Revolution Is Forthcoming

REVOLUTION IS FORTHCOMING.

A TECHNOLOGICAL ONE. 4

Through cross-pollination 30 to the future Upgrade 39 for manpower Brains for wings 42 are made

OpenOctober, 2016 RegionUlyanovsk economic magazine

At the All-Russian conference “RIF. Technologies” (October 2, 2016), organized by Ulyanovsk MediaSoft company and dedicated to new technologies, developments in IT-sector, and robotics. Photo by @yarkofoto REGIONAL DEVELOPMENT INSTITUTIONS

GOVERNMENT ULYANOVSK AVIATION CLUSTER OF THE ULYANOVSK REGION http://ulgov.ru/ CENTER OF CLUSTER DEVELOPMENT First deputy chairman OF THE ULYANOVSK REGION of the Ulyanovsk region government CEO Smekalin Aleksandr Aleksandrovich Yakovlev Aleksandr Alekseevich + 7 (8422) 589 395, e-mail: [email protected] + 7 (8422) 41 87 06, 41 84 72 e-mail: [email protected] http://cluster73.ru/ ULYANOVSK REGION DEVELOPMENT CORPORATION (URDC) CORPORATION FOR DEVELOPMENT +7 (8422) 737 001 — unified phone OF ENTREPRENEURSHIP OF THE for cooperation with investors ULYANOVSK REGION e-mail: [email protected] Chairman of the board http://ulregion.com/ Gaynetdinov Ruslan Shevkatovich + 7 (8422) 418 671, e-mail: [email protected] Chairman of the board http://openbusiness73.ru/ Ryabov Dmitriy Aleksandrovich AGENCY FOR RURAL DEVELOPMENT CEO OF THE ULYANOVSK REGION Vasin Sergey Nikolaevich Director +7 (8422) 444 573 Shpak Maria Alexandrovna +7 (8422) 73 59 38, e-mail: [email protected] First deputy CEO http://agro-agent.ru/ Ryabikov Igor Vladimirovich + 7 (8422) 737 001, +7 927 271 2526 AGENCY FOR TOURISM OF THE ULYANOVSK REGION CENTER FOR PUBLIC-PRIVATE Director PARTNERSHIP Skoromolova Yulia Vladymyrovna Head of centre +7 (8422) 241 804 Shlychkin Igor Vasilievich e-mail: [email protected] +7 (8422) 440310 http://visit-ulyanovsk.ru/ e-mail: [email protected] http://www.ulregion.com/center_gchp/ ULYANOVSK TECHNOLOGY TRANSFER CENTER SPECIAL ECONOMIC PORT ZONE (ULYANOVSK NANOCENTER) “ULYANOVSK” CEO CEO Redkin Andrey Pavlovich Baryshnikov Denis Borisovich +7 (8422) 27 24 27 +7 (8422) 249 417, e-mail: [email protected] e-mail: [email protected] http://ulsez.ru/ http://www.ulnanotech.com

Ulyanovsk technology transfer center, where high-tech start-ups are born. Photo by URDC from bird’s-eye view. October, 2016 3 Editorial Contents REVOLUTION

From the first person Proximity effect AND CAPITAL “A TECHNOLOGICAL THE PARK HAS STARTED SERGEY TITOV REVOLUTION IS OUR REALITY” THE ENGINES The governor of Ulyanovsk region OF LOCALIZATION Governor of the Ulyanovsk region tells about prospects and risks of How partners are cultivated....p. 28 Sergey Morozov has called for a rev- technological breakthrough...... p. 4 olution. Direct speech He declared that it was necessary Results and prospects while speaking in May, 2016 before ONLY CROSS-POLLINATION! the deputies of the regional legislative INVESTORS ARE CALLED Nanocenter head tells assembly, having noted that the main FOR A BREAKTHROUGH about chances of new tool for outstripping industrial — inno- How demands on potential friendship between science vative development of the region was residents are changing next and industry...... p. 30 “realization of a truly revolutionary project of the Regional technology to economic trends...... p. 8 initiative” (by analogy with the almost eponymous federal project Project of Russian global technological leadership by 2035, in which the Climate control Ulyanovsk region is one of the ten pilot regions). It is planned to THE FUTURE COMES FROM THE RIGHT WAY, make technological revolution in the fields of transport, aviation, THE LEFT COAST automobile, energy, food industries, and in health care. But the BUT ACROSS PITS How scientists, industrialists, authorities are planning to make a revolution first of all in the field Investment climate rating: and venture-builders will of education: to create a flexible system of education, of training new conclusions...... p. 12 be gathered in an unusual future highly qualified specilists beginning right from school. town...... p. 32 Note that the October Revolution, accomplished 100 years Experts round table ago, also had its origin in Simbirsk, which later received the name X-ZERO INDUSTRY: Alternative energy of the leader of proletariat, who was born in this town, Vladimir FROM WHENCE WE GO, Ulyanov-Lenin. Only life has shown that revolutions are not the THE WIND IS NORTH- AND WHERE TO best variant of development both in politics and in economy, they EASTERN, COMMERCIAL always carry painful transformations with them. Evolution is always Analysts discuss reality and Ulyanovsk aggravates more harmonious. However, the country lagged too much behind challenges of technological emerging competition in technologies in the years of perestroika and revolutionary polit- breakthrough...... p. 14 in wind industry...... p. 37 ical changes in the 90s, when the most powerful companies and research centers were left without funds and markets, when the Advance Profi roads of science and real economy diverged so dramatically, that TO TAKE A LOOK BEYOND have not crossed yet. STAFF DECIDE EVERYTHING THE HORIZON By the way, Vladimir Lenin also called for exploiting the crisis to How the region is incorporating How the region makes upgrade of make a revolution, but, in contrast to 1917, technological revolution in Ulyanovsk does not start at the lower classes, but is initiated by the in NTI project...... p. specialists training system....p. 39 18 authorities. Vladimir Ulyanov was hoping that the crisis would accelerate the fall of the capital, and the new Ulyanovsk revolution aims Aviation 2.0 AeroNet WINGS NEED BRAINS to strengthen and multiply the capital. At that time the capital was TO FLY OVER THE MISSED an enemy, now it is an assistant. Without it the revolution won’t go. STAGE Drones are born from meeting But will there be enough capital for technological revolution? How aircraft construction goes of competencies...... p. 42 That is a question. Moreover, the second one. to restart...... p. 20 It is because Ulyanovsk authorities refer to another capital, Direct speech the human one, as the first and most important condition for this Overseas interest “WE ARE ALREADY revolution. Another capital is creative people who are able to think IN REVOLUTION” freely, without looking back at the frameworks of established CHINESE HOROSCOPE rules and concepts, those who are motivated to change the world. Programmers tell about What can be negotiated And the main thing is to create conditions for development of this with China...... p. 23 breakthrough algorithm...... p. 44 capital. According to Lenin’s theory, a revolutionary situation occurs when the upper classes can no longer live in the old way, and the Changing orientation Small business lower classes do not want it. Now in Ulyanovsk everything is on THE AIRPORT ZONE “GAZELLES” GET HELP the contrary: the upper classes do not want it. And as for the lower ADJUSTS THE COURSE TO JUMP classes, simply no one asked them before. Why SEPZ Ulyanovsk starts How future champions are given Whether the revolutionary technological situation is ripe? Will the country and the region again, as once, be able to “catch to work under new rules...... p. 25 growth stimulators...... p. 45 up and overtake?” Will there be funds for this purpose? Is Russian and foreign capital Content and layout by the “Publishing Syndicate” Editorial board: ready to invest in new technologies, if all the conditions are created Project and ZAO “Kommersant-Volga,” for this purpose in the region? Copy editor — 44, Novo-Sadovaya str., Samara Sergey Titov Will the government be able to create conditions for development Graphic designer — Tel.: +7 (846) 276 72 51, 276 72 52 Ivan Kosobokov Interpreters: Elena Ahmatova, of a new generation, a creative and free one? Printed by the “Aeroprint” Printing House, the “O’K” Translation Bureau Today we ask experts and ourselves these questions, which so 18, Zavodskoye Shosse, Samara, Russia Correctors: Olga Mokhnacheva, Elena Ahmatova far do not have definite answers. Tel.: +7 (846) 932 02 43 Because it is a search. And a search for new ways needs open Signed for publication on October 21, 2016. horizons, open communication, open innovations. No. of copies printed — 3000, 1000 in English. All rights reserved. No part of this publication Finding new ways is always a discovery. And discoveries happen Distribution through special address sending may be reproduced in any form or by any means. only on new ways. 4 Open Region From the first person

Sergei Morozov: “A technological revolution is our reality” Photo by Stolbova Anastasya

On the first of October, 2016 the governor of Ulyanovsk region Sergey Morozov, elected by people of the region for a new term (53% of the votes), in his inaugural speech declared the beginning of a complex of reforms in the region, part of which is also a technological revolution, the necessity of which Mr. Morozov announced in May. Today, giving answers to the questions of Open Region, he explains why this is necessary. October, 2016 5 From the first person

— Sergey Ivanovich, in your inaugural processes will not be subject to crucial I believe that in the reform of regional address instead of the traditional promises moment. All these processes at our place and municipal authorities system we need of good prospects you have announced the will go most smoothly and predictably. to move from manual control to man- beginning of a complex of reforms. Why was President Vladimir Putin, giving start for a agement by results, to enhance the role it so outright? Is the time ripe for it? new approach to state administration at the of project approach, the responsibility of — Yes. The prolonged economic crisis federal level, noted that “it is necessary to civil servants for the final result of their forces us to abandon usual ways in econ- do everything calmly, carefully calculating work, to get rid of ineffective elements of omy and public administration, makes every move, so as not to bring harm.” It is regional government structure, turning it us learn to rely on our own forces and use by this rule that we will abide. I am sure into a highly effective organization, attrac- our potential as much as possible. And the that there will be no failures, but a smooth tive for talented employees. Although we potential is really great in our region. Not growth of indicators. have one of the most compact machines of reserves of mineral resources: we have little public administration in the country, this of them. The main potential of the region is — What priority revolutionary changes is not the limit. There should be even less the human one. Talented, highly educated are necessary in your opinion? officials, and the level of their competence and highly qualified specialists, traditions — I have already announced (in the in- should be higher. To do this we will intro- established in science and technology, in augural address — OR), that it is necessary duce a system of incentives for employees education. The main thing is to let this to proceed without delay to implementa- and performance indicators for offices. potential be revealed. But for this purpose tion of three groups of reforms. The first Their repeated failure will be a reason for a whole range of reforms is necessary. And is creation of a sustainable economy that dismissal. Many functions of the officials they should be started now, while there is will meet the challenges of time, a globally can be transshaped into project offices, the credit of confidence, given to me by Uly- competitive one. They are implementation following the example of european coun- anovsk citizens at these governor elections. of regional technology initiative and build- tries. For instance, we had the Ministry of ing support for small businesses in order investments, but the need for it disappeared — In spring, speaking to the deputies to bring out the strongest companies to a when we created Corporation of region of regional legislative assembly, you said level of russian leaders. The second is to development, a project office, engaged that one of the main challenges in social create conditions for people’s developing in accompanying investors. They are no and economic life of the region must be a and disclosing their potential. This is also longer government officials, but people technological revolution. Frankly speaking, reformation of pre-school and secondary from business environment, speaking the it is difficult to be a revolutionary? education system up to requirements of language of business. We should follow — During the years of leadership in the time, “smart school” project realization the same way in other departments. As region I have repeatedly heard accusations with continuous development of complex for local government, here we see the way that I make too ambitious plans and set competencies and teaching key technol- in enlarging administrations and reduc- exigeant problems, offer crazy ideas and ogies, reforming secondary vocational ing the number of municipal employees. break the habitual way of life. I was fre- education for professions of the future, When most part of local budget is spent on quently blamed that instead of waiting including activities in the framework of officials, you must admit that it is unfair. when everything changes in due course, WorldSkills international project. It is also Today we are preparing a large program evolutionary, I strive to make a revolution promotion of universities in development of regional governance reforms, designed in every industry. Meanwhile a technologi- of cooperative processes with scientific for two years and based on best manage- cal revolution might lay foundation for rap- organizations and enterprises, with world ment practices from different countries. id growth of the entire region economy and leaders. The third group of reforms will This is the first program in the country could predictably affect the social sphere. affect the entire region and municipali- which implies a comprehensive reload Yes, revolution is painful, uncomforta- ties management system, it will focus on of all regional management system. The ble, difficult, sometimes it means recours- formation of a power, which will be open document will be ready by the end of the ing to surgical measures. We have to break and accountable to people. year. But decisions on all conversions will stereotypes, and sometimes, unfortunately, be made not by someone alone, but only people also break down, cannot withstand, — In your inaugural speech you even after extensive discussion and adoption retreat. A lot of them are my colleagues pointed out that “control system operating by the Council of reforms, which is already and friends, and it would be possible to today is no more capable of ensuring effective working and which includes representa- let them further occupy high positions forward movement.” What should fundamen- tives from wide variety circles. in recognition of their services, to show tally change in it? what is called respect, to thank for their — The current management system — You say that it is necessary to move work. But I need a quick and vivid result, is an obstacle for further development. away from “manual control,” but you are otherwise the citizens of the region will And nothing is going to work, if we do not managing the region in this manner yourself. not receive expected improvements. In eliminate this barrier. We need a system Will any reform go in such a situation? place of those who left come the others: that will allow to implement our initiatives — “Manual control” is required in bright, ready to change, ready to work and projects in the shortest possible time. extreme situations, such as when the in inhuman conditions. And these folk This is a key factor of competitiveness of heads of municipalities are not able to achieve the results that Ulyanovsk people the region. Without winning a competition take meaningful steps. And people suffer! are expecting from them. between management models we cannot Here then — yes, it is necessary to get income out on top in economy. volved into the process myself to correct the — Will not a revolution, breaking the foun- Let me remind that at the beginning of situation, which has stuck in a deadlock. dations, lead to the failure of social and economic 2016 I addressed a proposal to the president But it was for this purpose that we started development indicators at the beginning? to prepare a management reform and to management reform, to get rid of such — Technological revolution is often include our region into a pilot project for characters and to put everyone on project connected with breaking the administra- its implementation. Now this topic is being track. And I’m sure that when the team tive system. But all that relates to economic actively discussed in the federal center. gets upgraded, when instead of maybe 6 Open Region From the first person

good, but too obedient passive performers those from China, Czech Republic, France, there will come energetic and competent Iraq, Singapore, Israel, India, Gabon, Japan. professionals, who will be able to work for But we all need to think how to improve the final result rather than for reporting, the quality of training specialists, how to the need for the so-called manual control change the principle of necessary staff for- will disappear by itself. mation. And it will be impossible to solve these issues without integration of univer- — The head of the Ulyanovsk nanocenter sities. But we should choose such methods Andrew Redkin believes that the most impor- of integration that would not provoke social tant condition for transition to knowledge protests, and the structure created would economy is the presence of a powerful, strong- meet prospective labor market needs, global est university in the region, so that talented trends of technological development, and high school graduates continued their studies reduce the risks of outflow of human capital here, not in the capital’s universities, from outside the region. which, typically, they do not come back. How One of such integration structures is to solve the problem? By integrating existing research and educational innovation and universities? technology Consortium of universities, — Certainly, the regions that have a research organizations, design and techno- developed system of higher education are logical bureaus of industrial enterprises of more competitive. Our region is fortunate Ulyanovsk region, in which we see a huge in this respect, we have high schools of scientific potential. Anastasya Stolbova by Photo various kinds: technical, agricultural, edu- Sergey Morozov is accustomed to examine cational, transportation, there is a classical — Our countryman Vladimir Lenin de- all the problems personally; however, university. In addition to five federal we scribed indications of the revolutionary sit- when reforming public administration system, he is going to leave “manual have eight branches of public and private uation: the lower classes do not want to live control” for design management high schools of Russia in our region. RF in the old way, while the upper classes cannot. and working for results. Ministry of education and science found Has the need for a technological revolution all universities to be effective, as well as matured? What signs of it will you call? 5 branches. So we have an opportunity — Since you remembered Lenin, I will to provide almost all sectors of economy answer with his words: “The idea that today you can go to bed at one time and with experts. has seized the masses becomes a material wake up completely at another. Yes, today the most important task is force.” And the masses have long been The future is not as far away as we think, professional training for the upcoming seized by the idea. Furthermore, for a long it is very close. Electrocars already drive technological revolution. Universities of time the technological revolution is no in Ulyanovsk: the employees of DMG Mori the region increasingly rely on develop- more an idea, it is our reality from which machine tool plant get to work on them ment of innovative education with prac- there is no escape. And we have two op- and charge the cars from solar panels. In tice-oriented learning technologies, more tions: either to be adrift, or to be embedded Ulyanovsk pedagogical university they are than 50 basic departments were opened at in the process chain, to roll up the sleeves engaged in creating the first human skin enterprises and organizations of the region. and work. Look at the world around us. We equivalent for transplantation. As soon as Regional universities develop international are witnessing and participating in one of the STI project was announced, in the Uly- cooperation: 21 agreements were signed the most interesting stages of mankind anovsk region we began working in order to only in 2015 on cooperation with foreign development, when the rate of world trans- integrate into its implementation, having universities and organizations, including formation is gaining such momentum that chosen five main areas, among which there are energy of the future, high-tech medicine, unmanned automobiles and aircraft. Being ahead of time, it is essential to synchronize watches at international economic forums. These and other trends already in the next decade will drastically change the appearance of cities, the nature of society and the structure of economy. Biotechnol- ogy, nanotechnology experts even today along with IT-specialists become not only the most claimed but also the most highly paid. It is for this economy and this society that we must prepare people already now. We already live in an era of technological revolution, this is simply necessary to accept.

