At InnoFest-2015 closing in Nizhny, experts saw potential but “project wheels have to be oiled”
17 Dec '15
Last week Lobachevsky UNN, the largest university in the Nizhny Novgorod region in the mid-Volga area, said bye to its second InnoFest festival of youth innovation which had been in focus both at UNN and across the city of Nizhny for almost four weeks
As in 2014, Russian Venture Company (RVC), one of this country’s key development drivers and the national fund of funds for innovation, provided support as General Partner.
Alongside traditional awarding ceremonies that pronounced the winners of InnoFest’s numerous competitions—the Territory of Youth Innovation and the Young Innovator of the Year, to name but a few—on December 11 the hosts announced the results of a poll UNN’s business incubator had conducted among the best and brightest in regional academia. The stats revealed both upsides and challenges in students’ perceptions of innovation and their place in it.
An estimated 77% of those polled said they wanted to be part of the process and commercialize technology. Ironically, 66% of these anticipated extreme difficulties, of which “the necessity to think much” was specifically highlighted.
Nonetheless, an estimated 49% said they were ready to run the risk of starting their own businesses. This looks like a promising mentality shift after years of similar polls across Russia showing that young people would prefer well-paid sinecures with little responsibility in government-owned corporations rather than entrepreneurship. Of those willing to take entrepreneurial risks, only 16% have any comprehension of what their business would be like; however, it’s good to know that they at least want to do something with their brain talent.
A surprisingly large number of the polled, 83%, believe the Nizhny Novgorod region is a place to do innovative business. That may mean the young locals don’t expect the region to backpedal on what positive it has done so far to improve business climate.
A challenge: how to add commercial dimension to purely scientific one
Of course, it’s technology projects developed by regional students and postgraduates that were the focal point during the entire festival. Here’s what some of the experts who had been able to take a look at innovative ideas told the UNN Technology Commercialization Center at the closing ceremony.
Sergey Zhivulin, a Nizhny representative of the federal Internet Initiatives Development Fund (FRII in Russian), said he’d seen a mixture of the positive and the problematic:
“The key thing I noticed was a substantial disconnect between theory and practice, calculated numbers and reality. The guys used beautiful presentation slides and had even prepared some sort of business plans, but two-thirds of them had obvious trouble understanding what they were talking about. My recipe here would be to immerse them more in practice—through business games, for example.
An obvious plus was the students’ good command of theory. They’ve been trained in that, sure; now it’s practice that has to be focused on.”
Evgeny Bokov, the director of the Start Invest regional association of angel investors, said he’d noticed some positive dynamics; however, most of the projects he’d seen were not yet ready for any commercialization:
“The projects were not bad, but almost all of them are little more than purely scientific research. The developers didn’t reveal any clear vision as to how to breathe life into their ideas. It’s a legacy of the recent past: I have invented something, and now someone else must figure out where my invention could be used.”
Mr. Zhivulin sounded more optimistic about the near-term future of some of the Nizhny Novgorod projects he’d seen. He emphasized that much of the key expertise UNN and other local universities are famous for intersects with what FRII is focused on, including service apps that make users’ life easier, e-commerce, and especially IT in medicine and education. FRII can also help developers fine-tune their ideas to make them fundable, the Nizhny representative said:
“It’s our responsibility to help projects get upgraded to the FRII standards. As one tasked also with liaising between my Fund and other investors, sometimes I see a project which doesn’t meet FRII criteria but is obviously promising, and I bring it to the attention of external investors. There is potential, but the very wheels that could take a project from a raw idea to a business concept have yet to be oiled.”
When asked how business angel investors could help developers add a solid commercial dimension to the already existing scientific one, Mr. Bokov put emphasis on a number of systemic problems that persist and have to be tackled on a very high level:
“We need much more substantial co-funding from the government at all stages of project development. Very few business angels across the world invest in just an idea. Most back the setup of an innovative company when there’s something tangible to look at.
We first said five years ago that Russia needed regional seed funds that would not expect immediate returns on their investments. Most VC funds we have now are after as quick returns as possible; none of those would shell out a considerable amount to support the seed stage. What we need is a network of seed funds established as private-public partnerships, showing the government that if a private investor is ready to risk his money on a project, he clearly sees potential in it. So far, it’s a valley of death that we see here.”
The article was first published on the website of the UNN Technology Commercialization Center.