Novosibirsk Region A look at the region’s business and innovation potential Deloitte CIS Research Centre Key economic figures 04 Macroeconomic overview
Youth tourism as a regional growth driver 18
Relations of SMEs with financial market participants 26
Deloitte CFO Survey among major companies in the Novosibirsk Region 36
Contacts 42 Novosibirsk Region: a look at the region’s business and innovation potential
Introduction
We are delighted to share with you the results from our research into the business and financial environment of the Novosibirsk Region.
The report prepared by the Deloitte CIS Research Centre focuses on the key economic trends in the region, offering insights into:
•• The macroeconomic environment
•• Innovation and investment
•• The market potential for youth tourism
•• The existing environment for SMEs Yulia Krasnova and large-sized businesses in the region Managing Director Novosibirsk Office, Deloitte CIS If you have any questions concerning this report, please contact us at: [email protected]
03 Novosibirsk Region: a look at the region’s business and innovation potential
Key economic figures
Gross regional product
GRP dynamics
15.0 15.2 GRP Over 2010–16, the Novosibirsk Region 14.8 14.9 14.0 of the Novosibirsk saw its share in the Siberian Federal Region, District’s GRP and the national GDP grow 12.5 1,085 RUB billion 11.7 1,022 by 30 percent and 22 percent, respectively. Share in the GRP
911 of the Siberian 818 Federal District, % In 2016, the GRP of the Novosibirsk 728 Share Region increased by 6.2 percent 599 in the national to RUB 1,085 trillion. 484 484 GRP, %
“In 2016, the increase in GRP was primarily driven 1.54 1.55 1.51 1.46 1.57 1.28 1.32 by the support measures for the manufacturing industry and the agroindustry.”
Vladimir Gorodetsky 2011 2012 2013 2015 2014 2016 2010 Presidential Plenipotentiary Envoy for the Siberian Federal District
YoY GRP index in unit terms (%)
108.4 After a slight decline driven by the overall 104.6 national trend in 2015, the Novosibirsk 103.1 105.0 103.0 102.5 101.1 Region demonstrated a growth 104.4 105.4 102.1 100.8 of 1.1 percent in GRP in 2016 104.6 105.0 99.4 101.5 101.8 101.6 101.3 100.3 98.8 98.0 2011 2012 2013 2015 2014 2016 2010
Novosibirsk Siberian Russian Region Federal District Federation
Source: Russian Federal Statistics Service for the Novosibirsk Region
04 Novosibirsk Region: a look at the region’s business and innovation potential
GRP per capita, RUB thousand 472 Novosibirsk While continuing behind the national 449 Region
405 level, the Novosibirsk Region’s GRP 391
377 Siberian 371 369 has been outpacing that of the Siberian 353 349 Federal District 333 333
318 Federal District by 3–5 percent 318
301 Russian 287 on average since 2012. 270 269 264 Federation 249 224 214 In 2016, the Novosibirsk Region’s GRP 182 per capita was RUB 391 thousand. 2011 2012 2013 2015 2014 2016 2010
GRP forecast for the Novosibirsk Region
Indicator 2017* 2018 2019 2020 Based on an optimistic scenario up to 2020, the regional GRP in current prices, RUB thousand 1,113 1,192 1,282 1,390 government expects the GRP to grow GRP per capita, RUB thousand 399 426 456 492 by 2–3 percent annually.
GRP index, % 100.0 102.1 102.9 104.1
*Expected GRP
Source: Novosibirsk Region Government Resolution Socio-economic development of the Novosibirsk Region for 2018 and the planning period from 2019-20 dated 3 October 2017
GRP by industry, 2016 (%)
Real estate 23 Real estate (23 percent), production Manufacuring 18 (18 percent), transportation
Transportation and telecommunications 17 and telecommunications (17 percent), and trade (17 percent) account for almost Trade 17 75 percent of the Novosibirsk Region’s GRP. Agriculture 5
Healthcare 4
Education 4
Construction 4
Other 8
Source: Russian Federal Statistics Service for the Novosibirsk Region
05 Novosibirsk Region: a look at the region’s business and innovation potential
Labor market
Employment by industry, 2016, %
Trade 19 Trade (19 percent) and production Manufacuring 17 (17 percent) are the industry employment
Finance and real estate 11 leaders in the Novosibirsk Region, employing almost every third person Transportation and telecommunications 11 of the working population in the region. Education 9 Healthcare 8 With a GRP of RUB 1.6–1.7 million Construction 8 per person employed, the mining, finance, Agriculture 6 and real estate industries are significantly outperforming the other industries. Other 11 The Novosibirsk Region has an average GRP of RUB 806 thousand per employed person.
