I recall discussing last month some innovation rankings and a number of top-ranked regions of Russia highlighted by RBC daily and its Russian official partners. Siberia was worth praising; it had shown such a terrific innovation spurt.
Such national rankings are useful and interesting. But there are also other indicators for an innovation economy, and different methodologies for ranking the regions. Of course, one of the key factors in any successful innovation economy is the activity of local business angels.
As you know, the European Business Angels Network (EBAN) had its major event in Moscow on the 23rd and 24th. The fact that the relatively small Russian business angel community was able to attract EBAN is a significant accomplishment that says a lot about the development of our regional business angels.
But MOST IMPORTANTLY, after the general meeting in Moscow the angels split and went to different regions. Some traveled to St. Petersburg where the SBAO business angel club had put together a major forum on venture investing. Simultaneously, some of the European business angels visited Kazan where the Russian Venture Capital Association hosted its Venture Fair, to see what’s happening in Tatarstan. Nizhny Novgorod was not lost in this, either. The Start Invest business angel club and the local administration also organized a two-day program for the business angels, and the president of the European association, Brigitte Baumann, came to Nizhny Novgorod. I think this says a lot about the power and influence of the business angel community in Nizhny Novgorod to draw attention to their activity there.
I think these three regions are showing themselves to be active and wanting to highlight their projects. To me, this is also a very good indicator of how competitive any particular region is in developing an innovation economy. You may have statistics today which show how many innovation projects are finding investment; and those are important, especially if you understand how those stats are calculated, and what contributes to innovation investment. But in my opinion, one of the most important factors, not necessarily of the investments taking place today but of the future potential of any given region, is how active angel investors are today.
As is absolutely understandable, angel investment projects take many years to develop. They are not just overnight commodity projects; these are projects in high technology, and it’s hard to really see the results of this work until a certain critical mass of activity has already been done in developing business education culture, the local legislation, and the regional infrastructure including techno-parks, business incubators, business accelerators and so forth.
So, I would say that the top rankings clearly need to include places like St. Petersburg and Kazan, and definitely Nizhny Novgorod which, in my opinion, has huge potential as an innovation cluster. And this is very much because of the importance of the local business angels that have a desire and an interest, and they put their money into real projects.
I think, in three-to-five years it will be obvious which regions in Russia will be the leaders in creating their own ecosystems and innovation culture. And this will be very much dependent upon the business angels in those regions, and how actively they lobby for adjusting laws, regulations, and tax policies. What’s also expected from them—and also out of their own self-interest—is a number of specific policies which will coordinate the development of an innovation economy. Political leaders need to have proper guidance from real venture and business angel investors on what policies work and what policies won’t work.
A LAB of opportunities
We conducted the MARCHMONT Business LAB program here in Nizhny Novgorod last week together with Russia’s Hi-tech Techno-park Association led by its president Andrei Shpilenko. As part of a multifaceted program we did two days of master classes, and we invited in some terrific, fantastic speakers from Moscow and internationally that came to Nizhny Novgorod and spoke to entrepreneurs here.
As a co-host of this very successful event I noticed clear progress in the development of an innovation ecosystem in the Volga and Central Russia area. While advising face to face local Nizhny entrepreneurs and entrepreneurs participating in Russia’s BIT competition of business plans and projects, we simultaneously ran webinar programs together with Penza and Kazan. The Hi-tech Techno-park Association organized in each of those regions the opportunity for local entrepreneurs to present their innovation projects to Marchmont experts and judges. I was deeply impressed with some of the projects coming from Penza. I think this region also has great potential, and we made plans to bring our MARCHMONT Business LAB to Penza this year as well. Of course, projects from Kazan were also quite impressive.
Enabling our Nizhny-based experts to participate in project presentations coming from around the Volga region was a terrific achievement. We were very pleased with a webinar, and my overall assessment is that step by step, in spite of Russia being so huge geographically, we’re beginning to use technology to break down the geographic barriers and bring face to face innovation experts and investment professionals together with innovators and entrepreneurs from anywhere in Russia.
For example, next month we’ll take our LAB to Kaliningrad but while we’re in Kaliningrad, having technology and investment experts meet with a local techno-park, we’ll also be connecting with other techno-parks and other incubators, simultaneously arranging through a webinar program the ability to have live presentations from around the country.
This is a strong push on the part of the newly created Hi-tech Techno-park Association with its 19 member techno-parks across Russia. With a decisive mandate from the Russian government it is really bringing this expertise to all regions of Russia, and I think this is a new player in Russia’s innovation ecosystem.