Transcript:

Vladimir Putin: Hello, and good afternoon! I’m glad to welcome you.

I’m very pleased that our joint project – let me put it like this because the project to create the Strategic Initiatives Agency is indeed ours as well as yours – has had such an active start. We have received about 1,000 applications with proposals for three main directions of the future work of the agency: support for medium-sized business, support for social initiatives and promotion of professional qualifications. Let me repeat that more than 1,000 applications were submitted.

You have passed the first round of selection. First of all, I’d like to thank you for your active participation at the start of the agency’s work. I’d like to see the agency become not a short-lived or opportunistic structure, but rather an effective instrument for broadening your opportunities, for those who want to promote their ideas, who are willing and eager to carry out and accomplish what they consider important for themselves, their business and the country in general. I’d very much like to see our project succeed. We will do everything we can to make this happen.

We’ve agreed to hold the first round. This has been completed, and 200 applications have been selected out of 1,000. Two weeks ago we agreed to gather all of you within the framework of Innoprom in Yekaterinburg so that you could get acquainted with each other and announce your proposals once again. On July 27, we will invite a small group of 25 representatives out of these 200 to Moscow and name the agency’s general director, three project directors and members of an expert council. But I’d like to emphasise the main point, which is that all of you will be involved in the agency’s work, either here in Moscow or in the regions.

As I understand it, we will now be organising round table discussions. Let’s not put this off. I’d like to give the floor to Sverdlovsk Region Governor Alexander Misharin, who will also make some introductory remarks. Then we will invite the round table mediators to speak. Mr Misharin, please go ahead.

Alexander Misharin: Good afternoon, Mr Putin. According to your instructions, we’ve organised a large strategic session today on planning the future activities of the agency as part of the Innoprom exhibition and forum. About 200 applicants are gathered here. A plenary meeting devoted to rating the problems of medium-sized business took place an hour and a half ago. We have determined six basic problems, and the groups are now drafting a model for the agency’s activities that will facilitate the proper resolution of these problems.

I’d like to mention that the first major infrastructure project on developing an enormous cluster of medium-sized businesses has already been launched today in Yekaterinburg. As we said, the Innoprom exhibition and the Yekaterinburg-Expo exhibition centre have now become a venue for discussing the drafting and development of new initiatives. Today is the first day of the agency. During three meetings we must determine the agency’s structure, model, functions and the main directions of work. We are working on this. I’d now like to give the floor to the round table moderators.

Vladimir Putin: Thank you very much, Mr Misharin. I’d like to compliment your city authorities. The city is probably beset with problems, just as any other major city, but during my last trip to Yekaterinburg I saw that the city is being looked after well. I would very much like for this to continue.

Late last night I met with former Governor of the Sverdlovsk Region Eduard Rossel. We spoke about the region and the city. He has come up with his own projects, which are completely new and high tech. He is an active man. I would like the current leadership of the region, the city and major enterprises to keep up the pace built up over these past years. Hopefully, the projects that are on the table will help to maintain that pace. Let us hear from Anna Belova, moderator of the agency’s medium-sized enterprise project. 

Anna Belova (Director-General of the New and Innovative Technologies Centre): Good afternoon, Mr Putin.

Vladimir Putin: Good afternoon.

Anna Belova: In general, we are having a very lively discussion here, indeed the very fact that a team of people from all the regions who have shown an interest has been formed creates a unique precedent. What you see is a real modernisation resource because these are people who have some experience, who have gone through a certain school, can take punches and are taking an active part in today’s discussion, jostling for a place in front of the microphone. There are more people wishing to speak than we have time to hear. The main thing, though, is that these are people who are ready to shoulder responsibility for real change, to contribute to real change: that is the modernisation potential we are speaking about.

What is the subject of our heated discussion? First, what type of projects and initiatives can be used by the agency, what resources and instruments the agency should be provided with and what its niche is. Because on the one hand it should not supplant federal executive bodies and regional authorities, and, on the other, it should not invade the territory in which business associations are already active. How can the Strategic Initiatives Agency contribute to the tasks that have been set? I think it can do so in two ways. We have said today that the first part of the projects has to do with networking and infrastructure and addresses the problems related to the attitude towards entrepreneurs. Many people are deterred from becoming entrepreneurs because the risks involved are too high. It is much easier to become part of the hierarchy of partially state owned companies and to be responsible for only a part of the budget. That situation must be changed. We should make the entrepreneur believe that the main process going on in the country is creation and not distribution. Otherwise we will have no real lever for change.

What are the infrastructure projects? First, the business climate. Everybody knows that the country’s leaders speak frequently about the need for change. Let us try to measure the entrepreneurial climate and the competitiveness of the regions not only through business associations, let us make this measurement an instrument and key performance indicator for governors and the regional authorities. Then the processes of real change can be monitored.

