ИСТИНА

In the post-economic crisis world, innovation is viewed as critical for overcoming downturns, and for ensuring national competitiveness and sustainable growth. In Russia, key strategy documents and a network of development institutions, designed to provide an “innovation lift”, have been put in place. Programmes to promote university R&D, entrepreneurship and innovative activities in strategically important sectors have been launched, and the range of tax incentives for R&D and innovation has been widened. However, government efforts to financially support R&D and infrastructure building are not enough to ensure innovation. In fact, Russia is inferior to the BRIC countries in many innovation-related respects, including the proportion of new-to-market innovative products and the percentage of innovative enterprises. The literature suggests that even if innovative ideas emerge quickly and the environment is conducive for their commercialisation, there is no guarantee of an innovation boom able to create new business activities that will bring a sustainable economy recovery. State intervention can disrupt the selection and cultivation of commercially viable inventions. Such intervention can stimulate a focus on short-term objectives given the access to “easy money”, and, in extreme situations, may cause corruption and stagnation. State funding crowds out venture capital (VC) investments, as it makes the business sector unattractive to investors. In contrast, private investments can lay the foundations for stable economic development by rejecting unsuccessful projects and teams, and by promoting competition. In addition, private investments are usually more efficient than state funding, as venture capitalists are more proficient at accelerating start-ups and imposing necessary controls. Furthermore, in a recession, the national budget is limited and the risk associated with commercialisation is high due to falling demand. It is therefore rational to attract private investors to develop attractive business sectors and allow the government to focus on sectors that are less attractive but socially important. One reason for Russia’s innovation underperformance may be the underdevelopment of the VC market and the lack of vision at the state level. When measured in terms of the number of transactions and the amount of funds raised, the Russian VC market is far behind the BRIC markets. Nevertheless, venture capitalists view Russia as a high-potential market. The number of start-up competitions and investor pitches is rapidly growing, and a pool of investors exists. However, many start-ups do not wish to compete for venture capital, and those that apply do not meet investors’ expectations. This may reflect a range of issues, from a lack of high-quality ideas to entrepreneurial distrust of this form of financing. This problem is addressed in the proposed study, which aims to investigate the limitations and potentially supportive mechanisms of VC financing for Russian innovative start-ups. On the basis of a triangulation approach, qualitative data collected in interviews with business angels, venture capital funds and innovative entrepreneurs are analysed. The results are used to form a conceptual understanding of how governments can encourage venture-capital initiatives and contribute to the building of supportive processes.