Interview with Andrey Nikitin, SSE Russia EMBA Alumnus and General Director of ASI

WE STAKE AT PERSONALITIES

Interview of General Director of the Agency of Strategic Initiatives for promotion of new projects Andrei Nikitin. Interviewer Svetlana Sukhova
Ogonek got to know that the first three "road maps" of the project of National Technological Initiative (NTI) would be adopted at a meeting of the governmental council for modernization in early October. The editorial board turned to General Director of Agency of Strategic Initiatives for promotion of new projects (ASI) Andrei Nikitin responsible for NTI for explanations.

— It is said that NTI will help Russia to achieve global technological leadership already by 2035. In which way?
— A correct forecast and skillfully considered steps for its implementation are necessary. In May, we organized Foresight-Fleet: we gathered about 700 representatives of business, science and authorities, placed them on three ships, they sailed and thought how Russia would look like 20 years later.
— They were not allowed to go to the coast until they formed this vision?
— Everything was not so harsh but they sailed for five days in succession. The process would have probably been drawn out if we did not narrow the framework. For the forecast it was necessary to select only the business lines that corresponded to the following criteria: potential market bigger than $100 billion, absence of commonly recognized standards now and presence of scientific (production) base.
— Which is these requirements is the most important?
— Presence of a standard. If there is a standard and it is not Russian the industry will be de facto managed from outside. So, no matter which know-how Russia develops it will be secondary relatively to the basic standard. What for do we need to pour water into the pail of someone else?
That was why we invited business first of all: let them look for niches on the international market into which it would be possible to penetrate. Who knows this better then they! ASI does not limit them in this in any way and does not direct them. They thought and proposed several lines. "Road maps," the list of measures for the next two or three years, will be created on their basis.
The prospect is breathtaking. Dossier Calculations of ASI about the prospects of implementation of breakthrough initiatives definitely braces you up. We will learn soon if this feeling is sufficient for launch of the projects. Materiality and potential for growth of AeroNet market (in billions of dollars) 2015 — approximately 10 2020 — approximately 15 2035 — approximately 300-350 After 2020 there will be explosive growth by more than 20% per year due to lifting of legislative (administrative) limitations and appearance of new technologies. Some lines of use of unmanned aerial vehicles will grow in Russia at a faster speed even before 2020 (more than 10% per year), which means that it will allow formation of national companies that are industry leaders. Materiality and potential for growth of AutoNet market (in billions of dollars) 2015 —approximately 600 2020 — approximately 900 2035 — approximately 2,500-3,000 Penetration in the global market of unmanned automobiles in 2035 will amount to about 10% (in 2025 — 0.5%). The main requirements of consumers who support growth of the market of unmanned transport are: automation, safety and environmental friendliness. The key segments of the market for companies from Russia are: production of sensor systems, creation of software systems for transport control, production of special-purpose automobiles. Competitive advantages for them are: development of software, GLONASS system, opening of the market for robotic automobiles. Materiality and potential for growth of NeuroNet market (in billions of dollars) 2015 — approximately 40 2020 — approximately 70 2035 — approximately 250-350 Growth of the global NeuroNet market: market of artificial organs, market of devices of deep stimulation, market of solutions in the field of brain health. Increase of life expectancy will result in a need for support of the brain functions and creation of artificial organs. Creation of intellectual networks and growth of the data volumes will create a need for new neuron interfaces, methods of finding of efficient chains and connection of diverse elements according to network principle. Source: Agency of Strategic Initiatives (ASI)
— Wait, you said that the planning prospect was for 20 years.
— We do not measure this by Strategies-2020 or 2030. It is important for us to understand what should be done on the market today or tomorrow for investments to start coming and for business projects to start developing.
— But there is understanding of the end goal?
— We hope that NTI will form it finally: everything will be clear as soon as we calculate the required resources.
— What was already proposed to the President?
— Three "road maps." The first is MariNet — unmanned ships. There is such company as USC-Tranzas, industry leader, that works on the system of ship navigation. We also have another bonus – a point for application of efforts – development of the Northern Sea Route.
