Mikhail Mishustin: ‘Digital developers will receive up to a quarter of a billion rubles a year’

13 July 2020

During a visit to Innopolis on 9 July, Prime Minister of the Russian Federation Mikhail Mishustin announced supporting measures for IT businesses. The chairman of the Russian government met with President of the republic Rustam Minnikhanov and State Adviser of Tatarstan Mintimer Shaimiyev and other high-ranking people behind closed doors. The guests looked over an exhibition with developments of the Popov Technopark’s residents, then together with leaders of the digital Russian economy discussed what concerned them at the moment. Read in Realnoe Vremya’s report more how the IT sphere should develop and what support IT companies would receive.

Meeting “in the city built from scratch”

Before the beginning of the panel discussion, Russia’s Prime Minister Mikhail Mishustin sincerely thanked the management of Tatarstan for the opportunity to hold the event dedicated to the development issues of the IT sector here.

“It is symbolic that we are gathering in the city that was built from scratch just recently in the region that has always paid special attention to developing information technologies. Tatarstan has done a lot for the appearance of a lot of IT companies,” Mishustin said.

He claimed that the digital transformation that had suddenly skyrocketed in the last 20 years was a chance for our country to get to a new development level. Digital technologies and free exchange with open data improve the availability of commodities and services and quality of life in general.

“The countries that highly appreciate knowledge, aren’t afraid to do experiments will be the world’s leaders. And only such an environment will found ground for the appearance of new ideas, solutions. Talent and knowledge become today the core asset, the non-financial asset is going to the forefront. The protection of rights to it must be a priority. […] Russia can’t afford a seat among advanced countries, it means we have no choice, we must be leaders,” the speaker emphasised.

The head of the government noted that modern business models were based on global data, new chains of added value were born, a new economy was created together with new companies. He wished Russia had more of such enterprises and noted that the Russian government tried to create this favourable environment to increase the digital ecosystem.

Mishustin reminded the audience that the rate of insurance premiums reduced to 14% for IT companies. Demand for software and IT services inside the countries has grown by almost 50% in the last six years. Demand for our developments in the foreign market has risen by 80%. Gross added value of this sector more than doubled.

The prime minister also paid attention to the fact that the situation with the coronavirus, which was tough for everybody, demonstrated demand for digital services. “The IT industry has helped Russians and Russian businesses in this hard time. Probably almost all schoolchildren, students, pensioners and people who have long worked in self-isolation have felt such support. Over 20 million electronic applications have been submitted via State Services portal to get different payouts in two months. There was no need for personal presence — quick, simple and convenient,” the speaker stressed.

He also noted that “it became clear what platforms, services we lacked” and that we should “reduce the lag from the countries who are technological leaders and occupy a place according to our capabilities”.

Talking about a set of measures the government elaborated on President Putin’s instruction, Mishustin noted six key areas of state support for the digital sector: a new tax regime, stimulated demand, support for introduction of innovations, help for start-ups, development of public and private partnership, expansion of the staff of the sector.

What government offered businesses

  • The insurance premium rate will reduce for IT companies almost twice from 14 to 7,6%.
  • Concessions will be provided to Russian companies whose 99% of income comes from a sale of software and service as well as enhancement of services. These companies will be included in a software register.
  • Restriction on purchase of foreign software for public needs. “This term will also apply to companies with public partnership and their subsidiaries. The enterprise must prepare a programme of digital transformation,” the prime minister noted.
  • “There will be created a united technology platform to create an information system for power agencies. We will stimulate the use, encourage competition between suppliers of these solutions,” Mishustin added. A separate inspection will be introduced for this purpose.
  • Companies will receive grants for new developments, up to a quarter of a billion rubles a year but no more than 50% of costs of such companies. This year the grants can cover 80% of expenses on the development and production of new products — because of the crisis. Such a decree has already been signed, the speaker noted. The selection of candidates for these grants will begin in August. 20bn rubles are envisaged for these purposes within Digital Economy national project through 2024.
  • There will be given grants for start-ups, the launch of new products in the market. There will appear acceleration programmes for companies that develop AI solutions. The grants for start-ups will be given considering prospects and demand of the market, Mikhail Mishustin said.
  • Russia companies will get a chance to connect to the infrastructure of electronic government. For instance, marketplaces, portals of private ads will be able to authorise their users with the help of a public platform. Mishustin put an example: a patient can provide a doctor from a commercial clinic his digital CT image, which is on his account on State Services portal.
  • Moreover, the Russian government plans to develop new services in health care, education, construction, transport, utilities within public and private partnership without public investments.
  • To solve the problem with a lack of qualified staff in the sector, the number of people admitted to funded IT areas will double in stages, from this year’s 50,000 people to 120,000 people by 2024.

