UK Technology Activities in Russia

1
UK Technology Activities in Russia
2nd International Working Group of the
ECNI Brussels 25-26 February 2002

• Juan Matthews
• International Technology Promoter
• Russia

2
Format of presentation

1. UK DTI International Technology Service
2. Tacis programme Innovation Centres and
   Scientific Cities

3
British Technology Support in Russia
Department of Trade and Industry
Foreign and Commonwealth Office
BRITISH TRADE INTERNATIONAL
Office of Science and Technology, Innovation
and Business Development Directorate
International Technology Service
British Council Moscow
British Embassy Moscow
4
DTI International Technology Services

• International Technology Promoters
• Information - Global Watch and Global Watch
  Online
• Overseas Missions programme
• International Secondments programme

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International Technology Promoters

• Programme managed by Pera
• Currently 15 ITPs covering
• North America (6), China (2), Japan (2), Europe
  (3), South Korea (1) and Russia (1)
• Sector skills in Life Sciences, Energy and
  Environment, Electronics IT and
  Telecommunications , and Performance Engineering

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ITPs can help by

• locating technology or potential partners
• making initial visits to potential partners on UK
  companies behalf
• provide cultural and language assistance in
  communicating with partners or on visits
• helping find specialised assistance legal, tax,
  customs, IP etc
• assisting with setting up missions and secondments

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and in Russia also

• link where appropriate to ISTC, eg for Partner
  Projects for good value RD
• clear activities with Russian Government
• provide advice on security and avoidance of
  criminal activities
• provide assistance to Russian partners to help
  meet UK business expectations
• Increasing confidence of working in Russia

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My background

• Originally a scientist and technical manager in
  nuclear sector with links to Soviet Union.
• Broad background in advanced materials, processes
  and energy technologies.
• Six years experience setting up companies and JVs
  in Asia, involved in technology transfer,
  manufacturing, technical services, software and
  equipment sales.
• Two years experience helping Russia RD
  organisations commercialise.

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Why Russia?

• High level of scientific and technological
  education (gt20k new post graduates/year)
• Strengths in specific sectors from former state
  driven priorities
• Unique technologies that have not yet been
  exploited commercially
• Low costs and surplus capacity

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Russian Science

• 4000 institutes with 400,000 researchers, 880,000
  total staff
• 2B investment in RD , equivalent to 6B in PPP
  terms
• 40,000 science based SMEs employing 200,000 staff
• 20,000 patent applications each year

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Main Opportunities

• Transfer of specific technologies for
  exploitation in the UK
• Supply of materials and equipment produced in
  Russia
• Low cost high technology manufacture in Russia
  based on UK and Russian IPR
• RD services, software writing and other
  activities than need skilled staff

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Technology Networking in Russia
RD Institutes
Institutes subsidiaries and related companies
Institute Technoparks
City innovation infrastructure
Private Companies
City and Regional administrations
Consultancy companies
National Academies
Ministries and advisory centres
British Council, RBCC, STI
EU delegation
British companies in Russia
Aid agencies (Tacis, ISTC, UNIDO)
British Embassy DTI Trade Partners
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Location of Russias scientific activities
ST PETERSBURG

VOLGA
S
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Tacis Project - Innovation Centres and
Scientific Cities

• The Creation of Sustainable business in Russias
  scientific cities
• Anglo-French consortium
• Phase 1 October 1999 to October 2001
• Phase 2 October 2001 to August 2002

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Reasons for project

• Commercialisation is the only way for science
  cities to develop
• Survival of scientific capability
• Institutions need help to manage commercial
  business and realise the benefits of change
• Institutions need help to generate income,
  improve quality, protect IPR and form strategic
  partnerships
• Institutions need help to attract investment to
  commercialise RD results

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Locations of Tacis Project

• Phase 1
• Obninsk, Russias first Naukograd- IPPE, Thermal
  Physics Department- Medical Radiology Research
  Centre
• Troitsk, many research bodies- Institute of
  Super-hard and New Carbon Materials-
  Geoelectromagnetic Research Institute
• Reutov, home of - NPO MashinoStroyenia
• Koltsovo, near Novosibrsk
• - Vector Virology and Biotechnology Centre
• Phase 2
• Dubna Russias 3rd Naukograd
• Tomsk, Akademgorodok, adjacent nuclear city
  Seversk

