Russia on the high-tech Russia on the high-tech marketsmarkets

Prospects and challenges

GOALSGOALS::

To enquire basic knowledge about Russia’s positions on the key high-technology markets

To analyze and to understand main features of improving country positions on the high-technology markets

To formulate personal opinion on the future collaboration of Russia with developed and developing countries

Classification of manufacturing industries by Classification of manufacturing industries by R&D intensityR&D intensity

High technology (>5% R&D intensity )aircraft and spacecraft; pharmaceuticals; office, accounting and computing equipment;radio, television and communications equipment; medical, precision and optical instruments

Medium-high technology (1.5-5% R&D intensity )electrical machinery and apparatus not elsewhere classified; motor vehicles, trailers technology and semi-trailers; chemicals excluding pharmaceuticals; railroad equipment and transportequipment not elsewhere classified; machinery and equipment not elsewhere classified

Medium-low technology (0.7-1.5% R&D intensity )coke, refined petroleum products and nuclear fuel; rubber and plastic products; other technology non-metallic mineral products; building and repair of ships and boats; basic metals; fabricated metal products, except machinery and equipment

Low technology (<0.7% R&D intensity )manufacturing, not elsewhere classified, and recycling; wood, pulp, paper, paper products, printing and publishing; food products, beverages and tobacco; textiles, textile products, leather and footwear

The key markets where Russia has The key markets where Russia has strong positionsstrong positions

Space and satellite marketsWeapons marketInformation technology marketNuclear technology marketNanotechnology market

The Structure of the Russian The Structure of the Russian Satellite IndustrySatellite Industry

RussiaRussia…..is the world leader in Launch Industry

(launch services)… has 15% of the world Satellite

Manufacturing ….total contract value of the aerospace sales

and modernization contracts in 2006 was about $6 billion, according to the Russian air and space agency

Russia is the leader of the world Russia is the leader of the world arms tradearms trade

The main sectors in The main sectors in RussiaRussia’s defence ’s defence industry today are:industry today are:

– Network-based command and control systems, – Telecommunications systems, including electronic

counter- countermeasures, – Combat aircraft; manned and unmanned, – Aircraft engines, – Command and control systems for land, marine and air

applications, – Systems for exercise and training, – Telecommunications war systems; passive and active, – Signal adaptation (e.g. camouflage systems); UV, VIS,

NIR, TIR and radar,

Russia Major Trading Partners in Russia Major Trading Partners in trade in Arms in 2000-2005trade in Arms in 2000-2005

India 33,5% China 24% Iran 6,4 % Algeria 4% Vietnam 3% United Arab Emirates 2% Kazakhstan 1,9% Yemen 1,8%, Greece 1,6%

Russia IT Market structure in Russia IT Market structure in 20062006

500 companies total market size of $3 billion IT's share of Russian overall exports has gone

from 0.3% to more than 5% in the last two years an average annual growth is of 15 %, higher than

Indian features Russia share of the world IT market is 1-1,2 %

IT market growth in 2006-2007IT market growth in 2006-2007

4,6

1

4,9 4,2

21

4,7

1,3

4,7 4,2

21

0

5

10

15

20

25

world Japan USA Europe Russia

%

2006

2007

IT Market structureIT Market structure The World IT Market

software9%

IT services58%

computer equipment

33%

computer equipment

software

IT services

IT market in Russia

computer equipment

60%

software15%

IT services25%

IT Services Trade, $ mln.IT Services Trade, $ mln.

0

100

200

300

400

500

600

2001 2002 2003 2004

export

import

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

2005 2010

Russia

India

The example of on of the Leading companies with a The example of on of the Leading companies with a successful strategy on European market – successful strategy on European market –

LuxoftLuxoft

the Russian market size for exported IT services approached $500 million in 2004 and is growing at a rate of 25 % per year.

Luxoft has operations in Russia, USA, the United Kingdom, Ukraine Russia’s premier software outsourcing provider in the Offshore 100 rank share on the Russian IT Outsourcing Market in 2004 was at 5%. generates over 25% of the aggregate revenue of the 10 largest Russian

software development services exporters

Clients Areva, Boeing, Dell, IBM, Thomson,  Citibank, Deutsche Bank, Caterpillar, U.S. Department of Energy;

Services Integrated IT Services, Client Engagement Framework,Development Centers

Number of employers 100 in 2000 and 1 000 in 2004

Russia in the Nuclear Power Russia in the Nuclear Power Engineering Construction ServicesEngineering Construction Services

construction under long-term contracts with former partners of the Soviet Union

major Partners are China, Iran the increase of the demand will depend on

developing and emerging countries The main competitors are EU member states and

USA participation in the international projects on

science and technological cooperation with USA, Britain, France, Germany, Italy, Japan

Russia in the ITER projectRussia in the ITER project

ITER is a joint international R&d project that aims to demonstrate the scientific and technical feasibility of fusion power

will be constructed in Europe, at Cadarache in the South of France

The construction costs are estimated at five billion Euro over 10 years, and another five billion Euros are foreseen for the 20-year operation period.

Russia in the ITER project:Russia in the ITER project:participating partiesparticipating parties

ITER COST SHARINGITER COST SHARING

Europe 45.45% Russian Federation 9.09% the USA 9.09%China 9.09%, Japan 9.09%, Korea 9.09%,

The future development will The future development will depend ondepend on

Innovation system reformIntellectual property right protection systemWTO membershipPenetration of IT and Telecommunication

hardware and servicesdevelopment of Education system

Fields of Direct and Indirect Fields of Direct and Indirect GGovernment overnment SSupportupport

small R&D and innovating organisations; innovation and venture funds; scientific parks, innovation technology incubators and

business incubators, etc.; consulting and engineering organisations, as well as

organisations rendering applied services in the field of humanities (sociology, law, economics, ecology, etc.);

science towns and technopolises.

Innovation System Innovation System Infrastructure in RussiaInfrastructure in Russia

Techno parks (in the first place for start-up projects)

Innovation-technological centers (oriented on small and medium enterprises that have successfully passed the start-up form)

Technology tranfer centers (commercialisation of innovations)

Information centersPersonnel developmentFinance and investment regulation

Innovation and Technological Centers Innovation and Technological Centers in Russiain Russia

0

10

20

30

40

50

60

70

1990 1995 2000 2004

number of centers

Venture Innovation FoundationVenture Innovation Foundation is the is the

key element of future developmentkey element of future development The Fund has encountered the following tasks:

• Implementing a complex of measures to develop a system of direct venture investment in technological business, including small and medium-sized innovating firms;

• Supporting Russian innovating enterprises developing products and technologies in the framework of priority areas and being at initial stages of development.

Russian researchers employed Russian researchers employed abroadabroad

2/3 of all Russian researchers employed abroad are in the United States (29%), Germany (19%), France (7%); the United Kingdom (5%), Japan (4%), Sweden (3%)