— Can you enounce the main conditions

Photo by Stolbova Anastasya of successful technological breakthrough? — Before we started drafting Teh- nokampus 2.0, we have analyzed the experience of other countries. There are examples of successful implementation of projects in the field of technological transformation. These include Silicon Val- October, 2016 7 From the first person

ley in the US, Cambridge in Europe, Leuven in Belgium. We are not just familiar with their practices, but also invite their repre- sentatives as experts to develop the main provisions of state regional policy. Business development director of the Center for technology transfer of Leuven Catholic University in Belgium Martin Hi- nul has named the main components of success: quality infrastructure, comfortable accommodation; high level of education and health care; understanding of importance of changing the economic model by regional government; presence of international companies (as, for example, in Zavolzhye industrial park); cluster approach, and others. And we have all these main conditions for success of technological breakthrough, it remains only to bring them to mind. Photo by Anastasya Stolbova by Photo — Does today’s business have a desire to Alone with everyone move into a high-risk field of technological entrepreneurship? — Any self-respecting entrepreneur, interested in creating competitive products, opment of entrepreneurship. We also create to pass this way faster, basing on their is ready to adapt to realities of the modern preferences for start-ups, giving special condi- experience. In their region they have world. And it is this desire of business that tions on taxes, provision of infrastructure, of achieved productivity 3 times more than allows to implement ambitious plans to areas in which entrepreneurs can get access the european average and 20 times higher create unique startups. We have a lot of to high-tech equipment. than in Ulyanovsk: about 60 thousand success stories. Not so long ago at once two euros annually per job. Such jobs are the Ulyanovsk citizens entered the prestigious — Ulyanovsk technology valley Techno- backbone of our future economy. The very ranking of most successful young entre- campus 2.0 is a very beautiful project. But idea of this project is so strong that it cap- preneurs of Russia — 2015. Another young where can money for it be found in times of tivates both RF government and private (19 years old) IT specialist has created an crisis, when the federal budget itself does not business. In that we see the guarantee agency for development of Web sites, which have enough funds for development? of confidence in success of Ulyanovsk in 4 years has implemented more than 100 — Really, it will be a whole city of inno- technological valley. successful projects across the country. One vators with an incredibly high potential. of the best solutions in the field of Ecwid Education, business, technological and — Is it true that, promoting the revolu- e-commerce by Ruslan Fazlyev is also our production sites will act as key elements tionary idea, you intend not only to improve native success story! A striking example of of infrastructure. Together they will allow the competitiveness of the economy, but also technology projects is nanocenter, at whose to form a common interdisciplinary envi- once again to bypass other regions in the site start-ups are actively developing, such ronment and to build close cooperation of investment attractiveness? as Stroylab with high strength concrete or science, business, and industry. Of course, — It is no secret that investment attrac- Testgen with technology to determine the the question of resourcing is the basic one. tiveness of the region is one of the most Rh factor of a future child. But many of the elements of this large pro- important factors of its development. But Entrepreneurship is always a risk, by ject have already been prepared. Industrial tax benefits alone are not enough for inves- definition. Innovation activities have their park with the world’s leading companies tors. Even good infrastructure of industrial risks, but they are more than compensated is working, more and more new residents park is too little. And the loyalty of regional later by the increased added value. The au- come there. Nanocenter as a starting nucle- authorities is no longer the determining thority task is to make technology business us is actively functioning. Of course, some factor. Already tomorrow investors will a driver of economic growth. And we are elements will require financial investment, begin to choose a region for its readiness trying to move from subsidies for basic needs but we see that businesses are interested to receive high-tech business. Why tomor- to the tools directed on development. Aim- in participating in such projects, and they row: even today they pay attention to it. ing to raise leaders from small and medium are also ready to connect to the PPP format, And investor’s decision will also depend businesses, we have developed a number of assuming part of the costs, for example, on how we have developed the knowledge measures, among which there is a system of to create infrastructure and construction economy, on how qualified the staff is, on preferential loans, credit resources provided of office and laboratory complexes. There how far small and medium enterprises in for modernization of production facilities. are proposals which business is willing to the region are willing to incorporate into Industrial development fund supports im- carry out fully at its own expense. the chain of high-tech business. portant directions for the region, implemen- In turn, the state will cover all costs tation of advanced technologies. We plan to related to social infrastructure. We un- — Do you believe in success of reforms? create a fund for agro-industrial complex. So derstand our area of responsibility and we — Of course, it was not without reason gradually we come to formation of a unified see the federal government’s interest, its that I told about them as much as possible financial infrastructure of business support, commitment to support us. in public. The road back is not for us. a kind of regional development bank on the In Belgium formation of innovative I believe in success. And I know, I will basis of the Ulyanovsk Corporation for devel- territory has taken 17 years. We intend manage it! 8 Open Region Results and prospects Investors are called for a breakthrough Photo by URDC

Zavolzhye industrial park with ready infrastructure is of particular interest for large industrial investors. Just at this spot in 2015 a machine tool plant of the German-Japanese concern DMG MORI was built, and now the concern calls its suppliers to this site.

Despite sanctions and crisis, Ulyanovsk TATYANA FADEEVA region continues to show growth In 2015 Ulyanovsk region ranked first among the subjects of the Volga Federal District (VFD) for investment activity dynamics. The in attraction of investments; but in order index of physical volume of investments in fixed assets amounted to enhance competitiveness of regional to 104.9 %. Only 6 of 14 VFD regions managed to avoid slowdown in investment activity, and Ulyanovsk region was among them. economy and ensure its readiness At the end of 2015 the volume of investments, attracted in the to enter new markets the institutions region, amounted to 90.1 billion rubles (compared to 82.2 billion rubles in 2014). of regional development begin to create Trends remained conditions, attractive for investors who In 2015 implementation of 12 investment projects with total carry new breakthrough technologies. investment of 32 billion rubles successfully completed, it was October, 2016 9

2.5 times more than in 2014; more than 4 thousand new jobs were created for the region inhabitants, as they say at the Ulyanovsk Investors are called region development corporation (URDC, engaged in attracting investments, 100 % owned by the region). Among the commissioned enterprises there are machine tool plant of the Japanese-German concern DMG MORI, plant for paints production of Danish com- for a breakthrough pany Hempel, plant for production of automotive components of Mexican company Nemak, cement plant of Eurocement- group holding in Sengileevsky district, A class logistics center of French company FM Logistic, an international class hotel Hilton Garden Inn, and others. In the first half of 2016 positive trends in investment activity remained, four new companies began working: German plant for production of plastic packaging Jokey Plastik, logistics center of Russian company T1, agricultural project of Vosrozdenie peasant farms, furniture production by Kedr company. In September a number of industrial and commercial objects were commissioned: production of cable board systems by Promteh-Ulyanovsk, Hel- iport-Ulyanovsk helicopter center, a hypermarket of household and construction goods Leroy Merlin; construction of a large plant for tires production of Japanese company Bridgestone was completed. In the near future will also be launched: plant of Pa- mir company in Ulyanovsk for precision iron -steel casting, oil extraction plant in Dimitrovgrad, enterprise for production of hydraulic equipment of Duet Hydraulic company in Radischevsky district, sports hypermarket Decathlon. The structure of investments is changing, following the trends As noted by URDC CEO Sergey Vasin, the structure of investment is beginning to change: over the past year there became more Russian companies. “We have got real projects aimed at import

substitution. A vivid example is the project of Russian company Photo by Tatiana Fadeeva Volga-Lacta, which will place production of starter cultures for Sergei Vasin (right) believes that it is necessary to learn how to attract dairy industry in the region. Earlier they were imported from investors for implementation of innovative projects in order to be in abroad,” says CEO. time for entering new markets Furthermore, in the structure of investment projects there appear more Asian companies. Work in the direction of China and South-East Asia was begun in 2014, and now there are first at the first production of pallets will be created, at the second — results: Conch, Dongfang, Chzhunnen Juania holding company, release of MDF boards. Gold Mountain, and other chinese companies came to Ulyanovsk. The first resident came to Novospasskoe industrial zone, Despite continued sanctions regime by the EU, cooperation with Surskaya ryba (Sursk fish) company, which will be engaged european countries also continues. This year active cooperation in cultivation of various species of fish on new technologies. has begun at the regional level: Ulyanovsk region establishes Against the background of retaliatory sanctions (restrictions contacts with the regions of Italy, Czech Republic, and other coun- on import of vegetables into Russia) several projects appeared, tries. In particular, over the past year Czech companies Trimill, initiated by Russian companies, for construction of greenhouses. Hestego came to the region, a memorandum of cooperation was In Novospassky district Promyshlennye technologii (Industrial signed with EUROSOTRA Spol s. r.o. technologies) company will be engaged in creating greenhouses, “However, the sanctions regime still affects the extension of and there is also another company in work whose name is not partnerships with European companies,” comments Sergey Va- disclosed yet. sin. “For example, German company Hermle bought a land plot Since the beginning of 2016 the work began on creating indus- here and has already begun the design, but was forced to suspend trial park in the second largest city of Ulyanovsk region, Dimitro- the project because BAFA, the organization issuing licenses for vgrad. Federal government granted it the status of monocity of export of equipment and technology from Germany, did not give the first category, which implies federal support. URDC provides permission for production of Hermle machine tools in Russia.” attraction of investors there. There are already several companies Inflow of investment is constrained also because of too expen- ready to place their enterprises in the park, for example, scientific sive loans. As it was explained in the corporation, there could and technical center Elbrus, which intends to produce carbon be much more Russian business projects if the enterprises had fibers for composite materials production. access to cheaper borrowed funds. The search continues for new residents to special economic In this situation presence of ready sites for conducting pro- zone (SEPZ), where construction of engineering infrastructure duction activities becomes particularly important for investors. was completed this year. Today this area is fully prepared to Region continues to work on formation of such areas. In 2015–2016 conduct operations. In SEPZ six resident companies are already work on creation of industrial parks in the municipalities was registered, five more have received their status in 2016. Among begun. The anchor resident appeared in Novoulyanovsk park, a them are Russian projects of small and medium-sized businesses, large wood processing complex, consisting of several productions and also international: a large project for furniture production of (Arakel-DO). The project will be implemented at several stages: Greek company Leontaridis, and a project for goods distribution 10 Open Region Results and prospects

Industrial parks of Ulyanovsk region

Dega Ulyanovsk agroindustrial park, 278 ha Industrial park on the base Darkat company of Ulyanovsk automobile plant, UZTS industrial 56,000 m2 park, 48 ha ISUZU RUS Martur Inza industrial park, Special economic zone, 276 ha 130 ha T1company CEST company Promteh-Ulyanovsk Fittings-flanges Inza company technologies production Novoulyanovsk company (PK AFL Volga-Dnepr Technics company) industrial park, 150 ha Ulyanovsk company ULYANOVSK Oksiblok company Technonikol company InterAvionika company Inter Logistic Park Eurocement group holding 1A company company Arakel-DO company Leontaridis company Gold mountain company

Novoulyanovsk Zavolzhye industrial park, 706 ha TAKATA Hempel Krasny Gulyai DMG MORI Legrand Novospasskoye Bridgestone Nanocentre industrial park, 300 ha Novospasskoye Dimitrovgrad Jokey Plastik Kuchina Schaeffler furniture factory Starately – Novospasskoe Krasny Gulyai NEMAK Legrand company industrial park, 210 ha EFES FM Logistic Henkel MARS GS Composite Sedrus company GC Eunice Автодорога Аэропорт Finance plus федеральногоcompany Dimitrovgrad Industrial park on the base Tashlinsky miningзначения and industrialПассажирский park, 60 ha of Dimitrovgrad automotive речной порт 2 Airport processing plant company units plant, 30,000 m Железная дорога Legenda company GREENFIELD Federal highway Грузовой Passengers Dimitrovgrad plant of BROWNFIELD river port constructionsречной without порт Railway GREENFIELD transom frame Cargo STC Elbrus river port BROWNFIELD Data from URDC

of chinese company Gold Mountain. This spring A class ware- being worked out. In addition, the second stage of nanotechnology house complex of russian company T1 was commissioned, in center is being implemented in Zavolzhye: a private investor from autumn aircraft onboard cable systems production was launched Tatarstan is constructing two new buildings there, a production by Promteh-Ulyanovsk company. Currently in SEZ an industrial building and an administrative laboratory. park for small manufacturing and other companies is under The most important task of the coming years, as noted in construction. the corporation, will be attracting investors in the sphere of “In 2016–2017 on the territory of the most successful industrial innovative and breakthrough technologies, which will be able zone Zavolzhye where more than 20 companies implement their to raise the economy competitiveness of Ulyanovsk region and projects we plan to create another industrial park for small busi- ensure its transition to a new technological pattern. “We need nesses. We will offer this site to the fund of enterprise development to learn how to attract investors for realization of innovative for accommodation of their customers, small and medium-sized projects corresponding to the directions of National technology enterprises of Ulyanovsk region,” said URDC head. initiative. And it is necessary to have time to enter new markets that are only emerging now, but in five — ten years they will The vector is knowledge economy determine success of entire nations and industries,” stresses Most part of Zavolzhye industrial park is now reserved for Sergey Vasin. technocampus project, and therefore new enterprises will be Search of such investors is a laborious task. We still have to placed in the park pointwise. Technocampus is a territory with learn how to search, and how to shape the sites for them. Major special regime of investment and innovation, it suggests high placements for innovative productions will be Zavolzhye, SEPZ, concentration of sites for research and development and signifies and industrial park in Dimitrovgrad. And in order to interest and transition to a new economy, the economy of knowledge. In the attract investors to these areas Ulyanovsk Region is developing next 10 years it is planned to organize up to 10 thousand jobs, some a package of relevant preferences. In turn, according to Mr. Va- of them for experts and researchers from other Russian regions. sin, a number of requirements will be imposed on new type of For technocampus employees a residential construction is planned investors, one of which will be a high proportionof costs of R & near the village Arkhangelskoye, and on technocampus territory D, which can be ordered, in particular, in nanocenter and tech- there will be school and pre-school institutions with high levels nocampus companies, at the same time providing them with of educational preparation. Negotiations are underway with for- additional loading. eign universities on opening of branches or representative offices Another problem is staff training for a new type of enterprises. there. URDC acts as a developer in the project. Together with Ulyanovsk region together with higher education institutions the Ulyanovsk center of technology transfer (UTTC, colloquial- will have to rebuild the system of vocational education to meet ly — nanocenter) an architectural concept of several buildings in the demands of new businesses for personnel. As the UTTC CEO teсhnoсampus with a total area of 15 thousand square meters is Andrey Redkin notes, modern innovative companies are a funda- October, 2016 11 Results and prospects

mentally new type of employer, that imposes special requirements out: projects, related to alternative energy industries, transport, on its employees. They must have, at first, practical experience medicine, new technologies in construction. in application developments, second, a broad technological “At the suggestion of our subsidiary, nanocenter, we have outlook together with narrow specialization in their fields, and joined a new perspective subject of alternative energy. Our first third, fluency in a foreign language: for example, all nanocenter project in this area was a project to deploy a wind farm of Finnish projects are going in cooperation with international companies. company Fortum in the region. Most recently we also signed “Today there is a big gap in formulation of requirements for an agreement with chinese company Dongfang on localization university product,” emphasizes Mr. Redkin. “Worldwide uni- of blades production for wind turbines in Ulyanovsk region. versity product is not high school graduates that go to work, but Next, on behalf of the governor, we will expand the number technologies with staff provision. That is, on the one hand, people of wind power plants in the region, therefore we are currently as technology carriers, who understand what to do and how; on conducting wind monitoring in the municipalities,” said the the other hand, a technological reserve, created in university in development institute head. According to him, it is planned partnership with external players, which has a market value.” not only to bring energy companies to build wind farms in There are examples of successful cooperation between univer- Ulyanovsk, but also to build a chain of cooperation both for production of wind turbines themselves and of accessories for them, including Ulyanovsk enterprises in this process (continuation of the theme at p. 37). No country can produce all the goods Experts also note the prospects in this direction. “In Russia required for its citizens absolutely this industry is just beginning to develop, the country has a “ independently great opportunity in terms of wind potential and connecting to the grid. In this respect Ulyanovsk region can become a good example,” said the head of Committee on wind energy of CIS Adam Smith, in 1776 countries, vice president of the World wind energy association ” Andrey Konechenkov. The new economy presupposes also development of traditional sities departments and companies, of creating technologies. But industries of the Ulyanovsk region: aviation, automotive, agricul- they are so far not numerous, higher education in general is not tural, and generating innovative projects in them. For example, oriented to it as to a basic system activity. This problem has to be now the development corporation together with nanocenter and solved yet. It can be overcome by higher education institutions SEPZ plans to be engaged in selection of projects related to pro- with strong will, with various kinds of resources. A possible way duction of unmanned aerial vehicles in the region (continuation out of this complicated situation could be establishing uniform of the theme at p. 42). In Ulyanovsk region work on development industrial interuniversity centers by several universities in coop- of public-private partnership (PPP) projects continues. Created eration with industrial players, where intellectual and financial in 2015 on the basis of development corporation, the PPP center resources will be consolidated. Example is a world leader in the initiated a number of projects in education, medicine, sports, field of microelectronics, IMEC center in Belgium. The partnership among which there are construction of new surgical facility of regional universities with foreign universities is also possible. for regional hospital, construction of schools in Ulyanovsk and Priority directions of developing economy of the future are also Dimitrovgrad. Over the coming months it is planned to unbundle identified, for which a targeted search of investors will be carried the centre into a separate independent structure.

