SYNOPSIS OCTOBER 31 – NOVEMBER 2, 2013 PANEL DISCUSSION Disruptive Innovations: How to Turn Crisis into Opportunity Jay Samit, President, ooVoo: “Cr isis is w hat made us s o successful globally – and allows you to get employees cheaper, allows to get to another markets as there is nobody competing with you there.” Andrey Sviridenko, Founder, Chairman of SPIRIT: “As an innovative company that has been operating on the global markets since the very beginning, we have always endeavored to make products that outpace the global market demands by 5−10 years… And when the market catches up – major players get hit by the wave of urgent demand, we already have a ready product of higher quality than what they’d be able to produce in a short amount of time.” “In 2009 which was a peak year of crisis – the European Investment Bank invested almost 18 billion dollars in projects in research and development.” “I think that cuts to R&D and innovation expenditures should take place last – especially in the time of crisis because companies may lose their competitive edge they have when they stop investing into new ideas.” Evgeny Kuznetsov, Director, Strategic Communications Department, RVC: “In a certain sense, the crisis will prove to be our good fortune – one that helps us to awake from our bad dream [of black oil addiction]. If we want to find the areas of growth, we must enter the technological fields where the answer remains unclear – where the question itself might seem strange.” “If someone had been able to predict 10 or 15 years ago that a semantic search, Skype, Twitter or other Internet projects would turn out to be disruptive, no one would have known what they were talking about. At that time, these technologies were thought about nothing but toys.” “Each and every moment of a financial crisis forces us to turn our backs on costly, superfluous methods of deriving profit and focus on riskier yet initially cheaper methods of achieving the same results.” Summary How crisis makes you more disruptive? • Make way for the young! Crisis opens up unprecedented opportunities for the start-ups successful entry to new markets due to weakened competition from other players. • No country for coward men. Without risk no disruptive innovations are possible. And during the crisis the number of projects cheap-to-enter on the very first stage and with serious disruptive potential – and yes, very risky – high-rockets. Moreover, a crisis makes new points of disruptive growth naked, showing new potentials for investment. It’s important not to cut innovation financing during a crisis – even to increase them. • Defying stereotypes. Crisis helps to make a breakthrough in thinking, dismantle stereotypes, look at the old in a new way, shift into do-ocracy and make bolder decisions, relying on a new market opportunities view. • Money for the Future. You can’t expect long-term R&D investments aimed at stimulating disruptive innovations payback immediately. • “Smart” government. The public sector must become more efficient and innovative. Today, the key to an effective innovation ecosystem is in how government is acting. The experience of Finland clearly demonstrates that only the government is able to implement a long-term strategy for technological development, as the results of such a policy may be far over the horizon and not immediately visible to all citizens. • Who knows… Crisis accelerates the transition to knowledge economy in which information is product №1 and the winner is the most “competent,” resulting in new players entering the market and much higher requirements to competitors’ competence. GLOBAL MARKETS TRACK “Crisis is a wonderful time. Crisis is a hospital orderly for the economy, a time of transition when prosperity passes from the wealthy to the clever.” Virgil Nae, Head of the Permanent Representation of the European Investment Bank (EIB) in the Russian Federation: 37 Alexander Aniskevich, Chairman, Institute of Modernization Problems, Strategy and Society Development: OPEN INNOVATIONS FORUM 38 GLOBAL MARKETS TRACK Yuri Ammosov, Head of the Innovation Programs Department, Analytical Center for the Government of the Russian Federation: “Four disruptive technologies may turn out to become either as opportunity or challenge for Russia – four aspects of mobility: mobility of people, mobility of capital, mobility of knowledge and mobility of things.” “It was precisely the reform resulted in the liberalization of investment mechanisms, implemented in the U.S. by the R. Reagan Administration that indirectly led to a dramatic increase in the amount of money available for investments in innovation. Companies that had dared not to dream of such investments suddenly got access to tens and hundreds of millions.” Esko Aho, Executive Chairman of the Board, East Office of Finnish Industries: “Deep crisis can sometimes be incredibly beneficial to innovation. Just look at how many startups were established during the crisis.” “In the 1980s, Finland decided to actively invest in scientific research and development. If you had asked Finns at the time if these investments were the right way to go, the answer would have been “no, we don’t see any results.” But if you asked the same question 5 years later, after the crisis, the answer would have been “oh yes, absolutely – it’s one of the best investments that Finland has ever made.” “Long-term factors are of crucial importance to the general health of any innovative ecosystem: education, investments in research and development, regulator y environment (and deregulation plays no less a significant role than regulation) and readiness to risk.”