Improved credit environment drives Russian tech growth
Despite its long reliance on large scale commodity exports, Russia continues to make concerted efforts to move its economic output up the global value chain.
WIPO’s Global Innovation Index shows Russia’s ranking in global technology exports up 75th to 51st, with its global innovation rankings up 62nd to 43rd
The Russian technology sector is expanding at an impressive rate, delivering an improvement in high value technology production and an invigorated entrepreneurial culture that is beginning to convert innovation into revenue.
Analysis by Rouse of the World Intellectual Property Office’s Global Innovation Index shows that Russia’s ranking in global technology exports has increased from 75th to 51st, while simultaneously improving its position in global innovation rankings, moving from 62nd to 43rd.
Improved access to credit is helping Russian tech entrepreneurs scale their operations at speed
A burgeoning innovation boom can in part be credited to the country’s strength in the provision of research and development and tertiary education. Russia consistently sits near the upper end of global rankings in higher education and the number of graduates with science and engineering majors – creating an environment where there is a wealth of skills and talent needed to boost innovative output.
A key change however has been an improved credit environment in which easier access to funding has helped significant numbers of Russian tech entrepreneurs scale their operations at speed.
In an economy traditionally short of venture capital, improved access to finance has been a key block on technological growth. Moscow has taken steps to improve access to credit by implementing a centralized collateral registry and allowing for a general description of a combined category of assets granted as collateral. Creditors can now immediately check whether potential borrowers have already used a certain asset as collateral – streamlining the credit application process.
This easing of the credit application process is coupled with an increase in state support. In January, Prime Minister Dmitry Medvedev announced a fund to promote Russian software development and increase support for scientific research and development, innovation activities and the expansion of innovative infrastructure.
Despite this, Russia remains a region with regulatory and political challenges that are barriers to a more accelerated rate of innovation. Of course, these hurdles are not impossible to work around but they require a level of knowledge and expert advice to be managed successfully.