State support measures for investors in Ulyanovsk region

TASED “Dimitrovgrad” Taxes and duties Specially Significant SEZ “Ulyanovsk” (territory of advanced social Investment Project Status and economic development) 1st year — not more than 5%; 2 % for 10 years from 2 up to 5 years — not more Income Tax (20%) 15.5 % for 15 years 15.5 % from 10 year than 10%. Prolongation for 5 more years is available. 0 % for 10 years 0 % for 5 years. Prolongation Property Tax (2,2%) 0 % for 15 years 1.1% from 11 to 15 years for 5 more years is available. 0 % for 5 years. Prolongation Transport Tax 0 % for 10 years 0 % for 10 years for 5 more years is available. 0 % for 5 years. Prolongation Land Tax (1.5%) 0 % for 8 years 0 % for 10 years for 5 more years is available. Execution of works and provision VAT 18% 18 % of services are not subject to VAT Insurance premiums 7.6% for 5 years. Prolongation 30% 30% to PFR, OMIF, SIF for 5 more years is available The importation of goods, equipment, construction materials Customs privileges Differentiated to the territory of SEZ is not Differentiated subject to VAT, excise and customs duties Data from URDC 12 Open Region Climate control The right way, but across pits Results of the national investment climate ranking have helped regions to adjust the direction of movement

“We were slow to saddle up, but now we will ride fast!” It was declared in SEPZ at the ceremonial start of constructing an industrial park, designed for small high-tech residents. In the photo (from right to left) is the chief investment unit of Ulyanovsk region: governor Sergey Morozov, first deputy prime minister Alexander Smekalin, CEO of the region development corporation Sergey Vasin. Photo by Stolbova Anastasya

According to the results of national SERGEY TITOV rating of the state of investment The results of national ranking of the investment climate state in Rus- climate the Ulyanovsk region sian regions were announced in June during St. Petersburg international economic forum SPIEF‑2016. moved to the 11th place, but Let us remind, this is a joint project of the Chamber of commerce, Russian union of industrialists and entrepreneurs, Business Russia, remained in the strongest group. Support of Russia, and Agency for strategic initiatives (ASI). It allows to One of indicators that has affected identify and disseminate best practice actions of regional authorities. As previously mentioned, it shows not so much the state of investment region’s position in the ranking is climate in the region, as the authorities’ efforts aimed at its improvement. The pilot project of the rating was implemented in 2014, 21 regions of poor quality of road infrastructure, Russia participated in it, and in the ranking the Ulyanovsk region took which, as noted in the region the second place behind the leader, Kaluga Region. The following year, in the first full ranking (76 subjects of the Russian Federation), the region government, “was accumulated ranked fifth. In 2016 the study covered all Russian regions (however Nenets and Chukotka autonomous districts, the Crimea and Sevastopol over 30 years, and by our own were not included in the rating due to insufficient sample size). While in efforts it can be fixed not at once.” 2015 the regions were divided into groups (absolute leaders, regions with October, 2016 13 Climate control favorable conditions for business, weak regions, and outsiders), in the ranking of 2016 only top twenty were highlighted, and they also included Ulyanovsk region in the 11 position, immediately after Moscow. First place went to Tatarstan, second and third lines — to Belgorod and Kaluga regions. Like last year, evaluation was carried out in four areas: regulatory environment (time to obtain registration of legal entities, building permits, etc.), institutions for business (the quality of regional legislation which protects the rights of investors, the average amount of additional documents requested besides the legal ones, etc.), infrastructure and resources (objects of infrastructure investment, proportion of roads that meet regulatory requirements, and others), level of small business support. Total study was conducted on 45 indicators; in addition to objective data (Rosstat) surveys of entrepreneurs were used, and this time a stronger emphasis was made on the opinion of business community: in 2016 the number of surveyed entrepreneurs was increased almost two times — up to 400 thousand.

Commenting on the ranking results, ASI CEO Andrey Nikitin Photo by Sergey Titov noted that “polls and statistics record decline in the quality of ASI CEO Andrey Nikitin (on the right hand of the Ulyanovsk region roads, deterioration occurred in 43 regions.” In addition he stressed governor Sergey Morozov) notes that “it is most difficult for the regions that “business does not consider measures of financial support that are not rich in raw materials: oil and gas; they include, for example, sufficiently effective; according to the rating, deterioration- oc Tula, Ulyanovsk, Vladimir regions. curred in 60 regions.” At the same time he noted that “the hardest is situation in the regions that are not rich in raw materials, oil and gas; they include, for example, Tula, Ulyanovsk, Vladimir on all 45 indicators, and they may themselves reveal their short- region” (in ASI they acknowledge that a strong correlation of comings if they wish.” rating with GRP is observed). Presidential aide Andrey Belousov However, first vice premier of Ulyanovsk region Alexander explained that, selecting the top 20 best regions, the rating Smekalin does not conceal where the region has got “not the compilers “wanted to draw attention to the regions that produce most advanced positions.” First — in the amount of benefits and results, and whose example should be followed.” state guarantees granted to businesses. “And this is at the time ASI does not disclose data on specific indicators of the regions, when our opponents, on the contrary, criticize us for the fact noting that the heads of regions “have got detailed information that we give a lot of business benefits and preferences,” said vice premier. Second — in comparison with other leaders, quality of Internet portal for investment activities has decreased. The re- National rating of the condition of investment climate gion positions were also affected by the state of its roads (in the in RF entities state of roads Ulyanovsk region lags behind for all three years). According to Mr. Smekalin, it is not so easy to eliminate this Place in rating Region disadvantage, “when for 30 years roads were not repaired, and 2016 2015 we only can count on ourselves.” He believes that “objectively Republic of Tatarstan 1 1 roads are not worse than those of other regions, but subjective assessment of business community was affected by the media Belgorod region 2 3 that “were savoring the results of inspections of All-Russian Kaluga region 3 2 popular front.” According to vice premier, “in a number of indi- Tula region 4 10 cators, for example, according to Russian register” the region has improved its positions, and their decrease is due to the fact that Tyumen region 5 15 “the others now just have pulled up, by the way, having taken Chuvash republic 6 9 over the experience of Ulyanovsk region.” However, Alexander Krasnodar territory 7 7 Smekalin believes that “one cannot always be the first — it dulls Vladimir region 8 18 vigilance and does not provide an incentive for development.” He also noted that “investors see what is there in reality, the more Khanty-Mansiysk autonomous area 9 12 so because for the last year, by which the rating was measured, Moscow 10 13 a record level of investment has been reached, when in other Ulyanovsk region 11 5 regions there was a recession.” Co-chairman of the board of Russian association of industrial Tomsk region 12 23 parks Maxim Pazdnikov agrees with him, noting that “the re- Oryol region 13 27 gions that first began to actively implement solutions to improve Chechen republic 14 17 the investment climate, of course, held leadership in the first Kirov region 15 25 rankings. But over time the others began to catch up, also by imitating solutions of the leaders. Therefore the number of lead- Lipetsk region 16 34 ers will grow, but the gap between regions in the leading group Republic of Mordovia 17 24 also essentially decreases, they are regions of approximately the Yamalo-Nenets autonomous area 18 16 same level of investment development. Since in the business community, especially abroad, Ulyanovsk region is seen as one Tambov region 19 4 of the most investment-attractive regions of Russia, with clear Republic of Bashkortostan 20 40 platforms and rules, to be in the top twenty of the strongest is an The data of the Agency for strategic initiatives indicator of long-term efficient work,” said the expert. 14 Open Region Experts round table X-zero industry: from whence we go, and where to Photo by Sergey Titov Sergey by Photo

The demand for highly qualified personnel continues to increase every year. In a laboratory of Ulyanovsk instrument manufacturing design bureau.

It so happened that after 1991 science cal revolution or transition to the sixth speed just to stay in the same place, but and industry in Russia have drifted apart. technological order, where the driving in order to get somewhere else you must There was no money for science. During the force of development is no longer water, run twice as fast.” period of frenzied inflation the industries steam, electricity, or microelectronics, but In December, 2014 Russian president had no opportunity for R & D. The failure knowledge, nano-, bio-, and information Vladimir Putin announced the project of lasted for two decades, in the course of technologies. Whatever the transition national technology initiative (NTI) one which staff, competencies, and develop- is named, Russia should pass it without of the priorities of state policy. Since then ments have been lost. During this time remaining at the outskirts of technology, the regions have repeatedly stated the need other countries have stepped into new at least because due to its severe climate for technological breakthrough. To what technologies. and vast areas the life –sustaining activity extent is it possible? Will we be able to fill Today the world is talking about tran- expenses of the country are a far cry from the gap? In which areas? How to do it and sition to a new stage, called Industry 4.0: other countries, and therefore they require which way to move? There are no absolute Internet of things (when devices and new efficient technologies. The task is to answers. At this virtual roundtable the embedded sensors are themselves ex- fill the gap, which is extremely difficult in experts will express their opinions. Even changing information about their con- today’s rapidly developing world, because, if they do not help to find the answers, at dition, quality, composition, route, etc.). in the words of writer and mathematician least it will allow to evaluate the depth of Others call the situation a technologi- Lewis Carroll, “it is necessary to run at top the problem. October, 2016 15 Experts round table Photo by Sergey Titov

Russian companies are to overcome an enormous stage of transition from old machines to industrial robots. And they will hardly manage it without western and eastern partners.

— Science and industry in Russia, alas, and companies are buying ready-made western and in the sectors that are growing rapidly it is have separated since the 90s … Where may be technologies. To break this situation we need possible to develop. For example, in production points of their intersection today? complicated unidirectional steps. First — to force of a robotomobile. Russian companies to compete on the global We are looking for new markets. The markets DMITRY BARANOV, market, because development at the expense that are promising for Russia are named within leading expert of domestic market is almost impossible. Sec- national technology initiative, but the general of Finam Management ond — companies need to become consumers sense is that we need to bet exactly on such in- company: of Russian technologies. This requires a class dustries which will develop: the Internet industry, of players: system integrators, engineering noosoft, lifestyle, biotechnologies. companies, which will create complex products from scattered technology solutions. In — Is it possible to jump over a missed most industries they only begin to appear, and step, to integrate into global industry and to the common goal is to promote integration begin creating something our own at a new — I believe that almost any scientific develop- process. Third — to make Russian science and technological level? Is it possible in economic ment can be commercialized. The only question is, technological developments more susceptible isolation? in what form, what resources are required, how to global market trends. long it will take, how much money it can bring. Evgeny Kuznetsov: In my opinion, the main problem is poor state of — What should be the new principles of — To jump over stages is not only possible, science and industry itself. collecting new industry on the devastated but necessary. All countries that catch up mod- field? ernization always jump over some stage, it is EVGENY inevitable. It is necessary to do, to try to create KUZNETSOV, Dmitry Baranov: such industries in which we are already hopelessly chairman of the board — It is hardly necessary to undertake all at behind. It makes more sense to implement them of the Russian venture once. It is more logical to find areas with good through global cooperation. Of course, techno- company: results and to move in them, manufacturing logical revolution in conditions of international products, and to invest obtained money into isolation is extremely complex, but we are not search for answers to other challenges that will at all in isolation. There are certain barriers with enable to solve the problem as a whole. Clearly, several countries, but there are also a number this will require extensive preparatory work, but of countries, including dynamically developing — The industry has ceased to be effective it is possible to achieve social consensus. and definitive future champions, who are very customer of scientific research because it op- interested in cooperation with us. For example, erates outside the area of active competition, Evgeny Kuznetsov: China, India, South Korea, Brazil. We need to create especially large state-owned companies. Most — First of all new industry must be created open economy in context of global cooperation. part of Russian industry develops comfortably in most dynamic sectors. It is useless, and it is by importing existing technologies from abroad, impossible to create an effective company in an — A technological leap requires consid- so in majority of large Russian companies skills industry that is already globally developed. Say, erable investment. Who should invest, state of creating their own technology have been it is very difficult to be competitive in the niche of or business? And in what it is necessary to lost. Russian developments go to the West, modern car production. But in emerging markets invest in the first place? 16 Open Region Experts round table

decline, and technological projects will be one of SERGEY LOZINSKY, the few methods of financial management on the partner of Strategy public, private, and even on personal level. Not Partners Group: You have to run as fast only state but also private investors will need to as you can just to stay think about how to come into technology market. “ in the same place, but in Everyone needs to understand that in the era of technological revolution you either move order to get somewhere ahead of schedule or lose. If we all do not move else you must run twice ahead consolidated, we all will lose. The state has a leading position, it must give a lead, must — I believe that much depends on the regions. as fast invest and facilitate investment for investors, An example of the Tomsk region shows very well both large and small. But private investment, that even in conditions of budgetary constraints Lewis Carroll, of course, forms the main mass. This occurs a region can achieve significant progress in “Through ”the Looking-Glass, worldwide. Population and private companies technological development. In just a few years, and What Alice Found There” in general have more money than the state, and from 2005 to 2009, in this regard the region has this source must become the basic one. become undisputed and recognized leader among Russian regions. Of course, it is a case of a region — What is the role of regional authorities with high potential for innovation, but Ulyanovsk in transition to knowledge economy? region also has enough potential to become Dmitry Baranov: one of Russia’s leading technological regions. — Given the size of the problem, the state Dmitry Baranov: The task of the regional government here is to must become a key investor. The purpose of — Regional authorities, of course, can begin involve, coordinate, direct, inspire, and to look business is profit, and technological break- to solve the problem at their level, but they will for opportunities, and nobody but the regional through will require very large investments, not succeed in making it alone. Support is needed government can do this, both in Russia and in which will not return soon. If the investor is the on the legislative, executive, and judicial levels, other countries: almost everywhere technological state, it will be able to synchronize solution of and federal center can help in this, becoming a development depends very much on the degree the problem with development of the regions, coordinator. of initiative, creativity and activity of regional and that will benefit social and economic situ- Evgeny Kuznetsov: authorities. We can observe a similar example in ation in the country. Finally, the situation is so — The mission of regions is to make their attraction of investments to Ulyanovsk region: the complex, and the problem is so great, that it is territories most competitive and attractive region is seriously ahead of its more developed unlikely that anyone except the state can find for new technologies, new companies and en- and wealthier neighbors due to greater activity, necessary funds for it. trepreneurs, for new industries. And business persistence, and right priorities. competition is, above all, the competition of Evgeny Kuznetsov: those regions which provide a full cycle, from — Do the interests and priorities of in- — Everyone will have to invest, it is an ob- training the best human resources and entre- vestors in choosing the region change in the jective economic necessity. Economic return on preneurs to favorable privileges in taxes and knowledge economy? What becomes most most of former types of investments will start to technological cycles. attractive factors for them: just the same

The degree of import dependence of industries, in %

100 92 87 88,4 90 81 82 80 72,5 73 70 60 60 55 56 60 48,5 44 50 40 24 24 25,5 30 19,7 20 9,7 10 10 0

Chemical industryMetallurgy industry buildingHelicopter industry industry industry Automobile Shipbuilding Oil and gas construction Forest products PharmaceuticalMedical industry Power engineeringTransport machine machine building EngineeringMachine-tool for food Aircra industry construction Radioelectronic industry Consumer goods industry Heavy engineering industry and processing industries Road construction, municipal, and land aerodrome Agriculturalindustries engineeringindustry

Data from RF Ministry of industry year 2013

2015

October, 2016 2020 17 Experts round table 0 5 10 15 20 25 World Russia

Annual supply of industrial robots to Russia, units

1303 1400 (forecast)

1200

1000 803 800

600 447 400 270 292 223 233 167 200 50 44 0 year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2016 The data of the World Robotics

Everyone should which is robotic, intelligent, flexible, and adaptable. This means that cheap human capital is a poor understand that in the era competitive advantage. The main thing is just the “ of technological revolution presence of highly qualified advanced engineers and developers in the region, who can work with you either move ahead, flexible robotic lines. Industrial zone cannot devel- or you lose op if nearby there is no good technical university, Photo by Pavel Shalagin Pavel by Photo good school that trains professionals with most advanced technological skills. Evgeny Kuznetsov,” chairman of the Russian — In which sectors there are prospects of venture company high-tech development in Ulyanovsk region? Sergey Lozinsky: with the presence of a high-quality university and a — Virtually in everyone, from industry to the benefits and low cost of labor? Trained per- good technological platform. Competitive economic sphere of personal development. It is only impor- sonnel, human capital? environment, social environment, and taxes are tant to use the opportunities properly. However, important. Investor will go where he will have the in some of them, such as automotive industry or Sergey Lozinsky: best conditions on the whole range of parameters. nuclear energy, a lot depends on the federal level — An important component is human capital. decisions, and the region has few opportunities It is necessary to use correctly the opportunities — What must change today in indus- for action. It is necessary to understand that of each high school, to support and mobilize trial parks, created in the regions, in order technological development will be based primarily them to work actively with businesses. It is also to attract investors with the help of ready on activities of entrepreneurs in technological important to foresee and create new directions, infrastructure? field, and to a lesser degree on activity of large as it is done in Ulyanovsk state university in the industrial enterprises. Although we hope that in medical theme. It is necessary to establish a Evgeny Kuznetsov: future the situation will change, and the main new system of promoting effective employment — I think that, above all, industrial parks should factor in introduction of new technologies will be from vocational guidance system in schools be designed and built directly for new economy, exactly the activity of large industrial enterprises. and further throughout all the working life to formation of new generation of employment centers; to predict changes in the field of general and vocational education, which will take place The market of smart devices in Russia and in the world, billion pieces under the influence of new technological revolution. Probably the model of resource centers year 3 will spread not only in primary and secondary 2013 vocational education, but also in school. 0,049

4,9 Evgeny Kuznetsov: 2015 — Yes, you can invest in the knowledge economy 0,075 in the region, which has all the necessary breadth of competencies in the field of modern development. 25 2020 This is not only a technological development of (forecast) 0,093 the region and the level of human capital. It is also logistics, global involvement. For example, the 0 5 10 15 20 25 number of international flights to world’s major World Russia economic regions is an important indicator, along Data from Gartner, J'son & Partners Consulting

1400

1200

1000

800

600

400

200

0 year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2016 18 Open Region Advance To take a look beyond the horizon Ulyanovsk region has started to develop national technology initiative projects Photo by Sergey Titov Sergey by Photo

Ulyanovsk nanocenter is already engaged in personal energetics matter

VICTORIA CHERNYSHOVA is already defined. “NTI cannot be made Other groups are SafeNet (new personal by bureaucratic methods. No magic will security systems, protection against cyber Ulyanovsk region has become one of the happen. All our experience shows that the attacks) and FinNet (decentralized financial first regions which risked to join the ambi- result is possible when there is a network systems); working on them is about to begin tious project, National technological initi- of bright leaders, and each of them does his in the region. ative (NTI). Decision was quite daring; the part of work,” says Dmitry Peskov, the ASI “We are already actively working on creat- region must literally unite the best brains: head of the young professionals direction. ing NTI model. A Russian venture company, scientists, teachers, business people, and to Have we found such leaders? which is the engine of this direction, has create its own model of NTI. This is a job for established a design office that has united the future, and, moreover, remote future: Energetics with intellect working groups on each of the markets being the participants of the project will have to Markets are a major component of NTI developed. We went along the same scheme. determine what will be in demand on the matrix parts. Currently nine areas are For the first time we began to look beyond the world market in 20 years, by 2035, and to defined, on five of them working groups horizon of 20 years. The main thing is that start outstripping movement already now, were set up in Ulyanovsk region. They are: all this comes not from bureaucracy but from to determine projects that, being supported EnergyNet (market of hardware, software, business and science,” says Sergei Galant, today, will give the chance to make a huge engineering and maintenance services for the head of ANO (autonomous nonprofit or- leap tomorrow. intellectual energetics), AeroNet (unmanned ganization) Agency of advanced initiatives, But before you make a breakthrough, it aircraft systems and their services), FoodNet technologies, projects, which is in charge of is necessary to determine the philosophy of (production and sale of nutrients, foods, and NTI at the regional level. movement. Agency for strategic initiatives related IT-solutions), HealthNet (personal- Today one of the most developed areas of (ASI), the main project ideologist, helps ized services and medicaments), NeuroNet NTI in Ulyanovsk region is EnergyNet. Head the region in this. An important emphasis (man-machine communications). of the working group Sergey Chikin says that October, 2016 19 Advance