Another infrastructure project. The state has created many financial and innovative development institutions, but they are aimed at big business and state-owned business. Medium-sized enterprises, which are drivers of modernisation because they form the largest stratum, are not included today and have no access to these institutions. Let us not create an artificial channel for that business, let us instead create instruments of access within the federal targeted research and development programme, of financing R&D through the Russian Technological Development Fund. There are many instruments that work and that are not known to medium-sized businesses, but they do not believe in them because their scale does not suit the purpose of financing these institutions. Let us introduce a quota.

Another infrastructure project has to do with information and communication. It is important to create a professional environment, a community in which you have to cross only one barrier to be able to share with colleagues. Modern information technology makes this possible. Let us set up a portal and solve these problems in terms of information, communication and getting feedback on the basis of the Strategic Initiatives Agency.

Another interesting project proposed by the participants today is to try to structure the themes of functional projects, because some projects meet the main national priorities – innovation, environment, energy efficiency – and some set very high barriers for entry and can only be created by the state, where the state is the strategic customer that determines the area where it would like to attract medium-sized businesses. Then a number of interesting projects could be launched through the development institutions, through the VEB and others, by subsidising interest rates and by offering an initial tax holiday. Today we are talking about specific functions and about designing the work plan. What do we start with in August 2011 and what results would we like to achieve beginning from 2012-2014? There are plenty of resources and plenty of ideas. We should manage the available resources very efficiently, gearing them towards the goals set. This is our game plan, Mr Putin.

Vladimir Putin: Thank you. You know, I agree with every word Anna Belova said, I really do. We should discuss two or perhaps three areas as part of this round table. One is the lifting of so-called administrative barriers. Incidentally, you surely know that of late (in the last two years) we have abolished many such restrictions on businesses. But the problem is that they tend to sprout up again and again like mushrooms: we eliminate them in one place and they crop up in another place. We need a systemic approach to monitor the business environment and climate.

Secondly, there are some systemic matters that have to be addressed through serious national acts at the federal legislative level, at the level of recommendations to regional authorities.

Thirdly, there are the projects themselves. I would like you to pay attention to the following. In selecting projects the final say will belong to the panel of experts and not to government or regional institutions. In my opinion, it is very important because it is the main guarantee that choices are made impartially. Which brings me back to what I said opening this meeting. All of you, practically everyone who has reached this stage can in one way or another take part in further activities as members of the panel of experts.

And the last thing. We will have to identify the instruments that will help us to implement the projects that our expert panels select. The instruments are very diverse. First and foremost, these are financial instruments and, as Anna Belova has said, we will bring in Vnesheconombank (VEB), but not only that bank. We can bring in other financial institutions. We can use government guarantees, state guarantees and so on. I urge you to think about all these things today, to discuss them and submit proposals in a couple of weeks’ time in Moscow on the 27^th, as I have said. Thank you very much.

Now the topic “New Solutions to Old Problems.” Valery Fadeyev, moderator of the next round table.     

Valery Fadeyev (editor-in-chief of Expert magazine): Good afternoon, Mr.Putin. What we are discussing at our round table is, above all, problems of communication. That is, how and through what instruments and particular decisions will business interact with the Strategic Initiatives Agency, how will the Agency interact with the authorities, including regional authorities and how to make that interaction effective?

An analogy has been suggested here with public-private partnership, which has been developing in recent years. But while in the case of the public-private partnership the state leads the way (the state initiates, for example, major infrastructure projects and invites private business as a partner) in this case it is the other way round: business initiates projects and, through the Strategic Initiatives Agency, invites the state and state institutions in order to achieve success through joint efforts.

That gives rise to the problem of mutual obligations. When we form these projects, obligations arise not only for the state institutions vis-à-vis the companies that have come up with a project, but also for the companies which undertake to achieve the result in more favourable conditions.

It has been suggested that the SIA is a project management instrument. That raises the question of how to manage the projects. Apparently, working groups should be set up that would include representatives of the Strategic Initiatives Agency (somebody even used the term “project management officer”), representatives of the relevant executive bodies, institutions of power that are interested in (or not interested in) promoting the project and naturally representatives of companies, and of the expert community. That working group will become an instrument that will see the project through.  

Assessment of the projects that have global potential is a very important function. You said recently that we should not only reach the global level but should produce better, the best goods in the world. We should scout out such projects and show the country, the business community and the authorities that such projects exist, even though they are still few. Such projects should be a priority , and communication is particularly important for demonstrating that we can and will do more and more such projects.

