According to media reports and official communications, the Russian government adopted a reform of the country’s sprawling network of 40 development institutions, including key players of the innovation ecosystem.
This long-awaited reform aims to eliminate inefficiencies by consolidating like organisations and ensuring that each institution works specifically towards achieving Russia’s national development goals.
The reform includes three components:
- An overarching development institution will be created within VEB.RF (formerly Vnesheconombank). Eight current organizations, including Rusnano, Skolkovo, the Bortnik Fund and the Russian Export Center, will be transferred to this institution.
- Twelve sectoral development institutions, classified as “specialized,” will remain untouched. These include Rostec (military-industrial), Rosatom (nuclear energy), Roscosmos (space), Avtodor (highways), Dom.RF (housing), and two regional development companies aimed at the North Caucasus and the Far East.
- Eight institutions will be abolished, and the remaining will be consolidated. For example, the Agency for the Development of Human Capital in the Far East and the Arctic and the Fund for the Development of the Far East and the Arctic will be liquidated. The fund of funds RVC (Russian Venture Company), meanwhile, will be transferred to the RDIF (Russian Direct Investment Fund).
Established by the Russian government in 2006, RVC is a major player on the country’s innovation scene. It acts as a fund of funds and supports a variety of programs, from startup accelerators to industry research and events. Earlier this year RVC head Alexander Povalko was arrested as law enforcement authorities were suspecting company management of misusing millions of US dollars.
Anatoly Braverman, First Deputy CEO of RDIF, will become the new head of RVC while maintaining his current position in RDIF’s top management.
“RVC will operate with a co-investment model for implementation of Russian and international projects attracting partners to joint funds, projects and companies — a model which is successfully used by the RDIF,” stated the sovereign wealth fund.
Under this, model RVC will “create joint funds with leading Russian companies and corporations, as well as RDIF’s international partners, to invest in promising technology projects.” In particular, “a technology investment fund is expected to be created alongside Sber and a number of other leading partners.”
As for the abolished institutions, their functions will be transferred either to VEB or to the government.
The government reportedly did not consult with the development institutions during the reform process – in which some observers see a sign that Mikhail Mishustin is asserting himself as prime minister.
Mishustin’s recent reforms suggest that he is returning to Russia’s socio-economic agenda after focusing his first year as PM on fighting the coronavirus. Mishustin undertook to reduce bureaucratic inefficiencies when he served as head of Russia’s tax service.
This material includes large excerpts from an article which originally appeared in the BMB Russia newsletter of the Foreign Policy Research Institute.
