The debate centered around whether state financial support is needed to encourage innovation in Ukraine. Speakers for the motion argued that many other countries provide substantial state funding and subsidies that have helped innovative companies succeed. However, speakers against the motion argued that Ukraine first needs to establish transparent financing structures and address corruption before implementing state support programs, otherwise the funds would not have practical benefits. While all agreed innovations are important, the audience vote showed general support for providing state financial support to encourage innovation in Ukraine.

1. www.debaty.org
STATE FINANCIAL SUPPORT IS NEEDED TO ENCOURAGE INNOVATION
PUBLIC DEBATE BRIEF
September 16th, 2010
Teacher’s House, Kiev, Ukraine
The debate on the motion “State financial support is needed to encourage innovation” has opened the autumn series
of Public Debates organized by the Foundation for Effective Governance and its British partner Intelligence Squared. The
event was moderated by famous Ukrainian journalist Mustafa Nayem.
The Foundation defines innovations as commercialized inventions that create added value and can be both technologi-
cal and managerial in nature. Innovations are an important contributor to a country’s competitiveness. Bearing in mind the
limited budget funds it is, therefore, important to understand whether innovations can be successfully developed in
Ukraine without state financial support.
All the speakers agreed that state financial support was needed at least for certain types of innovations, the debate
therefore centered around the sequencing. Speakers from the “against” panel argued that the state should establish a level
playing field and transparent financing structures before introducing any state financial support program for innovations
as otherwise any state initiative will result in corruption and no practical benefit to society at large. While their opponents
appealed to international experienced and the famous saying that those succeed who cut through the path they follow,
arguing that support of innovations is an important and urgent matter for the state and there is no time left to lose. The
audience voting results before and after the debate showed general support for the motion.
Public Debates are aimed to promote debate culture, to increase public awareness of important economic challenges
facing Ukraine and to contribute to the formation of educated socio-political consensus concerning future country deve-
lopment.
Speakers FOR the motion Speakers AGAINST the motion
Sergey Nedoroslev Anatoly Girshfeld
Chairman of the Board, Honorary President of IG UPEC,
Kaskol Group of Aerospace Companies, MP of Ukraine of the fourth convocation
Russia
Volodymyr Semynozhenko Olexander Kardakov
Chairman, Founder of Incom and DataGroup,
State Committee for Science, Innovations Chairman of the Advisory Board,
and Informatization Octava Capital
Dmytro Shimkiv Olexiy Skrypnyk
CEO, CEO,
Microsoft Ukraine Eleks

2. Key Statements
Sergey Nedoroslev: “The regional aircrafts market is Anatoly Girshfeld: “The modern model of innovative
now divided between Brazilian Embraer and Canadian development suggests that the state should develop
Bombardier as a result of huge state financial support innovative strategy and policies, as well as invest into
programs and proper corporate governance in those creation of necessary innovative market institutions,
countries. We could do it too.” instead of financing particular projects.”
Volodymyr Semynozhenko: “Western innovative Olexander Kardakov argues that innovations can only be
success stories were possible due to availability of long introduced by business in a competitive environment.
term financing, infrastructure and subsidies: Bill Gates Unless the state introduces proper structures to monitor
created his company on a long term loan! The state its investments, it should not spend money on innova-
should provide for those in Ukraine.” tions.
Dmytro Shimkiv: “If you look globally, during the crisis a Olexiy Skrypnyk: “The US Government is right to spon-
large number of countries, including the USA, Portugal, sor innovations, however, I am against state invest-
Argentina and Georgia initiated large scale national ments into innovations in Ukraine unless we solve the
innovative projects and the state itself was the main problem with corruption and foster result oriented
financier.” culture among innovation managers.”
Q&A Session
Q: Nataliya Izosimova, Managing Director of the Foundation for Effective Governance: “My question is to Mr. Nedoro-
slev, what is your opinion concerning Skolkovo, the innovative project of the Russian state?”
A: Sergey Nedoroslev: “It is often criticized as money are expected to be stolen, however, even if the tap is not fixed
properly and some water is pouring out you would not cut off the water supply in the whole bulding, therefore,
Skolkovo and similar projects should be supported.”
Q: Dmitriy Skobnyak, IT entrepreneur: ”My question is to the “FOR’”panel, do you think that the state can become an
effective innovation manager who could properly select and monitor start-ups?”
A: Dmytro Shimkiv: ”The state – no, but an expert committee which would include both the state and business repre-
sentatives – yes.”
A: Sergey Nedoroslev: “In Russia the state has created a venture fund for innovative projects, however, it finances
only up to 50% of a project, therefore, private partner bears 50% of the risk and is interested in executing proper
project analysis.”
Q:”My question is to the “AGAINST” panel, would you apply for government finance for your own projects?”
A: Anatoly Girshfeld: ”Most likely no, firstly, because instead of concentrating on my business I will have to spend
most of my time on different regulatory issues. Secondly, because in the current conditions direct state investments
into the real sector would involve money laundering, in which I am not interested.”
Voting Results We would appreciate your participation in our next
After the Debate conference on the motion:
What is Freedom of Speech?
13% to be held on December 02, 2010
11% For at October Palace, 1 Institutskaya Str., Kiev
76% Don’t know Start time: 19:00
Against
Further information and the full version of the
debates can be found on: www.debaty.org,
Before the Debate www.feg.org.ua
37% Debate videos are also available on
For www.youtube.com
54% Don’t know
9% FEG, 23-F Kudryavskaya st., Kiev, 04053, Ukraine,
Against tel: +380 44 501 41 00,
feg@feg.org.ua