10 Ulyanovsk projects will be recommended instrument design bureau: monitoring mandatory certification of drones weighing for inclusion in the federal roadmap. of the state of health of patients suffering up to 30 kilograms. This is one of the most “Ulyanovsk region has strong positions from cardiovascular diseases. Previously well advanced areas of NTI, what is quite in the field of energy-saving and energy-ef- the patient received a device, whose data expected from the region having strong ficient technologies. One of the NTI pilot were transferred to local hospital network. competence in aircraft industry. In the projects is construction of a wholesale wind The prospect is development of a mobile list of projects there are development of farm (Fortum energy company — OR). For application, thanks to which the sensors multicopters with central hydraulic drive farmers some solutions for creating local that collect biometric data will be able of no screw propellers, software for drones biogas energy complexes are considered. On to predict patient’s condition before an control, and a “feedback” technology, An- the basis of Ulyanovsk nanocenter hydro- infarct or an apoplexy and automatically tiDron complex, which will protect an gen storage systems are designed that will call a doctor if an urgent need arises (eg., area from access denied aircraft; it is also give impetus to development of hydrogen myocardial), and so on. planned to build a testing ground for drones energy,” explains Mr. Chikin. “Our strength is information technolo- (topic continued at p. 42). Working group members offer to use gies and mathematics, minus is that there It is expected to conduct work under experience of other regions in development are no synchronously developed biotech- AeroNet project in a technology company, of “smart energy,” in particular, of the Len- nologies and neuro research. Therefore which will bring together the resources of ingrad region, where there is a pilot project we need partners from other regions and, Ulyanovsk leading universities, of nano- to create “smart grids” (several regional possibly, countries,” sums up the head of center and center of cluster development, electric power stations are combined by a the working group. of aviation industry enterprises, and of unified management and control system). software developers. In SEPZ Ulyanovsk grids are just formed, Without regulations and therefore long-term energy solutions Many NTI areas require changes in After the start could be implemented there. current legislation, introduction of new Work on the projects of the National Another example of innovative approach rules and regulations. “The use of cell prod- technological initiative is just beginning. on a separately taken territory is private uct, which is used to treat burns, complex According to Sergei Galant, in the near industrial park Dega, where it is planned wounds, and trophic ulcers is still not regu- future creating of NTI fund at the regional to build gas piston plants, to create their lated. Health facilities operate at their own level will be discussed. “It will be logical if own gas generation center. risk. The newest technologies in medicine the vertical will be built from top to bot- “One of nanocenter residents is working are in demand, but so far there are difficul- tom, long-term projects support should be on personal energetics: creating portable ties with financing of their promotion in conducted at all levels. The main thing is chargers that will make a person independ- the market: it is necessary to go a long way, that beginning has been made, the start ent of outlets. In terms of customer service connected with testing and paperwork,” is given. How and where do we go next cooperation with Kiwi and Megaphone said the head of the HealthNet working depends entirely on us,” says Mr. Gallant. companies it is possible to introduce new group Elena Antonova. What could be there behind the twenty electricity metering systems, energy man- But there is legislative progress in im- years’ horizon is not visible yet. But if you agement, options of energy consumption plementing AeroNet projects: for example, walk quickly to it, new horizons will open analysis, and so on. All projects will be the state Duma has recently abolished to you. Perhaps sooner than to the others. combined in a cluster fund, which will attract assets both from businesses and from NTI. In 2016 the total amount of funding for The ability to create their own robotic complexes is very fine, but the participants of STI projects projects related to energy will be 4 billion believe that in order to develop it is necessary to be in demand on the world market, and this requires unique designs, which are not available in the west. rubles, while in general to 2035 — up to 45 billion rubles,” says Sergey Chikin. In search of partners Today several areas of NTI as if have descended from the pages of science fiction books. NeuroNet market is associated with development of brain-computer interfac- es. “The problem is that first helmets and virtual reality systems that have appeared should not create the illusion that we really understand how the brain works, and we can only give birth to start-ups. But it is this particular market that has to show explosive growth by 2035,” says the head of NeuroNet working group Nadezhda Yarushkina. For most NeuroNet directions there are no own capacities in Ulyanovsk region (this applies to neuro communications, neuro education, neuro entertainment and sports, neuro assistants). But Ulyanovsk people can offer their projects in the health sector. As Ms. Yarushkina says, an upgrade can be made of a promising joint project of the technical University and the Ulyanovsk Photo by Pavel Shalagin 20 Open Region Aviation 2.0 To fly over the missed stage Ulyanovsk aviacluster introduces new technologies Photo by Sergey Titov Sergey by Photo

For Aviastar-SP deeply modernized Il-76MD-90A was the first production aircraft built “on the digit” (fully digitized engineering documentation)

MICHAEL ZEMLYANOV the proportion of composite materials in passenger aircraft were built in the coun- its construction reached six percent, an try, in 2004 there was only one (data from Soviet transport planes three times unprecedented figure for those days. “The Strategy Partners Group report). During became a sensation of the famous air show case was a sensation!” said Ruslan chief the missed years Western competitors in Le Bourget. In 1965 imagination of the designer Victor Tolmachev. have already moved to new technological participants was stuck by the world’s first However, not all was the best, and avi- levels: the proportion of composite mate- wide-body aircraft AN‑22 Antey, in 1985 by onics, as designers told ironically, was “the rials in the design of Boeing‑787 and A‑350 AN‑124 Ruslan, mass-produced in Ulyano- heaviest avionics in the world” at that time. has reached 50 %, the digital revolution vsk; finally in 1989 by AN‑225 Mriya with Such, quite contrasting, was domestic civil has led to a new (sixth) technological space shuttle on the external suspension. “aviation 1.0.” Nevertheless, in the world mode. “In avionics we have lagged behind They admired experts not only by their size aviation market it was a notable player: industry leaders forever, in aircraft en- and flight performance, but also by inno- every fifth airliner on the planet was a gines — for 25–30 years, in airframe — for vative technologies. For example, AN‑124 Soviet one. 10–15 years,” considers Infomost Consult- was able to “crouch” under load, possessed Reforms of the 90s became tragic for ing CEO Boris Rybak. But, according to “eternal” cargo floor made of titanium, and Russian aircraft industry: if in 1990 63 him, much more dangerous for aircraft October, 2016 21 Aviation 2.0

industry prospects are yesterday’s business management technologies, as well as Production of civilian commercial passenger airliners in Russia shortage of qualified and motivated staff, in 1990-2012, items “caused by 20 years of miserable existence of industry and loss of a whole generation 80 75 of aviators.” 70 63 Daniil Martynenko, CEO of Ulyanovsk 60 instrumentation design bureau (UIDB 60 58 develops and produces avionics, including 50 aircraft flight control and navigation sys- 40 tems, information management systems), 30 23 14 is ready to argue with the expert. He notes 20 7 9 8 9 9 6 7 7 4 5 6 5 5 that “on MS‑21 plane there are UIDB prod- 10 3 4 1 ucts along with the products of the world’s 0 11 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 1 1 1 largest manufacturers of avionics, and 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 0 0 0 they compete and solve problems jointly 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 with them.” According to him, in spite of Data from the RF Ministry of industry and trade technological failure of the 90s, today a lot of products are developed and produced by the company, their characteristics are at 3–5 years there will be a few thousands According to the Aviaport industry agen- the level of western avionics. UIDB, for ex- a year.” He believes that the reason that cy head of analytical service Oleg Panteleyev, ample, has started production of the most helped to reduce the technological gap in order to restart the aircraft industry the modern strapdown inertial navigation was that the company has retained the UAC transition to a new industrial model systems (SINS) for aircraft of the fourth old staff of experienced developers and is required: each member company must and fifth generations, by parameters they managed to attract new ones. “And what have an individual specialization, and in are not inferior to foreign analogs, and “if contributed to this was state support, crucial technological areas competence a few years ago annual shipments were presence of large orders, and the situation centers should be created. “This is where measured by dozens of pieces, this year itself with import substitution, it worked we must start competing for a place under there are already hundreds, and in the next in our favor,” says CEO. the sun on the world market, while in fact until now each of our plants was aviation industry in miniature: every plant had its own forging, metallurgy, machining, and Ulyanovsk aviacluster programs today belong to three different other production. This leads to fabulous dis- technological modes. Maintaining airworthiness of An-124 sipation of resources on purchase of modern equipment and does not contribute to high “ is lofting template method, fading into oblivion, the fuselage product quality,” believes the analyst. panels for MS-21 is modern production, and the black However, the UAC now seems to move wing, manufactured by AeroComposite-Ulyanovsk plant, precisely on this route: one of the first centers of competence established by it is indisputably the world level. is AeroComposite with the most modern plant in Ulyanovsk. Its design capacity is 100 composite wings per year (central Oleg Panteleyev, head of Aviaport agency” analytical services planes plus 200 one-piece consoles) for MS‑21. Japanese experts, who visited the company, admitted that Ulyanovsk black wing was more advanced than the wing of Dreamliner Boeing‑787. And the Japa- nese can be trusted: they are the leaders, producing the strongest carbon fiber for composites in the world. Aviastar-SP aircraft building plant (core of the region aviacluster) tries to make up for lost time. According to company managing director Andrey Kapustin, it is possible to enter the competitive level, leaping over lost evolutionary stages of technological development, “although it would be very difficult. We are strong in the fact that we have preserved both

Despite technological failure of the 90s, today a number of products developed and produced in Ulyanovsk instrument manufacturing design bureau are at the level of western avionics by their

Photo by Sergey Titov characteristics. 22 Open Region

Aviastar-SP managing director Andrei Kapustin is sure that it is quite real to enter the competitive level by jumping over the missed stage of technological development

is an understanding that competences can be applied in practice not only for MS‑21, but also in other large programs,”

Photo by Sergey Titov Sergey by Photo says the head of the analytical service of Aviaport. According to him, the key role in this process all the same belongs to the state. “There is no use in pouring hundred barrels of water in the middle of the de- sert and trying to grow something there. It is better to grow in an oasis, and the industrial base and highly qualified spe- machinery, “for the time being imported, state’s task is to create this oasis. In this cialists. The problem was to bring them but the russian already appears, too.” In situation it means formation of favorable back to aircraft industry, which, in my the near future additive technologies are conditions for financing in the form of opinion, is almost done,” said the director. to be introduced (industrial 3D-printers). an adequate rate of interest on loans, as He notes that Aviastar-SP has completely “Now this issue is being actively studied well as stimulating demand for planes, switched to digital design documenta- by specialists of the plant together with including through government orders. tion on MS‑21 and on deeply modernized Ulyanovsk university and technical uni- And we can ourselves create high-tech Il‑76MD‑90A, reducing costs, improving versity scientists.” The plant’s management industries and bring forth breakthrough quality; now preparation is going on for is beginning to change former system of ideas,” says the expert. transferring all technical documentation aircraft manufacturing, when almost the into digital form. In addition, according to entire production cycle was concluded in the director, the factory introduces a new the walls of one enterprise, and is ready to The main technological challenges automated industrial management system give certain complex works to outsourc- (single production resource management ing. Mr. Kapustin notes that “the former by Oleg Panteleyev system), developed in collaboration with natural economy was inappropriate and programmers of Ulyanovsk university inefficient, and today Aviastar already has Production of a wide range and technical university (implementa- a lot of competitive offers on certain items.” 1 of components made of composite tion in 2017). “What is important about According to Mr. Panteleyev, it is possi- materials that require minimal further it is not only an increase in effectiveness ble to fly over the missed stage of techno- processing and reduce the amount and efficiency, but also provision of relia- logical development, “but only on condi- of assembly operations. ble information about all manufacturing tion of participation in really high series Mastering revolutionary additive processes, basing on which it is possible to programs. Today it makes sense to bring technologies. take right management decisions quickly the latest technological solutions into 2 enough,” says the director. In addition, production only if there is a long-playing Introduction of information according to him, the company is almost program, and with a large serial capacity. 3 technologies, penetrating the entire completely rearming, moving to modern The example is Aerocomposite, which is in product life cycle, from design digital high precision and productivity no way inferior to global companies. There to disposal.

OPINION In AeroComposite Ulyanovsk they produce a black wing with the help of imported robotized complexes, but using russian know-how.

“In domestic market of composites now the time is most favorable for import substitution. We have a number of domestic companies capable of creating medium durable prepregs, but domestic manufacturers are not yet able to replace high durable prepregs… The problem is partially solved by production companies from the US and Europe, localized on the territory of Russia. They enable domestic companies to produce high-quality carbon fiber.”

Anatoly Gaydansky,

AeroComposite CEO Ulyanovsk AeroComposite by Photo October, 2016 23 Авиация 2.0 Photo by Anastasya Stolbova by Photo

Chinese horoscope

The government of the Ulyanovsk region, continuing to cooperate with west european investors, at the same time responds to changes in federal policy and pays active attention to China. Chinese partners are attracted by the volume of russian domestic market, transit capacity of the country, and tax preferences, but they are alarmed by insufficient guarantees for investors, the order of execution of law enforcement practices, and existing public opinion.

VADIM PILYUKOV Also Sergey Morozov and the According to research by Er- be ensured by maintenance of board of shareholders of Anhui nst & Young, carried out in June, law enforcement practices and “China is one of the oldest Conch company group Ltd dep- 2015, 91 % of large Chinese com- their transparency; consistent and most important partners uty chairman Van Tszyanchao panies assess Russian market as and flexible position of the tax for the Ulyanovsk region: the signed an investment agree- attractive for their business. 66 % and legal authorities in relation third largest by trade turnover ment on construction a cement of Chinese investors are attract- to a foreign investor; ensuring and the second by import vol- production plant with capacity ed by Russia’s natural resourc- responsible dialogue with gov- ume. At the same time foreign of 5 thousand tons of cement es, and 62 % by the amount of ernment at different levels; trade turnover of Ulyanovsk a day in Terengulsky district. internal Russian market. Most improvement of legislation in region with China in the past The volume of investment is Chinese companies have specific terms of tax and legal benefits. six years has grown almost 500 million rubles. The third plans for investment projects in “The main risk for сhinese six times,” said the head of party of the agreement was Ul- Russia: 61 % of the poll partic- investors in Russia is still the the region Sergey Morozov yanovsk region development ipants are going to implement risk of misunderstanding,” on July 19 at the meeting of corporation (URDC). them in the next five years, and believes Mr Smekalin. “In the the RF cooperation council of “We have been conducting 21 % during 2016. At the same regional government and in VFD regions and the upper and maximum substantive negotia- time сhinese companies most URDC we seek to minimize middle reaches of the Yangtze tions with the Conch company often (39 %) named the execution it, without imposing our own River in China (“Volga-Yang- for over a year already. All this of law enforcement practices conditions on eastern partners, tze” format). time we were fixing all, even as obstacles to investment in but trying to work out the rules Within the forum two in- most delicate moments,” said Russia. And among the repre- together and accurately carry- vestment projects acquired offi- the first deputy chairman of the sentatives of big businesses 71 % ing them out ourselves: to build cial status. The project of Wang Ulyanovsk region government speak about this problem. Com- actual partnership which is Shen food company provides for Alexander Smekalin. “The Chi- panies that are already present based on trust. Everything else construction of enterprises for nese are long and scrupulous on the market note the impact is accompanying items that can flour processing and producing negotiators. It is the fact that of deteriorating macroeconomic be found in other regions.” lysine in one of the rural areas of must be taken into account, situation in Russia (63 %) and For China the priority in the region with an investment because they mind much more insufficient guarantees for сhi- relations with Russia is imple- of “more than 1.5 billion rubles.” distant horizons than we do.” nese investors (59 %) which can mentation of trade and infra- 24 Open Region Overseas interest

structure project “Silk Road of display, digital monitor and XXI century” (supply of chi- other medical equipment. At Direct investment of China and Russia, $ million nese products to Europe via the second stage it is planned 10 000 8940 the Trans-Siberian road). The to expand production capaci- 8380 Ulyanovsk region government ties, and at the third — to build 8 000 sees this as a great opportuni- an R & D center of technolo- Chinese investments into Russia Russian investments into China ty for cooperation, bearing in gies for production of medical 6 000 mind the Ulyanovsk special equipment. 4080 economic port zone (SEPZ). On If generally the scope of 4 000 June 10 Golden Mountain com- Chinese investment in Rus- pany from China, one of four sia is development of mineral 2 000 660 other investors, was approved resources, their transporta- 470 438 240 410 594 303 by the expert council of the RF tion, construction and wood- 0 869 947 Ministry of economic develop- working, the Eastern partners’ 67 62 60 32 35 31 30 22 ment to conduct activities in preferences in the Ulyanovsk год 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 special economic port zone in region look different. The re- Data from Chinese Ministry of commerce the region. The Chinese resi- gion already has both positive dent intends to open in SEPZ a and negative experience in im- region despite its low transport sian direct investment fund, distribution center of chinese plementation of Chinese in- accessibility and lack of large thereby reducing their political goods: building materials, tools vestments. For instance, a pro- deposits of oil and gas. This dis- and regional risks,” he said. Giv- and equipment, computer and ject was realized jointly with advantage is negated by plenty en the foreign policy factors, the office equipment, electron- Ulyanovskcement to build a of advantages in the form of expert believes the prospects of ics and domestic appliances, new plant for production of tax exemptions for production Ulyanovsk region cooperation and business, especially in with China to be iridescent. On our SEZ Ulyanovsk,” considers the other hand, the interlocu- Mr. Smekalin. “It is obvious tor does not see the existence In Uber we were told one phrase, that that our market is of interest of competition of western and competition from the Chinese has reached for the Chinese, but there are eastern investors, and is not some concerns, in particular, inclined to see the tendency “ such an extent that it seems to us that if we about existing stereotypes of for replacement of western wake up this morning with a very interesting the Russians in attitude to chi- technologies by the chinese new idea about new products, then in the nese products. Therefore, the ones. “In the current globalized solution to enter the market at world economy there are almost afternoon, when we are going to meet to first, “to feel” it seems reason- no large national companies discuss this, Chinese people are already able. Because the risk of loss if any longer, everywhere foreign the market does not accept the capital is present in one form or reproducing it. product really exists.” another. The same is true with An analyst at Finam invest- technologies. No country in the German Gref, at SPIEF 2016 ment holding Timur Nigmatul- world can develop its own tech- ” lin noted that chinese partners nologies in everything. There- aim to create a joint venture fore successful manufacturers with local companies in Rus- are using the best practices auto parts, with their possible cement by “dry” method; at the sia, and preferably with state from around the world, there subsequent production. At the same time, a failure was crea- participation. “Investors from are always complex solutions,” first stage the warehouse of T1 tion of production of light and China prefer to work with Rus- stressed the interlocutor. company (warehouse complex medium commercial vehicles of A class launched in SEPZ in and buses by BAW-RUS Motor April, 2016) will be used with corporation (part of AMS, the a status of free customs zone. volume of investments about Investment in the project will $ 50 million in a 50 % part- amount to 62.5 million rubles. nership shares), which is cur- At the same place a project rently undergoing bankruptcy of Chzhunnen Juania holding proceeding. According to the company to create production URDC head Sergei Vasin, clos- of medical equipment will be ing of the project was dictated realized. The volume of invest- by “purely economic reasons: ment is “at least $ 1.5 billion.” AMS had invested in another At the first stage, during one unsuccessful project, plus the and a half year, it is planned impact of the fall of Russian to build a plant for produc- car market.” tion of magnetic resonators, “Chinese business shows ultrasound devices with color great interest in the Ulyanovsk Anastasya Stolbova by Photo

