1. Advisory
Skolkovo Foundation
Russia and Skolkovo’s
attractiveness as an R&D
destination
Public report
March 2013

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i
Important message

3. Table of contents
Section Overview Page
Introduction
1 International R&D dynamics and trends 1
2 Critical success factors in attracting R&D investment and Russia’s performance 8
3 Overview of R&D incentives globally and availability of support in Russia and
Skolkovo
12
4 Skolkovo as an innovation centre in comparison with other development institutions 19
Appendices
1 Glossary 28
iii

4. PwC
March 2013
Public report
Given its capabilities and investment in R&D infrastructure through Skolkovo, Russia offers
favourable opportunities for international R&D investment
Skolkovo Foundation • Russia and Skolkovo’s attractiveness as an R&D destination
MNCs are looking to go international for additional R&D capabilities.
Nowadays, leading MNCs driven by the needs of global markets are intensively
looking for unique R&D capabilities that can generate new technologies, products and
know-how with strong commercial potential in their respective industries.
Russia is a potentially attractive R&D destination for MNCs as a country
with an extensive historical legacy in science and huge market potential.
From 2002 to 2011, at least 15 MNCs established R&D centres in Russia. Among the
main reasons why MNCs decide to establish R&D centres in Russia are the following:
1) Extensive talent pool available in Russia, ensured by:
• High level of education
• Long standing scientific and engineering culture and tradition, especially in
aerospace, nuclear science, engineering and software
• Renowned universities and research centres
• Strong track record in international educational competitions
2) Commercial opportunities driven mainly by attractive domestic market:
• B2C market: Russia is one of the largest consumer markets in Europe
• B2B market: industrial output with a 5% annual growth rate is among the
highest in the world
• B2G market: the Russian government is pursuing an ambitious modernisation
programme covering such diverse industries as healthcare, energy, aviation,
transport and utilities
However, the number of foreign corporate R&D centres in Russia is very
small in comparison with such countries as China and India, which have
attracted the majority of total outbound R&D centres over the past 10 years, at least
224 and 95 centres, respectively.
The average number of foreign R&D centres established annually in Russia per total
number of researchers in the country is the lowest among the BRIC countries: two
times lower than in Brazil, six times lower than in China, and 18 times lower than in
India, meaning that Russia’s R&D environment is relatively less penetrated by MNCs.
Meanwhile, the Russian market is also relatively untapped as the average number of
foreign R&D centres established annually in Russia per average annual GDP is also
times less then in China and India.
In particular, this is the result of the low level of integration of Russian
science into the global scientific community and a lack of entrepreneurial
culture in Russia, which is due to historical factors. Among other obstacles
preventing MNCs from establishing R&D centres in Russia is the country’s outdated
or underdeveloped R&D infrastructure, especially in the Biomedical and
Industrial Machinery industries, and administrative barriers, which partially
result from investors' unfamiliarity with Russian legislation and business practices.
Currently, the Russian government is focused on improving the country’s
R&D environment to increase its attractiveness as an R&D destination.
The Russian government is implementing a policy of economic modernisation and
support for innovation. R&D support measures include:
• Tax incentives for R&D: Russia provides a favourable tax regime for R&D activity
compared to other countries, including lower rates for major taxes and
accelerated depreciation of R&D expenditures at the federal level and/or within
SEZs and Skolkovo clusters
• Public funding of science, including grants and venture capital through special
development institutions
• Technological platforms aimed at uniting key stakeholders on a specific R&D
task: industry (large, medium and small companies), public authorities, research
institutions, civil society and the academic and financial communities; such
platforms are supported by Russian Foundation for Technology Development
providing preferential loans for R&D expenditures
• Organising innovation clusters: the cluster approach to organising R&D allows
for creating an innovation ecosystem that offers participants, including MNCs,
easy access to partners, financial sources, professional services, infrastructure
facilities, etc.
Skolkovo has successfully attracted MNCs to its R&D clusters as it
addresses the key issues such corporations face in Russia’s R&D
environment.
Skolkovo represents the Russian government’s most successful initiative for creating
R&D clusters. It has already established partnerships with several MNCs that plan to
set up R&D centres at Skolkovo.
MNCs see Skolkovo as a particularly attractive R&D location for the following reasons:
• Access to a talent pool through the country’s leading universities and research
institutes located in the greater Moscow area that specialise in Skolkovo’s
foresight industries (IT, Space and Telecom, Biomedical, Energy Efficiency,
Nuclear)
• Availability of public financial support for start-ups and access to high-
technology partners
• Cost effectiveness (tax incentives, large-scale construction of infrastructure)
• Absence of bureaucracy and red tape
iv

5. PwC
March 2013
International R&D dynamics and trends
1
Section 1
Skolkovo Foundation • Russia and Skolkovo’s attractiveness as an R&D destination

6. PwC
March 2013
Public report
Corporate R&D spending is highest in the USA and Europe while the BRIC
countries demonstrate the strongest growth
Section 1 – International R&D dynamics and trends
2
Skolkovo Foundation • Russia and Skolkovo’s attractiveness as an R&D destination
Sources: 1) European Commission JRC; 2) PwC analysis
Corporate R&D expenditures by Top-2000 companies,
EUR bn , 2005-2010
BRIC
Asia
Europe
North
America
Others
RoW
RoW
Others
Comments
+4%
35.1%
35.1%
26.6%
2.6%
% of region
460.8
34.7%
0.4%
10.3%
5.5%
4.8%
4.5%
10.0%
21.5%
2.9%
2.2%
1.7%
0.4%
0.4%
0.1%
0.6%
2005
370.1
40.8%
10.4%
5.8%
5.8%
3.5%
8.8%
18.9%
2.8%
0.9%
0.2%
0.1%
0.2%
0.1%
0.6%
2010
1.2%
• MNCs from developed countries still take the lead in R&D
spending worldwide; in 2010 they represented 96.8% (EUR 446.1
bn) of corporate R&D spending, but their share has been gradually
decreasing since 2005, when it was 98.9%.
• However, MNCs from the BRIC countries have demonstrated
outstanding growth in corporate R&D thus increasing steadily
their share from 0.6% (EUR 2 bn) in 2005 to 2.6% (EUR 12 bn) in
2010. This rise in the BRICs’ R&D expenses has been driven by
strong overall economic growth.
• Among the BRIC countries, the most rapid growth in 2005-2010
was posted by MNCs from China (53%) and India (49%). China
holds the leading position among BRIC countries with a share of
49% in 2010. In terms of growth, Russian MNCs placed third
among their BRIC peers and in the world with a 29% CAGR in
2005-2010, while Brazilian MNCs posted an honourable fourth
place showing with 23% of annual growth from 2005 to 2010.
• Russian corporations spent on R&D EUR 193 m in 2005, while
this figure was 3.5 times higher in 2010 at around EUR 679 m.
0.6%

