from Rusnano. Among them was the solar division of Konti, which offers bifacial crystalline silicon solar cells like those made by Sanyo (see the September 24, 2009 LRSJ — client registration required). Konti is seeking funds to expand from 5 MW of production to 60 MW by 2012.
Another firm seeking Rusnano investment was Russian Superconductor, a project of Atom Invest, the investment arm of Rosatom. The firm was using its parents’ support for work on superconductors for power cables and fault current limiter, much like those pursued by American Superconductor (see the June 3, 2009 LRPJ — client registration required).
All told, Chubais noted, Rusnano has approved €1.2 billion ($1.8 billion) worth of investment in 36 projects, which have pulled in a total of €2.1 billion ($3.1 billion) including other private investments.
There’s clearly some distance to go before Russia becomes a high-tech powerhouse, but its goal of 900 billion rubles of products is certainly achievable, especially under the broader umbrella of technologies Rusnano pursues. On the positive side of the ledger is the vast sums Rusnano deploys. It plans to invest €3 billion ($4.5 billion) through 2015. That has clearly attracted a lot of interest and activity in these technology areas. On the other hand, changing the business culture to a more entrepreneurial one will be a slow process, and excessive bureaucracy continues to gum up the works for innovation in Russia. Even for emerging technology events like Rusnanotech: One invited speaker at the event lamented the need to collect 20 different signatures just to get her travel expenses reimbursed.
Nonetheless, Russia’s commitment to emerging technologies looks real. President Medvedev emphasized, “we can’t just relax and give up on nanotech as global economy recovers, and go back to just supplying energy.” Clients should expect Russia to increasingly become a global player in areas like nanotech, solar, power, and medicine. The question is whether it will be a minor one, or whether it could ultimately rival major movers like the nations of Western Europe.