The business environment has been discussed here (it was the subject of discussion both in Moscow and here) and the question is, what needs to be changed? Change the environment, which is very unfriendly towards business, or concentrate on the projects? After the discussion it seems that these are twin tasks. The promotion of the most advanced projects will bring forth new people, new technologies, organisational solutions of these problems and will change the business environment. I think there is no contradiction between the two tasks. Finally, I would like to say something about communicating with society. As we all know, public opinion in Russia takes a guarded view of entrepreneurship, even though business has done many good things in the last twenty years and especially in the last ten years. The public attitude must be changed little by little. Unfortunately, there are few talented works of art that, far from extolling business (God forbid), would show that the atmosphere in the country is one of creative endeavour and development. I think special attention should be paid to the cultural aspect of the work of the Strategic Initiatives Agency.  Thank you.

Vladimir Putin: Thank you very much. I would like to pick up your last point. It is important that the public see the entrepreneur not as a parasite who sucks the working people’s blood but as a dynamic and active person who does good for the country’s development, helps the people who are not engaged in entrepreneurial activities to live decently, to bring up children, raise families, earn decent wages, and have good, high-class, modern jobs.

To achieve such results education alone is not sufficient. It takes a certain mindset. That may be a subject best suited for our creative workers in the film industry, theatre and on television. That is, of course, very important. I agree that the very best and most promising projects should be selected. One would like them to have national and, better still, global resonance. I have to say that I am sure there will be many such projects.

I would like you to reflect on yet another complicated topic. Of course, the problem cannot be solved by the agency single-handed, but one always has to keep it in mind, and that is ensuring that there is a market for the results of the project. That is an extremely important ingredient of success. Take a very simple example: we are encouraging automobile manufacturers to adopt more sophisticated models, more environment-friendly, more powerful, more efficient and so on. But we do not have a suitable fuel for them. So we have to stimulate the producers of fuel to switch to modern types of engine fuel. But the huge fleets of automobiles that would make that type of business profitable for the oil producers has yet to be created. That applies to the Defence Ministry, which has a huge fleet of old vehicles, to agriculture and so on. That example should give us cause to think. It is very important to have effective interaction between the agency and government institutions, ministries and departments. Therefore, I agree totally that there should either be a special person in charge of it at the agency, or this function should be performed by the director-general or directors of various units. But the agency must have what you call a liaison officer. Once again, the function of the liaison officer should be to maintain constant and strong links between the agency and the bidders in tenders – current and future—and the ministries and agencies of the Russian government. It is a very important function, and we should think it over thoroughly when the final structure of the Agency is approved. Thank you. Sergey Vorobyov, moderator of the round table “The Energy of Young Professionals: Career Advancement of Young People.” 

Sergey Vorobyov (chairman of the board of directors of Ward Howell): Good afternoon, Mr Putin. Our round table deals with people, which is by and large a very difficult business, especially if one remembers that Russia has had an eternal problem of “fools and bad roads,” which, translated into modern jargon, means “management and infrastructure.” The problem has come to a head and it cannot be resolved without bringing in young people. In order to launch a concrete action programme, we have divided it into four parts.

First is bringing the standards of job and skills description in line with the 21^st century, because we are hopelessly lagging behind. But then we thought, what will happen if we have good standards and people trained in accordance with these standards? They will have completely different employment requirements. This is why our second topic is devoted to figuring out how to make medium-sized business an attractive employer. Big business can afford to build an independent development and training system that can then, in principle, be copied for government and small business, but this is difficult for medium-sized private companies to do. So there is a reason for cooperation, and the Strategic Initiatives Agency may be helpful in this respect.

Third, we realised that if we offer a good job to a young man with a modern education, who already earns a good salary, he won’t live just anywhere. So, unfortunately, we also have to consider a place of residence and an environment that will, in turn, encourage feats of labour from our heroes. Therefore, we hope that there are energetic professionals among those young people who want not only to live in excellent conditions, but also seek the opportunity to realise their potential, and are ready to improve things not just for themselves, but for others as well. But the majority of specialists and top managers want the Augean stables to be already clean, otherwise they quit… On the whole, we should not be distracted from competition and from doing what we need to.

And the last thing, Mr Putin. Considering mobility, primarily upward mobility, we have established a fourth group, where we can allow ourselves to dream. We named it “Vertical Flights.” We believe if we think well, we may find a good resource for involving young people. And we are trying to dream.

And we have a question for you, Mr Putin. We started by describing the portrait of a hero, a young professional for whose sake we are doing all this. We have a question about this. Please share with us, how do you decide whom to bet on, whom to teach and whom to trust from among the young generation? What qualities and values do you consider important in making this choice? Thank you.

Vladimir Putin: We’ll place our bets on successful professionals that succeed in open and honest competition, such as the processes today during the formation of the Strategic Initiatives Agency. I’d like to thank you very much for undertaking this complex, delicate and sensitive work. It requires high professionalism in addition to a creative approach. I very much hope that after breaking up the problem into four parts you will be able to pull it all together, because we have, since time immemorial, been very good at breaking things apart, but your task is to bring things together in order to create an efficient, modern instrument to recruit top professionals. With this in mind, I’d like to draw your attention to this task. I believe it is necessary that professional standards and educational standards match each other. We need to ensure that there are guidelines for professional education at all levels in order to enable young people to feel confident and comfortable as soon as they enter the workforce.