Gross added value per person employed, 2016, RUB thousand
Industry Finance, real estate, leasing and services 1,674 Mining 1,670 Transport and communications 1,247 Manufacturing 825 Wholesale and retail; repair services (cars, motorcycles, domestic appliances, personal items); hotels and restaurants 737 Power, gas and water generation and distribution 714 Agriculture, hunting, forestry, fishing and fish farming 673 Public administration and military defense; social security 572 Healthcare and social services 458 Construction 402 Education 382 Other utility, social and personal services 269
Annual average unemployment (%)
8.7 Novosibirsk 8.1 Since 2015, the Novosibirsk Region 8.0 7.7 7.7 Region has seen an emerging growth 7.1 7.2 Siberian 6.8 7.0 in unemployment. However, Federal District 7.4 this growth is notably lower than 7.3 5.9 6.9 Russian 5.6 the average unemployment level 5.1 Federation 6.5 across the Siberian Federal District. 5.5 5.5 5.6 5.5 5.2 2011 2012 2013 2015 2014 2016 2010
Source: Russian Federal Statistics Service, including the regional office for the Novosibirsk Region
06 Novosibirsk Region: a look at the region’s business and innovation potential
In 2017, the Novosibirsk Region was ranked 26th among other regions in terms of national living standards
Household real and nominal income
108.9 Monthly nominal Over 2010–16, the Novosibirsk Region personal income, 105.4 104.8 105.8 104.8 generally continued at 8 percent ahead RUB thousand 99.5 of the Siberian Federal District in terms 105.2 98.2 99.5 Novosibirsk 103.3 103.9 Region of average household income per capita. 102.9 102.1 103.8 96.2 101.2 94.4 Siberian 96.4 95.9 Federal District In 2016, the Novosibirsk Region 94.4 Russian had a nominal household income 92.2 Federation of RUB 25.4 thousand. Personal real income, 30.5 30.7 YoY, % 27.8 Households in the Novosibirsk Region have 25.9 25.4 Novosibirsk 24.2 23.1 23.6 23.7 seen their income decrease since 2013, 23.2 22.6 Region 21.5 20.7 20.5 20.8 in line with the overall national income. 19.0
18.5 Siberian 18.2 16.6
16.3 Federal District 15.0 Russian Federation 2011 2012 2013 2015 2014 2016 2010
Consumer price index, 2010–17, %
112.9 111.4 Novosibirsk In 2017, the Novosibirsk Region Region 108.8 saw an annual inflation of 1.5 percent, 106.1 106.5 105.4 Russian 106.6 111.4 one percent lower than the average Federation 110.2 inflation across Russia. This is also 102.5 106.2 106.2 105.4 105.8 significantly lower than the year before. 104.4 101.5 Inflation in the Novosibirsk Region, 2017 Food products 0.5% 2011 2012 2013 2017 2015 2014 2016 2010 Non-food products 1.0% Paid services 4.3%
Source: Russian Federal Statistics Service, including the regional office for the Novosibirsk Region; RIA Novosti: 2017 living standards ranking across the Russian regions
07 Novosibirsk Region: a look at the region’s business and innovation potential
Business
Production sphere
Industrial production index and its components, %
140 Industrial In 2017, the Novosibirsk Region production index saw its production continue to recover, for the Novosibirsk Region with an industrial production index 120 Mining of 2 pp higher than the national index. Manufacturing In 2017, the mining industry recorded Power, gas 100 and water generation a rocketing growth with an index and distribution of 141.6 percent (this was primarily due to the fact that coal production increased 80 by 68 percent). It came against the backdrop of almost no minerals being produced 2011 2012 2013 2017 2015 2014 2016 2010 in 2016. In fact, the region generally has low minerals production output.