The second is AeroNet: it is easy to guess that it is dedicated to unmanned aerial vehicles. There are all chances to become a leader there: although in the field of airplane building Russia has lagged behind the Americans, in the US it is impossible to create and to test an automated control system of unmanned aerial vehicles due to density of air traffic. It is possible to do this in Russia and scientists are already working on this task in Novosibirsk. Incidentally, cosmonaut Serge Zhukov became the head of the working group of AeroNet and a team from United Aircraft-Building Corporation (UAC) already joined it.
The third "road map" is NeuroNet — control by the power of thought, for example, control over prosthetic arms and legs. This is done by the institute of brain and there is a prosthetic industry, although weak (majority of prosthetic limbs are imported now). Well, we will kill two birds with one stone: we will develop the industry and will reduce the import.
— How many "road maps" are planned in total?
— So far, 11 but we will see later: probably there will be 12 of them or 10. The number is not so important. If only five such "maps" are implemented by 2035 this will already be victory. Each of them is a kind of breakthrough in technologies and on markets. What has been planned? To determine such markets by 2035 where Russian companies could not only produce but also export hi-tech products. Or raw materials but not only oil but, for example, food products. The next "road map" that is upcoming is FoodNet. Development there is managed by Sergei Vykhodtsev (head of Velle company, creator of Bystrov brand — Ogonek).
— Food for whom?
— We think not only about Russians but also about 1.5 billon representatives of the middle class who should appear in rapidly developing economies of Southeast Asian countries in the next few years and about their food requirements. They will not wish to buy and eat what grows now on poisoned soils of their region. The topic of development of territories of outrunning development in the Far East is well combined with implementation of FoodNet. And I agree with the experts who are convinced that Russia will be able to substitute oil with export of high-quality food products.
But there are also two other "maps." One of them id dedicated to development of a network of children's technical clubs. At present, 90% of additional children's education consists of music and sport and there is simply nowhere where new Kulibin, Mendeleev and Einstein may appear. Startup businesses develop early in this century: it is not rate when people of 14 years old outrun experienced businessmen.
Another topic is AutoNet, development of the market of unmanned trucks. Bearing in mind gigantic unpopulated spaces of Russia, it is even more interesting than project of unmanned cars.
— How is it possible to let unmanned automobiles to our roads on which there are traffic jams and accidents everywhere?
— Do not worry about safety: such stringent protocols are planned there that an automobile will stop avoiding a collision. A lidar, device that determines a space around and automobile and prevents an accident is being developed in Naberezhnye Chelny now. Russia imports similar devices from Europe now. We plan to arrange their production in the country organizing a cluster around KAMAZ. I think that as soon as the idea comes true, 15-20 years later, the quantity of purchases of personal automobiles will decrease seriously. What for is it necessary if it is possible to order an unmanned cheap taxi and you will be accurately delivered where it is necessary? The quantity of traffic jams and accidents should decrease and influence of the human factor will be reduced.
— What about state participation in implementation of the "maps?"
— ASI will not develop another state program for sure. The task of the agency is to find people who implement our "maps" and to help them with the administrative resource. We will decide how exactly separately in every certain case. For example, if we understand that it is necessary to develop MariNet on a certain Far Eastern territory of outrunning development we will come to Alexander Galushka (Minister for Development of the Far East— Ogonek) and we will make a proposal that he hopefully will not reject. In reality, we are already discussing a possibility of appearance of a cluster of unmanned aerial vehicles with the colleagues from UAC. For FoodNet there is already base in Michurinsk: although there is no animal breeding there, colossal experience was accumulated in fruit and vegetable genetics. It is necessary to have what already exists and not to multiply new state structures. Special economic zones, territories of outrunning development, clusters and technical platforms are more than sufficient. We are not even going to invite institutes to participate in the "maps."
— How is it?
— We stake at personalities, we count on movement from below, on business initiative. What for do we need an institute or a chair? We need solution for a certain problem! Not everyone understood this. There were those who perceived NTI as a way to retain financing. Yes, these or those preferences from the state will be embodied into every "road map." Somewhere these will be tax preferences and somewhere these will be customs preferences, it depends on who needs what.