The Chinese are long and rigorous negotiators. It is a fact that must be taken into account, because they mind much more distant horizons. October, 2016 25 Changing orientation The airport zone adjusts the course SEPZ Ulyanovsk will work according to new rules

Pioneer of Ulyanovsk SEPZ development, CEO of Technic ONE Muharbek Aushev seems to be satisfied by infrastructure prepared for investors in the territory of special economic port zone. At the opening of the first SEPZ enterprise, T1 resident complex. Photo by Anastasya Stolbova by Photo

Ulyanovsk special economic port zone will soon begin VICTORIA CHERNYSHOVA to work according to new rules. The federal government Without “carrots” decided to transfer powers of SEZ management to the “The reform is intended to improve efficiency of investment projects implemented regions. The decision to close those zones that were in SEPZ, to shorten time for construction of infrastructure and decision-making related found to be ineffective has given a significant impetus to further development of territories. After to revision of Russian zones development policy. signing an agreement on powers transfer, in accordance with terms of the contract, Ulyanovsk SEPZ did not get in the list, but important the region commits to achieve certain eco- adjustments were made to its development strategy. nomic and financial indicators, including amount of investment, number of jobs Emphasis will be placed on involvement of residents, created and of projects implemented. For who will be able to open high-tech (and, ideally, a RF subject it means more responsibility than getting some “carrots,” says CEO of outstripping time) productions in the region, with special economic port zone Ulyanovsk (ZEPZ on the basis of Ulyanovsk-Vostochny wages higher than the average for the region and with airport) Denis Baryshnikov. According to high level of added value. him, commitments taken by the region are 26 Open Region

Denis Baryshnikov sees the prospects of SEPZ development in cooperation with nanocenter, where new technologies are emerging

Finer and deeper But in many high-tech areas the inter-

Photo by Stolbova Anastasya nal resources of the region are not enough. Companies, forming breakthroughs in various fields, often start a project in a new location with their own team, which has necessary competence. Or they look for the right people in other regions. A vivid example is one of the UTTC residents, TestGen company, which has come to the international market this year thanks to unlikely to be performed without improv- cooperation with the iranian Institute of ing the “quality” of residents: a company DOSSIER Cell and Gene Therapy. It had to look for that can give desired effect should not only rare specialists on genetics all over Russia invest in construction of an object, but also The first start-up complex of SEPZ Ulyano- and CIS. be at the peak of scientific and technical vsk covers an area of 120 hectares, “Our task is to create the most comfort- progress. “We will have to pay particular the second will occupy 204.7 hectares. able living conditions for port zone resi- attention to industries that are seriously Currently SEZ residents are: dents, to socialize the expats who bring represented in the Ulyanovsk region. Our • T1 company (logistics center for supply new knowledge to the Ulyanovsk region. main task is to “land” such projects in SEPZ of aircraft spare parts and components, This task is related to another project in which will use existing competencies, storage of SEZ residents’ and other which we will participate, the inves- achievements, resources available here. companies’ goods, center of maintenance tors’ settlement. This is a very important At the same time their task is to predeter- services for aircraft); step forward. The practice of attracting mine the structure of employment over the • Promteh-Ulyanovsk company (serial residents to SEPZ showed that today an next 20–40 years. In the near future major factory, producing onboard cable network important advantage for the companies changes will affect a number of basic in- for aircraft); is not taxes or ready infrastructure, but dustries, aviation and automotive industry: • Volga-Dnepr Technics Ulyanovsk presence of their products’ customers or all that is connected with new materials (maintenance and repair of wide ramp suppliers on the territory, as well as staff and vehicle control systems (UAS, etc.). If and aircraft); with required qualification. Thus we set we do not bring high-tech companies to • InterAvionika company (manufacture, ourselves the important task to locate these industries, we risk falling behind repair, maintenance, modernization of human capital in the Ulyanovsk region,” greatly,” emphasizes CEO. aircraft instruments); explains Mr. Baryshnikov. According to SEZ head sees the prospect in close coop- • PC AFT company (fittings-flange tech- him, the work itself on recruitment and eration with Ulyanovsk technology transfer nologies production company, production selection of residents has become fin- center (UTTC, nanocenter), where startups and maintenance of airport and airfield er, deeper. If at the initial stage of SEPZ appear that use the latest, in a literal sense equipment); development the choice was limited by just emerging, technologies. It is already • 1A company (center for supply of avia- aviation industry (and then it was joined agreed that special economic port zone tion technical equipment). by logistics), now, in fact, there are no with industrial parks in Cherdaklinsky and Zavolzhsky areas, as well as Ulyano- vsk-Vostochny airport, will become part of the technological valley (its area is 2,000 hectares). Joining forces will enable to use UTTC residents’ competences, as well as to attract productions, relevant to selected startups, and new high-tech industrial players to the site of the Ulyanovsk SEZ. All this is expected to generate additional demand for innovation and new staff which will be prepared by local universities. Anastasya Stolbova by Photo

Promteh Ulyanovsk company found a niche that was primarily occupied by no one, but is demanded now. The company is ready to outsource manufacturing of any configuration of board electric wiring harnesses and pipelines for different types of transport, taking to assembly line the things in which earlier each company was engaged separately. October, 2016 27 Changing orientation

frames. The effectiveness of the zone work will depend on how well and quickly the missing links will be embedded into technological chains inside cluster, so that the volume of added value is fully formed in the region. In order to do this it is necessary to identify the peculiarities of a project at an early stage, and then, at the implementation stage, to emphasize and strengthen them. “We did not plan and do not plan to develop mono- industries so as not to form a one-industry town, which can be depend- ent on only one project. Emphasis will be laid on engaging technology platforms that are more viable than vertical chain of businesses that are built into manufacturing of one product, for example, an airplane or a car,” said the SEPZ head. For example, Promteh-Ulyanovsk company

(included in Promyshlennye technolo- Anastasya Stolbova by Photo gyy (Industrial Technologies) holding) forms a technological platform that will allow to produce onboard electrical wiring Further — along the vector place. According to Mr. Baryshnikov, the and piping systems (on special machines In September there was an official open- chief criteria in selection of residents for according to digital 3D-model) not only ing of SEPZ first start-up complex. In fact, the industrial park is their tax capacity, for aircraft and helicopters, but also for construction of all its infrastructure is personal income tax in the first place, ships, spacecraft, cars, and other ground completed: all the networks necessary “that is why priority is given to high-tech equipment. By the way, the company for residents are put into operation, free companies with a high level of competence has already received the expert council customs zone operates according to a tem- and, therefore, with high salaries.” approval of a business plan to expand the porary scheme. Before the end of the year it At the end of the year construction of a project. Investments are increasing from is planned to finish building SEPZ customs hangar complex for aviation activities will 240 to more than 700 million rubles, the infrastructure. begin in SEPZ. number of new jobs — up to 470 people in Construction of F category taxiway is At the last expert council in the econom- one shift. being completed: it is intended for towing ic development Ministry business plans It is with such residents that SEPZ aircraft from airport into SEPZ for repair of five new SEPZ residents were approved. management associates the zone devel- and maintenance. The scope of their work is most diverse. opment, since they correspond to the In the second quarter of 2017 the indus- Leontaridis company (Greece) will build expected requirements: they are more trial park will be commissioned, which an enterprise for production of furniture viable, effective, and fully comply with will make it possible to implement pro- and interior design items with a showroom the chosen vector: to rely on new materials jects of two dozen residents of small and (the volume of investments is 4.5 billion and technologies. medium businesses, high-tech in the first rubles). Inter Logistic Park will create a logistics center for warehousing and han- dling of palletized goods (investments are 873 million rubles), Oksiblok company will implement a project for production OLEG viable project will be met quite of aircraft emergency oxygen equipment PANTELEYEV, positively. sets for domestic aircraft manufacturers head of analytical service But it would be great for (103 million rubles), and ЦЕСТ (CEST) will of Aviaport branch agency effective operation of SEPZ if zone open a factory of LED products (70.8 million infrastructure is developed at a rubles of investments). high enough level, so that investors Finally, the Golden Mountain company would not have any questions. Much will create a chinese goods distribution “I think that transfer of powers has been done for the first start-up center in SEPZ: building materials, com- of SEPZ administration to the complex. But there is a need to de- puter and office equipment, hardware and region will simplify solution velop infrastructure of the second tools, electronics, electronic and household of issues related to residents start-up complex. Will the region appliances, auto parts, and so on. Invest- involvement. Ulyanovsk region is have these opportunities? May be it ments in the project are 62.5 million rubles. extremely focused on interaction will have to seek investors for it. “The next stage of development will with investors. Region devel- But for now I think there is an be working out the project of the second opment corporation is actively option to increase residents’ pool start-up complex: beginning to design the looking for those wishing to without additional capital invest- road which will connect SEPZ with Uly- come to the sites, including ment, the possibilities of the first anovsk — Samara highway and territories special economic zone. And any start-up complex allow it.” adjoining it. The priorities are designated, the vector is defined — we go further,” sums up Mr. Baryshnikov. 28 Open Region Proximity effect The park has started the engines of localization

Efficiency of investments depends not only on the main investor, but also on location of its suppliers, and they need their own incentives. The most important of them are markets. Photo by Sergey Titov Sergey by Photo

The main conveyor of Ulyanovsk machine tool plant is awaiting Russian suppliers

VICTORIA CHERNYSHOVA For the first time in Ulyanovsk region tal commission of RF industry and trade they started talking about establishment Ministry took the decision on this at the New attraction factor of a whole industrial park for related com- end of May, and at the investment forum Russian regions in the competition panies during implementation of a major in Sochi on September 30 a contract was for investments (not without the help of project, construction of a machine tool signed by the leaders of RF industry and the Agency for strategic initiatives which plant in Ulyanovsk (UMTP, included in trade Ministry, of regional government, spreads best practices) in recent years have DMG MORI concern). Investors, consider- of DMG Mori concern, and of UMTP. SIC gained experience and have long ago de- ing the russian market promising, did not gives the company an opportunity to ob- veloped attractive preferential packages: minimize or reduce the project during the tain the status of russian producer (which the standard list, as a rule, includes tax crisis and sanctions; on the contrary, they allows the company to participate in state breaks, land plots with utilities, and a even began to expand it, locating suppliers purchases and to work on an equal footing promise of support in overcoming all the around them. with other players in the market), at the bureaucratic barriers. However, investors same time it establishes requirements for pay attention to one more important factor, To grow for themselves production localization of machine tools in the presence of necessary suppliers in the Ulyanovsk machine tool plant (UMTP) Ulyanovsk from the current 15 % to 70 % by region, convenient in terms of logistics and is the first enterprise, working in Russia 2020, for additional volume of investments in price — quality ratio. It is even better if it in the sector of machine tool building, (750 million rubles) and expanding (twice) is possible to locate them in close proximity with which a special investment contract the plant design department so that it could to production. (SIC) was signed. The interdepartmen- address more ambitious goals. October, 2016 29

According to UMTP CEO Alexey Antipin, SIC will allow to increase the volume of production (annually up to 1,200 machines under SIC terms), which, in turn, will give impetus to development of component suppliers. However, it is not so simple to perform localization conditions. “We see a number of those wishing to produce components for our machines. But, unfortunately, as a rule we are forced to admit that a supplier is not able to produce components of desired quality because of outdated equipment and lack of qualified personnel,” says CEO. Ac- cording to him, “there are ambitious small companies, small and medium business, Photo by Sergey Titov which are quickly advancing because their Ulyanovsk machine tool plant CEO Aleksey Antipin is ready to help potential russian suppliers to reach flexible thinking allows rapid adaptation the level of DMG MORI requirements to demands for quality and delivery time.” And UMTP helps such potential russian suppliers to improve. “Our employees go to their production, if necessary, we invite suppliers to the region. “When inviting an that manufacture parts for them, and also experts from abroad, they conduct an au- anchor investor to the region we first ana- for other final integrators. This model is dit, saying what is necessary to improve, lyze a possible supply chain from our enter- more effective; the one we use, a vertically train and bring the supplier to the desired prises, and if not, then we look for options integrated scheme of aviation industry level,” said UMTP CEO. At the same time for localization of foreign companies. At enterprises, in fact, fell behind by 30 years,” machine tool builders say that the presence the same time, knowing that for suppliers says Mr Vasin. But there is some progress. of qualified personnel in the region is an the only anchor customer is not enough, So, Forsch factory will house production of important factor in deciding about locali- we try to analyze and select markets by the Czech company Trimill, which produces zation, and DMG MORI activities to support establishing links with enterprises which processing centers for Aviastar-SP plant. If development of WorldSkills movement in may be additional consumers of products the project goes, the investor will consider Ulyanovsk should also have positive effect of potential suppliers,” says Mr Vasin. He the possibility of building its own business on it in future (see. P. 39). admits that the UMTP production volume in special economic zone Ulyanovsk. One of is not sufficient to attract foreign partners, decisive factors in the choice of the region Those who were invited “and it is a minus, although there is also was its proximity to the Czech company come with their demands a plus: the enterprise is forced to place customers, which in this case acted in the Because of the lack of russian suppliers orders in russian companies, including literal sense like localization engines. the plant invites its foreign partners to the Ulyanovsk ones, to download them.” Small “The process of localization of the Uly- region. According to Mr. Antipin, “two series and lack of diversification of suppliers anovsk machine tool plant can become a companies have already given prior con- leads to a paradox: on the Ulyanovsk plant driver for component manufacturers in the sent, they are now looking for partners in Schaeffler, which produces bearings, there region, and subsequently can form them Russia, with which it would be convenient are components which can be easily made into a full-fledged cluster. Certification of to work, to which they can transfer technol- by local businesses. However, the plant or- components suppliers can take a long time, ogies;” with one of them, Czech company ders this range in Europe, since Ulyanovsk but after passing this procedure russian Hestego, they have signed an agreement manufacturers offer a higher price because producers can rely on supplying compo- to establish production of telescopic and of small volume of order; in the end it turns nents to DMG MORI foreign enterprises cabinet protections at the region territory. out that it is cheaper to bring components in Poland and Germany, as a minimum,” But a peculiarity is that potential suppli- from abroad, where production costs lower marked CG FINVAL vice president on strate- ers need to be confident that their products due to large series. gic development, deputy chairman of Rus- will be in demand from other enterprises sian union of industrialists and entrepre- also, for only a single UMTP order is not Proximity priority neurs on machine tool building Vladimir enough for a supplier’s effective work. “In In addition to machine tool industry, Smetana. At the same time he noted that future Hestego intends to produce painting other industries could serve (and already “the main risks for russian manufacturers chambers which can be used in a variety of serve) as localization engines: automotive, of components are in non-competitive industries: automotive, furniture produc- alternative energy, and aeronautics. environment on a global scale, which was tion, and so on. The possibility of diversi- The pilot project, which is implemented formed not without the help of Central fication increases stability. If we have got in Ulyanovsk region by finnish company Bank of Russia and economic bloc of the only final integrators, it is fraught with Fortum (wholesale wind farm of 35 MW) government. Funds for industry should falling economic indicators. The lower is could give a boost to localization of produc- be at the level of european ones, with the the level of suppliers, the greater is their tion of wind turbine components by their rate of about 2–4 % per annum, and fiscal ability to diversify,” says Sergey Vasin, global manufacturers (see. P. 37). and administrative burdens should be URDC head (Ulyanovsk region develop- “In aviation industry all components are considerably reduced. Only under such ment corporation, engaged in attracting manufactured within UAC, but internation- conditions it will be possible to achieve investments). It should be noted that the al experience is quite different. There are the objective of import substitution and corporation provides targeted assistance final collectors (Boeing, Airbus, Bombar- export orientation of russian industry and for anchor investors in attracting potential dier, and so on), and a variety of companies economy,” stressed the expert. 30 Open Region Direct speech Only cross-pollination! The head of the Ulyanovsk technology transfer center Andrew Redkin tells about technological revolution and evolution paths Photo by Sergey Titov

Education, life quality, and proximity should become basic factors of knowledge economy