Industrial production (%) Mining (%) 141.6
108.3 109.0 112.5 Novosibirsk 105.0 116.8 102.3 112.6 Region 103.0 107.3 101.7 101.0 101.3 106.2 Russian 105.0 103.8 104.5 102.0 103.4 100.3 Federation 101.4 101.3 101.0 100.4 100.3 101.8 101.0 101.1 101.4 102.7 96.6 95.3 2011 2011 2012 2012 2013 2017 2013 2017 2015 2015 2014 2016 2014 2016 2010 2010
Manufacturing (%) Power, gas and water generation and distribution (%)
108.8 104.1 110.6 110.2 100.2 101.7 108.0 97.5 99.9 98.4 100.1 102.4 102.1 101.8 102.0 110.1 100.6 102.2 101.3 107.8 97.8 100.2 105.1 94.6 95.7 94.9 100.5 100.7 100.5 100.2 94.6 86.6 2011 2011 2012 2012 2013 2017 2013 2017 2015 2015 2014 2014 2016 2016 2010 2010
Source: Russian Federal Statistics Service, including the regional office for the Novosibirsk Region
08 Novosibirsk Region: a look at the region’s business and innovation potential
Retail sales
107.9 110.8 103.3 103.5 100.0 83.6 95.3 101.6 Retail sales, In 2016–17, the retail industry 106.5 107.1 106.3 103.9 102.7 90.0 95.4 101.2 RUB billion in the Novosibirsk Region rebounded after a slowdown in 2015, reaching Retail sales index RUB 469 billion in sales. 469 462 Novosibirsk 450 399 434 444 Region, % In 2017, the retail index was 101.6 percent
368 Russian in unit terms, a slight increase by 0.4 pp 312 Federation, % on the national index.
“It is really important that household real income has taken off, boosting retail sales. This factor is highly critical when it comes to kick‑starting overall economic recovery.” Olga Molchanova 2011 2012 2013 2017 2015 2014 2016 2010 Minister for Economic Development in the Novosibirsk Region
Dynamics of housing commissioning
518 562 582 634 840 940 800 Total ’000 sq.m, The Novosibirsk Region has seen Novosibirsk 225 343 386 414 460 485 448 a persisting downward trend since 2016, Region 409 436 459 491 576 583 547 which is in line with the national trend.
Housing commissioning, Based on housing completion rates
2,588 sq.m per 1,000 people per 1,000 people, the Novosibirsk
2,302 Novosibirsk Region outperformed the Siberian 2,216 Region Federal District and Russia as a whole 1,726 1,723 Siberian by an average of 1.5–2 times. 1,571
1,505 Federal District 1,380 Russian Federation 2011 2012 2013 2017 2015 2014 2016 2010
Source: Russian Federal Statistics Service, including the regional office for the Novosibirsk Region
09 Novosibirsk Region: a look at the region’s business and innovation potential
Foreign trade
The regional government has been actively using geographic advantages, developing and strengthening commercial relationships across the largest foreign markets for the region. China and Kazakhstan are the major trading partners for the Novosibirsk Region.
Novosibirsk Region: Top 5 export destinations Top 9 national export destinations in 2017
Country Overall exports, Share in exports Country Share in exports 2016–17, mln USD China 11% China 571 16% The Netherlands 10% Kazakhstan 563 16% Germany 7% Ukraine 483 14% Belarus 5% India 271 8% Turkey 5% Germany 262 7% Italy 4% South Korea 3% Kazakhstan 3% Poland 3%
Novosibirsk Region: Top 5 export categories by product
In terms of leading export destinations, Export category Overall exports, Share in exports 2016–17, mln USD the Novosibirsk Region is different Mineral fuel, oil and petroleum 1,102 31% from Russia as a whole, which is primarily products due to higher exports to Kazakhstan Equipment and mechanical devices 1,088 31% (+13 pp) and China (+5 pp). Electric machines and equipment 277 8% Mineral fuel and equipment/mechanical Inorganic chemistry products 87 2% devices account for more than half Other chemicals 82 2% of the total exports from the Novosibirsk Region (62 percent). In 2016–17, total exports in these product categories exceeded USD 2 billion.
