www.debaty.org

STATE FINANCIAL SUPPORT IS NEEDED TO ENCOURAGE INNOVATIONPUBLIC DEBATE BRIEF

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.

September 16th, 2010Teacher’s House, Kiev, Ukraine

Speakers FOR the motion Speakers AGAINST the motion

Sergey NedoroslevChairman of the Board,

Kaskol Group of Aerospace Companies, Russia

Anatoly GirshfeldHonorary President of IG UPEC, MP of Ukraine of the fourth convocation

Olexander KardakovFounder of Incom and DataGroup, Chairman of the Advisory Board,Octava Capital

Volodymyr SemynozhenkoChairman,

State Committee for Science, Innovations and Informatization

Olexiy SkrypnykCEO,Eleks

Dmytro ShimkivCEO,

Microsoft Ukraine

Key Statements

Q&A Session

Sergey Nedoroslev: “The regional aircrafts market is now divided between Brazilian Embraer and Canadian Bombardier as a result of huge state financial support programs and proper corporate governance in those countries. We could do it too.”

Anatoly Girshfeld: “The modern model of innovative development suggests that the state should develop innovative strategy and policies, as well as invest into creation of necessary innovative market institutions, instead of financing particular projects.”

Volodymyr Semynozhenko: “Western innovative success stories were possible due to availability of long term financing, infrastructure and subsidies: Bill Gates created his company on a long term loan! The state should provide for those in Ukraine.”

Dmytro Shimkiv: “If you look globally, during the crisis a large number of countries, including the USA, Portugal, Argentina and Georgia initiated large scale national innovative projects and the state itself was the main financier.”

Olexander Kardakov argues that innovations can only be introduced by business in a competitive environment. Unless the state introduces proper structures to monitor its investments, it should not spend money on innova-tions.Olexiy Skrypnyk: “The US Government is right to spon-sor innovations, however, I am against state invest-ments into innovations in Ukraine unless we solve the problem with corruption and foster result oriented culture among innovation managers.”

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.”

FEG, 23-F Kudryavskaya st., Kiev, 04053, Ukraine, tel: +380 44 501 41 00,

feg@feg.org.ua

Further information and the full version of the debates can be found on: www.debaty.org,

www.feg.org.ua Debate videos are also available on

www.youtube.com

Voting Results

Before the Debate

After the Debate

Against

ForDon’t know

Against

ForDon’t know

13%

76%

11%

37%

54%9%

We would appreciate your participation in our next conference on the motion:

What is Freedom of Speech? to be held on December 02, 2010

at October Palace, 1 Institutskaya Str., KievStart time: 19:00