7. PwC
March 2013
Public report
MNCs are either seeking to access additional (sometimes cheaper) research
capacity (talent) or are following manufacturing to adjust development
locally. In Russia, access to research skills is currently the main driver
Internationalised
manufacturing
Internationalised
R&D
1 2
Internationalised
research
Internationalised
development and
manufacturing
1 2
• MNCs enter new markets to ensure sustainable growth
through localising their production facilities. Proximity to
customers allows for reducing the time to market.
• At the second stage, MNCs customise and tailor their goods to
local needs and regulatory requirements; thus, as a rule, they
localise development centres. Occasionally, they may also
incorporate a research centre.
• This model is typical for a huge market with relatively low
scientific potential, of which China is the best example.
Market-driven model Technology-driven model
Approach
Comments
Example
1883-
1891
1992 20051974
• Established
as two
separate firms
which merged
in 1988
• Hong Kong
business formally
established
• First
manufac-
turing
operations
established
• Opened Chinese R&D
centre focused on
power systems, robotics
& manufacturing
technologies
200719931969
• Samsung
Electronics
established in
Seoul, Korea
• Moscow
research
centre
established
• First plant established
in Kaluga, focused on
manufacturing
household appliances
(monitors, TVs, etc.)
Source: PwC analysis
Skolkovo Foundation • Russia and Skolkovo’s attractiveness as an R&D destination
Section 1 – International R&D dynamics and trends
3
1 2
or
• MNCs seek out new ideas and qualified talent to expand their own
competencies. By localising their research centres, MNCs can
benefit from the host country’s existing track record, legacy and
educational system. They can also potentially expand their research
activities through development.
• At the second stage, after acquiring a good understanding of a
specific market, and if the market is attractive, MNCs may opt to
localise their manufacturing operations.
• This model is typical for countries with strong intellectual resources
and untapped market potential, or which Russia is the best example.

8. PwC
March 2013
Public report
The industries most likely to offshore R&D are Telecom, Software,
Chemicals, Automobiles, Electronics, Pharma and Semiconductors
Section 1 – International R&D dynamics and trends
4
Skolkovo Foundation • Russia and Skolkovo’s attractiveness as an R&D destination
Top industries for “exporting” R&D
centres, Number of centres, 2002-2011
1
2
3
3
5
6
18
21
21
35
36
45
50
62
63
65
69
7 6
88
98
Ø 38
Biotechnology
Gas, Water & Utilities
Oil & Gas
Construction & Materials
Electricity
Alternative Energy
HealthCare E&S
Internet
Aerospace & Defence
Industrial Machinery
Computer Hardware
General Industrials
Computer Services
E&E Equipment
Semiconductors
Pharmaceuticals
Automobiles
Chemicals
Software
Telecom1
2
3
4
5
6
7
1 2
3 4
6 75
Telecom
Primary reasons for “exporting” R&D centres by MNCs
Software
Chemicals Automobiles
Pharma SemiconductorsElectronic & Electrical
Equipment
Proximity to customers
Limited supply of technical
talent in home country
Proximity to production
facilities
Unique specialists
New markets
Legal limitations in home
country
Proximity to
manufacturers/customers
Quest for talent
Opportunity to work with
reputable research institutes
High operating costs
Lack of qualified
personnel at home
Proximity to customers
New markets: proximity
to manufacturing
facilities
Search for talent and
outstanding technologies
Proximity to suppliers
New markets: time to
market
Proximity to customers
Proximity to producers
Lack of specialised talent
Proximity to suppliers
Sources: 1) Glorad database; 2) PwC analysis
6.2%
4.7%
4.4%
15.8%
16.3%
6.2%
6.5%
2.4%
2.9%
3.0%
1.9%
3.6%
0.9%
2.0%
0.14%
0.7%
1.0%
2.1%
0.2%
2.2%
68%
nn - Share of industry in total corporate R&D spending (average 2008-10)
- Space
Technologies
- ICT
- Energy
Efficiency
- Biotech
- Mix: includes
Nuclear Tech
Average share of total
R&D spending, 2008-2010
Less than 10, not active
“exporter”

9. PwC
March 2013
Public report
Inbound R&D is highly concentrated – the clear leaders are China, India
and the US, with Russia placing only 9-11
Section 1 – International R&D dynamics and trends
5
Skolkovo Foundation • Russia and Skolkovo’s attractiveness as an R&D destination
153
7
9
9
12
14
15
15
15
21
22
24
33
38
61
95
224
RoW
Brazil
Ø 45
UK
Australia
Japan
France
Russia
Canada
Ireland
Israel
Taiwan
Korea
Germany
Singapore
USA
India
China
Criteria for winning modelsTop countries for “importing” R&D centres, Number of centres, 2002-2011
2.81
2.60
1.55
2.35
0.85
4.20
2.85
1.95
3.40
1.05
1.75
3.47
2.21
1.81
All R&D,
% of
GDP
GDP,
USD
tn
 HuHuge market potential
 Low costs, including labour
 Pool of talent
 Political stability and favourable
economic environment
 Good infrastructure
 Established legislative base, especially
in IP
 Financial and non-financial incentives
 Low administrative barriers
 Developed educational and science
support system
2.25
15.2
0.31
11.3
0.88
4.47
0.23
3.09
1.39
1.55
2.37
0.18
4.38
2.23
2.25
0.92
1.20 2.23
50%
Sources: 1) Glorad database; 2) Battelle; 3) PwC analysis
2011
Average
monthly
salary, USD
2009
4,240
n/a
415
1,200
65
2,230
3,703
n/a
2,633
650
5,005
2,731
4,001
5,467
3,930
565
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16