Source: Russian Federal Customs Service
10 Novosibirsk Region: a look at the region’s business and innovation potential
Top 5 importers to the Novosibirsk Region Top 9 importers to Russia in 2017
Country Overall imports, Share in imports Country Share in imports 2016–17, mln USD China 21% China 1,332 40% Germany 11% France 375 11% USA 6% Kazakhstan 323 10% Belarus 5% Belarus 187 6% Italy 4% USA 164 5% France 4% Japan 3% South Korea 3% Kazakhstan 2%
Novosibirsk Region: Top 5 import categories by product
China accounts for almost half Import category Overall imports, Share in imports 2016–17, mln USD of the imports to the Novosibirsk Equipment and mechanical devices 476 14% Region (40 percent), which is almost twice as high as the national imports Ferrous metals 336 10% from this trade partner. Overland vehicles 239 7%
Electric machines and equipment 239 7% France and Kazakhstan also enjoy Plastic materials and related 174 5% notably higher shares in imports products (+7 pp and +8 pp, respectively), compared to their overall shares in imports to Russia.
The Novosibirsk Region primarily imports equipment, ferrous metals, and overland vehicles. The top 5 import categories for 2016–17 totaled almost USD 1.5 billion.
Source: Russian Federal Customs Service
11 Novosibirsk Region: a look at the region’s business and innovation potential
Innovations
In the national rating of innovative Russian regions for 2017, the Novosibirsk Region came fifth, entering the “Strong innovators” category. The region’s top achievements are in R&D (fourth place) and innovation activity (third place).
Source: Association of Innovative Regions of Russia
Regional R&D investment, RUB billion
In 2016, R&D investment 64 64
58 was RUB 20 billion, almost twice Novosibirsk Region as high as in 2010. 48 47 Siberian 41 Federal District The Novosibirsk Region accounts 34 for a third of the R&D investment across the Siberian Federal District, 20 20
19 coming first in the region and sixth 16 16 15
12 in the Russian Federation. 2011 2012 2013 2015 2014 2016 2010
Internal R&D investment in 2016 by activity, %
Novosibirsk Region 53 17 30 Fundamental research represents Siberian Federal District 33 15 52 the largest portion of R&D investment
Russian Federation 15 21 64 in the Novosibirsk Region, which is 20 pp and 38 pp higher than in the Siberian Fundamental research Federal District and Russia as a whole. Applied research R&D solutions
Over 2010–16, investment in R&D solutions in the Novosibirsk Region grew significantly, going from 19 percent to 30 percent
Share of hi-tech and R&D-intensive industries in GRP (%)
Novosibirsk Region 22.6 In 2016, hi-tech and R&D-intensive Siberian Federal District 18.4 industries accounted for almost
Russian Federation 21.3 a fourth of the GRP in the Novosibirsk Region (22.6 percent)
Source: Russian Federal Statistics Service
12 Novosibirsk Region: a look at the region’s business and innovation potential
The share of innovative products in the total amount of goods, work, and services provided (%)
10.0 10.0 Novosibirsk 9.3 9.7 Over 2010–16, innovative products Region and services saw a growth in their share 8.0 9.2 Siberian in the total products and services 8.7 8.4 8.5 Federal District 6.3 in the Novosibirsk Region. Russian 5.1 7.3 Federation 4.1 3.5 It is noteworthy that being three 4.8 5.4 3.3 3.5 2.7 times higher, this share puts 2.2 1.5 the Novosibirsk Region ahead of the Siberian Federal District. 2011 2012 2013 2015 2014 2016 2010
The share of innovative products in the total goods, work, and services for industrial use in 2016 Innovation intensity ratio* Russian Federation 8.4% Siberian Federal District 3.2% 2.06 2.02 2.00 2.00 Novosibirsk Novosibirsk Region 11.2% 1.85 1.93 1.90 Region 2.01 1.99 2.00 1.89 1.83 Siberian With an innovation intensity ratio 1.72 1.65 Federal District Russian of 74 percent above the average 1.25 1.25 1.29 1.23 Federation across the Siberian Federal District, 1.13 1.15 1.09 the Novosibirsk Region leads the Siberian Federal District. 2011 2012 2013 2015 2014 2016 2010
*The innovation intensity ratio is the number of national patent applications submitted in Russia per 10,000 people
The Novosibirsk Region accounts In 2016 the Novosibirsk Region issued: for 27 percent of the patents granted patents for inventions in the Siberian Federal District 428 202 patents for utility models 55 patents for industrial designs Source: Russian Federal Statistics Service
13 Novosibirsk Region: a look at the region’s business and innovation potential
Investment
In 2017, Expert RA assigned a rating of 2B to the region. In terms of investment potential, the Novosibirsk Region is ranked 16th (medium potential) and 23rd (moderate investment risk).