About losses Where state control remained (for example, at The government tried to solve the problem, only it Unfortunately, science and industry in Russia the Federal space agency Roscosmos), something gave not support but crutches in the form of federal have diverged as early as in the nineties. And this was saved. Without it only some fragments survived targeted programs. But it was a surrogate customer, problem is still relevant, despite all the attempts miraculously thanks to enthusiasm of the leaders. because among officials there are no people who are of the state to solve it. Until 1990 the vector was Now these companies are called national champions. able to formulate a technological problem. As a result generally correct: the state conducted a policy And where managers were ineffective, equipment the state paid for reports and not for actual product. of building integrated added value chains on the was sold for metal scrap, design documentation And ten years of such a life gave rise to a whole layer branch principle, and in each industrial conglomer- was burned or thrown away into the garbage like of grant consumers who made not a product, but a ate there was a component of applied science, which something unnecessary. And the new business was report to be folded on a shelf. in the Soviet Union was one of the strongest in the not science intensive: people who came there were The government, realizing the situation, tried world. For example, in the field of composite fibers far from science. to select real scientists and entrepreneurs out of the Soviet Union was at the most advanced posi- At the same time a request for interaction with them, there appeared development institutions tions in the world. Technologies of the All-Russian science has disappeared. The sectors which were that began to give grants. But here again, no one research institute of polymer fibers were leading, not protected by the state, when surviving, no checked in detail what was actually being done. and around it there was a comprehensible cooper- longer formulated any order for application devel- And efficiency of such a system was in the range of ation of enterprises. But the reserve created at that opment, and new businessmen could not formulate 1–5 %. The format “to give money” is working in the time was wrecked later, and, in spite of theoretical it, because they were far from it. At the same time developed entrepreneurial society, but, alas, not at existence of technology, today modern fibers for there was a mass exodus of talented engineers us. And another ten years went away. aircraft construction are not produced in Russia, we and scientists. Someone went to Israel, someone As a result, for over 25 years the industry was have to buy them from other countries. to the States, someone to the market to sell clothes. disaccustomed to order application developments. October, 2016 31 Direct speech

new practice-oriented model at several places, to change some training processes at others, and on the basis of former palaces of pioneers we should create a new type of activity of local circles type, with modern technological environment: only it will attract children. And also formation of a strong university. I would give any resources in order to create a strong university in the region. In any

Photo by Sergey Titov Sergey by Photo possible way: mergers, acquisition, invitations, creating branches … But if a strong university does not appear, in 10 years the region will become an outsider, all investments which are being made will not be justified. Because the main thing for the economy of knowledge is human capital. For now The way out is in uniting science, education, and technological etrepreneurship under one roof. At the opening of the Ulyanovsk center of technology transfer strong, talented young people, graduating from school, go to study to Moscow or St. Petersburg, and are unlikely to return. They would stay here if here is a good strong university. But it requires a And we have to admit that, for example, in micro- evening over a beer or at lunch in a cafe, and then different budget, different approach, other staff, electronics Russia lags behind for five technology at some point a director, through communication, other professors. First and foremost, the rectors generations. will find necessary options for interaction himself. have to stop thinking that they are fine. Today the grown up rich companies start to And the second: within this system there must The second is the quality of life. Good specialists, glance towards R & D because there is no choice: be fair rules. Each player must have clear under- scientists must come here. They are coming even either to remain in loges and die, unable to compete, standing of benefits from this interaction. If the now, often in some way they are people with a spirit or to engage in technology. But the world market government gives money to the system, it should of adventure, keen on scientific-technological and leaders are investing in R & D up to 10 % of their only arrive to real private investment, to actual business ideas. But many of them are not satisfied revenues, in some cases even more, while russian co-financing. So far in the system of federal targeted with the quality of life. Public kindergartens are companies are not investing constantly and con- programs there are unfair rules. overcrowded, socialized medicine does not cure. tinue to increase the time lag. Roads, transport accessibility, housing … Without upgrade of education there And the third, what I have already said, is proxim- About revolution will be nothing ity, closeness. Students, professionals, researchers, Is it possible to restore connection between To speed up transition to a knowledge economy startupers, business leaders must live and work in a science and real economy? Yes. But I am an ardent we need fundamental changes. Here I agree with unified ecosystem, in a mode of constant cross-pol- opponent of any revolution. There should be no the governor: if attraction of investments used to lination, due to constant crossing of ideas. revolution, because every revolution is a setback. be the basic process of development of the region, But this evolution will not happen by itself. We And what is called a technological revolution is a now the number of such regions has increased. need a catalyst, and the catalyst for this, in my fifteen to twenty years cycle of transition from one Now a knowledge economy must become the basic opinion, should be the regional power. It has the technology package to another. process. And therein there are three main factors. ability to destroy everything if they do nothing It is understood that for the country it is now The first and the most important is education. about it, and to fix everything if they start to solve important to reduce the lag that emerged in the Without it nothing will begin. It requires a significant the problems today. To fulfill all these conditions last decades. And acceleration is possible. But there upgrade of school education. We need to build a is not that difficult, but it requires political will. must be incentives. One of them is inner motivation of renewed generation which is now being involved into a scientific environment. These people do not According to nanocenter head, valuable specialists and scientists already come to Ulyuanovsk, want to make reports any longer, they want to do but yet they are mainly adventurers, capturedby science, technology, and business ideas, while we science. need total motivation. On the photo is Comberry research lab, organized in cooperation with an american company. The key is in the right to access Not money is a factor of convergence between science and economy, but availability of communication: there should come together on one platform not only scientists and industrial players, but also entrepreneurs who decide to take the role of dealers by assuming part of the risks. They should agree, sitting at the same table, meeting in the same premises. And the best is to combine them all together physically, geographically, so that they were in five minutes vicinity from each other, to be able to communicate on equal, or nearly equal. And there already comes a new generation of applied scientists, startupers, willing to take on customer’s challenging problems. But this is not easy with today’s directors of enterprises, even I find it difficult to meet with a director: he’s a big shot… but it is necessary that these young startupers could com-

municate with a director on an equal footing in the Photo by Sergey Titov 32 Open Region

LYUBOV CHILIKOVA The future comes The essence of the project is creation on the left coast of Ulyanovsk in Zavolzhye industrial park and in special economic port zone (SEPZ) a teсhnocampus, a territory from the left coast with special investment and innovative regime, with high concentration of sites for investigation and development. Within Teсhnological valley will start from the nucleus 10–15 years over an area of 50–70 hectares it is planned to build teсhnocampus infrastructure for scientific, educational organizations, start-ups, experimental Economy gets away from dependence on hydrocarbons, productions, spin-off companies, R & D centers, technology entrepreneurs. The which, as scientists predict, will lead to significant enterprises of the industrial zone and changes in society. Regions choose for themselves SEPZ will become customers and users of intellectual property of these compa- whether they engage in innovation or will develop nies. In the next 10 years at the territory the economy of the old type. Ulyanovsk region chose of teсhnocampus it is planned to organize up to 10 thousand working places, some of the first and announced creation of an ecosystem which will be occupied by specialists and researchers from other russian regions. A of technological entrepreneurship under the project cottage settlement will be erected on the “Teсhnocampus 2.0. Big technological valley.” Volga coast for technocampus employees. October, 2016 33 Project

The Nucleus courtyard. Nucleus is situated in the heart of technocampus. It is a hub for exchange of knowledge, a place where all of its components intersect: education is connected with production and business. It includes a conference center, a hotel, a food court, a movie theater, an exhibition center, a museum of the future, shops, workshops, media space, and a digital library. These public objects form an area of social cooperation, inspire and provide creative synergy.

ability to commercialize this knowledge means the core, in this case the core of and to create new business. And then we knowledge), small companies, and large- decided to create a special area of science, scale production. education, knowledge, and business,” said According to Mr. Redkin, Ulyanovsk Ulyanovsk governor Sergei Morozov to universities may become the core of Ul- the Open Region. According to him, the yanovsk technocampus, but they require share of innovative companies in the gross deep structural changes that due to bureau- regional product in 2030 should be 20 %. cratization of high school may take a long For six months creative teams from time. Therefore a more suitable option for Denmark, Belgium, Italy, Israel, Russia, the project is to create from scratch uni- specializing on campuses and industri- versity-type facilities within technocam- al parks, were working on the project of pus, or to invite here a branch of a global technocampus. They developed the design university, which is actively engaged in of urban environment, transport logis- applied science. tics. Ulyanovsk technocampus will be Near the core there are experimental built in the industrial zone adjacent to productions, technology entrepreneurs, the building of Ulnanotech (nanocenter, the so-called startups founders or venture Ulyanovsk technology transfer center — builders; a few people are already working UTTC), which was opened three years ago. in Ulyanovsk, they “pack” developments Now it is overcrowded by residents and for sale in the market. requires expansion. Today in Ulnanotech The third part of the structure is large 60 legal entities and about 30 companies companies, R & D customers. Industrial are located which are engaged in metal perimeter for technocampus has already matrix and polymer matrix composites, formed in many ways. Over the past five thin film coatings, building coverings and years the government of the Ulyanovsk materials, genetics, early diagnostics. “The region attracted about 70 companies of new work upon commercialization of applied type with high productivity and profita- research in nanocenter has started. So far bility (Efes, Mars, Takata, Legrand, DMG on a microscopic scale in terms of the global Mori, Bridgestone, Nemak and the like). economy. But this embryo of economy has In the portfolio of the region development appeared, we must continue to work with corporation there are 90 more projects. All it, to connect the entire region here,” said new companies, as well as traditional indus- the initiator and one of the authors of the tries, will unite into a great technological project, UTTC CEO Andrey Redkin. valley. “Over time the traditional industrial Examples of such areas are Doha (Qatar), As it was planned by the authors of production will be transformed into an in- Leuven (Belgium), Cambridge (England), the project, technocampus is to develop dustrial symbiosis of the next generation, Haifa (Israel), and others. The most famous an ecosystem of technological entrepre- where some companies are using waste and is the Silicon Valley in California. All of neurship, which has arisen in nanocenter. by-products of the others in associated in- them are characterized by high labor pro- The structure of any of the technoparks is dustrial chains,” say the developers. Accord- ductivity, exponential economic growth, approximately the same and consists of ing to one of the authors of “Technocampus indirect jobs — from 3.5 to 10 auxiliary three parts: nucleus (the nucleus in Latin 2.0 project. Big technology valley,” jobs for one basic. In Russia the largest industrial parks are developed in Skolkovo, in Tatarstan (Innopolis), in Novosibirsk (Akademgorodok). Ulyanovsk became a partner of the University of Leuven, which was able to reach in 17 years the first position in continental Europe on income received from sale of start-ups and developments. “Many years ago, discussing the prospects for development of our region, we noticed that the future does not belong to Soviet economy, which we inherited, but to a new economy based on knowledge, on the

Educational technology center is an open training space Open Region region center To Dimitrovgrad To Technological Technological University Central business NUCLEUS Airport town Students` Students` School Social infrastructure Technocampus town Santor production Embankment Experimental

New town Nucleus It will be a smart city where and institutions educational public spaces will be woven landscape. urban into

Technocampus, connecting on its territory education, science, business, and production, is to become a unified communication environment, which creates a synergistic effect. The borders of the city intersect with nature. The main landscaping element is park space, which connects the bank of the Volga nucleus. Technocampus with They are linked by a green corridor, which passes through the entire city to the coast. Ulyanovsk, center Kindergarten

ULYANOVSK TECHNOLOGICAL VALLEY. TECHNOCAMPUS2.0 PROJECT Residential area, the city of Santor, will combine a wide variety of housing options: individual houses,houses, town club apartment houses, and high –rise blocks. In each part there will be kindergartensincluding and international. schools, There also will be minor shopping centers, cafes for communication, barsrestaurants, and fitness centers, spa and wellness centers. On embankment there will be a andpedestrian a small marina area for yachts and boats. Airport To Moscow To and Nizhny Novgorod October, 2016 35

As envisioned by the project authors, that is how R&D park passages should look like

Ulyanovsk SEPZ CEO Denis Baryshnikov, specialization in selected areas will allow One of the ideas of the project is to unite the technology valley will include the en- to get away from direct competition with different types of professionals in one place, tire spectrum of industry from Aviastar-SP Innopolis in Tatarstan, where they focus on to create an interdisciplinary creative en- aircraft manufacturing plant to businesses IT. Therefore Ulyanovsk will not compete vironment, where projects should boil that are located in Zavolzhye industrial area with Tatarstan, but will cooperate with it and new ideas should be born. This point and in SEPZ, as well as the nuclear cluster in various projects. By the way, Innopolis’ was taken into account by the architects. in Dimitrovgrad. “All these companies will appearance in the neighborhood of Ulyano- They came up with a huge glass covered form an economic belt of the ecosystem. all-weather street, which would host sci- They will give the demand for innovation to entific and production companies, R & Ulyanovsk technology transfer center and D centers, and educational institutions. to technocampus,” said Mr. Baryshnikov The best way to predict It also would focus small cafes, meeting to the Kommersant edition. rooms, shops. “The density of communi- “Our task is to form high-quality coop- the future is to create it cation, live connection is one of conditions erative ties between participants of the “ for development of entrepreneurial ecosys- process. We form new competences on Jean Rabi, tem,” said Ulnanotech head. technological marketing in order to in- Alcatel-Lucent chief director ” Personnel for technocampus will be crease both start-ups and industrial players on financial and legal issues trained also here. Smart School and In- in the fields and specializations required nopraktika companies have developed a for us,” he said. model of a new school, whose task is to Ulyanovsk technocampus will focus teach entrepreneurship. Not just business, on developments in the field of renewable but an understanding that the world is flex- energy, electronic health, and transport of vsk is one of the reasons why the Ulyano- ible and figurable and can be changed with the future. That’s what nanocenter deals vsk citizens undertook the technocampus their own effort. Smart School head Mark with today in one way or another. One project. Ulyanovsk is considered the place Sartan told to Open Region that starting of the latest examples is nanocenter par- with one of the strongest IT-clusters of from the middle classes pupils would solve ticipation in the project of 35 MW wind the country, and if the local IT people are real problems arising in technocampus farm, which Fortum company is going not provided with interesting work, they resident companies. At first they will be to build in 15 kilometers from the future all will go to Innopolis, the nanocenter simple, then all the more difficult. “The technocampus. Mr. Redkin believes that head is sure. school will take a problem of real life, turn

R&D park should necessarily have a green yard, where students, scientists, entrepreneurs, designers could relax and socialize in the same free manner 36 Open Region Project

Martin Hinul, an international expert in the field of business, science and investment, is sure that Ulyanovsk region with its good universities, strong IT-cluster, and unique geographical location has got a great chance for implementation of Technocampus 2.0.

this regard the example of Novosibirsk is similar to Ulyanovsk. There infrastructure is built on the same principle, so there is always a 100 percent loading of facilities. The same is in Leuven. Negotiations are underway with several companies at

Photo by Stolbova Anastasya a time, and who knows which of them will go to the the technopark in the end. “This is the meaning of flexibility. Nobody knows what will grow. The development of such things never occurs from the top down. It’s impossible. But something still can be done from the top down. Assisting the growth, creating opportunities,” said Andrey Redkin. it into an educational problem to solve, and Construction of the facilities began this The package of benefits for residents return back into real life. It will be a kind year. The global project of a technocampus is still under discussion. “We propose to of a wheel,” said Mr. Sartan. An individual and a big technology valley will be carried extend the SEPZ regime on technocampus educational route will be developed for out at public-private partnership princi- residents, discussing different models in each pupil. Thus, when leaving school, the ples, the total cost is not announced, but terms of a reduced rental rate up to free of graduates already will be integrated into judging by Innopolis, it will cost billions charge rent, accommodation at preferential university and technocampus. A young of dollars. “Close to technocampus there conditions,” noted Andrey Redkin, adding specialist may take any niche in tehno- must be a venture fund, maybe more that a final decision had not yet been taken. campus: he may become a scientist, an en- According to the project, housing for trepreneur, an engineer. “We will not force technocampus and industrial zones em- anyone to stay in Ulyanovsk, but at every ployees will be built on a plot of 147 hec- stage we must create value for them,” said It is impossible to make tares near the village of Arkhangelskoye. Mr. Sartan. According to him, there are no all the smart guys work Residential part was developed by UNK more such schools, though a lot of schools “ for you, and then you project company (Moscow). Construction teach entrepreneurship in the form of a will begin in 2017, it is planned to attract game. Besides school, educational complex need to learn to work developers to it. in technocampus will include a children’s with smart guys, both Business development director of KU technology park, a children’s technology Leuven (Catholic University of Leuven) incubator, a center of youth innovative inside and outside Martin Hinul, an international expert in creativity, a subsidiary of inter-regional of your company! the field of business, science, and invest- competence center, a technical college, ment, heads the advisory council of the higher education institutions (including Technocampus 2.0 Ulyanovsk project. He world-class university representations), Henry Chesbrough, ” has already visited Ulyanovsk twice to as well as all-universities technological author of the study the project. According to him, the incubator. Open Innovations region has a great chance to build a tech- The school building is planned to be concept nocampus, because here the geographical built by September 1, 2018. It will be de- location is unique: an hour by plane from signed for 700 pupils or more, depending on Moscow, good universities, and a strong the technocampus filling with residents. IT-cluster. “If we collect all IT-companies Mr. Redkin informed that today are than one, a seed fund. We are currently together, we will get a cumulative effect,” already prepared a master-plan of the being negotiating with several funds,” said Mr. Hinul. “You have strong aviation, entire global project that may change said Mr. Redkin. mechanical, mechatronic industries, many over time, and an architectural concept According to him, at the first stage no international companies are present here. of the first technocampus line for five funding is required, since the land in Za- And here is a nanocenter. I see an ecosys- or six buildings with a total area of 15 volzhye industrial zone is reserved for tem basis. It is not yet built, but it is being thousand square meters. In addition, an technocampus, communications are laid. built, it is growing,” the expert added. How- investment agreement is signed with Developers will build facilities for specific ever, according to Mr. Hinul, in Ulyanovsk the developer from Tatarstan, Capital companies. In general, all this large-scale universities technology transfer is poorly holding company, for construction of project, designed not for one decade, is to developed. Also, in his opinion, Ulyano- two buildings for nanocenter residents: be carried out gradually, in small steps, vsk citizens should pay more attention to an office and laboratory building of 2.5 involving cooperants inside and out. First relations with international universities, thousand square meters, and a produc- residents will be found, and then infra- for innovative economy operates on the tion and laboratory one of 1.4 thousand. structure will be supplied for them. In principle of cooperation. October, 2016 Alternative energy The wind is north-eastern, commercial

Ulyanovsk region government has undertaken development of alternative energy. It plans to not only to eliminate energy deficit in the region, but also to form a cluster with localization of equipment manufacturing, service and sales organizations.