10. PwC
March 2013
Public report
Some countries score well across industries due to market size, while others score
well only for a limited set of industries due to specific strengths (talent, incentives,
costs, etc.); Russia is chosen mainly for its scientific talent pool
Section 1 – International R&D dynamics and trends
6
Skolkovo Foundation • Russia and Skolkovo’s attractiveness as an R&D destination
Japan
Highly qualified personnel, internationally renowned universities, established
IP legislation, developed infrastructure
Countries
China
India
USA
Singapore
Germany
Korea
Taiwan
Ireland
Canada
France
Source: PwC analysis
1 2 3 4 5
6 7 8 9 10 11 12 13 14
Qualified staff, English-language capabilities, IP legislation, cost effectiveness,
government support , market
Highly qualified personnel, internationally renowned universities, established IP
legislation, highly developed infrastructure
Government support, qualified personnel, clustering, infrastructure, hub for East-
Asian market
Highly qualified personnel, internationally renowned universities, established IP
legislation, developed infrastructure, advanced technologies
IT infrastructure, qualified personnel, tax incentives, favourable labour costs
Proximity to production facilities, strong government support, developed
infrastructure
EU membership, developed infrastructure, low taxation, the government's active
economic policy, English-speaking manpower, strong educational system and
proximity and cultural similarity to the UK and the USA
Developed ICT infrastructure, easy access to US and world markets, superior
workforce, quality of life
Highly qualified personnel, internationally renowned universities, established IP
legislation, developed infrastructure, convenient geographical location
1- Aerospace & Defence
2- Telecommunications equipment
Huge market, proximity to manufacturing facilities, cost effectiveness, government
support
Israel
High R&D spending; highly educated population, especially with technical
background; large Jewish diaspora abroad, providing access to Western financing
resources; developed telecom infrastructure
      
Key success factors


  
   
 

 
   
 
 

 
9- Industrial Machinery
10- Chemicals
7- Semiconductors
8- Electronic & Electrical Equipment
 
   
  
- Industries with the share of more than 8% of the total number of R&D centres


   









13- Pharmaceuticals
14- Health Care Equipment
& Services
Russia
Strong Soviet legacy in physics, mathematics and aero-
space, government support, improving infrastructure    
3- Software
4- Computer Services
5- Computer Hardware
6- Internet
11- General Industrials
12- Automobiles & Parts

11. PwC
March 2013
Public report
Over the past 10 years, Russia has attracted approximately 15 R&D centres
– the leading sectors are ICT, Aerospace & Defence and Telecom
Section 1 – International R&D dynamics and trends
7
Skolkovo Foundation • Russia and Skolkovo’s attractiveness as an R&D destination
Sources: 1) Glorad database; 2) Company sites; 3) PwC analysis
1
1
2
2
2
3
4
Automobiles & Parts
Chemicals
Aerospace & Defence
Internet
Telecommunications
Equipment
Computer Hardware
Semiconductors
CommentsRussia’s inbound R&D centres, Number of centres, 2002-2011
 Over the past 10 years, Russia has attracted 15 R&D
centres, both Specialised Contributors and Supported
Specialisation.
 The majority of R&D centres are localised to take
advantage of Russia’s talent pool; but, there are also
centres dedicated to product customisation and are
thus market-driven.
 Currently, there are approximately 48 R&D units in
the leading sectors, including:
1. ICT: 21 centres,
2. Aerospace and Defence,
Telecommunications: 7 centres,
3. Chemicals: 6 centres.
 Among leading MNCs, Russia has hosted R&D
centres for EMC, LG, Google, EADS, Boeing, Intel,
HP, Siemens, Samsung, DuPont and Corning, among
others.

12. PwC
March 2013
Critical success factors in attracting R&D
investment and Russia’s performance
8
Section 2
Skolkovo Foundation • Russia and Skolkovo’s attractiveness as an R&D destination

13. PwC
March 2013
Public report
Our Interview Programme has shown that for MNCs the most important
country selection factors in the R&D localisation process are personnel,
stability, know-how and market
Section 2 – Critical success factors in attracting R&D investment and Russia’s performance
Skolkovo Foundation • Russia and Skolkovo’s attractiveness as an R&D destination
6
18
19
20
29
34
37
38
40
42
45
47
50
52
53
Costs
Cooperation
Infrastructure
Legal
Acceptance
Processes
Market/
Customers
Know-how
Stability
Personnel
Image
Critical mass
Location
Culture
Regulations
Ranking of CSF by importance
Sources: 1) PwC Interview Programme; 2) PwC analysis
Must-
have
Impor-
tant
Comments
 In our Interview Programme, we conducted interviews
with 24 MNCs from such industries as Telecom
Equipment, Aerospace and Defence, Software,
Computer Services, Computer Hardware, Internet,
Pharmaceuticals, Chemicals, Healthcare Equipment
and Services, Electricity, Alternative Energy, Oil and
Gas, General Industrials, Electronic and Electrical
Equipment, Industrial Machinery, and Automotive and
Parts, both with and without R&D centres localised in
Russia.
 Data is presented in an aggregated form: for both
research and development type centres.
 Depending on the specific industries and the R&D value
chain stage (R or D), the importance of specific factors
may differ.
 All companies interviewed across all industries
indicated that the most important factors are: talent,
technology, market and stability (political, social and
economic).
9

14. PwC
March 2013
Public report
Given Russia’s world-class scientific base and its statute as one of Europe’s
largest markets, the Russian government has focused on improving the
R&D environment to spur corporate capital investment in R&D
Section 2 – Critical success factors in attracting R&D investment and Russia’s performance
10
Skolkovo Foundation • Russia and Skolkovo’s attractiveness as an R&D destination
No. 1
RUSSIA’S HUGE POTENTIAL COMMENTS
World-class,
creative, bright
talent
Huge,
untapped
market
opportunities
Rapidly developing
national innovation
system
# of researchers,
2010, ‘000
• With a large number of researchers per 10,000 of
its economically active population, Russia is
comparable to developed countries and far above
developing ones.
• Historically, Russia has been strong in natural and
technical sciences, thus these disciplines account
for about 92% of the total number of researchers.
• Russia’s B2C, B2B and B2G markets are some of the
most attractive in the world.
• Russia represents one of the largest consumer markets
in Europe. The country’s industrial output, with 5%
annual growth, is among the highest in the world.
• The Russian government is carrying out an ambitious
modernisation programme covering such sectors as
healthcare, energy, aviation, transport and utilities.
Sources: 1) IMF; 2) Rosstat; 3) CIA; 4) PwC analysis
• The Russian government launched one of its most
ambitious and promising projects – the Skolkovo
Innovation Centre – aimed at developing an
innovation-driven economy in Russia and covering five
clusters: Information and Computer Technologies,
Space Technologies, and Telecommunication, Nuclear,
Energy Efficiency and Biomedical Technologies.
• Skolkovo hosts a critical mass of stakeholders and
offers a comprehensive system of incentives: tax
breaks, preferential customs regime, access to funding
and infrastructure, and simplified hiring of foreign
labour.
1 3 3
1 5 54 4 2
14
4
15
65
0
5 0
1 00
500
0
BrazilIndiaRussiaChina
1,152
USA
1,413
95
1,000
1,500
Per 10,000 of
economically active
population
82
1 4 33 1 0
44
48
1
5
0
1 0
2 0
3 0
4 0
5 01,400
1,200
200
0
GermanyRussia
13
USAIndia
1,191
China
1,341
GDP per capita,
2011, ‘000 USD
B2C market, 2010, mn of
population