Investment in fixed assets
107.8 112.5 105.3 108.1 102.0 75.9 92.2 100.2 Investment The 2015–2016 downward trend in fixed 113.5 116.2 111.8 94.1 99.2 83.4 98.5 100.3 in fixed assets capital investment seen in the Novosibirsk 106.3 110.8 106.8 100.8 98.5 89.9 99.8 104.4 for the Novosibirsk Region, region and across Russia reversed in 2017. RUB billion
Fixed asset investment index, % Novosibirsk Region 193,2 184,0
175,0 Siberian 164,4 163,1 162,2 Federal District
140,1 Russian Federation 115,0 2011 2012 2013 2017 2015 2014 2016 2010
Government initiatives for supporting investment projects in the Novosibirsk Region
Subsidies Tax benefits
•• 1/2 of the CBR’s refinance rate – an interest rate •• Zero percent tax rate on property used for a project, credit subsidy. instead of the standard rate of 2.2 percent.
•• 25 percent of lease payments – a subsidy •• 13.5 percent – a reduced corporate tax rate, for lease payments made by an investor. instead of the standard rate of 18 percent.
•• 25 percent of expenditure – a subsidy for costs Government guarantees in the Novosibirsk Region incurred as part of investment projects in pre-school education, extra-school education, physical education, culture, and sports. •• 100 percent of funds raised for an investment project are guaranteed by the Novosibirsk Region •• 25 percent of expenditure – a subsidy for costs incurred as a security for obligations incurred by investors to acquire new production equipment for an investment project. as part of their investment projects.
Source: Russian Federal Statistics Service for the Novosibirsk Region, Ministry of Economic Development for the Novosibirsk Region
14 Novosibirsk Region: a look at the region’s business and innovation potential
Largest investment projects in the Novosibirsk Region
Project originator Project name Commissioning Investment, Social impact year RUB million (new jobs) Ongoing investment projects Ministry of Transport and Road Construction and operation of a river crossing 2021 41,000 n/a Infrastructure for the Novosibirsk Region over the Ob River Siberian Anthracite, JSC Capacity expansion of up to 9.5 million tonnes 2020 17,316 1,043 for CJSC Siberian Anthracite RusAgroMarket-Novosibirsk Construction of a wholesale and distribution center n/a 16,703 2,481 Siberian LPK, OOO Construction of a timber-processing complex 2018 8,508 3,075 with enhanced processing
Investment projects in the pipeline Barabinsk Refinery, OOO Construction of an oil refinery with a capacity n/a 80,365 600 of 3 million tonnes Volver Company, TOO (Kazakhstan) Sibirskiy, a warehousing complex 2021 10,540 4,000 Transservis, AO Zapovedniy Les, a forest park 2024 10,055 1,404 Barabinsk AgroPromKompleks, ZAO Production of import-substituting products with n/a 8,567 n/a the use of innovative industrial cereal biotechnology
Source: Ministry of Economic Development for the Novosibirsk Region (State Register for Investment Projects in the Novosibirsk Region)
Public-private partnership
As of February 2018, the Novosibirsk Public funds Region had 50 projects of RUB 62 billion* Private funds running based on public-private partnerships (PPP) and municipal- RUB 46% private partnerships (MPP), 62 with 46 percent of investment 54% billion coming from private investors. *Projects with an investment value disclosed as according to the register
The Novosibirsk Region SKTB Katalizator, AO Business: Materials and chemicals has two companies that along Key clients/partners: chemical, petrochemical, oil refining with the other 60 companies, companies from Russia, the CIS, China, the United Arab Emirates, Europe and the USA. In 2016, Katalizator earned have become part of the National a revenue of RUB 2,220 million, with an annual growth Champions program. The program of 105 percent over 2011–16.
is run by the Russian Ministry Eltex, OOO Business for Economic Development Business: Electronics and instrumentation Key clients/partners: Rostelecom, RZhD, to support hi-tech growth the Russian Ministry of Defense. In 2016, Eltex earned leaders in the private sector. a revenue of RUB 3,527 million, with an annual growth rate of 26 percent over 2010–16.