You know the organisation that I worked for in Soviet times. I spent many years abroad. I studied German in school, then at university, then in special courses under KGB management and finally at an intelligence school. But when I arrived abroad I thought to myself, what a fool I am! I've studied this language for all these years but I can’t speak it properly. I should probably leave now… But over the course of two, three and four months I felt more confident and realised that this was my place. But ideally, education should enable every person to feel confident in his or her job. It is necessary that we achieve this. But to do so we must work out professional criteria and educational standards. I hope very much that in this case, these vertical flights will only go upward. Thank you very much.

I’d like to give the floor to Yelena Nikolayeva, the moderator of the round table, “Promotion of Social Initiatives,” who also chairs the Public Chamber’s Commission on Social Issues. Please, go ahead.

Yelena Nikolayeva: Good afternoon, Mr Putin. Our discussion today has been as multifaceted as our very lives. We realise quite well that the social sphere is not limited to social services, but extends to healthcare, education and cultural initiatives as well. There is good news and bad news. The bad news is that when we rated the agency’s tasks, unfortunately, social initiatives and social issues were in last place with only 4%. This means that we are unable to understand in full the depth of these problems and the importance of the social sphere. Moreover, I believe business underrates the direct dependence of its success on the social sphere in Russia, comfortable living conditions and friendly social environment. This is the first point.

But we also have good news, because today we have been having a very interesting and lively discussion which is still going on. I’d like to say we have a very high potential for making a breakthrough here. There are enterprising young people and teams and unique projects that exist not because of the existing conditions, but despite them. Despite them, because medium-sized business simply does not exist in the social sphere because there are no the conditions for it, no competition, and so on. We approached this topic today as a fundamental issue… We must therefore raise the following important questions: what role do the state, its institutions, non-profit organisations and business play in the social sphere? Determining these priorities was the first part of our work.

And now the second point, which I consider very important. We started discussing what rules the social sphere should adopt in order to yield results for everyone in Russia and help us create an effective model that everyone will understand. Today we have started working out the criteria for project evaluation. We want to determine what these projects should be like and what teams should carry them out. We believe these projects should be socially meaningful, able to be replicated, involve new elements and the potential for a breakthrough, which will help them achieve serious social and economic results. In general, we believe that the social sphere is a kind of terra incognita that contains an enormous potential for the country’s socio-economic development. We think that the mechanisms and models that we’ve begun to discuss… That is, not just the appraisals and criteria for project selection, but an actual road map that will help us switch from a patchwork approach to the social sphere to a more systemic one. Some unique ideas were voiced. We began thinking of how to establish social networks for social initiatives, and for social innovators, how to create a project exchange for the more effective use of private investment and charitable funds in social projects. We have also been thinking about how to ensure more rational budget expenditures. The money should be spent on people, rather than being locked up in some specific institution. I think that this element of competition can seriously promote our development.

It's very important that we are fully aware of the social significance of these changes. They must be carried out only after an accurate assessment of all risks involved, because the social sphere is the most sensitive area in the country.

The most important point is that we are reaffirming that Russia is a social state, and we have good opportunities for a breakthrough in this area. Thank you.

Vladimir Putin: Thank you very much. The social sphere is important not only for those who receive assistance, although this goes without saying. Social policy maintains moral standards in society in general. This is extremely important, not just for the elderly or those with disabilities, people that need our help. This is important for every member of society. High moral standards, which must be continuously introduced and maintained in society, are indispensable for the effectiveness of all our efforts. People will only work hard if they know that the state is constantly thinking of them, taking care of them and will never abandon them. Army servicemen will carry out their sacred duty to their homeland without thinking about what will happen to their children only if they know for sure that the state will by all means take care of their children and families. There are many elements that are vital to public life, and for the state to be effective and competitive in general.

Therefore, I very much hope that your round table discussion and the subsequent activities of our agency in this sphere will be successful. We’ll do all we can to support this work. We, and I personally don’t consider this to be a secondary or peripheral issue. It is a top priority for our state and the agency.

In concluding our meeting, I’d like to wish you success once again, and express the hope that when we meet with a small group of your representatives in Moscow in two weeks, we’ll talk again about the problems that you have been discussing so actively today. I hope the work of the agency will bring success to its participants and the country in general, and that for all of you these vertical flights, as you put it, will be associated only with your ascent. I hope we will move forward all together, and that each of you will have a one way ticket in one direction – forward and upward. Thank you very much for taking part in this joint work. I wish you success and all the best.