15. PwC
March 2013
Public report
Note: a) Cover several sectors like Electricity, Energy, Alternative Energy, Healthcare Equipment, and Industrial Machinery;
b) Also relevant for specialised software in Aerospace and Pharma
In Aerospace, Internet, Nuclear Technology and Software Russia has strong
capabilities both in research and development due to the Soviet legacy in
physics, mathematics, and space technologies
Sources: 1) PwC Interview Programme; 2) PwC analysis
Capabilities of Russia
- High - Medium - Low
11
Skolkovo Foundation • Russia and Skolkovo’s attractiveness as an R&D destination
Section 2 – Critical success factors in attracting R&D investment and Russia’s performance
• Longstanding scientific tradition in life sciences
• Developed infrastructure for clinical tests of specific groups of illnesses
• Lower labour cost in the sectors versus competitors
• Attractive market size and potential
• Longstanding scientific tradition in physics and mathematics
• Strong partnership of research centres with civil/military companies in A&D
• Lower labour cost in the sectors versus competitors
R D
Aerospace and Defence
Telecommunications
R D Key advantages of Russia
Softwareb)
Computer Services
Computer Hardware
Internet
Semiconductors
Electronic and Eectrical
Equipment (E&EE)
Industrial Machinery
Chemicals
Automobiles and Parts
Pharmaceuticals
Healthcare Equipment and
Services
ICB sector
• Longstanding scientific tradition in mathematics proven by strong
achievements of students at international contests
• Creative educational process at leading universities that foster the ability
to solve non-standard tasks and issues
• Employee potential in software and Internet recognised by leading IT and
Internet companies
• Strong Russian market growth for Internet-related industries and in-
demand IT goods and services, e.g. growing broadband connectivity
• SME and start-up development in IT sector
• Lower labour cost in the sectors versus competitors
• Longstanding scientific tradition in physics and material engineering
• Market potential in these sectors due to unsatisfied demand for modern
equipment, services and goods from B2C, B2B and B2G segments
• Longstanding scientific and engineering culture in physics, mathematics,
and material engineering
• Globally renowned universities and research centres
• Developed infrastructure for working with nuclear technologies
Industrial Machinery
Electricity
Nuclear Technologiesa)
Skolkovo
cluster
- Very high

16. PwC
March 2013
Overview of R&D incentives globally and
availability of support in Russia and
Skolkovo
12
Section 3
Skolkovo Foundation • Russia and Skolkovo’s attractiveness as an R&D destination

17. PwC
March 2013
Public report
Globally, governments support R&D start-ups and projects through special
mechanisms providing services and infrastructure, and public financing and
tax incentives. While Russia does provide tax incentives and public financing
for R&D, it has not actively developed business incubators and TTOs
 Governments support R&D activity at different stages of R&D
projects, mainly through:
• tax incentives for private, innovation-driven companies;
• providing special R&D supporting mechanisms, such as
technology transfer offices, business incubators and business
accelerators;
• providing non-revocable (grants) and revocable financing
for R&D projects (mainly through special funding and
development institutions, such as public foundations, state
venture funds, development banks, etc.).
 Such support can be provided individually or as part of a
package based on R&D and R&D/industrial clusters, special
economic zones (SEZ), technoparks, technological platforms,
etc.
 Public project financing usually requires co-financing from
private sources (excluding fundamental research), i.e. own
capital, venture and private capital funds, and banks.
 Currently, the Russian government provides mainly public
financing and tax incentives for R&D projects, but lags in
providing supporting mechanisms for commercialising R&D
results.
 Existing innovation technoparks (Sarov, Idea) and innovation
centres (Dubna, Zelenograd) mainly provide infrastructure
facilities but very limited outsourcing and individual consulting
services to their residents.
 Skolkovo can be used as a platform for providing supporting
mechanisms in accordance with global best practice.
Section 3 – Overview of R&D incentives globally and availability of support in Russia and Skolkovo
13
Skolkovo Foundation • Russia and Skolkovo’s attractiveness as an R&D destination
Comments
Maturity
Incubation
(pre-seed / seed)
Acceleration
(growth)
Stage of
development Concept Technical
validation
Market
validation
Implementation
scaling-up
International
expansion
IPO or
M&A
Sales
Evolution of a
company
Transfer technology office (TTO)
1-2 years
(3-5 years for
biotech start-ups)
Up to 1 year
Business
incubator
1 2
3
4
5
Supporting
mechanisms Business accelerator
Duration Up to 2 years
6
Public
financing
R&D tax
incentives
Grants Grants, venture
capital
Venture capital,
preferential loans
Preferential
loans
Tax deductions,
preferential tax rates
Investment grants, tax
deductions, tax exemptions
Source: PwC analysis
Provided by
government
in Russia
To be
developed
in Russia
Map of government support by stages of R&D project

18. PwC
March 2013
Public report
Russia offers a favourable tax regime for R&D, including reduced tax rates,
accelerated depreciation of R&D expenditures and tax credits, at the
federal level as well as within SEZs and the Skolkovo clusters
Section 3 – Overview of R&D incentives globally and availability of support in Russia and Skolkovo
Skolkovo Foundation • Russia and Skolkovo’s attractiveness as an R&D destination
Transition economies Mature markets
Russia China India Singapore Israel Ireland USA
Reduced profits tax rate 15% 17% 5%a) 10-25% 12.5%
Profits tax holidays b) c)
Increased tax rebate for R&D expenditures 150% 150% 150%
Tax credit for R&D and investment in high-tech
Accelerated depreciation
Inclusion of some of R&D capex into revenue
expenditures
d)
Property tax reduction
Exemption from customs dues e)
  
    
Note: a) Minimal rate for a time period up to 10 years; b) Based on individual agreements; c) For designated companies; d) Only hardware for IT
companies; e) Dues are not collected
Sources: 1) Incentives for innovation 2010, PwC; 2) Russian Federation Tax Code; 3) PwC analysis
     
   
     
   
Transition economies tend to
provide higher tax rebate for R&D
expenditures
Mature markets offer tax credits more often
Tax polices are generally based on
individual countries’ conditions; however,
similar economies may have similar policies


     




 


