Ekaterinburg nano-center is treading water

23.07.2012 — Analysis

The Uralvagonzavod Research and Production Corporation, OJSC, has agreed to become an investor of the nanotechnological center in Ekaterinburg, thus clearing the way for government financing. The Rusnano corporation expects that pilot project will be put into operation as early as the first quarter of 2013. However, experts doubt that the Uralians will be able to provide the adequate infrastructure for the future economy within such a short period of time: Most of the world’s technological centers are aimed at development of small innovative business, and such business does not exist in Russia.

The Sverdlovsk Region started work on opening the center three years ago. Initially, it was planned to be opened through involvement of research and academic institutions; however, Rusnano turned it down, requiring participation of a local investor. The regional government tried to talk the Ural Mining and Metallurgical Company (UMMC) into the project. However, the state corporation refused to co-finance the project without guarantees provided by the Sverdlovsk regional authorities, so that the corporation’s investment would be refunded if the project did not come to function. At that time no one was able to give such guarantee, and the project was suspended.

The third attempt was successful, and Rusnano approved the project, but UMMC had changed its mind and decided against its participation as an investor. The project was rescued by the state-owned Uralvagonzavod that agreed to allocate 50 million rubles for operations of the technological center. Another 21 million was provided by the regional government for contamination-free clean-rooms. Rusnano’s Fund for Infrastructure and Educational Programs reserved 600 million rubles for purchasing of equipment.

At present, the team of the project participants has been formed: In addition to UMMC and Uralvagonzavod, it includes UralNITI, OJSC, and the Ural University Complex Management Company. Two Israeli university centers were engaged to help in setting up startup companies and commercialization of research innovative projects. The investment agreement between the participants is expected to be signed by the end of the third quarter of 2012.

Rusnano is not satisfied with the pace of innovative infrastructure development in the Urals. Ruslan Titov, Deputy Managing Director of the Fund for Infrastructure and Educational Programs, states that at the beginning of next year seven Russian nanocenters will have a ribbon cutting ceremony, their equipment will be put into operation to provide a launching pad for pilot projects. The Ekaterinburg center treads water, thus casting doubt on some business projects.

However, the lack of progress is not the main concern of Rusnano. The corporation’s people think that the earmarked investment resource of 700 million rubles does not fit into the region’s capacity. The next pool of projects must be provided without delay. In the meantime, their sources are highly unclear, as big business is not motivated in making investment in innovations. The Sverdlovsk region focuses on implementation of sporadic projects that are primarily tied to solving specific business objectives: For example, the objective aimed at increasing metal strength based on nano-texturing and extending service life of the products made of such metal. Manufacturers do not see nano-industry as business they could be interested in, and this lack of interest impedes any efforts in building research programs for the future. If the situation remains unchanged, the technological center is going to lose its principal function and to turn into an ordinary company dealing with management of the portfolio consisting of the projects picked up for the existing resource.

Experts have also doubts about the promising future of the center. The leading countries with innovation-driven economy went through several successive steps of development: They mobilized human and financial resources, created an innovative community, and only then there was a breakthrough and mature growth. In the meantime, Russia, in the opinion of Dmitry Grishankov, General Director of the Expert RA Rating Agency, is preoccupied with copying the Western experience, while building infrastructure arduously without any result reached so far: The conducted survey revealed poor activity in submission of bids to innovation tenders and stagnation in creation of innovative institutions.

The expert points out that in the West most of the innovative centers are focused on development of small innovative business, whereas Russia has no small business and no one takes its development seriously. The situation could be rectified by large-scale government projects that would pull together research resources and small business. However, implementation of such driver projects requires development of horizontal links in society, which is frowned upon by the present-day elite nurtured by monopoly.

The present-day Russian power structure is worried not so much about the economic lag as about activity of the middle class, which constitutes the core of small innovative business. Absent opportunities for creative work and favoritism to mediocrity in the country can hardly help to pull together human and financial resources that form a vital prerequisite for innovations. Hence, experts wonder: Why does Russia need technological centers, if there are no technologies and no one is going to cultivate them?

Vladimir Terletsky