Motivations, Preferences, and Barriers to Going Abroad: Russian High-tech Start-ups and Small Innovative Enterprises
This article is devoted to studying the motives, preferences, and market entry barriers for Russian high-tech start-ups and small innovative enterprises (SIE) that took part in the “Startup Village” event held at Skolkovo Innovation Centre in May 2019. Due to limitations in neoclassical theories, corporate motivation at the micro-level cannot be accurately quantified. Thus, this work uses survey and interview methods to gather primary data directly from top representatives of participating enterprises. In total, about 100 participants were interviewed. Every respondent expressed intentions to engaged in foreign economic activity; half of them already have experience operating outside of Russia. Further, 44% intend to sell their business or intellectual property rights outright, with only 12% ready to cooperate in a join venture.
Based on the analysis of the results, the corporate motives of Russian startups and SIEs going abroad is in seeking: new markets (17.3%), improved efficiency (20.0%), resources (40.0%), and strategic assets (22.7%). This is diverges significantly from the average estimates made by UNCTAD in 2005/2006, where they found motivation from foreign companies in developing and transition economies to be 51%/22%/13%/14%. Against this background, Russian innovative enterprises appear far more resource-oriented and more interested in finding strategic assets. However, they are notably less interested in acquiring new markets or efficiency gains.
Additionally, the preferences in foreign partners by Russian enterprises exhibit some variety. Many choose the CIS countries (mainly Belarus and Kazakhstan) and BRICS nations (primarily China) as desirable partners. Most also express interest in developed economies in the EU (namely Germany). Among the main barriers to establishing foreign relations is the lack of personal finances and other key resources, as well as a lack of state support in promoting Russian companies abroad.
Based on the obtained results, impactful recommendations are offered to the government of the Russian Federation to strengthen the investment motivation of Russian innovative enterprises. Also, recommendations are given to advance the international cooperation of BRICS in the form of joint global value chains (GVCs) using their own innovative capability.