15 Novosibirsk Region: a look at the region’s business and innovation potential
Technoparks
Technopark Objective Investments Taxes New jobs Novosibirsk Akademgorodok Translate scientific outputs RUB 11.6 billion n/a 5,540 Technology Park into industrial technology (Academpark) Biotechnopark Koltsovo Provide innovative biotech companies RUB 1 billion RUB 0.6 billion 53 with space and infrastructure Innovation Medical Shorten the design-to-implementation cycle RUB 1.6 billion n/a 700 Technology Center for innovative medical technology, services, (Medtechnopark) and products Industrial Park “Ekran” R&D-intensive production, including enhanced RUB 0.5 billion RUB 0.1 billion 1,500 cost efficiency for products by residents Industrial Logistics Park Strengthen the investment climate in the region RUB 3.8 billion RUB 2.7 billion 1,187 of the Novosibirsk Region (jobs announced: 3,918) Novosib Industrial Park Support regional development by building n/a n/a 5,000 new metal-working facilities Medical Industrial Park Innovative healthcare products RUB 1.2 billion n/a 500 and import substitution Industrial Logistic Park Support the development of transport RUB 0.9 billion RUB 0.7 billion 574 “Vostochny”* and logistics infrastructure
*This project is in the construction pipeline. Source: Ministry of Economic Development for the Novosibirsk Region (State Register for Investment Projects in the Novosibirsk Region); Novosibirsk Akademgorodok Technology Park
Clusters in the Novosibirsk Region
A cluster ecosystem is actively evolving The Novosibirsk Region’s cluster Innovation cluster for IT in the Novosibirsk Region. It already policies are aimed at driving and biopharmaceutical includes three mature clusters plus economic growth and diversification technology an emerging medical technology cluster. by building stronger competitiveness Industrial medical Below is a diagram with the existing among businesses offering technology cluster cluster ecosystem. equipment, spare parts, professional for the Novosibirsk Region and production-related services, The ecosystem is primarily regulated as well as among R&D and education Production cluster by the Cluster Policy Concept providers operating in clusters. for agricultural equipment, approved by the Novosibirsk Regional machinery and tools Government on 16 April 2012, as well as Innovation cluster by the Novosibirsk Region Socio-Economic for “Sibirskiy Naukopolis” Development Strategy until 2025. (Siberian Science City) focusing on IT and biopharmaceutical technology
16 Novosibirsk Region: a look at the region’s business and innovation potential
17 Novosibirsk Region: a look at the region’s business and innovation potential
Youth tourism as a regional growth driver
Tourism and recreation infrastructure in the Novosibirsk Region
Local infrastructure
Tourist statistics for 2016: hotels 259 Total number of tourists: 239,000 Including foreign tourists: 43,000 sanatoriums and resorts Sales from travel and recreation 33 services for 2016: Travel services: RUB 3.3 billion recreation centers Spa and sanatory services: RUB 1.4 billion 103 Hotel services: RUB 1.6 billion
In 2016, the government museums 42 collected in taxes and duties: RUB 650 million 29 theaters
As of 1 January 2017, the Novosibirsk Region had a youth population (aged 7–17) of 295,000 persons. Every third child is a regular recreational center visitor. In 2017, the local government invested RUB 438 million in leisure and recreation for children. The same level of spending is also expected for 2018.
Health and recreation facilities for children 2012 2013 2014 2015 2016 2017 The number of health and recreation facilities for children: Total 1,022 1,014 995 999 985 963 Out-of-town health and recreation facilities 56 55 52 55 55 51 Health and recreation facilities offering daily accommodation 940 938 923 925 909 895 Other health and recreation providers (work and recreation camps, tent camps, etc.) 26 21 20 19 21 17 Total number of youth visitors in summer (‘000 persons): 100.4 101.0 105.0 107.7 108.2 107.9
In 2017, the Novosibirsk Region was ranked third according to the number of youth summer recreation programs (53) in the national rating for the regions. This rating was prepared by experts from Rossiya Segodnya, a national news agency, as part of the Social Navigator initiative.
