IInvestmentnvestment No. 3 NNewsletterewsletter 2011 Region Topic of Obninsk, the Outpost of the Innovative Economy the Issue:

[[2]2] EEvents:vents: [[3-5]3-5] TTopicopic ooff tthehe iissue:ssue: [[6-7]6-7] TTourism:ourism: Kaluga Region’s ’s first scientific Taking a walk around Obninsk: industrial parks research center – a city in the forest or a forest in have been certified an innovation hub the cityy

Editorial

Presenting this issue of the Investment efforts of talented scientists who came here of all, research done by Obninsk-based sci- Newsletter, I would like to mention that from all over the country. If you consider the entists. Today it is impossible to imagine the almost all its articles are dedicated to our number of discoveries of global significance development of Russia’s innovation system region’s innovative growth. Russia’s first per 1,000 people, there is no city in the without Obninsk. But what is it impossible to scientific research hub, Obninsk, has natu- world equal to Obninsk. There was a time imagine Obninsk without? Answers to this rally become an innovation hub in Kaluga when political activists and top scientists from question can be found in the Newsletter… Region. all over the world came to study the Obninsk This is a unique city, despite its young phenomenon. Outlining Russia’s technologi- Svetlana Kozeneva, age, it has an outstanding history. Almost cal modernization objectives, Russian Presi- Director, News agency “Kaluga” 55 years ago Obninsk was created by the dent Dmitry Medvedev has mentioned, first www.arrko.ru Investment 2 Newslletter Events № 3, 2011 Events

KALUGA REGION’S INDUSTRIAL PARKS HAVE THE KALUGA PHARMACEUTICAL CLUSTER IS BEING FINNISH COMPANIES INVESTED USD 75 MILLION BEEN CERTIFIED EXPANDED: ASTRAZENECA LAUNCHES CONSTRUCTION IN KALUGA REGION IN 2010

Russia has 25 industrial parks currently During a meeting in dedi- Russia’s investment opportunities have in operation, and only eight of them have cated to promotion of international par- been considered at a meeting of the Russian- received Industrial Park Association certifica- tnership in the pharmaceutical industry, Finnish working group for investment coopera- tes. Thus, only 20% of Russia’s industrial par- AstraZeneca, a biopharmaceutical com- tion, which was set up by the Russian-Finnish ks are actually ready to accomodate investo- pany, has announced its plans to build a Intergovernmental Commission for Economic rs, participants of the Russian Industrial Parks new plant in Vorsino industrial park. The Cooperation. Ruslan Zalivatsky, the Minister 2011 annual forum say. The purpose of cer- company plans to invest over USD 150 for Economic Development of Kaluga Region, tification is to present reliable and structured million and launch production in the spring made a report on cooperation with foreign information. Three industrial parks in Kaluga of 2013. Maksim Akimov, Deputy Gov- investors in the region. Finland is one of the Region – Grabtsevo, Vorsino and Rosva, ernor of Kaluga Region, is positive that main partners of Kaluga Region. The first sign have become the vivid examples of succe- the global pharmaceutical industry lead- was an investment project with Stora Enso’s ss. Vladimir Popov, CEO of Kaluga Region er will not only implement its production in volvement. Finland’s Lemminkainen has Development Corporation, emphasized that plans but also encourage the creation of built the first private industrial park in the regi- the region had many incentives for investors a modern biotechnology research center on. Finland’s Rani Plast became the park’s first but in most cases neither tax incentives nor in Kaluga Region. On the same day the investor. Facilities owned by RUUKKI, LTM, production facilities prepared for investors groundbreaking ceremony for the new fa- Kiilto Oy and other companies also launched were the determining factors. Local authori- cility was held. their production facilities in the region. Today a ties’ personal involvement and the quality of number of joint logistics and energy efficiency their support are much more important. «We projects are being implemented. In Helsinki the have a track record of sticking to our promis- working group members discussed prospects es, and this is very important». and possible joint innovation projects.