Available in
Skolkovo
and/or SEZ
Available in
Skolkovo
and/or SEZ

14

19. PwC
March 2013
Public report
Russia has all major types of development institutions providing public
funding for R&D at different project stages
National development institutions in top countries/regions for inbound R&D
(with overall budget)
Administrator
of government
programme
China
Ministry of
Science and
Technology
N/A
India USA EU Russia
National
venture
capital
provider
Development
banks
Clusters/
Special
economic
zones
Council of
Scientific and
Industrial
Research
USD 150m
US Small
Business
Administration
USD 172m
The Federal
Ministry of
Economics and
Technology,
Germany
N/A
Skolkovo
Foundation
USD 200m
N/A
US Small
Business
Administration
USD 8.2bn
The European
Investment
Fund
USD 1.8 bn per
year
Not used for
innovation
development
Not used for
innovation
development
Not used for
innovation
development
The
European
Investment
Bank
EUR 1.4bn
per year
MSP-Bank
(affiliated with
VEB)
EUR 1.25bn per
year
Shenzhen
SEZ
Usually used for
manufacturing
and foreign trade
Skolkovo,
SEZ Dubna
Not used for
innovation
development
Israel
Chief
Scientist’s
Office
~USD250m
Yozma
N/A
--
N/A
Russian
Venture
Company
USD 851m
N/A N/A
Sources: 1) Development institution websites, 2) Erawatch, 3) PwC analysis
Skolkovo Foundation • Russia and Skolkovo’s attractiveness as an R&D destination
Section 3 – Overview of R&D incentives globally and availability of support in Russia and Skolkovo
15
Comments
 The Russian government is
implementing a comprehensive
innovation promotion programme
and developing various
mechanisms for the financial
support for R&D, while most of
other R&D-active countries focus
on specific types of development
institutions.
 In particular, the Russian
government provides public
funding for R&D through special
government grant programmes, a
venture capital fund of funds, a
development bank (preferential
credits) and SEZs (preferential tax
regime).

20. PwC
March 2013
Public report
Although public funding in Russia is sufficient, access to venture capital
and loans for R&D is limited
Section 3 – Overview of R&D incentives globally and availability of support in Russia and Skolkovo
16
Skolkovo Foundation • Russia and Skolkovo’s attractiveness as an R&D destination
Loans and
credits for
R&D
Grants
Venture
capital
 Access to grant funds on terms that are
aligned with other countries’ policies
 Grant programmes cover all stages of the
R&D cycle
 Grant programme requirements are in
line with other countries’ practices and
relatively easy to meet
 R&D loans and credit instruments are
focused only on commercialisation stage
 Budgets of R&D soft loan providers are
limited with voluntary contributions from
Russian companies
 State bank-provided funding for
preferential R&D credits requires a
patent, thus significantly limiting the
range of potential borrowers
Financing
sources critical
for SMEs
Available
amount
Ease of
access
1
2
3
High High
High Low
Medium Low
Skolkovo/Russia benchmark versus other
countries
Comments on Russia
 Large number of investment funds with
capital to invest.
 RVC provides private seed capital and
risk sharing mechanisms for private
funds.
 Access to venture financing for SMEs and
start-ups is limited as a result of the lack
of innovation support structures and
mentoring systems (business angels,
professional intermediaries)
Skolkovo,
Russia
SBIR,
USA
OCS,
Israel
Russia USA Israel
Russia Europe
1. Total funds (USD bn)
2. Max. sum of grant (USD
mn)
3. Time required for
funding decision (days)
1. National VC Funds
available (USD bn)
2. VC availability a)
1. Development banks
budgets (USD bn)
3. Ease of access to loansa)
(for Europe – Germany)
87 90 70
10 1 0.8
(Average)
0.2 2.5 0.3
(2010)
1 8.2 0.1
3. Quality of proposals
(based on interviews)
2,3 4.0 4.5
Low High High
2,4 3.o
1.6 1.8
2. Number of R&D credits
provided by banks
(indicative)
Low High
Note: a) Country indicator, Global Competitive Report rating, where 1 is the lowest, 7 is the highest
Source: 1) The Global Competitiveness Report 2011-2012, 2) Development institution websites; 3) PwC Interview Programme; 4) PwC analysis

21. PwC
March 2013
Public report
Initiatives introduced by the Russian government are improving Russia’s
attractiveness for R&D
Section 3 – Overview of R&D incentives globally and availability of support in Russia and Skolkovo
Skolkovo Foundation • Russia and Skolkovo’s attractiveness as an R&D destination
Innovation commercialisation
and growth management
programme
Initiatives Description Status
Innovation projects support
programme
Presidential programme
“Innovations and Risks in
Business”
Allows managers to gain advanced knowledge and learn
necessary traits in the area of commercialising innovative
projects and managing innovative companies for the purpose of
achieving competitiveness and providing substantial business
growth
The programme is aimed at stimulating innovative activity
between students, researchers and scientists in the area of
information security and related industries
The main objective of the programme is to educate a new category
of specialists who will manage the development of a new product
as well as its introduction to the market
TACIS project
Innovation and technological
project contest ‘Technovation
Cup”
The main goal of the "Support of Export-Orientated Innovative
SMEs“ project initiated by the Russian agency and realised on its
base is to support and co-operate in the process of developing
innovation-driven and export-oriented SMEs with the ultimate
goal of expanding trade relations between EU countries and the
Russian Federation, as well as developing a “common economic
space.”
The main objective of the Cup is to help project teams to market
their product or technology in the real sector of the economy and
to turn their ideas into businesses
Sources: 1) Programs’ websites, 2) PwC analysis
Education - Moscow
State University
Was running
2006-2008,
now closed
Research Grant -
Kaspersky Lab
Type of program-
Executive agent
Running since
2008
Education –
Commission of
Executive Education
Running since
2009
Developing SMEs -
Moscow Physics
and Technology
Institute
Running
Developing SMEs -
Enterprise Europe
Network Running
17