Source: Russian Federal Statistics Service for the Novosibirsk Region, Ministry of Economic Development for the Novosibirsk Region, Federal Treasury, Novosibirsk Region Government Committee for Youth Leisure, Recreation, and Occupation
18 Novosibirsk Region: a look at the region’s business and innovation potential
Current and potential demand for youth out-of-town recreation services
This section offers a closer look at youth out-of-town recreation services, which make up a major portion of the youth tourism market. Below are the findings from the market survey conducted by Deloitte CIS.
Current demand for youth camps Potential demand for youth camps
Over the last two years, did you send your children aged 7–17 Do you plan on sending your children aged 7–17 to full‑time recreation centers or full-time youth camps? (%) to out-of-town full-time camps within the next two years? (%)
20 13 3 13 10 3 Only sent children to camp(s) in Russia Yes, we are planning to send children to Russian camps only 17 Only sent children to international camp(s) 31 Sent children to both Russian Yes, we are planning to send children and international camps 20 to international camps only 11 19 Did not send children to either Russian Yes, we are planning to send children or international camps to both Russian and international camps 10 Do not plan on sending children to Russian 3 or international camps 2
2 77 3 74 3 6 68 65 67 The existing national demand In Russia, the average potential for Russian and international out-of-town 60 demand for out-of-town camps youth camps is 80 percent. is 87 percent, suggesting a potential growth in demand for summer camps The Siberian Federal District within the next two years (+7 pp). and the Novosibirsk Region demonstrate a notably stronger demand in this segment: The number of families planning to send 87 percent and 97 percent, respectively. their children to Russian or international out-of-town camps has grown by 9 pp. In the Novosibirsk Region, families more The Novosibirsk Region demonstrates often tend to send their children to Russian an even higher demand of 31 percent. camps only (+9 pp above the national average), as well as to both Russian The Novosibirsk Region is also close and international camps (+7 pp). to the top of the national statistics as regards the current and potential demand for youth camps (97 percent). Russian Federation Russian Federation Russian Novosibirsk Region Novosibirsk Region Siberian Federal DistrictSiberian Federal DistrictSiberian
19 Novosibirsk Region: a look at the region’s business and innovation potential
Consumer preferences for camps
An ideal camp
What are your top 3 criteria for a youth camp in Russia? (%)
Safety / security / control 64 59 61
Engaging activities / fun / creativity / out-of-the-box thinking 45 30 29
Health / recreation / salubrious climate 15 27 27
Comfortable / accessible / convenient environment 24 20 19
Education / development / learning opportunities 21 16 17
Free of charge / affordable / low cost 3 14 15 Education / discipline / responsible approach / well-managed timetable / regularity 18 13 13 Sports and fitness promotion 6 13 11
Clean facilities 9 13 10
Fun / positive / entertaining 9 10 10
Health and delicious food 6 8 9
Rural environment / green surroundings / clean air / moderate climate 9 8 8
Mountains / forest / scenic environment / nature 12 11 8
Novosibirsk Siberian Russian Region Federal District Federation
As the most popular reply, most parents Engaging programs for children Most parents (69 percent) name with children aged 7–17 (61 percent) are mentioned in particular by those entertainment and recreation noted that a camp must be safe living in the Novosibirsk Region as a top reason. Athletic development and secure. Offering engaging programs (45 percent; +16 pp above the average). (36 percent), treatment/health (29 percent) and promoting good Respondents from this region also pay improvement (35 percent), health (27 percent) came second. more attention to a comfortable camp and cultural development/education This is followed by a comfortable environment (24 percent), as well as (32 percent) come second. environment (19 percent) and learning/ educational programs and discipline development opportunities (17 percent). (18 percent). The Novosibirsk Region has a higher share of parents who specify athletic development (+9 pp above the average), entertainment/recreation (+7 pp) and language learning (+4 pp).
