Export of technologies

Clever decisions from Russia with love

Sandra Deza

As innovations and hi-tech production tend to bring more economic benefits and influence, Russia is working on increasing exports of non-raw material sector, including technological export and transfers. And the current economic situation in Russia with sanctions, restricted financial support from European banks and weak ruble only comes in flavor for Russian companies opening opportunities to fulfill their potential abroad. So among exporting companies there are those who aimed at foreign markets from the start; companies that manufacture unique advanced technology products with no competitors in any part of the world; and companies that take advantage of the current economic situation to expand their markets.

ENERGOPROM Group has aimed at export from the start because there is no demand for their technology in Russia. Now the company is a leading Russian manufacturer of hi-tech electrode, cathode and other graphite and carbon-based products. The Group’s products are widely used in aluminum, steel, silicon, ferroalloys, chemical, nuclear, engineering, aerospace, electronics and power industries. The company exports more than 50 per cent of its output covering more than 60 countries around the world. The Group has its own R&D Center developing projects for the industrial production of isostatic graphite. Most of the Group’s products will be exported because in Russia there are still almost no consumers of isostatic graphite, the market is still very small.

Research and Development Center "Transkor-K" is one of the exporting companies with unique products to offer the world. The company specializes in the area of pipeline systems non-destructive testing. One of the company’s biggest projects was development of submerged and subterranean pipeline survey technology with Malaysian oil company PETRONAS. In 10 year-old history the company has successfully worked in Uzbekistan, Ukraine, Syria, Argentina, Brazil, Colombia, Mexico, Croatia, Saudi Arabia, Malaysia, Indonesia, China, UK and the USA.

Moreover, startups are also becoming more and more interested in technology export and transfers.

Konstantin Semenko, expert on legal support and mediation of technology transfer, says that Russian companies started to realize that innovations bring economic growth and, thus, more and more often Russian companies turn to him for consultation and support of technology transfers to foreign countries. “Not only large corporations but also startup projects in Skolkovo seek international expansion and expect to gain 20 % of income from abroad” – he says, “The economical situation is in fact promising.”

Not only the Russian companies are ready to export but also foreign potential consumers and suppliers of the technologies are looking at Russia as an attractive market.

First of all, government has been increasing its support for innovative small and medium-sized businesses according to the state strategy for innovative and technological development. The infrastructure is growing, more and more industrial parks, incubators and funds are opened across Russia, including specialized and narrowly focused technology parks.

State Corporations such as "Rosnano" and major Foundations, including the Foundation for Assistance to Small Innovative Enterprises in Science and Technology and the Skolkovo Foundation presents grants and provide the infrastructure for R&D projects. Due to government support of R&D and IPR sectors are developing intensively.

Secondly, Russia has a vast intellectual property reserve. Large part of the potential dates back to the Soviet Period, when science and technology industry flourished. And now all the intellectual property from that time has formed in a decent way. Other part of the intellectual property reserve comes from actively developing R&D centers.

In the Skolkovo Foundation there is a project, "Intersoft Eurasia", which is developing portable dosimeters that are compatible with modern mobile devices. The company has received patents in China and Japan, which opens the company markets in the Asia-Pacific region.

Furthermore, one should not underestimate the benefits for foreign suppliers and partners of cooperation with Russian exporters. Such as the price-performance ratio, for example.

Production Company CJSC "Svetlana-Optoelectronics" produces lighting products based on LEDs for over 10 years applying its own design and technology. Their products meet international quality standards ISO. Though the price is not as high as the European products and not as cheap as the mass Chinese products which are twice less energy-effective than the European. Thus the quality of the Russian company’s production is at the same level as Europe’s which is confirmed by European certificate, but the price segment is between Europe and Asia.

However, having an idea is not enough, knowing how to commercialize it, how to earn money on it – is the key. As R&D centers and institutes thrive with ideas, most scientists lack common business knowledge. In foundations they can be offered to make a practical use of their research and start a business, but nobody will explain to them how it should be done.

“We collaborate closely with scientific society, industry and investors, and we help assess the practical potential of scientific research or technology and its commercial value”. – Konstantin says.

“And when you know the potential value of your innovation you realize the importance of guarantee of intellectual property rights for success,” - he says. “It is a major requirement for successful agreement in technology transfer. And the cost of IPR is usually quite small in comparison with the capital investments and risks that are involved.”

“There are well-developed internationally recognized mechanisms of sharing IPR. But avoiding and not securing your rights on the intellectual property is an internationally recognized absurdity.”

That’s where mediators like Konstantin are needed. Businessmen with legal knowledge, and lawyers with business knowledge and experience.

Konstantin emphasizes the importance of mediators with legal and patent specialty: “Filing for patents issued for practical processes of the intellectual property and making sure that technology transfer or export agreements satisfy both Russian researchers and developers and foreign suppliers and partners should be by default part of the preparation for export.”

Another key point that needs thorough analysis is the process of the technological transfer. It can involve licensing agreements or technology leasing or setting up joint ventures and partnerships or engineering or spin-outs or technical support services or personnel exchange or other. Each process depends on the company’s goals and specific features of the entering markets.

For example, Russia’s state-owned United Shipbuilding Corporation not only exports licenses on submarine technology to India, but also creates joint ventures in military high-technology sector. And at the same time, United Engine Building Corporation, another state company, delivered to India more than 100 technology kits for the production of fighter jet engines on its territory. This means that the company should analyze and assess the most effective and cost-effective process suitable for it.

“There are a growing number of Russian IT, biotechnology and hi-tech manufacturers that have unique products to offer the world.” – he says.

“And we also work with foreign countries and know how consumer mindset differs between the countries.” – Konstantin says.“

Starting partnerships and exporting to foreign markets is not possible to form unilaterally, it is a two-way operation joint by mediators, including lawyers, patent specialists and marketing specialists.

Assessing the risks and advantages of entering certain markets, choosing the most effective method of transfer and providing knowledge about consumer and supplier mindset of a specific country are few of the components of the chain of actions.

“We seek to foster the growth of high-tech export and technological development. We take advantage of our close collaborations with both business and scientific societies to develop intellectual property, transfer technology and support partnerships with foreign countries.”