VADIM PILYUKOV ditions of production localization are expected to be agreed on in By 2025 one-third of electric- November, 2016. ity consumption must be made According to Sergey Vasin, an from renewable sources. It was incentive for coming of the сhi- said on August 19, this year by the nese investor to the region was an regional governor Sergei Morozov agreement signed in December, during signing a memorandum 2015 with the finnish company of intentions between president Fortum to build a wind farm with and director of сhinese compa- a capacity of 35 MW in Ulyano- ny Dongfang electric corporation vsk, with a view to expanding the (DEC) Chen Jun, Ulyanovsk region project to 300–400 MW. The total development corporation (URDC) investment will amount to about CEO Sergey Vasin, and CEO of Uly- 65 million euros. Total wind farm anovsk technology transfer center site will locate 14 wind power gen- (UTTC, Ulyanovsk nanocenter) An- erating units. drey Redkin. At the beginning of December, The agreement envisages local- 2015 Fortum Corporation with its ization and provision of technical project passed the competitive se- support by DEC for creating wind lection of investment projects for turbine blades production in Uly- construction of generating facili- anovsk region. ties of renewable energy sources “The blades of modern wind (RES), conducted by the market turbines have a considerable size, Council (the regulatory agency of more than 50 meters, and in the energy sector) and has received a structure of cost of wind generator quota of 39 MW. In turn, a division they amount to 21 % (blade — 18 %, of DEC Dong Fang electric wind turning control system of blade — company Ltd (DEW) became the 3 %), so it is advisable to make them winner of the JSC Fortum (the Rus- not far from the site of future pow- sian subsidiary of Fortum) compe- er plant,” said Sergey Vasin. “Our tition for supply of equipment for company Aerocomposite-Ulyano- the Ulyanovsk wind farm. vsk has necessary production ca- “The risks of joint project re- pabilities and competencies. DEC alization are minimized due to leadership has already visited this the fact that Fortum has secured enterprise and has shown interest federal support, that is, it gets in cooperation.” As it was noted a specific resource that helps to in the regional government, final align the economy. On the other parameters of cooperation and con- hand, there are certain condi- Photo from the site www.wildlife.by 38 Open Region Alternative energy

tions for localization of production, which are to protect us already from the risk of non-realization of the project,” said the first deputy chairman of the regional government Alexander Smekalin. According to him, the wind farm “must be launched in summer of 2017.” Signing the contract of power supply, Fortum gets state support in the form of guaranteed profit of 14 % for 15 years. One of the conditions of state support is grad- ual localization of equipment production in Russia at 25 % in 2016, 40 % — in 2017, Photo by Tatiana Fadeeva 55 % — in 2018, 65 % — in the period from In August, 2016 Chen Jun, president of chinese company Dongfang, CEO of Ulyanovsk region 2019 to 2024. development corporation Sergey Vasin, and nanocenter CEO Andrey Redkin signed a memorandum Sergey Chikin, CEO of the Altren compa- of intent to cooperate on establishment of wind turbines manufacture in Ulyanovsk region. ny (UCTT subsidiary), believes that for full The Dongfang company is ready to provide technologies, to ensure localization of production value development of the Ulyanovsk project and technical support. in addition to the blades it is also possible to produce here generator shafts, composite elements of the nacelle, cooling systems, formed. “We selected plots, regulated mat- (along with Saratov) as a site for a project to covering (at Ulyanovsk plant Hempel), ters with the federal government, brought build a wind farm of 300 MW. The amount electrical components. The next stage is partners together. But the main thing is of investment is not yet known. As noted to attract a cluster of service and sales that we provide a ready wind monitoring. in the company, according to agreement companies. As noted by Andrey Redkin, Its preparation takes one to two years. Giv- achieved in February, this year, with the “European experience shows that where en the tight time frame conditions of the Ulyanovsk government, the region takes on the basic competencies of wind energy competition (of the market Council — ed.), conducting wind monitoring for power up are located, there arise additional 10–15 investors have to implement the project to 400 MW, and T plus will make “a detailed thousand jobs.” exactly in Ulyanovsk.” study of the project, starting from the issue Wholesale wind farm in Ulyanovsk Mr. Chikin added that “the estimated of investment and ending with choice of will be the first implemented project of installed capacity utilization rate (load fac- potential suppliers of equipment, among a modern wind farm in Russia. Andrey tor) is significantly higher than threshold them are regional businesses also.” At the Redkin recognizes that there are no unique of 27 %, specified in the regulations. The next stage the company will participate natural conditions in the region for this: average annual wind speed in Ulyano- in the contest for construction of wind on the results of measurements the wind vsk is about 7 m / sec. It’s a good value, power plants. energy use coefficient (WEUC) in Ulyano- allowing wind power generation projects According to Sergey Chikin, currently vsk is 33–37 % (the maximum attainable pay back in reasonable time. We can say under negotiation with wind measure- WEUC in the world is 45 %). However, an that in Ulyanovsk the wind is suitable ment company is the choice of a platform. attractive business case for investors was for wind energy, it is “commercial,” he “Wind monitoring for power up to 500 MW said. Another advantage of the Ulyanovsk will be conducted throughout the year, we region is universal presence of the Volga expect to get the result during 2017,” the Ulyanovsk machine tool plant as a transport line and ports, capable of interlocutor said. of the concern DMG MORI also decided receiving ships for loading bulky items for President of the Russian wind indus- to use wind and solar energy further transportation of wind generators try association (RWIA) Igor Bryzgunov components made here to other regions thinks that Fortum dared to be the first in and countries. creation of the first large wholesale wind It is noteworthy that initially the Russ- farm. “It’s a risk not only to reputation but ky veter (Russian wind) company from also to finances: delays in the input of the Cheboksary should have been engaged in wind farm can lead to a fine by the market Ulyanovsk wind farm, and initiator of the Council in form of 5 % of the capital costs first wind farm project development was of the project,” said the source. However, Simbirsk energy retail company, seek- with the advent of DEC to Ulyanovsk “the ing to compensate for the lack of 6 MW of project acquires real prospect of implemen- electric capacities in Zavolzhsky district tation. Blades are one of the most complex of Ulyanovsk region. In August, 2015 the and risky elements of wind turbines, their anchor customer appeared, CG Vetropark manufacture provides the largest share of Simbirsky (Simbirsky wind farm). But then localization.” According to Mr. Bryzgunov, Russky veter became an agent of Fortum, the arrival of such a large chinese inves- and Vetropark Simbirsky lost its status. tor is a serious step, which has become The reason was in the same Russian gov- a surprise for many. This will aggravate ernment requirements for localization of an emerging competition in the country components production. market of wind power, for there are other

Photo by URDC by Photo T plus company (former Volzhskaya companies that come to the russian mar- territorial generating company, a major ket, wanting to produce their components shareholder is Viktor Vekselberg’s Renova here. “Now they have to look closely to CG) is also considering Ulyanovsk region Fortum and DEC,” stressed the expert. October, 2016 39 Profi Staff decide everything Region upgrades the system of specialists training Photo by Sergey Titov

Transition to new technological order requires a large number of highly skilled workers and engineers. Masters contest on the most modern CNC machines allows not only to identify the most talented people, but also to pay attention of youth to importance of the profession.

Ulyanovsk region is fundamentally changing its LYUBOV CHILIKOVA, OLEG SEVEROV approach to the system of personnel training, Look for specialists at the test site trying to meet the needs of regional economy for In Ulyanovsk the first and the only Rus- highly qualified specialists, workers and engineers, sian interregional center of competence (ICC) is created for preparation of highly necessary for new high-tech industries. The regional qualified specialists of working trades for aviation industry and automotive compa- government develops a whole range of measures, nies. The center is created by the United including “purchase” of personnel from other regions, Aircraft Corporation (UAC) together with the RF education and science Ministry and and is confident that this will not only increase the the government of the region. As noted in the UAC, “ICC will become the largest investment attractiveness of the region, but also will base for training high quality specialists lay the foundations of economic security. in domestic aircraft industry.” 40 Open Region Профи

Creating quadrocopter`s working reau, and Aviastar-SP. It is characteristic model with his own hands is the that competing Ulyanovsk IT-companies first step of the schoolboy to high technologies. As part of the WorldSkills (IT-cluster is considered to be well-devel- championship. oped in the region), faced with a shortage of qualified personnel, have united into a single non-profit organization (IT development fund) and organized a whole system equipment test site will be manufactured of additional education of professionals at plants in Canada and the United States, (seminars, conferences, etc.), and also for cars — in Germany and France. achieved the creation of a basic depart- The region government is interested in ment at Ulyanovsk technical university, creation of ICC because it “will not only where they are themselves engaged in improve human potential of enterprises, teaching activities. but also will increase investment attrac- The government of the region intends tiveness of the region.” to expand the ICC experience in dual education (when creating ICC the UAC took Education goes to workshop the example of German dual education Ulyanovsk is rich in highly qualified personnel in machine building and electronics, but it is worth noting that today, after the staff and technological failure of Russia has one of the the nineties — two thousandth years, new high-tech enterprises increasingly need world’s highest levels highly qualified workers and engineers. “ of education and human Out of 300 billion rubles expected as the Photo by Pavel Shalagin Pavel by Photo resource capacity, especially regional GRP of 2016th an innovative share is 30 billion. “The problem now is not so in the field of natural much in the number of staff, but in their sciences. The task quality. Economy, unfortunately, or perhaps fortunately, grows more rapidly than is to create conditions personnel training system changes,” says in which young the first deputy chairman of the regional entrepreneurs and active 465 million rubles are invested in the government Alexander Smekalin. He notes project, including 300 million rubles of that under new requirements of economy and educated people subsidies from the education and science with the trend to high technologies the will not want to leave Ministry within the framework of federal education system should also adapt to this the country. programs, 150 million rubles from the situation; “it is not always possible, but regional budget, 15 million rubles from they are trying to do it.” Universities of the Aviastar-SP. ICC will prepare specialists region have already opened 44 basic chairs Jean-Philippe Plateau, professor of economics,” in aircraft and drones manufacturing and at the factories, including departments at operating, as well as in maintenance of Mars, Ulyanovsk instrument design bu- University of Namur, USA automobiles. All in all there will be seven similar centers in Russia for various industries; aviation industry will have the One must also be a master in order to solder the necessary circuit quickly and correctly only center, in Ulyanovsk. UAC director of department for staff training Lubava Shepeleva noted that “ICC task is to use modern techniques and equipment for training of young workers and to establish a year-round exchange of best practices for all UAC plants.” According to her, ICC will also be a training ground for the national team which will participate in the Interna- tional WorldSkills championship in Kazan in 2019 (in 2012 Russia joined the international WorldSkills movement which aims to identify and disseminate best practices in training of young workers). It is planned that each year about 400 people from Ul- yanovsk and from other regions of Russia will be accepted for training in ICC. The center will start working on September 1, 2017. As noted in the regional Ministry of defense, purchase of “the most advanced in the world” equipment for ICC is already underway. Educational stands for aviation Photo by Sergey Titov October, 2016 41 Profi

Kuhlman drafting units can be forgotten forever. Today aircraft industry needs constructor engineers, who will be able to create designs directly in digital 3D-format. system, where 2/3 of teaching time is spent at actual practice in the factory). “This trend is now developing and will develop further,” says Alexander Smekalin. How- ever, new modern industrial enterprises are not waiting for the education system to be reoriented, but begin to create their own resource centers (DMG MORI). But Mr. Smekalin believes that, ideally, the dual system of education must be mixed: “The government should give basic things, and business should complete education directly in the plant.” He also notes that in future new companies, joining together for a common goal, training necessary specialists, will themselves begin to create resource centers whose graduates will be demanded by their industry cluster. As an example he mentions furniture companies of the region, which, not being able to create their own training centers, have united to form a common resource center.

Apparently, regional authorities have Photo by Sergey Titov decided not to be restricted by these tools and to develop staff capacity of innovative economy through motivation to learn since childhood. In August the RF science and Russia has a brilliant however, associate professor of St. Peters- education Ministry committee approved burg Higher school of economics, manager the region application for establishment potential for growth and for of Innovative entrepreneurship center of children’s technopark. The committee “ building a great economy. Konstantin Timofeev believes that imple- is carrying out selection of RF subjects Russia has a fantastic mentation of engineers training for prom- which claim grants for projects of addition- ising high technologies will be difficult al education of children (the competition human capital. without establishing interrelationships initiator is Agency for Strategic Initiatives with large enterprises, because nowadays (ASI). Beginning from junior classes, here universities due to insufficient funding kids will get skills in the spheres of high Shiv Vikram Khemka,” even cannot afford to purchase modern technologies, physics, mathematics, design vice-chairman of SUN Group equipment. “Today technical colleges are in six directions: “auto,” “robo,” “IT,” “aero,” virtually deprived of supply with modern “nano,” and “bio.” All in all 180 million equipment for decent education. Former- rubles are allocated for the technopark ly universities often received the latest from all sources. people from the region, but, according to equipment due to implementation of the Mr. Smekalin, in order to retain talented so-called NIR (R&D) work. Now they teach How much is a pro? young people in the region not so much students on computer simulators without In addition, regional authorities are the presence of entertainment, cultural, being able to show the process alive,” notes actually going to “buy out” highly qualified leisure, and sports infrastructure is impor- Mr. Timofeev. specialists from other regions. “All the tant, (“We already have a lot of infrastruc- Nevertheless, in spite of the regional winners of the national championship ture facilities inherent in megacities”), but budget deficit, the government of the region (WorldSkills is meant — OR), who are close also presence of very strong institutions of intends to keep the chosen vector of the by their competencies to what we do will higher education, whose level is compara- personnel system development. be in the sphere of our attention. We are ble to the best universities in the country by “All this is not only a condition for im- ready to offer them to come to Ulyanovsk the level of knowledge. “Now we are talking proving investment attractiveness of the to get wonderful education, to move their about integration of our universities with region, it is the foundation of economic families here, we are ready to create for the world’s leading universities through security. We do not want simply to ensure their parents most comfortable conditions science, up to opening representations of the arrival of someone, but we want our up to allocation of housing and addressing leading European universities in Ulyano- staff to become carriers of knowledge the issues of employment,” said the gov- vsk. And it can be an incentive for young and technology themselves in order to ernor, speaking at the International air people to ensure that they stay here,” ex- replicate it, creating new enterprises and transport forum –2016. plains the first vice-premier. technologies here, which would become The regional government also takes Experts say that regional direction for a basis for a new industry,” Mr. Smekalin measures to reduce the outflow of young personnel potential formation is logical; stresses. 42 Open Region AeroNet

Wings need brains

Drones are born from meeting of competencies Photo from the site www.army-world.ru

In Ulyanovsk region it is planned to undertake development, production, and testing of unmanned aircraft systems. According to experts, the region has all the conditions and necessary competencies for this purpose. The rest will depend on the integrator company, as well as on the ability and willingness of companies working in this field.

SERGEY TITOV collaborate with UAS developers from other of globalization and excellence; moreover, regions), a developed IT-cluster (several there appeared modern composite materi- Two years ago our magazine, when ana- companies are known for their works at als that provide high construction strength lyzing the situation in development of un- international level and have their offices with maximum lightness. manned aerial vehicles in Russia, pointed abroad), and AeroComposite-Ulyanovsk, a Two years have passed, and it seems that out that Ulyanovsk could be the best place modern enterprise for production of com- the forecasts of the Open Region begin to for development and production of UAVs ponents for aircraft. And what requires a come true. Most likely, implementation of (previously there was this abbreviation, but special mention is Ulyanovsk instrument the program of scientific and technology now, in accordance with the amendments manufacturing design bureau (develop- initiative (STI) by the Agency for strategic to the Air Code, the terms “unmanned ment and production of information and initiatives became the impetus. It will al- aircraft system” (UAS) and “ unmanned control systems of aircraft, navigation sys- low providing co-financing of prospective aircraft” (UA) are used. In Ulyanovsk we tems, automatic flight control systems). It is projects through the STI fund (up to 70 %). have a modern aircraft factory Aviastar-SP, at the junction of these competencies that Already in April, this year the regional a large number of various aviation compa- the direction of development and produc- Agency of advanced initiatives, technolo- nies (and, hence, aviation specialists), three tion of unmanned aerial vehicles cannot gies, and projects (AAITP) announced the airports: international airport Ulyanovsk but evolve. That was how it happened with start of activities in several areas of STI, (Baratayevka), international airport Uly- drones themselves: in different ways they in particular AeroNet (distributed systems anovsk-Vostochny (aka — Aviastar-SP test have existed for a long time, especially of unmanned aerial vehicles). According airfield), Ulyanovsk DOSAAF flying club in the military-industrial complex, but to AAITP CEO Sergei Galant, among the airport); a number of higher and second- rapid growth of this sector started only projects there are: creating a UAS testing ary specialized educational institutions when electronics has reached the level of site in Ulyanovsk; an “electronic agrono- of aviation profile, a good school of model excessive miniaturization, IT-technologies mist” complex, which allows to monitor airplane builders (some of them already and the Internet have reached today’s level farmland germination, weed infestation, October, 2016 43 AeroNet