COTTON WAY – INNOVATIONS IN THE HOSPI- TALITY INDUSTRY

IN FOCUS: INDUSTRIAL LOCALIZATION ISSUES An investment agreement between Kal- FAURECIA CHOOSES A PRODUCTION SITE IN uga Region Development Corporation and KALUGA Cotton Way has been signed in Moscow. Russia’s largest modernized business focus- Industrial Localization in Russia internati- ed on providing an innovative service, the Faurecia Interior, France’s leading mo- onal workshop was held in Kaluga upon the leasing of textiles – first of all uniforms – will tor car component producer, intends to la- initiative of Russia and EU Manufacturers Ro- be launched in Vorsino industrial park. The unch production at V-Park’s leased facilities und Table business association. The discussi- use of environmentally safe technologies in Rosva industrial park in Kaluga. This is an on was centered around creating conditions and modern equipment will allow the com- important step for Faurecia, which plans to for industrial localization of foreign busines- pany to guarantee a high level of service develop its production facilities in Russia. ses operating in Russia. Projects implemen- quality that will meet the demand of both PSA Peugeot-Citroen and Faurecia Interior ted in Kaluga Region were used to identify the manufacturing industries and the regi- have already concluded a contract to supply common problems and the key ways to add- on’s entire hospitality infrastructure. About Just-In-Time interior components to the Kalu- ress them. Efficient tools for encouraging the 400 jobs are expected to be created. Invest- ga-based PSMA Rus plant. Investments are expansion of foreign investors’ businesses ments in the project will total about Euro 20 projected at Euro 9 million. 150 new jobs in Russia were also discussed. Conclusions million. are to be created. Faurecia Interior plans to drawn during the workshop will be used dur- move to the new premises with an area of ing the implementation of the Russian-EU Part- 14,000 square meters in November 2011 nership for Modernization project, as well as and start supplies to PSMA Rus as early as in when developing the recommendations for December 2011. the upcoming Russia-EU summit. Investment № 3, 2011 Topic of the issue Newslletter 3 Obninsk, the outpost of the innovative economy

«Obninsk stands out from other cities – it’s very young and rapidly deve- loping. Its prospects are just astonishing. Our task is to create here an envi- ronmentally friendly, intellectual oasis, a favorable environment for life and business», — Alexander Avdeev, Mayor, Obninsk City District .

Obninsk at a glance Obninsk was not yet on the map Sheremetyevo when the whole world learned about it. In 1954 the world’s first nuclear power • Founded in 1956; plant was launched in this Moscow Moscow Region town. Two years later the town • Kaluga Region’s second largest city. Popula- was awarded city status. Today, Vnukovo tion – 105,600. Labor force – 59,050 people; nuclear power plant is a museum Domodedovo • Obninsk is the city where the first nuclear power of nuclear industry atomic energy. plant was built; More details on page 7. Ermilovo • First nuclear power; Obninsk • First fast neutron reactor; • First meteorological lab on Earth; • Obninsk is the only submarine industry center with no access to the sea. A training for nuclear submarine staff is located here; Kaluga • Obninsk is the first scientific research hub in Rus- sia. Today Obninsk is an acknowledged global scientific center; • Obninsk is the center of Kaluga Region’s phar- Kaluga Region maceutical industry cluster; • The Medical Radiology Research Center of the Russian Academy of Medical Sciences in Obninsk AAdministrativedministrative ccenterenter – OObninskbninsk is currently the only radiation therapy center in the DDistanceistance bbetweenetween KKalugaaluga aandnd OObninskbninsk country; (M3 highway) 80 km • One fifth of the city’s population are employees of scientific research institutions; DDistanceistance bbetweenetween MMoscowoscow aandnd OObninskbninsk (M3 highway) 100 km • 10,600 scientists and specialists, including 204 doctors of science and 795 candidates of science (a PhD-equivalent degree); • Located at the intersection of Moscow-Kiev • Located on the Moscow-Bryansk-Kiev railroad. • Over 500 managers and lecturers have been (M3) and Moscow-Roslavl-Brest (A101) federal It has a passenger railway station and a freight trained under Grow Kaluga project implemented in highways. The Big Moscow Ring Road is located railway station; cooperation with Sweden; at a 5 km distance from the city. This gives a direct • The nearest airports: Vnukovo (70 km), She- • 33 state research institutions; access to Moscow-Minsk (M1) highway (25 km), remetyevo (130 km), Domodedovo (90 km). Er- • A branch of the Moscow Engineering and Phy- Moscow-Simferopol (M2) highway (40 km) and molino cargo airport (15 km); sics Institute, a national nuclear research university. Moscow-Rostov-on-the-Don highway (70 km);