Everyone has his own drawbacks. Expertise Alexander Kuzminsky, general director of national radio technical bureau Sistema, doctor of technical sciences, comments on research of ASI in the segment of unmanned vehicles. Such business line as construction of unmanned vehicles, first of all, aerial ones, is developed now by many countries. It is difficult to become trendsetters in this area. Along with this, the matters of their control represent a broad field for innovations and Russia could succeed there. Control over unmanned aerial vehicles (UAV) like control over ground devices of such class is closely associated with navigation support. At present, the basis for navigation of UAV that includes determination of its own coordinates and their use for flight control consists of global satellite navigations systems GPS/GLONASS (GNSS), inertial and combined systems. Each of them has its own drawbacks. Despite significant progress in creation of inertial systems, the level of accumulated mistakes does not allow their autonomous use (without additional external correction) for a long time, as well as conduction of automatic landing of unmanned aerial vehicles. Satellite navigation systems are badly protected from interferences and from the "political factor" in the form of deliberate worsening of precision of navigation determination by owners of the systems (defense ministries) in case of worsening of international situation. On the one hand, they have global nature and this is their indisputable advantage. On the other hand, they have low precision of positioning in high-latitude areas. For neutralization of aforementioned risks satellite systems need an alternative. The US is working on creation of a ground double system that can substitute GPS in case of absence or suppression of satellite signal. Prototype of such system mounted on White Sands training range (New Mexico) successfully passed through preliminary tests in the interests of the air force. Russia does not lag behind too. Domestic specialists developed a new technology for building of ground multi-position system that allowed determination of current position of the users with accuracy of a few centimeters including positioning of objects moving at high speeds (airplanes, helicopters, UAV etc). Possibility of formation of a fairly big zone of effect with a small quantity (approximately six units) of emitting elements (ground radio beacons) located on a limited territory represent an advantage and distinctive peculiarity of the technology. The system can be deployed quickly, it can function in Arctic areas and other regions problematic for GNSS. According to the level of characteristics including costs, it is superior to the known Western counterparts. Prototype of the system has been made and is undergoing experimental working out. At this point there appears a question of demand for innovations. Very often proposals that can be useful for the country do not find the proper response of state officials. The matters are being settled for decades. Meanwhile, similar developments appear abroad. If ASI manages to change the situation and to ensure real promotion of domestic innovations necessary for the country, this will be a huge step forwards on the path to creation of modern competitive economy in Russia.
— Incidentally, how do you select scientists for the projects?
— I wish we find them first! Everything is simpler with regard to business: the national enterprising initiative is working, as well as the rating of investment attractiveness of the regions and it is clear whom to address. There is a problem with regard to scientists. There is no unified base, we look in all areas: through the Federal Agency of Scientific Organizations (FASO), Russian Academy of Sciences and Skolkovo. When you find them there are problems too: scientists are often not ready to sell themselves. It is good that with regard to some "maps" business knows which "brains" it needs. With regard to unmanned automobiles and ships we have no problems with search for the scientific base.
— Incidentally, according to results of polls of Ernst&Young, human resources problem was a key problem for foreigners in Russia. Now this is already a problem of domestic business. There are no human resources of the necessary level of training! Starting from ordinary locksmiths. What we need to do?
— We took care about this problem back in 2013. This happened incidentally: two people happened to be in a reception office who strangely reminded Cat Bazilio and Fox Alisa from a well-known movie. We were not surprised by anything then: people with foil hats (protection from zombifying emission) sent letters to us, they sent gravitation vehicles, eternal engines etc by mail and to the office. We were also glad to have this pair that proposed launching of a contest of worker professions, although, honestly speaking, the first thought was, "What a nonsense!" We started checking this. It turned out that WorldSkills were invented in Europe after World War II to synchronize educational standards in the field of special technical education. Locksmith in Portugal and locksmith in Denmark were two different levels of professional skills then. So, we formed a team and went to Leipzig where we were on the last place. This happened because requirements were set for operator of CNC machine tool not only for milling of a part but also for its designing and for cleaning of the working place. How we have used to do this in Russia? Designers design, technology engineers program the machine tool and nobody likes cleaning at all. Or let us take two students of technical schools, Russian and Finish who are like twins, are approximately of the same height but the Finn somehow pay tiles fourfold faster and with better quality. We started checking this and found out that in Russia standards of professional technical education were not revised since the Stalin time! Our workers are taught slower and worse.