All these measures will allow increasing the number of employees in the IT industry by 50% by 2024 and double demand for Russian software, the prime minister is sure.

Digital leaders ask for new support

Directors Arkady Volozh, Boris Nuraliyev, Yevgeny Kaspersky, Boris Dobrodeyev, Ilya Sachkov, Dmitry Yeremeyev, Ilya Perekopsky were among the participants in the panel discussion. Executives of companies talked about the huge potential of the sector and the problems they faced. They noted that modern realities that must keep up with new developments impede the development of the IT sector, including artificial intelligence, cybersecurity, educational platforms, and financial injections are also needed. The heads of digital businesses offered to reconsider the list of United State Exams, specialities, university subjects, include more practice in learning. They asked for more support for the platform that would unite students and teachers, make additional vocational education in digital specialities more accessible. They talked about the optimisation of taxation. At the end of the meeting, the prime minister claimed that many statements coincided with the country’s management’s outlook on prospects of the IT industry:

“We will elaborate and include many of those ideas, approaches you talked about to our plans. We have key ministers: the ministry of digitalisation, science, and higher education, health care, key vice premiers — Chernyshenko, Overchuk who is responsible for international ties and connections, Khusnullin is a compatriot of those who are here today in Kazan, he is responsible for a section of issues, not only in construction but also transport, property. We came as a team. Your ideas will be backed, of course. We are ready to change rules and approaches only together when it comes to the stimulation of technological innovations, I will repeat once again we are partners.”

Mishustin stressed that at the moment the sector was given carte blanche, a chance to develop the business. He hoped that schoolchildren would “get additional vocational education that all our specialists need to provide a powerful effective growth of Russia’s economy”.

250,000 specialists to be trained in short-term

Welcoming visitors of the exhibition in the Popov Technopark, Vice Premier of Tatarstan Roman Shaikhutdinov who supervises Innopolis’s development said that a meeting of the supervisory board chaired by Vice Premier Dmitry Chernyshenko took place on the same day. Minister of Science of Russia Valery Falkov, Minister of Communications of Russia Maksut Shadayev participated in the session.

“A historic decision has been made today to create a united methodological centre for digitalisation of the Russian economy in Innopolis. This centre will aim at four key branches of development: bachelor, master’s degrees, a PhD — a traditional system of higher education with a focus on IT. It is an additional education for a constant upgrade of IT specialists’ qualification. Most importantly, it is training and retraining of the academia in universities that will be in the consortium of our country, it is 10-15 universities,” Shaikhutdinov said.

According to him, now the task is to train 250,000 IT specialists within a very short time in all mentioned areas of higher and additional vocational education.

Miracles of innovation

The Moscow delegation looked over the exhibition on which 11 residents of the Popov Technopark presented their developments. Many of them are already applied in practice. While Ak Bars Bank presented its development based on biometric technologies. It is a whole ecosystem of services for a business with computer vision — Face2. It has already been introduced in the canteen of the high-tech city and CAVA cafe. They have bio machines. Anyone can test them. It is necessary to take a photo via Tatarstan Tourist Pass mobile app — a guest card of the Republic of Tatarstan — and easily pay for a purchase after looking at the camera for a few seconds. The development allows substituting plastic discount and club cards for a service of biometric identification of clients.

On cash, a camera recognises a member of the loyalty programme, and the system will automatically grant bonuses one can use to pay for an order in the future. Such a service will soon operate in 88 public catering establishments of the republic. Moreover, the app will show where in the city such a loyalty programme will run.

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