Reasons for sending children to a camp
What are your top reasons for sending children to a camp? (%)
Entertainment and recreation 76 67 69
Athletic development 45 39 36
Health improvement and treatment 33 36 35
Education and cultural development 15 26 32
Foreign language learning 15 12 11
Novosibirsk Siberian Russian Region Federal District Federation
20 Novosibirsk Region: a look at the region’s business and innovation potential
Location criteria
Which location criteria are the most important to you when selecting a camp in Russia? (%)
Proximity to greener environments and far from cities 77 68 69
Proximity to the sea 45 39 44
Proximity to home 16 29 31
Proximity to bodies of water (rivers, lakes, etc.) 30 30 27
Proximity to mountains 13 14 9
Novosibirsk Siberian Russian Region Federal District Federation
Parents named a greener While respondents in the Novosibirsk environment as the most important Region are more likely to mention consideration (69 percent). the importance of a green environment Proximity to the sea (44 percent) (+8 pp above the average), and home (31 percent) came second they place significantly less importance and third, respectively. on proximity to their home (16 percent; –15 pp below the average).
Transfer options to a camp
Which means of transfer to a camp is most convenient for you and which is not? (%) The chart below shows net balances of replies. A net percentage balance is the difference between a percentage of respondents replying in positive terms and a percentage Transfer by bus (27 percent), train of respondents replying in negative terms. (21 percent), and private car (15 percent) are named as most acceptable.
48 Mini shuttle bus (-33 percent) and water Private car transport (-23 percent) are the least Train 33 preferred means of transportation.
27 Bus
21 Plane The Novosibirsk Region has a significantly 15 Ship or other 12
11 water transport higher share of parents who name 6 Mini shuttle bus bus transfers as the most convenient 3 3 form of transportation, with a net balance of +48 percent (+21 pp above the average). -1 At the same time, respondents -6 from this region are notably less enthusiastic about trains and private -21
-23 cars as a means of transfer. -24 -29 -33 -39 Russian Siberian Novosibirsk Federation Federal District Region
21 Novosibirsk Region: a look at the region’s business and innovation potential
Camp security
Which of the security measures below are necessary at a camp? (%) The chart below shows net balances of replies. A net percentage balance is the difference between the percentage of respondents replying in positive terms and the percentage of respondents replying in negative terms.
Camp access control 94 90 93
Daily camp site patrolling (including by night) 94 82 88
Camp leader constantly present 64 75 84
24/7 video surveillance 58 73 74
Kid GPS trackers for parents to see where their children are 21 34 42
An ATM so that parents can transfer money to children at a camp 21 15 24
Novosibirsk Siberian Russian Region Federal District Federation
Top security considerations
•• Camp access control (93 percent) In the Novosibirsk Region, respondents pay more attention to night camp •• Night camp site patrolling (88 percent) site patrolling (+6 pp) while a camp •• Camp leaders constantly present leader’s constant presence and video (84 percent) surveillance are mentioned less often (–20 pp and –16 pp, respectively). •• 24/7 video surveillance (74 percent)
22 Novosibirsk Region: a look at the region’s business and innovation potential
Top considerations when selecting a camp
The table presents the top considerations Top considerations by category Index (from 0 to 1) divided into seven categories. General considerations In the Novosibirsk Region, Availability of information about the camp, including any general information 0.89 such as camp conditions, meals, etc. respondents place importance on meals, staff, the availability of regular Publicly available official state documents, reports, and camp inspection certificates 0.89 communications and transfer to the camp. Positive reviews 0.83
Transfer to a camp Transport conditions, qualified Qualified transportation attendants on transfers to/from the camp 0.92 transportation attendants and professional Transport conditions (clean and comfortable compartments, vehicles in good order, etc.) 0.92 security guards on constant duty are Transfer terms and conditions (travel time, the number of stops, etc.) 0.83 notably given more importance (+0.03 – +0.05 p), compared to the national average. Meals Comfortable eating area (comfortable seating, clean place, etc.) 0.89 Taste and food quality 0.89 Sufficient meals 0.86 Healthy food 0.84 Meal variety 0.83
Camp program Engaging entertainment programs with recreational activities 0.83 Sports programs 0.80
Accommodation and infrastructure Clean rooms and camp site, including regular cleaning 0.88 Communications at the camp (Internet, mobile and landlines, etc.) 0.76
Staff and communication Constant availability of medical personnel with appropriate professional skills 0.92 and qualifications Professional security guards on constant duty 0.91 Qualified and friendly camp administration 0.87 Administration acting in a qualified and friendly manner when providing 0.86 information a