«Undoubtedly Kaluga Region has all pre-conditions for developing a knowledge economy: Obninsk is a concentration of fed- eral scientific institutions and creative people and has an appropriate history and an image of a scientific city, the first scientific research hub. No wonder it has become an innovation hub», – Maxim Shereikin, Deputy Governor, Head of the Ministry for Development of Information-Based Society and Innovations of Kaluga Region.

Huge scientific potential has predetermined Obninsk’s development as an innovation hub. Obninsk has become a city where the “triple spiral” of cooperation between government, business, a large university and research institutions has been created and works efficiently. Economic development objectives are being formulated for Obninsk. These include both the research hub’s traditional fields – nuclear energy and radiation therapy – and new ones: biopharmaceutical research, IT and nanotechnology. It is important that each of them has relevant growth drivers: the Physics and Energy Institute, the Medical Radiology Research Center, Medbiofarm NPP, Radiko ZAO, Tekhnologiya NPO, and a number of other companies and organizations.

Continued on page 4 Investment 4 Newslletter Topic of the issue № 3, 2011

Continued from page 3 Obninsk, the outpost of the innovative economy

«Obninsk’s strategic objective is to become an international innovation hub»

AAlexanderlexander AAvdeev,vdeev, MMayor,ayor, OObninskbninsk CCityity DDistrictistrict Theory of a territory of innovative development 1 Capability to generate new knowledge and train professional specialists

2 Presence of global corporations that contribute to the financial sustainability of the region 3 A well-developed financial support system 4 Effective infrastructure ensuring strong viability of innovation companies 5 Cluster nature of the regional economy development Practice of a territory of innovative development Three state scientific centers and a number of research organizations operate in the region, and the Moscow Engineering and 1 Physics Institute is expanding its activities A number of major companies (VW, Volvo, Samsung, GE, Nestle, StoraEnco, AstraZeneca, etc.) set up production facilities in the region 2 that led to the increased economic prosperity of the region and provided an additional resource required for reaching the next stage of innovative development A venture fund and a guarantee fund have been established, a small businesses support fund is in operation, and a seed invest- 3 ment fund is being established. This is in addition to the activities of the federal development agencies, including the Russian Venture Company, Vnesheconombank, Rusnano, and the Small Scientific and Technical Businesses Support Fund The support infrastructure is represented by all elements of the chain required for generation of new ideas and their transfor- 4 mation into commercial products. There are the Russian Technology Transfer Network (RTTN), the Science and Technologies Center (STC), and two business incubators operating in the region, and a new one is being developed at an area of 7,500 m2 that will be able to accommodate from 30 to 40 companies. A technological park for development of high technologies has been established and is expanding its activities. An urban innovations development zone has been formed. Medium and large high-tech production facilities are being built in the municipal industrial zone. An industrial park has been created in Vorsino, not far from Obninsk The cluster policy of the region is not focusing just on concentrating several enterprises that belong to the same sector in one par- 5 ticular location. It is rather an interlinked system whose objective is to gain access to the global highly competitive product markets. It encompasses the whole product manufacturing cycle, starting from training of personnel, conducting research and carrying out design works to setting up logistics facilities, support and service production facilities, and manufacturing of finished products Pharmaceuticals and biotechnologies cluster – R&D should be put into able hands! Kaluga Region has gained a unique Chemie/Menarini (Italy), NovoNordisk stances in this cluster. For this reason, the experience in attracting investments to (Denmark),NiarMedicPlus (Russia), and key focus of our efforts aimed at formation build new production facilities. For many Galenica (Serbia),while AstraZeneca in- of the innovative pharmaceutical cluster is foreign and Russian companies, this is a ternational pharmaceutical company laid the establishment of an Active Molecules cluster of first choice! So far, the following the first brick into its new production facility Center (AMC) that will have all the re- six major pharmaceutical producers have in Russia this April. quired expertise to identify, select and made a decision to set up their production Our objective is to create an en- create advanced molecules, conduct re- facilities in the region: Hemofarm (STADA vironment conducive to development of quired research and implement programs German group of companies), Berlin- new formulations and production of sub- to turn them into pharmaceutical products, Investment № 3, 2011 Topic of the issue Newslletter 5

