Russia’s Technoparks, a growing industry that can’t be ignored

Russia's technoparks are a hotbed of digital and technological research, development and innovation. For Moscow its a fast growing industry and one the world should take note of.

Russia’s Technoparks, a growing industry that can’t be ignored

Russia is a hotbed of technological advancement and Moscow is its burgeoning centre of digital development, hence its moniker as the Soviet Silicon Valley. Technoparks form the backbone of that digital expertise and have helped the city take 6th place in the recent Foreign Direct Investment Intelligence survey of European Cities and Regions of the Future.

The Financial Times Group member’s report assessed 301 cities and measured their performance in five different areas:

  • Infrastructure.
  • Economic potential.
  • Cost effectiveness.
  • Labour environment.
  • Business friendliness.

Home to a quarter of Russia’s technoparks

Russian technoparks are specialised industrial areas or parks, that are home to a variety of technology-related businesses. That includes high-tech production plants, transport and tech infrastructure firms, tech research facilities and digital manufacturing hubs.

Some of the world’s best loved tech started out in one of Moscow’s 33 technoparks – which is a quarter of all technoparks across the country. To put that into context, there are four similar tech and digital facilities in London, two in Singapore and also two in Hong Kong, while there are 23 across the whole of Japan.

The first Moscow-based technopark was built in 1991 in Zelenograd – some 40 years after the first such facility at Stanford University, California.

And, given that clear prevalence of technoparks in Moscow, it’s pretty certain that much of the digital tech of the future will start out in the Eastern European city.

Technoparks have replaced former industrial sites as a significant driver of the country’s economy. And, that’s not the only link between the old and the new in Moscow. Many of the digital facilities have moved in on former industrial plant sites, owing to the existing physical infrastructure that is ideal for the needs of the technological research and development locations.

Supported investment option

While the first technopark in Russia was created some 27 years ago, since around 2010, they have become a more popular option for investors. They also guarantee Russia’s ability to make a major contribution to a digital, global future.

Among the reasons behind the growing popularity of technoparks in Moscow, are the financial benefits of investing in such a facility. Due to the growing revenues Russia’s digital research is producing, the industry is supported by a 25% tax reduction for investors.

It’s an incentive that’s proving attractive to many, as Moscow technoparks now employ some 45,000 staff across around 1,700 businesses, with a total investment between 2011-16 of around $900 million.

Examples of the type of businesses that populate Moscow’s digital and techno sites include:

  • Autonomous vehicle research and development.
  • Quantum electronics and production centres.
  • Laser development and production.
  • Computer software.
  • Nuclear power and medicine.
  • Water purification plants.
  • Implants and batteries.
  • Navigation equipment.

Not only are new technology techniques developed there, older ones are improved, updated and refined to accommodate a broader range of industries and uses.

More technoparks for Moscow

Moscow has established itself as a popular home for the country’s tech and digital development and there could still be another 20 or more technoparks, over the coming years. While that sounds like a large increase, the creation of additional tech and digital businesses in the region will be perfectly placed to more easily help accommodate the graduates from and attendees of the city’s 120 high tech universities and institutes of research and learning.

Indeed, the ‘new economy’ which includes digital and technological research and development, is considered a priority investment project for Moscow and attracts certain benefits, including active support from the Moscow City Government.

In addition, global ratings firm, Standard and Poor’s upgraded Moscow’s credit rating to an investment grade of BBB-, up from so called junk status of BB+. S&P also has a stable outlook on the city’s credit status.

The low level of debt in the city and strong budgetary performance were both detailed as key reasons behind the change. And Moscow’s startling level of technopark growth, is likely considered by many to be an important part of the city’s economic diversification away from the country’s dependency on oil-related revenues.

The business landscape in Moscow is much more diverse than it has been in the past. The focus on technoparks has undoubtedly aided that and helped support the inclusion of more small-and-medium-sized businesses in Russia.

The benefits of a more diverse business landscape appear to be working for Moscow and a further expansion of tech and digital research and development should grow to support the wider Russian economy, too. And finally, Moscow City investment agency introduced a new b2g and b2b platform – Moscow Investment Portal. On the part of the federal government large state investment programs and the development of the federal legislative base were ensured.

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