Regulation for the digital state and new types of business will be included in the investment climate agenda in 2020

Support mechanisms for network communities for non-resource exports, creating comfortable conditions for new types of business, overcoming personnel shortages in the regions, new regulation for the digital state, as well as normalizing relations between security officials and entrepreneurs were among the key topics for 2020. Such an agenda was formulated by the participants of the conference “100 Steps to a Favorable Investment Climate”, which was held in Moscow on December 10.

“If you go back to 2010, everything was simple then. We had an understanding that was formed by the business about the problems that exist in the regions, and then a regional (investment) standard appeared. We had an understanding of where we are located on a global scale, the places that we occupied in the second hundred (Doing Business ranking) in different positions. We understood where to move and what way we have to make. Since then, we have basically gone this way, and now we have a whole series of new challenges, new problems and new forks,” Andrei Belousov, Assistant to the President of Russia said.

Pre-conditions for a new agenda

According to Andrei Belousov, over 9 years of active work with the investment climate agenda, a class of new players has appeared in Russia, primarily in the field of small and medium-sized businesses. Simplification of business procedures has not affected many of them.

“These are those entrepreneurs who risked engaging in the technology agenda - startups, agricultural cooperation, which is gaining momentum, entrepreneurs who work in the field of physical education and sports, entrepreneurs who have engaged in social business, and a number of other players. And frankly speaking, our regulatory framework, our regulatory structure is not very suitable or far from always suitable for these entrepreneurs,” the assistant of the president emphasized.

According to Andrei Belousov, the digital agenda has already become a new challenge for the development of the regulatory environment.

"New fields have emerged: a platform business that is developing fast enough, a marketplace that absolutely does not fit into today's civil law. It is unclear who is responsible for something and how. This is not only a problem of the Russian Federation, it is a global problem. The same questions arise in China, in the United States, and in Europe. One way or another, these questions need to be answered,” he pointed out.

According to the assistant of the president, the digitalization of the public administration system will create unique opportunities for the formation of a fundamentally new regulatory environment and increase transparency of relations between government and business.

Dmitry Peskov, the President’s Special Representative for Digital and Technological Development, Director of the Young Professionals Direction of the Agency for Strategic Initiatives (ASI) spoke about new formats for companies to enter global markets.

One of the emerging trends is the creation of network export communities from among small companies. Startups increasingly prefer to use the concept of technology trading houses. Export support measures for such forms of cooperation have not yet been provided.

“Companies can be completely different, one could be about online training, another on about triathlon, they agree to create a new online triathlon training service for the Chinese market - this is a particular example of such cooperation between our companies that did not exist before. On digital platforms, this is becoming possible," Dmitry Peskov explained.

The line between digital and non-digital business, in his opinion, is missing.

“Completely new formats that we have not seen so far are emerging. What conclusion can be made of all this? We definitely need a different rating for this new investment climate. We must look at different ratings and make a synthetic rating for our tasks. Second, we need target growth models for different markets and for different companies,” Dmitry Peskov said.

Russian support measures focus on commodity exports and do not target new markets.

“Our companies, even small companies, are ready to pay - somewhere a fixed price, somewhere percent of profit, somewhere with analytics, somewhere with legal support. A huge demand for cooperation. Coworking in other countries for quick market tests, networking and a very massive request - payment systems for working with foreign markets that allow you to make payments twenty four -seven, 365 days a year. The financial system doesn't allow doing Time-to-Market today,” Dmitry Peskov said.

At the regional level, Russia lacks technological specialization. “We need regions - holders of uniqueness in the global market. We don’t think about ourselves globally, we don’t think about the region in a global framework,” the President’s Special Representative said.

Old issues on the new agenda

In 2020, unsolved issues from the old agenda will again come to the fore. By a large margin, according to surveys of entrepreneurs, relations with control and supervisory authorities and law enforcement agencies are leading.

“The regulatory authorities are in a state of smooth and, I hope, painless guillotination. The procedure, which should be completed in a year, to the common joy of all - both the business community, and the regulatory authorities themselves. Therefore, now the topic of inspections, the topic of transparency of inspections, has, in my opinion, faded into the background, but relations with security agencies have come to the fore. And the launch of the so-called digital ombudsman - the platform (Забизнес.рф), where entrepreneurs can apply, shows the depth of the problem to the full extent,” Andrey Belousov said.

The concern of entrepreneurs with these issues was confirmed by the heads of regions.

The governor of the Novgorod region, Andrei Nikitin, outlined the topics of staff shortages and interaction with law enforcement agencies as priorities for business. “I’m not saying that there is some kind of terrible pressure on business from the side of law enforcement agencies, there is definitely a lack of understanding. Misunderstanding of the validity of certain actions is present, - Andrey Nikitin explained. - Regarding control and supervisory activities, the issue has not been resolved either: there is a guillotine, but no control tools. This mechanism has not yet descended to the level of regions”.

The Governor of the Ulyanovsk Region Sergey Morozov drew attention to the multidirectional actions of various structures and the isolation of the federal agenda for improving the investment climate from what is happening on the ground. “If we don’t take the similar“ 100 steps ”in the activities of the municipal government, then we won’t succeed,” Sergey Morozov said.