and to set up pharmaceutical production ing scientific and research institutes and a facilities. In essence, this center will help developed network of small and medium- scientists and researchers see their ideas sized innovation enterprises are concen- turned into specific products that the peo- trated in the region. The only radioactive MMaximaxim SShereikin,hereikin, ple need, while continuing to do the work therapy unit in the country is located in the Deputy Governor, they love doing. AMC itself will become a Medical Radiological Scientific Center of Head of the Ministry for Development major multi-access center and a source for the Russian Academy of Medical Sciences of Information-Based generating future project ideas that may be (MRSC RAMC) in Obninsk. Society and Innovations of interest to investors. of Kaluga Region There is no doubt that R&D in Kalu- «A lot has already been ga Region will end up in able hands. Lead- achieved in terms of making a transition to a knowledge- based economy. However, we need to substantially acceler- ate the development process Despite substantial achievements in the tion of production facilities in the innova- and look for new ways and development of innovative activities, the in- tive development zone. mechanisms of innovation ac- novation potential of Kaluga Region is still At the same time, the Agency is in the tivity growth. We are in the far from being fully realized. One of the process of developing a range of services to process of forming an innova- main reasons for this is that there is a cer- be provided to small innovative companies tain lack of coordination among the main and projects: technological and commer- tion conveyer, i.e. we conduct players that form the ecosystem for inno- cial expertise, access to seed and venture our activities in such a way vations development. This was a decisive financing and other investments, support in as to ensure that specific sup- factor in determining the main objectives of putting products onto the market, including port measures are put in place the Regional Agency for Innovative Deve- support in arranging exhibitions. Currently, for each project. It is for this lopment that was established last year. the Agency is working with more than 20 reason that the Agency for In- The key area of the Agency’s activ- projects and enterprises and 20 start-up ity is to ensure efficient functioning of the companies. Sixty individual projects to be novative Development was innovation chain: prompting new ideas implemented in Kaluga Region have been established which serves as a through establishment of multi-access and nominated to participate in the START and center of cluster development prototyping centers, holding of contests U.M.N.I.K. contests organized by the Fund in Kaluga Region». and workshops, pursuing favorable poli- for Supporting Small Scientific and Techni- cies for the benefit of business incubators cal Businesses. and hi-tech park residents, and construc-

My business My idea

Turn it into a business plan AAnatolynatoly SSotnikov,otnikov, Director General of the Agency for Innovative Start-up! A go ahead Development – the Center for Cluster Development New projects of Kaluga Region Business incubator «We regard the Agency as a network organization striv- First customers ing to achieve a synergy effect from the activities of all parties Cash flow First revenue interested in the innovative deve- lopment of Kaluga Region, the innovations support infrastruc- Venture investments ture organizations, and other regional and federal develop- Global market ment institutions». Efficient Rapid marketing growth