etc.; development and construction of a “bystrolet” (“speedflier”), an unmanned Demands for test airfield for civilian unmanned aerial vehicles vertical take-off platform based on new principles of creating lifting force with ▪ Broadband internet access SPECTATOR ▪ Site available power capacity — 500 kW the so-called propellers of Shpadi (Uly- AREA ▪ Emergency generator anovsk inventor). All these applications ( ) ▪ Terrain without gradients have already been submitted by Ulyano- Warm boxes Mounting 300 Capron mesh for fencing for models` platforms vsk enterprise Diesel (engaged in single cars storage of 30–100 m2 production of M‑12 aircraft). Diesel CEO (≥6 m height) Evgeny Shagarov considers the projects RUNWAY Oﬃces Production sites 50–100 m2 with machines promising, but admits that “a prototype Runway UAS Free zone of unmanned platform is not yet available, laying preparatory for emergency landing Control tower, it requires money, which we do not have,” LED indication site (width ≥5 m) height 30–40 m and “electronic agronomist” complex is still under development. He intends to use FIELD as a UAS an M‑5 single-seater (produced by Diesel, date of creation — 1987), “which is easily converted into a drone, for it is Width ≥12 m Weather Length of the runway working part ≥250 m station quite simple.” Length of the glidepath ≥300 m Tower for teams` The advisor of one of Moscow companies operation, height 20–30 m working in the field of UAS, the head of Ul- From Dmitry Peskov report (ASI) yanovsk aeromodelling club Yuri Tynnikov is of a different opinion. He notes that 80 % cessing, of development flight algorithms technological reserve, there are conditions of UAS cost is electronics with software: and control systems for a UAS swarm, and that promote economic development, in- “If we can professionally make a glider, also of monitoring systems related to the cluding special economic port zone. There then who will make the filling, I do not use of UAS legislation. is also a strong IT-cluster, and software is know.” He also notes that today exactly Executive director of the Association the brain, all other functions are useless model aircraft engineers are in demand of operators and developers of unmanned without it. So, there is every prospect,” in Russian companies that produce UAS, systems (Airbus), deputy co-head of the explains the interlocutor. “but so far no one was interested in them Aeronet interdepartmental STI working Apparently, the STI working group will in Ulyanovsk. We are ready to join in the group Gleb Babintsev believes that the Ul- have quite a tough approach to the projects work, but we need a specific customer with yanovsk region has all the prerequisites for of AeroNet direction. “The ability of an air- specific tasks,” adds Yuri Tynnikov. creating a UAS test site and for development craft to abandon the pilot does not make it Yet no one has appealed to the represent- and production of new UAS. According to automatically necessary for AeroNet or STI. atives of Ulyanovsk IT-cluster. Executive him, “there is no such a polygon anywhere First of all the authors need to answer the secretary of the governor’s public expert in Russia, the only one is currently under questions: what is the novelty and where council on IT Denis Efremov assures that construction in the Tyumen region, but it is the market,” draws attention to the prob- the regional IT-companies have sufficient is only intended for heavy drones,” while lems of projects Gleb Babintsev. Accord- competence and will join in the work on the polygon in the Ulyanovsk region in ing to him, among the key requirements the UAS with interest, “if there is a serious addition to the availability of competencies for parameters of new UAS developments customer, ready to set a clear goal.” and existing infrastructure of Ulyano- should be their unpretentiousness to a place Mr. Galant acknowledges that so far vsk-Vostochny “is geographically conven- of take-off and landing, economy with a in the region there are “only a few groups ient. The region has a strong scientific and high efficiency, autonomous restoration that are in varying degrees engaged in of energy reserves, ability to maintain the the subject of drones, and there is a need route in case of disappearance of signals for a company-integrator, which would be Investing in development of UAS from a satellite or from another network, able to set goals and to put together what in the years of 2014-2018, $ billion artificial vision and collision avoidance we have got.” algorithms, networking between the UAS Perhaps the Ortus company, “daughter” 7,7 without using ground infrastructure for of the Ulyanovsk technology transfer center 11 26,85% joint use of airspace and renovation of 38,36% (UTTC), could become such an integrator. It flight task in course of communication. was established in August, 2016 specifically He also points out to importance of work to work with UAS technologies. According 5,2 upon avionics and software, stressing that 18,14% to the UTTC CEO Andrei Redkin, at pres- “there is the only brain that has to be very ent Ortus has got two problems. The first clever and fail-safe, otherwise a UAS that is hybridization of several types of UAS has gone mad will do trouble.” (quadrocopter and aircraft) into one glider, 0,38 1,9 2,5 According to the expert, Ulyanovsk so with a view to ensuring high flight dura- 1,34% 6,59% 8,72% far has got a priority due to a set of com- tion (up to four hours) and the possibility of petencies, but there are offers from other hovering and vertical landing. The second USA Total amount regions on the same test sites, and further is development of a power source and a fuel Asia of investments — will depend on regional teams. “Transition $28,68 billion cell based on hydrogen. Further integration Western Europe from words to action is always difficult. will begin already as the second stage (ap- Eastern Europe Unmanned technologies develop, and they proximately in a year), and it will be at that will be either created here, or will come Middle East Data from time that IT-specialists will be involved to Aviation Week & from outside, which is the worst option for solve the tasks of data collecting and pro- Latin America Space Technology the region,” adds the expert. 44 Open Region Direct speech “We are already in revolution”

SERGEY YURKIN, director of IT-company SimbirSoft, IT obmbudsman, member of the board of trustees of Ulyanovsk region fund for information technology development, co-founder of regional association of information technology development

“In fact, Ulyanovsk IT-companies have already long been in the process of technological revolution. However, we do not call it anyhow, just participate in it. There is a request, and we fulfill it. For example, creating advanced drilling monitoring systems for oil industry. In Ulyanovsk the IT-industry is very well developed. It is a strong cohort of programmers, many IT-companies are known globally: Ecwid, ITECH, MST, SimbirSoft are included in Russian and international ratings. We are already built into global value chains of software production. Ulyanovsk region in general is a well — known region on IT map: we conduct

Russian and international IT-conferences Stachka, Photo by Sergey Titov UlCAMP, RIF.Tehnologii, together with the regional government we organized a fund for development of information technologies for training of person- candidates of mathematical sciences, physical and therefore they will be able to work at specific, nel for this sector. and engineering sciences are working almost even most complicated orders. Yes, our companies are yet mostly working everywhere, and they are able to solve most And another thing: it is necessary to promote in electronic commerce, in creating websites, complicated problems. Moreover, we have tight success stories of our companies. After all, our in customized software development, because relationship with universities, and in this bundle products are no worse than those in Silicon Valley, it is claimed. But if necessary, they can work probably almost any task is within our scope and sometimes much better. But the leaders are in all directions and move quickly from one of abilities. Yes, we are already on the crest those who are often spoken about. And rapid task to another: in aviation, in drones, in pub- of advanced technologies, because we do not development is only possible when our projects lic utilities; there will be no problem, because need unique and expensive equipment, the main are in demand at the world market. I think we need thing we have is the brains. But in most cases to create things that will not catch up with what our IT-companies themselves will not be able to is already done, but surpass it. invest in new high technologies, which will give STI is primarily a concern of the state, which return ten years later; after all, our companies wants to be competitive in global economy for years are not so large, it is not the level of Intel or IBM. to come, and which is able to invest in very risky areas There should be integrator’s interest, which will without predictable results. If it does not encourage be able to find funds for an idea and to give us this activity, we will not be gone: we will solve simple an order that we can handle. but profitable problems. West will buy our products The biggest challenge for our field in techno- and implement them into their technologies, which logical revolution is staff. It should not be just a will be bought by our own enterprises. sufficient number of programmers, it is necessary The world is unified, world competition is going to connect information technology with physics, on. At the level of IT this is especially noticeable, mathematics, maybe medicine, geology, and so on. and we already do not divide the world into Russia, Perhaps it is not obligatory to change the system the USA, and Germany, for us it’s all a single space.

Photo by Sergey Titov Sergey by Photo of higher education radically, but it is necessary And our technologies all the same come to Russia to encourage new research seriously, to invest in later on. But to make them go directly to Russia we science. It is universities that will be able to deal need specific actions of government and compa- with risky research, while IT-companies are still nies which are willing to invest in result that can more focused on business, they must make profit, be commercialized in 10–15 years.”

“Yes, we are already now on the crest of advanced technologies, because we do not need unique and expensive equipment, the main thing for us is the brains.” October, 2016 45 Small business “Gazelles” get help to jump

The Ulyanovsk region government creates conditions for development of small enterprises to the level of “national champions,” leaders of relevant markets, which will be capable to supply their products to other regions and countries. Experts agree on the need to find new methods of state support, however, they indicate the risks and not always real efficiency of the methods used. Photo by Pavel Shalagin

Market leaders are indeed doing doors with the help of high technologies, and are even embedding new digital technologies in their products. GC Aleksandriyskie dvery with support of industrial development fund has purchased equipment for mastering a new business direction, manufacturing of “smart” doors.

VADIM PILYUKOV enters into details of the enterprise work, develop sales and to survive,” says a board assesses the prospects, gives the tools for member of the Ulyanovsk association of After emergence of successful practices further development,” says Mr. Sinerkin. entrepreneurs Hamza Yambaev. the regional leadership began to speak The corporation considers one of such “Somehow unexpectedly for ourselves about possibility of advancing development tools a 100 percent compensation from the we found that more than half of all the of certain regional small and medium state budget of wholesale storages rent for furniture and doors in the country are enterprises. Chairman of the Ulyanovsk the first 4 months in the four nodal regions: made in Ulyanovsk region,” said Ruslan region state corporation for development Moscow region, St. Petersburg, Krasnodar, Gaynetdinov. “In this area there are more of entrepreneurship Ruslan Gaynetdinov and Novosibirsk. “Experience of one of the than a thousand companies, which employ refers to Fort furniture factory as an exam- Ulyanovsk furniture factories showed that about 15 thousand people.” ple. Over 4 years of its existence the area the presence of wholesale depot in Mos- This year governor Sergey Morozov in of production of the factory has grown out cow for six months increases turnover by his report to the deputies of the legislative of ordinary 4 x 6 meters garage to 3 thou- 40 %,”said Ruslan Gaynetdinov. council said that “raising national cham- sand square meters. Now the owner of the “Furniture industry has received good pions out of small businesses is a principle factory Alexander Sinerkin looks for new development in the region, having become position.” “The task is set to develop an production facilities and has announced the basis for “garage economy.” Unfortu- effective support tool on the basis of suc- his plans to increase the staff from 150 to nately, the industry has not acquired a cessful business cases, to work out not only several hundred people, and to bring an- leader, neither in technology, nor in volume financial but also administrative decisions, nual turnover to the level of more than 1 of production, and is still represented by which would help to accelerate develop- billion rubles. The entrepreneur considers numerous scattered enterprises. I know ment of small enterprises to the level of provided support measures to be effective. that many of them are forced to sell their leading companies,” says Mr. Gaynetdinov. “The corporation not just gives money, but products under false brands in order to “If successful companies have passed this 46 Open Region Small business

way in, say, 10 years, we must create such which require additional funds. According conditions that the new ones could reach to the document, loans are issued under 5 % that level in 3 years.” per annum on sums from 20 to 100 million After analyzing the work of small and rubles. At the same time 70 % of the neces- medium industrial enterprises in the re- sary sum is directed from the federal fund, gion the corporation identified two main and 20 % from the regional one. types of “gazelles businesses, ready to In 2016 100 million rubles were laid jump” (as early as in the 1980s an Ameri- down into the regional industrial devel- can economist David Birch found that av- opment fund. As noted in the corporation, erage fast-growing companies make quite “signing an agreement with the federal a large contribution to economy growth, fund will allow to multiply capital and to especially in creation of jobs. He called increase the volume of borrowed funds to them gazelles, and ever since the term 600 million rubles,” all in all during the has fixed). “There was a small textile pro- time of the contract they hope to attract duction which, having received a major “at least 1 billion rubles of investments” order, so as not to lose the customer, was to the region. forced to gather additional volumes at the Photo by Sergey Ershov Hamza Yambaev considers lack of clear enterprises in other regions. But if a com- criteria for selection of candidates a weak Chairman of the state corporation pany is successful and perspective, what for entrepreneurship development spot of financial business support. “In the prevents us from “reloading” it, helping of Ulyanovsk region Ruslan Gaynetdinov region no one is seriously, at a professional the entrepreneur to purchase equipment is sure that if correct support is provided, level, engaged in analysis of businesses on favorable terms, and carrying out orders many small businesses will be able to rise prospects,” he says. “Supporting entrepre- here?” gives an example the interlocutor. to the level of “national champions.” neurship as a whole is not possible, espe- The second scenario for development cially because of the limited funds, so the consists in incorporating local business- authorities anyway provide assistance to es into production chains of existing Armenia, Azerbaijan, and Moldova. In someone in particular. But to who? To those companies and coming investors. “Our the near future they plan an access to the who really have know-how, or to those who Bridgestone factory needs casting molds European market. just because of their immodesty managed for rubber products, which are supplied In May GC Alexandryiskye dvery was to reach the purse first?” from the outside,” continues director of the the first to get a loan in the amount of 20 “Know-how, high-risk high-tech start- state corporation. “But we have enterprises million rubles for 36 months at 8.25 % per ups are not our profile of support,” Mr. with appropriate production capacities and annum from the Ulyanovsk region fund of Gaynetdinov answers. “Venture funds, competences. There is nothing cosmically industry development. As they say in the business angels are engaged in this. While complicated as it might initially seem. company, the funds will be used to pur- our priorities in the context of limited re- Yes, major manufacturers have their re- chase new equipment for development of sources are support of potential champions, quirements to the suppliers, but it is often a new business direction, manufacturing “gazelles” that have already prepared to enough to stick a sticker in another place “smart” entrance doors. The corporation jump, and they, being in a highly com- or to pass certification. And sometimes no estimated that the project would provide petitive environment, attract the latest financial investment is required, and you 18 million rubles revenues to the regional technologies themselves so as not to be just need to establish communication.” budget by 2019. left in the basket.” GC Alexandryiskye dvery(Alexandria “Speaking about financial support of An analyst of Finam investment hold- doors), another small business which has business, we have moved from subsidizing ing Timur Nigmatullin partially agrees become a national leader, has passed a more “all in a row” to the measures of return with him, saying that in a crisis “support long way of formation. In 1995 it became funding for normal business,” says Mr. measures from the government become the first Ulyanovsk enterprise for produc- Gaynetdinov. On August 2 regional and relevant, and it is worth focusing on de- tion of interior doors. Today the company federal funds of industry development velopment of efficient enterprises that are has more than 80 offices across the coun- signed an agreement on joint lending of already operating at a profit.” At the same try and abroad: in Ukraine, Kazakhstan, Ulyanovsk business industrial projects time the analyst believes that “subsidizing lease payments of wholesale stores is unlikely to be effective, for it entails What do businessmen consider the main success factors of their companies, large budgetary costs.” He also considers distribution of responses in % of respondents interest rate subsidies on loans to be risky, because “if due to circumstances the budget is not able to provide support, a company Original scientific and technological ideas 59 can come to bankruptcy.” He also notes A strong team of developers and constructors 57 that in Russia there are no conditions yet High product quality, its compliance 57 with consumer demands for rapid growth of high-tech companies Successfull business model of the company 31 from small businesses: “these companies, Strong management team 28 until they grow up, are in constant need Modern production basis 24 Good partnership with of funds for development, and it requires a a large consumer 19 developed financial market, which we do Effective system of sales and distribution 7 not observe yet. But a rising tide lifts all State support 5 boats, and with the growth of economy Ability to obtain financing 3 small enterprises naturally become me- 0 10 20 30 40 50 60 dium — sized, and then large,” encourages The study of the Institute of innovation management of the national research University, High school of economics Timur Nigmatullin. USEFUL STATISTICS

Human resources The ratio of the number of employees of large and medium-sized enterprises of Ulyanovsk region by economic activity types, in % at July, 2016

The population of Ulyanovsk region 2,72 1,53 Construction 0,63 13,44 Wholesale and retail trade, repair of motor (at the beginning of 2016) amounted 25,24 to 1257.6 thousand people. vehicles, motorcycles, household goods and 16,03 personal items 4,89 In total, according to the Federal state Hotels and restaurants statistics service for Ulyanovsk Region, 2,10 Transport and communication 10,92 6,28 on January 1, 2016 there were 650.5 Financial activities 5,65 3,01 6,95 0,61 thousand economically active Operations with real estate, leasing and services people, of which 334.9 thousand Agriculture, hunting and forestry Public administration and military security; social were men, 315.4 thousand were Mining insurance women. Processing industries Education Health care and social services The level of unemployment in the re- Production and distribution of electricity, gas, and water Other municipal, social, and personal services gion is 4.9 %.

The average salary for full circle of en- Economicaly active population of Ulyanovsk region according to education, in % terprises amounted to 23,593 rubles (at the beginning of 2016). Higher professional (including 26,9 17,7 postgraduate) education The region has 40 secondary Secondary professional education vocational schools (public and pri- 24,5 Primary vocational education vate), with an enrollment of 19 thou- Secondary complete general education 25,7 sand people. 0,3 Basic general education 4,9 No basic general education There are 13 higher education institutions in Ulyanovsk region (in- The structure of industrial production, in % cluding public and private), in which 39.3 thousand students are trained. 10,3 Mining In the structure of unemployment 85 Manufacturing production 31 % of people have higher education, Production and distribution of electricity, about 44 % have secondary profes- gas, and water sional education. 4,7 INVESTOR ROADMAP

ULYANOVSK REGION GOVERNMENT INVESTOR’S APPEAL First deputy chairman of the government Alexander Smekalin (letter of intention for project implementation) + 7 (8422) 589 395; [email protected]; http://ulgov.ru/

Selection of a partner company ULYANOVSK REGION DEVELOPMENT CORPORATION for the project if necessary. CEO Sergey Vasin Creation of a joint venture. +7 (8422) 737 001; [email protected]; http://ulregion.com/

Direction of technical specifications for selection Visit of investor to the region: acquaintance with Ulyanovsk region, Selection of the of a site (including area, volume of investment, sites survey, meetings with the leaders of Ulyanovsk region optimal variant number of jobs, need for utility services: gas, development corporation, with supplying organization, with investors of placing water, and electricity) already operating in the region. by investor.

Support for investment project at all stages Assistance in obtaining state Selection of accommodation options and direction of implementation in “one stop shop”: at the stage of support measures in accordance of investment proposal to the investor: registration of land; in obtaining technical specifications; with the Ulyanovsk region Law from industrial parks; SEZ; municipal development zones; in design; in construction and installation works; in plant start; 15.03.2005 № 019-3O “On the Ulyanovsk region development corporation; assistance in building cooperative ties; and in all matters development of investment activity Ulyanovsk SEPZ (+7 8422 249 417) on the investment project. in Ulyanovsk region.” Open Region

The new generation of Ulyanovsk citizens is already preparing to work closely with high technologies. At the All-Russian conference “RIF. Technologies” 2016. Photo by @yarkofoto