22. PwC
March 2013
Public report
Russia is establishing technology platforms, primarily following the EU’s
example
Section 3 – Overview of R&D incentives globally and availability of support in Russia and Skolkovo
18
Skolkovo Foundation • Russia and Skolkovo’s attractiveness as an R&D destination
Energy ICT
Bio-based
economy
Production &
processes
Transport
Biofuels ARTEMISg) FABREk) Construction
Platform
Aeronautics
SmartGrids ENIACh) Food
European
Steel
Rail
TPWindc) Integral Satcom
Initiative
Global animal
health
Sustainable
min resources
Road
Photovoltaics Net!Works NanoMedicine Manufuture Waterborne
ZEPd) Networked &
Elect Media
Plants
Future textiles
& clothing
Space
SNEPTe) NESSIi) Forest-based
Water supply &
sanitation
RHCf) EUROP SusChem
EPoSSj) EuMat
Photonics21
Industrial
safety
Σ 36
Medicine and
bio-
technologies
Medicine of
future
BioTech2030
Bioenergy
ICT
Nuclear and
radiation
technologies
Electronics
and machinery
Transport
Programming
platform
Nuclear fuel
cycle
Mechatronics,
robotics
Auto and rail
roads
Super-
computer
Thermonuclear
fusion
UHF tecb) High speed rail
transport
Photonika
Radio-
technologies
Ocean
exploration
Polymer
composites
LED techa)
Power system Ecology tech Metallurgy tech
Aviation
mobility
Thermal power
High tech
systems
Solid minerals
Space Platform
Renewables
Textile and
light industry
Satellite
platform
Σ 30
Photonics
Aerospace
Power
Small
distribution
Metallurgy and
new materials
Mining and oil
& gas
processing
Mining tech
Ecology
development
Deep
processing
• Technology platforms are centralised, industry-led initiatives aimed at strengthening research and
setting strategic research agendas
• Technological platforms include as stakeholders: industry (large, medium and small companies),
public authorities, research institutions, civil society and the academic and financial communities
Sources: 1) EU Cordis; 2) Russian Federation Ministry of Economic Development; 3) PwC analysis
Note: a) Light-emitting diod; b) Ultra high frequency; c) Technology Platform; d) Zero Emission Fossil Fuel Power Plants; i) Sustainable Nuclear Energy Technology Platform; f)
Renewable Heating & Cooling; g) Advanced Research & Technology for Embedded Intelligence & Systems; h) The European Nanoelectronics Initiative Advisory Council; i)
Networked European Software and Services Initiative; j) European Technology Platform on Smart Systems Integration; k) Farm Animal Breeding and Reproduction

23. PwC
March 2013
Skolkovo as an innovation centre in
comparison with other development
institutions
19
Section 4
Skolkovo Foundation • Russia and Skolkovo’s attractiveness as an R&D destination

24. PwC
March 2013
Public report
R&D clusters like Skolkovo provide a platform for efficient and effective R&D
set up and facilitation of innovation
Clusters increase
productivity and
efficiency
Clusters stimulate and
enable innovation
Clusters facilitate
commercialisation and
new business
formation
Competitiveness
How R&D clusters impact on a company’s competitiveness
 Efficient access to specialised inputs, services, employees, information, institutions, training
programmes, and other “public goods”(local outsourcing)
 Ease of coordination and transactions across firms
 Rapid diffusion of best practices
 Ongoing, performance comparisons and incentives to improve against local rivals
 Proximity of rivals encourages strategic differentiation
 Greater likelihood of perceiving innovation opportunities (e.g., unmet needs, sophisticated
customers, combinations of services or technologies)
 Presence of multiple suppliers and institutions to assist in knowledge creation
 Ease of experimentation given locally available resources
 Opportunities for new companies and new lines of an established business are more apparent
 Spin-offs and start-ups are encouraged by the presence of other companies , commercial
relationships, and concentrated demand
 Commercialising new products and starting new companies is easier because of available skills,
suppliers, etc.
Sources: 1) Clusters, Innovation, and Competitiveness: New Findings and Implications for Policy, M. E. Porter, Institute for Strategy and Competitiveness
Harvard Business School, 2008; 2) PwC analysis
Skolkovo Foundation • Russia and Skolkovo’s attractiveness as an R&D destination
Section 4 – Skolkovo as an innovation centre in comparison with other development institutions
20

25. PwC
March 2013
Public report
This is why the majority of top R&D investors prefer to localise R&D
centres in clusters across industries
Distribution of new outbound R&D centres established worldwide by top
MNCs in 2002-2011 by type of localisation, Number of R&D centres
Top clusters by number of new foreign
R&D centres established in 2002-2011
Individual R&D
centres
Other
Energy and
Nuclear
64
78%
22%
Industrial
machinery
35
57%
43%
Automobiles
and parts
69
67%
33%
Chemicals
76
63%
R&D centres
in clusters
37%
Biomedical
Technologies
84
79%
21%
Aerospace
and
Telecom
119
63%
37%
ICT
320
87%
13%
• Essentially, clusters can be considered as
geographical concentrations of different
players which simultaneously compete and
cooperate within the same industry sector
• If they are efficiently organised, the clusters
are able to generate superior returns by
focusing innovation to create region-specific
competitive advantage
ICT
Aerospace
Telecom
Biomedical
Technologies
Energy
Efficiency
Shanghai,
China
Beijing,
China
Bangalore,
India
Singapore
Detroit, USA
(automotive)
Cluster Key foreign investors
Ruhrgebiet,
Germany
Bangalore,
India
Shanghai,
China
Biopolis, Singapore
Beijing,
China
Sourcse: 1) Glorad database; 2) PwC analysis
Skolkovo Foundation • Russia and Skolkovo’s attractiveness as an R&D destination
Section 4 – Skolkovo as an innovation centre in comparison with other development institutions
21

26. PwC
March 2013
Public report
In Russia, there are three main destinations for MNCs’ R&D centres;
Skolkovo is the only one that has strong federal government support and
commitment
Voronezh Centre Of
Microelectronics and
Nanotechnology
(2006)
No foreign residents
St. Petersburg SEZ (Strelna)
(2005). No foreign residents
Irkutsk
Baikal Nanotechnology
Cluster (2009)
No foreign residents
Tomsk SEZ (2005)
Kazan
“Idea” Technopark
(2004)
No foreign residents
Sarov Technopark
(2005)
Foreign rResidents:
• Intel
• CD-Adapco
• Nokia – Siemens Networks
Dubna SEZ
(2005)
No foreign residents
Zelenograd SEZ/
Technopark
(2005/1997)
Foreign residents:
• Beneq
R&D clusters in Russia Comments
Biomedical Technologies
Information and
Computer Technologies
Energy Efficiency
Technologies
Nuclear TechnologiesSpace Technologies and
Telecommunication
Specialisation
Source: 1) Skolkovo; 2) PwC analysis
 Most existing technopark initiatives and
special economic zones (SEZ) mainly focus on
domestic investors and have not yet
demonstrated the ability to successfully attract
foreign corporate R&D centres
 Moscow and St Petersburg have specialised
zones with an adjusted tax regime for residents
 Only selected foreign investors have opted to
localise their R&D centres in technoparks such
as Sarov Technopark and Zelenograd SEZ
 In the greater St Petersburg area, MNCs have
localised their R&D in the SEZ (Strelna),
driven mainly by non-tax factors (proximity to
pool of scientists, city and R&D infrastructure)
 Skolkovo has managed to attract MNCs by
providing a comprehensive value proposition
Skolkovo Foundation • Russia and Skolkovo’s attractiveness as an R&D destination
Section 4 – Skolkovo as an innovation centre in comparison with other development institutions
Other St. Petersburg area
Foreign Residents: • Corning
• Giesecke & Devrient
• LG Electronics
• Siemens
• Synopsys
• Google
• EMC
• Hewlett-Packard
• Sun
• Intel
• Alcatel-Lucent
• Motorola
Foreign partners:
22
• Cisco
• IBM
• Microsoft
• EMC
• Alstom
• Nokia
• J&J
• Siemens
• EADS
• GE
• NSN
• Ericsson
• Intel
• SAP
• Honeywell
• Sсhneider