EEvenven ttodayoday tthehe rresourcesesources aavailablevailable ttoo tthehe AAgencygency aandnd iitsts ppartnersartners aallowllow ttoo pplanlan tthehe ffutureuture ddevelopmentevelopment ooff iinnovationnnovation eenterprisesnterprises aandnd pprojectsrojects iinn KKalugaaluga RRegion,egion, wwherehere tthehe AAgencygency fforor IInnovativennovative DDevelopmentevelopment pplayslays a rroleole ooff aann eentryntry ppointoint aandnd ppromoterromoter tthroughouthroughout tthehe iinnovationnnovation cchain.hain. SStanis-Industriestanis-Industries OOOOOO aandnd OObninskbninsk EEnergotechnergotech ZZAOAO tthathat hhaveave eenteredntered iintonto ttrilateralrilateral aagreementsgreements fforor ssettingetting uupp ttheirheir pproductionroduction ffacilitiesacilities iinn tthehe zzoneone ooff iinnovativennovative ddevelopment,evelopment, sserveerve aass a ggoodood eexamplexample ooff tthehe aabovebove aapproachpproach Investment 6 Newslletter Tourism № 3, 2011

Taking a walk around Obninsk: a city in the forest or a forest in the city?

Obninsk is a unique place. Being the youngest city, it has now become the second largest center in the region. And it was the first city in Russia to acquire the status of a Science City. Naturally, such an extraordinary place is bound to have interesting history. Its residents established a museum so that guests could feel the uniqueness of Obninsk...

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1 The Obninsk History Museum is the first to take their walks through. The residents of stationed here. The staff of the Obninsk history place that the local residents recommend the visi- Obninsk are making a lot of effort to renovate museum are currently working on creation of tors to go to when they start familiarizing them- this country estate – they have restored the old- a historic exposition of this country estate. In selves with the city. The museum was established est church in the city and the linden park with a the meantime, the ancient parks make tourists through voluntary contributions, and it is of the cascade of ponds. Most likely, you will never feel like taking a stroll amidst the century-old same age as the city itself. More than 40 guided forget taking a walk through the Belkino park lindens. tours were organized for tourists, some of them with its ornamental little bridge and a sum- were in the form of interactive travel through histo- merhouse that enamored couples frequently 4 Obninsk is a young city and until recently, ry. For example, one can visit the fancy-ball of the come to. Unfortunately, the dilapidated manor there has been not a single cathedral there. 18th century. You may ask – what does the 18th house is now a sorry sight but, hopefully, some Currently there are a number of cathedrals in century have to do with this city that is barely 50 investments will be made sooner or later in the the city itself and in the city outskirts, the most years old? The truth is that Obninsk was founded restoration of this part of the country estate popular of which is the Nativity gold-domed at a location that used to be occupied by villages too. The residents of Obninsk do not give up cathedral located in the very heart of the city. and country estates that existed here back in the hope to see Belkino restore its past glory one times of Ivan the Terrible. One of these – Belkino day. In the meantime, one can view the mini- 5 All landmarks in Obninsk are associated country estate – is what the residents of Obninsk ature of this country estate in its heyday in the with science in one way or another. One can are proud of. Throughout its motley history, the Obninsk history museum. learn much about this science town by visiting Belkino country estate changed hands numerous the Obninsk history museum, in which a large times. Eventually, it was bought by the Obninskys, 3 Turliki farm or Mikhailovskoe country es- room is dedicated to this particular theme. There a family of noble decent the city subsequently de- tate has a similarly interesting history. This is is an exposition in the museum dedicated to the rived its name from. where the famous Shatsky School, also referred nuclear power industry. The City of Peaceful to as “Vibrant Life”, was located during the So- Atom is the name that Obninsk has acquired, 2 Belkino is located in the northern outskirts viet times. During the Second World War, the and one can see a symbol of atom surrounded of Obninsk. It is a place that the residents like command post of Marshal Georgy Zhukov was by a laurel wreath even in the city emblem. Investment № 3, 2011 Tourism Newslletter 7

