Vladimir Putin's address:

Prime Minister Matti Vanhanen, forum participants, ladies and gentlemen,

Thank you for inviting me to the 1st EU-Russia Innovation Forum. First, I'd like to say that we welcome a more active dialogue with our European partners on innovation and research. We want to improve our interactions and to strengthen its intellectual and technological component.

Natural logic tells us that we should promote cooperation, join forces and strive for full-scale integration and an effective consolidation of the creative potential of the business and scientific communities in Russia and the EU.

In the last few years, Russia and the EU proved that they can cooperate fruitfully in various spheres. We have greatly strengthened mutual trade and are implementing major infrastructure and energy projects together. Mr Vanhanen has just mentioned one of such infrastructure projects in railway transport. We are also working on humanitarian and environmental initiatives.

Our interdependence is becoming increasingly evident. We need to work hand in glove, and people in Russia and the EU are coming to see that we all benefit from greater cooperation. We understand that it is making us stronger and opening new, unexpected opportunities for our people and business, for the whole of Europe, from the Atlantic to the Urals. If we remember our geography and the fact that Russia is a huge country, the scope extends from the Atlantic to the Pacific Ocean.

We have set for ourselves the ambitious goal of creating a common research and technological space in Europe.

I think the turning point on the way to that goal was the decision of the EU-Russia summit in Stockholm to launch the Partnership for Modernisation programme. In our opinion, we could pursue that initiative in the following key spheres.

These include technology sharing, including "green energy", expanding and deepening innovative cooperation, removing barriers to scientific, student and business exchanges and working towards the goal of visa-free travel. We must also work to harmonise our standards for high-tech industrial production and to recognise each other's certificates and accreditations for testing laboratories. In general, we need to work together on the issue of certificates.

Mr Vanhanen just spoke about the fact that we have different technical environments through which trains will travel - Russia and Finland have different voltages, to name just one of our many differences. In the field of transport, experts had to do a lot in order to simply establish a high-speed train link between Finland and Russia. Many innovations had to be developed. And this is how it is in every field, in every area of cooperation.

In just a few days, the dialogue on cooperation within the framework of the Partnership for Modernisation programme will resume, as was already mentioned, at the EU-Russia summit to be held in southern Russia, in the city of Rostov-on-Don.

Esteemed colleagues, today we are working to overcome the consequences of the global economic and financial crisis. The most important way we are doing this is by seeking out new and more sustainable development models and making our national economies more competitive.

I particularly want to highlight that the transition to innovative railways is a strategic project for Russia. These plans are backed up by serious potential and Russia's significant manpower, financial and technological resources.

But we also understand and are realistic about our many shortcomings. We intend to overcome them one by one. The government's actions are intended to stimulate demand for innovations in the economy and the social sphere, unify the fragmented innovation environment and eliminate burdensome and excessive bureaucratic procedures, for example, those associated with foreign investment in strategic sectors of the Russian economy and with recruiting foreign experts for employment in Russia - in our companies, our higher education institutions, our universities.

Incidentally, Finnish businessmen often raise the issue of labour migration. I think that they would agree that there has been some progress on immigration lately.

Next. We have seriously revamped legislation in the field of intellectual property. We have streamlined procedures for the use and commercialisation of research results of R&D departments.

Universities and scientific organisations now have the right to set up innovation and research companies. This represents a completely new chapter for us. Until now, this was absolutely prohibited - starting up companies to market your scientific developments. Such companies are now free to transition to the simplified taxation system. For those of you who don't know, I will explain that this implies simplified administrative procedures for calculating taxes and therefore reduces the number of administrators necessary and the overall financial burden.

I believe that these plans are quite promising in terms of cooperation in our countries' business circles, including by bringing small and medium businesses into the fold.

We are making considerable investments in innovative infrastructure - technoparks, industrial and technology development zones. Naturally, we would like our foreign partners to become residents in these zones.

Not long ago, at a meeting of the Russian government, we approved an additional package of tax breaks for innovation companies. We will also expedite the procedure for drafting new technical regulations for industry, which I already mentioned. These regulations are meant to encourage businesses to retool and to make innovation a necessary condition for companies to achieve long-term success on the market.

Serious reforms are underway in education and science. The goal of these reforms is to integrate science and production to meet the needs of our economy and society. Our challenge is to make tangible progress in basic research, the commercial application of new technologies and training a qualified workforce.

We are forming a network of research universities. A pilot project to establish national research centres is being carried out at the famous Kurchatov Institute.

We are launching major initiatives in energy efficiency, information, space, nuclear and medical technologies. These areas were chosen specifically.

First of all, these are the areas where technology is advancing in the world. Secondly, they have traditionally been among Russia's strengths. We are now improving research and production efforts in these areas. And finally, these areas offer the greatest opportunities for extensive cooperation with our partners, especially our European partners.

Russia's mutually beneficial partnership in innovation with its northern neighbour, Finland, offers a good example of what's possible.
Russian and Finnish higher education institutions are working together productively, especially Lappeenranta University of Technology, St Petersburg State University and St Petersburg State University of Engineering and Economics.

Our priorities include the environment and energy efficiency.

The Memorandum of Cooperation in Energy Efficiency and Renewable Energy was signed in Helsinki on January 28. This document supports modern initiatives and unites businesses, scientific organisations and central and local governments around them. Russia and Finland have agreed to invest a total of 30 million euros to develop two to three pilot projects by the end of this year.

I would especially like to highlight the fact that the Russian state corporation RusNano and the Finnish Industry Investment fund have signed an agreement on joint nanotechnology research today.

Put simply, it is clear that we are both interested in further cooperation in technology and innovation. To realize our goals, we must first learn more about each other's capabilities and cultivate a partnership that inspires mutual trust and a team spirit.
I am sure that today's forum and the discussions held here will serve these important goals.

I would like to thank the forum's organisers, the local government in Lappeenranta, and all our partners in this undertaking.
And, of course, I invite you to attend the 2nd Innovation Forum, which will be held this autumn in nearby St Petersburg.

Thank you for your attention.

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Vladimir Putin and Matti Vanhanen attended the signing of the Agreement on Joint Investment between the Russian state corporation RusNano and Finnish Industry Investment Ltd.