The thesis of the colleague was supported and developed by Maksim Reshetnikov, the Governor of the Perm Territory: “We are trying to break through the same system of requirements everywhere in a federal state. We need decentralization and powers to the regions".

In the Khabarovsk Territory, the business experienced serious problems with the availability of credit resources. Sergei Furgal, the governor said that the region’s authorities have created a special fund through which they act as a property guarantor in front of the bank to attract borrowed funds for the implementation of business projects.

“We have a common failure in the accessibility of small businesses to cheap resources. Under the 8.5 program, we have not reached the necessary indicators,” Aleksandr Braverman, head of the SME Corporation, said.

Business Request for New Regulation

Aleksandr Shokhin, President of the Russian Union of Industrialists and Entrepreneurs (RSPP), considers the regulation of intellectual property rights to be a new challenge. “We need to create regulatory sandboxes, go for legal experiments. There should be flexibility of regulation while simplifying procedures,” the head of RSPP explained.

His colleague from Delovaya Rossiya, Aleksei Repik, suggested paying more attention to criminal policy, decriminalizing business, and providing for a mechanism for redressing economic punishment.

The problem of personnel shortages in the regions, according to Aleksei Repik, needs to be addressed in a comprehensive manner, by creating a comfortable social and business environment. “We need to create such conditions for an individual that he/she wants to realize one's potential in a particular city, so that he/she feels comfortable there. It’s clear that you can’t transport Nornickel to Perm Territory, and you can entice the programmer with better conditions and confidence in the future, the stable work of the institutes and the absence of risks of forceful pressure on the business,” Delovaya Rossiy chairman explained.

This approach was supported by the chairman of VEB.RF Igor Shuvalov, who heads the ASI Expert board. He emphasized that with high rates of GDP, people's quality of life may not improve.

“If we are talking about high rates of economic growth, we must concentrate on the urban economy. This includes comfortable environment for business development, entrepreneurial initiative. We will work on this in ASI Expert board. Young people must have a choice of opportunities to implement their ideas,” Igor Shuvalov added.

ASI-2020 Agenda

The issues voiced at the conference “100 Steps to a Favorable Investment Climate” will be included in the agenda of the Agency for Strategic Initiatives.

“We perceive it not as a platform for summing up results, but as a platform for setting goals for the next year, for the near future,” Svetlana Chupsheva, the head of ASI, said. She identified several tracks which the agency will continue to work on in 2020.

The first track (analogue): further advancement in the Doing Business rating.

“Two new indicators appear there, but I want to note that they are already in our national rating. This is access to procurement of state-owned companies, as well as training. It seems to me that this can become our competitive advantage in the global rating, and we are ready to focus on those growth points that will provide our country with the advantage and entry into the top 10,” Svetlana Chupsheva said.

A separate direction in this track will be the development of the regulatory environment for business.

“Updating the rules, updating the tools, "dormant" norms, the regulatory guillotine — revising and abolishing Soviet obsolete norms, new technologies and new algorithms that give rise to the need for new formats, new protocols, new standards. Here, our task is to formulate these rules together with business so that it is validated by business, to fix them and give entrepreneurs a clear horizon of stability - that we will not again review these rules in the near future and change them for the worse for business,” CEO of ASI explained.

The next track: creating mechanisms for Russian companies to enter global markets.

“We should not catch up, not watch how we enter somewhere, improve our positions, but participate in the formulation of new standards for the new economy, and become a full-fledged participant in this discussion. Starting next year, we want to form an international expert council within the framework of our new ASI Go Global initiative, where VEB.RF, REC, SME Corporation and our other partners working in foreign markets have already acted as participants and partners of this platform,” Svetlana Chupsheva said.

She noted that entrepreneurs who turn to ASI for project support have a request for foreign expertise and access to international certification.

“And here, too, we had an instruction from the president following the results of the supervisory board on the creation of such international certification laboratories. This year we are also launching the Smartek project on the exchange of best practices and solutions, which will give us the speed of implementing proven solutions, both for the regions and for companies representing NCEs and foundations that will be able no to “reinvent the wheel”, but to advance quite quickly in terms of business growth, acceleration and entry into new markets,” Svetlana Chupsheva explained.

The new content on the ASI agenda in 2020 will be certain types of entrepreneurship - youth, social and freelance (self-employed).

“We have a huge demand from young people under the age of 18 who are engaged in illegal "grey" technology entrepreneurship. Our task is to help them to step out of the shade, formulate the services and support that they need to meet their needs, so that they can patent their technology, their right to develop, receive grants and subsidies for their technological developments, give them access to youth accelerators, to mentors and project teams that will help bring their ideas to a real product,” Svetlana Chupsheva said.

REFERENCE

By BCG projections, economic growth in the 2020s will remain only in megacities, artificial intelligence will penetrate all spheres of life, and the conflict between data openness and their monopolization will intensify. Currently, 42% of young people under 34 years old prefer remote work and freelance. Losses of the global economy from the skills mismatch make up 6% of GDP.