The Ministry of Digital Development will not have enough grants for everyone

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This was stated by Alexander Pavlov, CEO of RFRIT, at the plenary discussion "Technological Sovereignty in the Context of Sanctions and Restrictions" at the IVA DAY 2023 conference. "Over the past six months, we have supported 20 projects. But unfortunately, so far we have only been able to satisfy a tenth of the needs from azerbaijan whatsapp resource the pool of projects that enterprises formulated during the first wave. This is not much. It is clear that both companies themselves and private investors are investing in the digital transition and import substitution. But given that access to resources has decreased due to the international situation, the closure of foreign markets, and the transition of a number of former partners to the number of unfriendly countries, we are seeing difficulties with financing. But the fact that the "red zone" of critical needs was quickly removed after the departure of foreign vendors is encouraging," Alexander Pavlov explained.

Back in April 2023, the Minister of Digital Development, Communications and Mass Media (Ministry of Digital Development, Communications and Mass Media) Maksut Shadayev warned that there would not be enough grants for everyone and proposed replacing them with preferential lending and venture financing. However, 93% of domestic IT companies spoke in favor of maintaining grant support.

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The Ministry of Digital Development, Communications and Mass Media proposed replacing grant support for the IT industry with preferential loans and venture financing from 2023. Many companies have spoken out against this initiative.

But already in June 2023, at the St. Petersburg International Economic Forum (SPIEF), Maxim Parshin, who at that time held the position of Deputy Head of the Ministry of Digital Development, said that IT companies submitted grant applications to RFRIT for 1,100 projects to develop domestic solutions, of which only 200 were selected: "Naturally, not all received money. Of the 1,100, about 300 projects passed all stages of evaluation. These are, indeed, high-quality projects that it would be a shame to lose. But slightly less than 200 turned out to be worthy of support." As a result, as of October 2023, RFRIT was able to support only 20 of them.

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The Ministry of Digital Development has found a replacement for IT grants in venture investments
The Ministry of Digital Development has developed measures to stimulate venture investments in Russian IT projects and sent the document to other departments for approval. According to the digital ministry, venture funds will replace state grants, for which the Russian government does not have enough money. Eight venture funds have already shown interest in cooperation.

Nevertheless, the top officials of large Russian companies note successes in import substitution. Deputy General Director of Russian Railways (RZD) Evgeny Charkin spoke about the company's plans for the near future: "In 2023, our main goal is to make the first fully digital multimodal transportation on a national scale. This is a unique experience not only in the domestic market, but also in the global transport digitalization industry. Already about 90% of clients interact with us completely paperless. This is a very good indicator at the global level, which inspires optimism."

Deputy Minister of Transport of the Russian Federation Dmitry Bakanov noted the duality of the situation: "As funny as it may sound, the joy is that foreign vendors are abruptly leaving projects in Russia. For example, after the Pobeda airline was left without services from foreign vendors, we had to implement the transition of the entire industry to domestic booking systems. There are two of them, so we can even observe a competitive market. But the pessimism is that it is often difficult for them to negotiate. When we depended on a foreign vendor, we worked on it calmly, and no one was afraid of market trends. As soon as we began to choose from domestic developers, it turned out that no one wants to become dependent on a competitor who is also a customer in relation to this vendor. Often, you need to negotiate with everyone. And in this regard, the mechanism of industrial competence centers (ICC) helps. In the aviation industry, for example, there is consolidation for all services."

Natalia Popova, First Deputy Director General of the non-governmental development institute Innopraktika, expressed the concerns of IT market players: "Many of the problems that the IT industry has encountered under the sanctions pressure have to be resolved very quickly. But these are surmountable obstacles. In general, it is clear in which direction to move. Companies are making maximum efforts. Of course, they are investing huge amounts of money to replace foreign competitors. But there must be confidence that these competitors will not want to return if the situation changes. Developers still have some concerns that after large investments in the industry, they may not pay off, and the system will work unstable."