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Phase 1 results

• 15 institutional appraisal workshops and reports
• 6 institutions selected and assisted
• 16 product plan evaluations and related workshops
• 12 products assisted
• 3 institutes restructured
• 3 joints ventures and 2 legal partnerships
• 120 staff trained for cultural change and
  commercial skills
• Methodology and training courses transferred
• 4 innovation centres equipped

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Sustainable development

• Source of IP to drive innovation- in Europe and
  USA the universities- in Russia RD institutions
• Right culture in RD institutions to provide
  innovators
• Rights environment and infrastructure to support
  innovation
• Link with universities and educational institutes
  to provide staff
• Development of Russian market

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The cultural change process

• Institutional appraisal
• Leadership from the top
• Strategic planning
• Change actions
• Training workshops
• Restructuring to reinforce change

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Evolution of RD Institutions
Commercial Activities Transfer Set-up
Re-organise Whole To
private technology commercial to face
organisation sector Spin-offs
structure market commercialised
MISSION LED
MARKET TESTING
MARKET ORIENTED
MARKET DRIVEN
MATURITY
Increasing business emphasis on cost control,
management of resources, marketing and sales etc
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Evolution of RD Institutions
Government actions Develop Diversify
Distance Detach Divest
MISSION LED
MARKET TESTING
MARKET ORIENTED
MARKET DRIVEN
MATURITY
AEA Technology 1954 1965
1977 1986 1994
Examples of European Institutes now CERN Switz
CEA France Riso Denmark ECN Holland
Studsvik, Sweden PSL Switz FZK Germany NPL
UK TNO Holland Sinteff Norway
SCK Belgium
VTT Finland AEA Technology
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Model of Commercial Structure of RD Body
Federal bodies
Aid and conversion bodies
payments for research and restructuring
Budget and project funding
Rent and IP payments
CUSTOMERS
Commercial activities MS IP Management
payments for contract RD
Management and central services
Research activities
Spin offs
Rent payments
IP payments
IP payments
IP holding company
direct IP payments
Product Development
IP payments
Production and service subsidiaries and JVs
Rent payments
Institution boundary
IP advice
Business planning advice
Marketing and investment advice
Investors
Local innovation infrastructure
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Technology Generation and Commercialisation
Research
Basic research funding
potential but needs further work
IP evaluation
no stop
Evaluation funding
protect
Product Development
Development funding
Market information
needs further development
Business planning
no stop
exploit
Exploitation funding
Select route to market
Sell Technology Exploit alone
Find exploitation partner
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Instruments for technology transfer

• License agreements for patents or know-how
• Joint development agreements with shared access
  to IPR (eg use of ISTC Partner Projects)
• RD contracts - research against specific targets
  IPR owned by customer
• Exploitation partnership or JV based on Russian
  IPR
• Distribution agreement
• Sales of materials or equipment
• Service agreement to supply resources for
  analysis, field activities, software
  development, technical support

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Options for exploitation of IP
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Coherency of business (in Obninsk)
Radiation related
Nuclear materials control
State sector
Decommissioning and waste disposal support
IPPE
Land remediation
Epidemiology
MRRC
Atmospheric and land monitoring
Isotopes and radiopharmaceuticals
KPCI
Environmental related
ARAE
Environmental protection equipment
Typhoon
Land remediation
Epidemiology
Technologia
Atmospheric and land monitoring
INPE
Process industry related
Private sector
Process optimisation - thermohydraulic, corrosion
Pharmaceutical production
SIGNAL
Materials production
Cyclotron
Energy related
Energy production
SMEs
Energy system development
Energy efficiency optimisation
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Conclusions

• 1. Research and production organisations need to
  internally reorganise to prepare for more
  effective commercial activity.
• 2. The Federally funded research base needs to be
  preserved as a source of technology for business
  development.
• 3. Research and production organisations need to
  be flexible and imaginative in the types of
  commercial activities they develop.
• 4. The town should look for some coherency of
  business to stimulate co-operation between
  organisations and attract industry.
• 5. The establishment of a city brand should be
  considered based on the common science and
  technology activities.
• 6. Innovation activities should also be part of
  an overall plan supported by an efficient
  infrastructure.