RUSNANO's Advantages
Market
Another advantage that cooperation with RUSNANO offers is direct access to Russia’s vast markets. According to Goldman Sachs, the Russian Federation is one of the world’s fastest growing markets along with Brazil, India and China, albeit also one of the most volatile. Whenever asked, Mr. Chubais is quick to highlight this advantage (Chubais, Fostering Nanotechnology Innovation in Russia 2010), and rightfully so: many professional Venture Capitalists in the United States point out that a high-capacity market is the single most important component contributing to a venture’s success. (Metrick 2007) Given the fact that Russia is not a member of the WTO, its markets can be easily sheltered by protectionist legislation. Since Russia has demonstrated on a number of occasions its willingness to protect its industries and markets from foreign competition, there is every reason to believe that state-backed companies, including enterprises funded by RUSNANO, will at some stage have the protection or at least some sort of preferential treatment and market support from the government.
However, if Russia is to achieve an efficient innovation model, it will eventually have to abolish protectionist measures altogether to allow for full-blown competition and rivalry among tech firms. By any measure, this is a distant future, as Russia’s attempt at obtaining WTO membership has been largely unsuccessful and lengthy: its application has been in progress for the past 18 years⎯a record length of application in the history of the WTO. There is little incentive for the country to open up its domestic market for foreign goods and services. Therefore, domestic firms will continue to benefit from their dominant position in Russia with little or no pressure from foreign competition.
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