— How is it possible to initiative NTI in this case? Who will carry out the breakthrough?
— Back in 2013, we tried to persuade the governors to organize championships of professional skills. At present, 20% of colleges in Russia work according to WorldSkills standards and at international contests we are already on the 14th place. Our goal is to make the share of such colleges bigger than 50% by 2018. Working out of the "road maps" for NTI will not be started immediately too and construction of their implementation will be built in 12-18 months. And the selected developments will have to determine the face of the country in 2035. Do you remember how at the beginning of perestroika Russia was only ballet and outer space?
— And in 2035?
— You ask a wrong person. I am a pragmatist and as soon as futurologists start twittering at the meetings (what can we do without them!) I switch myself off. My business is to ground everything, answering the question by which administrative resolutions can this or that business initiative be supported. In my opinion, it is better to postpone a forecast for a couple of years than to write something absolutely fantastic. One of the reasons for failure of some well-known projects is too remote horizon of implementation. My experience shows that if a task cannot be formulated for the near future it will also be hardly possible to sell a product. Conventionally speaking, let unmanned aerial vehicles deliver only Valocordin but let them take off already a year later. We will broaden the product range later. So, in National Enterprising Initiative we started from abolishment of seals and business trip documents. We do not need remote outer space now.

— But what about a dream, robots, computers, space. Americans dream about a manned flight to Mars.
— I speak about remote outer space figuratively. Of course, we plan and dream that in 20 years pizza will fly to our home by phone call and taxi without a drive will take a child from school, whereas cargoes will cross the spaces from Europe to the Far East and Siberia on their own and "made in Russia" stamp on the product packaging is a brand by itself. Of course, I as a person who has worked in business and in the real sector for the whole life wish to laugh when I hear such wishful thinking but you are right: what can we do without them? Having started from the "maps" now, we may quite come to a result comparable to the space program of the Soviet time in 20 years. Now we have the same situation as the group of engineers in the basemen of the house in the Garden Ring in Moscow.
— About whom do you speak?
— I speak about the group for studying of jet propulsion (GIRD). The group created in 1931 was accommodated in the basement of house No. 19 in the Sadovo-Spasskaya Street. Friedrich Zander was the head of GIRD and Sergei Korolev was chair of the technical council. As a rule, age of the employees did not exceed 25. So, these young people tried to implement the ideas of Tsiolkovsky. Two years later, the first rocket took off. GIRD and the Leningrad gas dynamic laboratory were united into the jet research institute. We will omit the problems that exist in the Russian space industry now. Besides them there is also a technological platform and we do not need to reinvent a bicycle and we only need skillfully composed "road maps." Hi-tech is a sector where it is impossible to forecast beforehand where another breakthrough invention will be made. But the more new business lines are developed the bigger a change to become a birthplace of a breakthrough. The main thing that the ideas selected by ASI should pass a test for feasibility and business is ready to invest in them.
Person with a prospect Business card Andrei Nikitin was born in 1979 in Moscow. He graduated from the state university of administration (Moscow). In 2006, he received degree of the candidate of economic sciences, in 2008 he received EMBA degree of Stockholm School of economics. In the last ten years, he taught in the state university of administration. Since 2002, he was general director of managing company RUSKOMPOZIT. Since July of 2011, he was general director of the Agency of Strategic Initiatives (ASI).
— Will this readiness be preserved? The crisis is getting deeper.
— The problem is not in the ruble exchange rate but in the fact that besides oil Russia does not have other drivers of growth. If they are not created our economy and budget will keep fluctuating after the oil price. From the start we announced that we would stake on private money. If there is state financing, it will be only of pinpoint kind. We in ASI do not believe that it is possible to fly somewhere on state money now. We know many examples of the innovations paid by the state but there are no working innovations among them.

— Does not the crisis influence your plans?
— Now it does not, afterwards it will definitely influence them. The main thing is to have demand.
— And who will be the buyer of the know-how?