27. PwC
March 2013
Public report
Skolkovo is an ambitious project supported by the federal government with
the aim of creating five industry innovation clusters in Russia
Skolkovo Foundation • Russia and Skolkovo’s attractiveness as an R&D destination
Section 4 – Skolkovo as an innovation centre in comparison with other development institutions
23
Source: Skolkovo
Skolkovo Innovation Centre structure
Clusters
Technopark
University
City
 Skolkovo has created five clusters (IT, Nuclear, Energy Efficiency, Space and Telecommunications,
Biotechnology), which specialise in developing Russian R&D projects within selected industries.
 The Skolkovo Foundation, which provides grants for R&D commercialisation activities, is the main
vehicle for project support.
 The Skolkovo Technopark is a specialised platform which provides assistance to innovation-driven
companies.
 The main services the Technopark provides for start-ups are: accounting, HR, business training and
providing offices and R&D equipment.
 Skoltech University is intended to be a specialised educational institution which will help develop
Skolkovo’s main areas and provide partner companies with well-qualified specialists.
 According to planes the University starts work in 2014. Now students have been attracted for learning in
partner institutes, Open University provides special training programmes for students.
 In 2018 15 centers of science, innovation and education are planned to launch.
 Skolkovo is aiming to become a city-laboratory, where innovations developed onsite will be introduced
and approved.
 The total building space within the Skolkovo municipality will exceed 2.4m square metres.

28. PwC
March 2013
Public report
Skolkovo will help Russia overcome major obstacles in the R&D environment
by providing an innovative ecosystem necessary for accelerating
commercialisation through easy access to network partners and finance
Key issues in Russia’s R&D
investment climate
Cluster mechanisms for
overcoming challenges faced
• Build strong financial infrastructure and assist
with venture capital and seed financing
• Attraction of anchor R&D investors and SMEs
• Build R&D supply infrastructure
• Technology Transfer Organisations
• Business Incubators, Accelerators
• Role model entrepreneurs teaching platform
• Entrepreneurship mentoring programme
• Social infrastructure and financial aid for mobile
workforce
• Visa support/special employment terms
• Cluster international visibility and international
collaboration
Gap between fundamental & applied
research and development / gap
between S&E and business
Low demand for technological
innovation in the economy
Poor entrepreneurial environment /
intolerance of failure by
entrepreneurs and start-ups
Difficulties with risk-tolerant
financing for SMEs
Low awareness of the country’s
attractiveness as a destination for
corporate R&D centres
Low level of workforce mobility
Clusters as an R&D ecosystem platform
FormationConception
Maturity Growth
Lack Lack of qualified managers
specialised in technological
implementations
Technology
Transfer
Commerciali
sation
Clusters &
Networks
Incubators/ TTOs/
Training centres
Strong cluster
organisation
Regulatory
Environment
Universities &
Research
institutions
Public and Private
irrevocable funding
Technologies
Venture capital
Critical mass
of researchers
employed
Industry and research
Collaboration/
Partnerships
National and international
research competitionsNational
reputation
Structured cluster
organisation
International
visibility
Shared platforms
and infrastructures
VCs are well
established
• Attracting top MNCs and R&D investors with
strong management practices to the cluster
• Networking initiatives by cluster organisation
Knowledge
Creation
Source: 1) PwC Interview Programme; 2) PwC analysis
Skolkovo Foundation • Russia and Skolkovo’s attractiveness as an R&D destination
Section 4 – Skolkovo as an innovation centre in comparison with other development institutions
24

29. PwC
March 2013
Public report
Stakeholders
aiming to be
organised in
clusters
Emerging
Clusters
Developing
Clusters
Mature
clusters
World class
clusters
Most internationally known clusters are developed and have an industrial
specialisation. Skolkovo is at the embryonic stage of development, but is
expected to become an emerging cluster by the end of 2014
Degree of
cluster
development
Cluster
performance
Bubble size is proportional to the number of clusters present on the worldwide market, indicativea)
Resources
Technology
Génopole, France (●)
Medicon Valley, Denmark and Sweden (● / ●)
Oslo Teknopol, Norway (●)
Hokkaido, Japan (●)
St. Hyacinthe, Canada (●)
Biocat, Spain (●)
Bioval, Spain (● /●/ ●)
Rio, Brazil (●)
Zhangjian, China (● )
Skolkovo plan (end of 2014)
Biotech Umea, Sweden (●)
Biovalley, France, Germany and Switzerland (●)
IAR, France (● / ●)
Hamburg, Germany (●)
Food Valley, The Netherlands (●)
UAFC, Austria (●)
Ghent, Belgium (●)
Munich, Germany (● / ●)
Technion, Israel (● / ●)
• Biomed
• Agrofood
• Energy
• Maritime
• ICT
• Aerospace
• Nuclear Energy
Skolkovo, Russia (● /●/ ●/ ●/ ●)
Nancy, France (●)
Note: a) On this slide clusters are mostly represented at the highest level of maturity: This is due to the fact that these clusters have been widely studied and used as
models by PwC
Source: PwC analysis
San Diego, USA (● / ● / ●)
Cambridge, UK (●)
Toulouse, France (●)
Hyderabad, India (● / ●)
Skolkovo Foundation • Russia and Skolkovo’s attractiveness as an R&D destination
Section 4 – Skolkovo as an innovation centre in comparison with other development institutions
25