6 You cannot imagine how one could possi- believe they symbolize Protva river, on the bank nor in the CIS countries. The equipment of the bly start the process of learning about this city of which the city of Obninsk was built. However, mast makes it possible to take measurements without visiting the world’s first atomic power the majority of Obninsk residents attribute these of temperature and air humidity, wind speed station that was built here in 1954. The success- wavy lines to the activities of the Training Center and direction, atmospheric pressure, turbulence ful commissioning of this first atomic power sta- of the Russian Navy that was established in this characteristics and many other parameters re- tion made it possible to launch a global project city in 1956. The Atomic Submarine Crews quired for monitoring the conditions in the lower for construction of new atomic power stations in Training Center is the same age as the city, and atmosphere. Located next to it is an aerosol Russia. By now, the Obninsk Atomic Power Sta- the crew members of all the country’s subma- unit, which represents a unique structure that is tion has been decommissioned and turned into rines visited this center. being used for simulating various weather phe- an atomic power industry museum. nomena. It is true though that in order to get to 8 One of the most important landmarks of the the aerosol unit or to take an elevator to the top 7 There are two explanations of the origin city is a 310-meter high meteorological mast. of the meteorological mast, one has to obtain of one more element of the Obninsk city em- This meteorological mast is unique in a sense a prior permission. This is just a reminder that blem – the three silver wavy lines. Some people that there are no similar masts neither in Russia, Obninsk once used to be a secret city

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Even the most sophisticated tourists are likely to make many wonderful discoveries while visiting Obninsk. For example, amid buildings of modern architectural design, one can enjoy viewing historical buildings that represent the best part of the city. This is “the old city” that was built in the 40s and 50s of the 20th century by military construction workers based on the designs developed by architects town Leningrad. However, in order to be able to properly see and feel the history of Obninsk, one should consider using the services of a pro- fessional guide.

To arrange for a tour, transportation, guides, and interpreters, please contact the Kaluzhsky Krai Tourist and Information Center. Phone: /4842/ 56-25-78; www.visit-kaluga.ru IInvestmentnvestment No. 3,2011 NNewsletterewsletter Kaluga Region Acute issues

May 19-20, 2011, Kaluga Region, Obninsk TThehe SecondSecond ObninskObninsk IInnovationnnovation ForumForum www.obninskforum.ru

Innovations for Life. Innovation Development Systems

«The forum discussions will mainly be focused on the successful experience in the development of na- tional and regional innovation systems, and identification of solutions for issues we had to address in this area. We invited our partners from the countries that are advanced from the point of view of innovations development, including Finland, Sweden, Germany, France, and Singapore, to participate in the Obninsk Innovations Forum. I believe that their participation will help us jointly come up with optimal solutions and proposals for developing an economy of new type in Kaluga Region, and that this experience will be use- ful to other regions of Russia as well as to our foreign friends. I do hope that this forum will contribute to the establishment and strengthening of business relations and will become a place where smart investments will AAnatolynatoly AArtamonov,rtamonov, Governor, find interesting and promising projects and technologies». Kaluga Region

«Clearly, today we are just in the process of searching for, and trying out new mechanisms for support- ing innovation activities, and we are looking for ways to substantially accelerate the pace of innovations advancement. I hope that the Second Obninsk Innovation Forum will play a key role in this endeavor. We expect that this forum, like a similar forum that was held in 2010, will become a venue for sharing best practices in the area of regional development both in Russia and elsewhere in the world, as well as a venue for establishing new business contacts and partnerships that would help us address as early as possible a number of issues associated with building of an innovative economy. Our colleagues from innovative regions of Russia and from countries that are leading the innovative development effort are going to visit us. Their AAnatolynatoly SSotnikov,otnikov, experience and expertise are of great value to us». Director General of the Agency for Innovative Development – the Center for Cluster Development of Kaluga Region

Investment News agency “Kaluga” Newsletter Contacts Kaluga Region 27 Truda St., Kaluga, Russia Tel.: +7 (4842) 76-27-00 E-mail: [email protected] Published with the support of Ministry [email protected] of Economic Development of Kaluga Region Fax: +7 (4842) 76-27-01