— Private individuals. For example, farmers, on whose fields it is possible to sprinkle whatever you wish from unmanned aerial vehicles, which was done by "small aviation" in the Soviet time. Or owners of companies for delivery of products, medications and food. There is demand for all this even now and we are going only to stimulate it. But what we would not wish is creation of state corporation Rosbespilotnik. Money of the state should be spent on payment for scientific developments, for example, on creation of durable batteries for unmanned aerial vehicles. For example, Dmitry Lopatin, the winner of the Zvorykin award, inventor of solar batteries that work in cloudy weather who has been nearly imprisoned for 11 years for purchase of a solvent in China that includes psychotropic components participates in implementation of one of our "maps." The story made loud noise.
— Have you studied demand only on the domestic market or do you have export in plans?
— In the US unmanned delivery has been working for a long time and demand for it is growing. We have presumed that in Russia this service will be also attractive. Besides pizza delivery it is possible to conduct geodetic research and to deliver vitally necessary things to remote areas. Just imagine how wonderful it is if such thing flies to a granny in a remote Siberian village and brings medication? We are currently negotiating with Russian Post about a possibility of unmanned delivery of parcels and orders through their offices. The post service is calculating expenses and revenues from implementation of such plan. The speed of development and payback of the project depend on answer to the question: how cheap it is? So we try to make it so that projects are managed by businessmen. If a product has no demand from the start we do not work on it. Business limits wolfish appetites of state officials and theoretical aspirations of scientists.
— What about the legislative basis for flights of unmanned aerial vehicles?
— There are problems with lifting of regulatory barriers. The matter is about serious correction of the Air Code: now the law limits the altitude of flight for unmanned aerial vehicles by eight meters from the ground but eight meters is a height of a tree. Military and special services have their own reasons why the corridor for flights should not be increased. So far, we have found a compromise: we will increase it but on separate territories, little by little, not to scare anyone.
— How is it possible to launch such expensive projects in conditions of a crisis and without state financing?
— It is necessary to do it only so in Russia. Do you think that in the 1930 Soviet authorities had time for rockets and outer space? Unlikely. In Ogonek I look at a photo and inscription on the last page: sample of the epoch. In the 1930s, they evidently lived with other things. This is so now too: the country lives with oil prices and ruble exchange rate and we live with "road maps."
Interviewer Svetlana Sukhova
Economy of knowledge in figures Context Expenses on research and development (R&D) and their share in the GDP of the country are usually used for quantitative measurement of parameters and volume of the economy of knowledge According to the Organization of Economic Cooperation and Development (OECD), for 2013, in absolute figures the biggest amounts are spent on R&D by the US ($457 billion), China ($336 billon), Japan ($160 billion), Germany ($101 billion) and Republic Korea ($69 billion). Expenses of Russia in absolute figures ($41 billion) are comparable to expenses of the UK ($40 billion) but in relative terms (per capita) they amount only to $285 per capita and are inferior even to Hungary ($328) and Estonia ($449). Leaders according to investments in R&D per capita are Switzerland ($1,657), Singapore ($1,539), Sweden ($1,474), US ($1,444) and Republic Korea ($1,373). Relatively to the size of economy the biggest investments in R&D are made by Israel (4.21% of the GDP), Republic Korea (4.15%), Japan (3.47%), Finland (3.31%) and Sweden (3.30%). Parameter of Russia amounts to 1.12% of the GDP, which is less than in Luxembourg (1.16) and New Zealand (1.17%), but bigger than in Turkey (0.94%) and Poland (0.87%). Such indicator as technological balance of payments is used to characterize the level of economic payback of the economy of knowledge by the OECD. This balance reflects movement of payments (inflow and outflow) for transfer of technologies, technical support, licenses, patents, trademarks and other objects of intellectual property. In 2013, the biggest exporter of technologies was the US ($127 billion), it was followed up by Germany ($66.6 billion), Ireland (mostly on account of status of offshore jurisdiction for hi-tech companies; $59 billion), Netherlands ($44.4 billion) and UK ($38.8 billion). The biggest net exporters (export minus import) were the US ($38.9 billion), Japan ($28.9 billion), UK ($26.2 billion), Sweden ($12.8 billion) and Germany ($12.4 billion). Export of Russia amounts to $0.8 billion and import amounts to $2.5 billion, which results in a negative technological balance of payments of $1.7 billion.