30. PwC
March 2013
Public report
Skolkovo plans to attract a critical mass of companies and employees in its
five clusters, which would move them to the emerging stage of development
(cont’d)
Skolkovo Foundation • Russia and Skolkovo’s attractiveness as an R&D destination
Section 4 – Skolkovo as an innovation centre in comparison with other development institutions
Skolkovo plan (end of 2014)Skolkovo “As is” (March 2013)Cluster driving forces Emerging stage criteria
• Jobs have been created
• Some visibility (reputation)
• Some funding sources have
been mobilised
• Cluster organisation has been set
up
• First strategic plan
Cultural
Supporting
Financial
Scientific
Industrial
Market
• Entrepreneurs are present
• Critical mass of entrepreneurial
activity is developing
• Lack of entrepreneurs • Entrepreneurs present
• Critical mass of entrepreneurial
activity is developing
• Cluster organisation has been set up
• Services for supporting the technology
commercialisation process are provided
through appropriate mechanisms
• Cluster organisation is in the
process of formation
• Strategic plan is developing
• Skolkovo grant programme has
been launched
• Number of investment funds are
accredited by Skolkovo
• 50% co-financing of Skolkovo
participants
• Venture capital has been mobilised
• Research assets/labs have been
inventoried
• Lack of awareness on the
importance of disclosure of
innovation
• Three shared service centres have
been launched
• First residents work in Technopark
• A number of renowned universities
and research organisations close to
Skolkovo
• Two core facility centres and 4 additional
shared service centres are to be launched
• Techopark is being developed
• Launching 5 centers of science,
innovations and education within SkTech
• Cluster strategy is in the line
with market needs
• Adoption and transfer of new
technology ensured
• Cluster strategy is developing
• Cluster strategy is in the line with
market needs
• 1000 participants
• 50 R&D centers
• Some visibility (reputation)
Sources: 1) Skolkovo KPIs to end 2014; 2) Skolkovo management; 3) PwC Interview Programme; 4) PwC analysis
26

31. PwC
March 2013
Public report
Skolkovo’s current partners confirm that it is an attractive destination for
R&D localisation
Skolkovo Foundation • Russia and Skolkovo’s attractiveness as an R&D destination
Section 4 – Skolkovo as an innovation centre in comparison with other development institutions
27
“I don’t see too much bureaucracy
and decisions are made quickly.
That is very important.”
Lack of
bureaucracy and
red-tape
The right
place for a
cluster
“We hope to find good conditions for R&D
activity at Skolkovo, good price being one of
them. We needed to find a place for R&D
and Skolkovo was a natural choice for us.”
Attractive
conditions and
costs
2
3
Proactive and
supportive
actions
4
“We have not experienced any challenges yet. And at this moment
we don’t foresee any future challenges, thanks to great support
from the Skolkovo clusters and Key Partners Department.”
Positive feedback from Skolkovo’s partners
1
“The possibilities offered by Skolkovo in
terms of infrastructure, proximity to
high-technology partners and financial
advantages make Skolkovo an easy
choice for the location of our centre.”
“Skolkovo is close to Moscow and St.
Petersburg, where most of the country’s
talent pool is concentrated.””
“Our presence at Skolkovo will give
more visibility to our R&D in Russia.”
“Everything went
smoothly.”
“Skolkovo is close
to our markets.”
“When we were choosing a location for
an R&D centre we were looking at
different options including Moscow,
Kiev and other cities. Access to talent
and other resources was an important
factor for choosing Skolkovo.”
“We were attracted by the idea of the
Skolkovo innovation ecosystem with
access to talent. We also wanted to
associate our brand with Skolkovo.”
Optimal
positioning
opportunities
5
“From a government relations
point of view, it is a good idea
to establish an R&D centre in
Skolkovo.”
+
Sources: 1) PwC Interview Programme; 2) PwC analysis

32. PwC
March 2013
Glossary
28
Appendix 1
Skolkovo Foundation • Russia and Skolkovo’s attractiveness as an R&D destination

33. PwC
March 2013
Public report
Glossary
A&D Aerospace and Defence
ASEAN Association of Southeast Asian Nations
bn billion
BRIC Brazil, Russia, India, China
BMI Business Monitor International
BB broadband
B2B Business-to-Business
B2C Business-to-Customer
B2G Business-to-Government
CAGR Compounded Annual Growth Rate
CAPEX Capital Expenditures
CSFs Critical Success Factors
CIS Commonwealth of Independent States
CT Corporate Technology
D Development
E&EE Electronic & Electrical Equipment
EIF European Investment Fund
EU European Union
EUR Euro
FDI Foreign Direct Investment
FPSES&T
Russian Foundation for Promotion
of Small Enterprise in Science and Technology
FTSE Financial Times Stock Exchange share index
GERD Gross Domestic Expenditure on R&D
GDP Gross Domestic Product
GE General Electric
HW Hardware
HQ Headquarters
HR Human Resources
HSE Higher School of Economics
ICB Industry Classification Benchmark
ICT Information and Computer Technologies
ILO International Labour Organisation
IMF International Monetary Fund
IP Intellectual Property
IPR Intellectual Property Rights
IT Information Technology
JRC Joint Research Centre
JV Joint Venture
KPIs Key Performance Indicators
kW kilowatt
MEPhI National Research Nuclear University MEPhI
m million
MNC Multinational Corporation
MISIS
National University of Science and
Technology MISIS
MSU Moscow State University
M&A Mergers & Acquisitions
NPD Network of Product Development
N/A not available
N.a. not appropriate
OECD
Organisation for Economic Co-operation and
Development
PwC PricewaterhouseCoopers
Phystech Moscow Institute of Physics and Technology
R&D Research and Development
R²
R-square, goodness-of-fit measure in
regression analysis
R Research
RFBR Russian Foundation for Basic Research
RFTD
Russian Foundation for Technology
Development
RSFF Risk-Sharing Finance Facility
RoW Rest of the World
ROI Return on Investment
Skolkovo Foundation • Russia and Skolkovo’s attractiveness as an R&D destination
Appendix 1 – Glossary
29

34. PwC
March 2013
Public report
Glossary (cont’d)
RVC Russian Venture Company
S&E Science and Engineering
S&T Science and Technology
SBIR Small Business Innovation Research
SBIRI Small Business Innovation Research Initiative
SEZ Special Economic Zones
SME Small and Medium-sized Enterprises
STTR Small Business Technology Transfer
sq.m square metre
TACIS
Technical Assistance for the Commonwealth of Independent
States
tn trillion
UNESCO
United Nations Educational, Scientific and Cultural
Organisation
TIP Technology Innovation Programme
TTO Technology Transfer Office
UK United Kingdom
US / USA United States of America
US NSF United States National Science Foundation
USD United States Dollar
VAT Value Added Tax
VC Venture Capital
WB World Bank
WEF World Economic Forum
94 FL 94 Federal Law
24/7 24 hours a day, 7 days a week
Skolkovo Foundation • Russia and Skolkovo’s attractiveness as an R&D destination
Appendix 1 – Glossary
30

35. © 2012 PricewaterhouseCoopers Russia B.V. All rights reserved.
In this document "PwC" refers to PricewaterhouseCoopers Russia B.V., which is a member firm of PricewaterhouseCoopers
International Limited, each member firm of which is a separate legal entity.
www.pwc.ru