12-13 November 2018
"Russia is My Story",
Basseynaya street 32, building 1
12-13 November 2018
"Russia is My Story",
Basseynaya street 32, building 1
Investment climate in Saint-Petersburg: how to create favorable conditions for business?
Import substitution as a method for stimulating investment activity
Implementation experience and prospects of private and public partnership projects
New spheres for investments: does future belong to the creative cluster?
high-level discussions of most relevant issues of investment activity in St. Petersburg
identification of necessary qualitative changes for improving the investment attractiveness of the city
development of effective mechanisms for attracting investments into different sectors of the city economy
offering relevant measures for supporting investors and protecting their rights
presentation of your own investment projects and taking part in successful St. Petersburg projects competition
Solutions developed at the Forum will become strategic guidelines for further work on developing favourable investment climate in Saint-Petersburg; they will also give an impulse to creation of modern enterprises and urban infrastructure that will improve the quality of life for people living in the city.
In 2017, foreign investors placed their funds in 238 projects - this is a record figure for Russia. The manifestations of globalization processes in the world are growing. Distances between raw materials, production and consumers are not so significant, and economic factors are becoming more important than geographical ones. The high level of freedom of movement of capital and goods does not coincide with the freedom of movement of labor from country to country. Competitiveness of territories in the capital market is determined by the ability to provide conditions for maximizing profitability. Resources with limited mobility, and most importantly, human capital, become major factors in the competition for investment between big cities. As a result, the global competitiveness of megapolises is determined by those factors that shape the quality of the urban environment and infrastructure.
The exchange of best management practices is an essential condition for the development of Russian regions. Each region is unique and represents a complex system of interrelations that influence each other, problems and opportunities, new approaches and management principles. Certainly, each region can independently identify its trouble spots and take all the necessary measures, but in the face of increased economic and political uncertainty, we need an interregional dialogue and dissemination of best practices in order to ensure a stable inflow of investment and address systematic issues aimed at improving the investment climate.
Import of pharmaceuticals in Russia is 14 times higher than export. 86% of the Russian export market is the post-Soviet space. The most stringent registration procedures are in Europe and the US, so Russian companies enter the CIS market, which is facilitated by the customs union and historically adjusted supply cycle. Russian companies are also interested in the markets of Asia and Africa, which are much easier to access than in America and the EU. The entire volume of exports has not yet exceeded 1% of the domestic market. Unfortunately, the level of export didn't rise in 2017; the demand for traditional pharmaceuticals is weakening, while new ones have to fight for a marketing niche in international markets. However, according to experts in the pharmaceutical market, an increase in the volume of exports can contribute up to 20% to the overall impact of factors that stimulate the development of the industry.
Since 2017, for many pharmaceutical companies in the Russian Federation, the effectiveness of public authorities has become a more significant factor in business development than the impact of macroeconomic factors. A change in the regulatory and legal framework requires market participants to react as quickly as possible in order to maintain their market positions; it is a key risk for the development of the industry.
Due to the development of sports infrastructure, St. Petersburg is becoming one of the largest sports centers in the country and a popular venue for international competitions. Holding of sports events in St. Petersburg attracts additional investments to the region, stimulates the development of the infrastructure, increases the influx of both domestic and foreign tourists, and contributes to the formation of a positive image of the Russian Federation abroad.
The presence of large infrastructural sports facilities, on the one hand, allows holding competitions of international level and smoothing out the seasonality in tourist flows. On the other hand, it requires competent management of sports facilities, which allows them to generate rental income.
The total volume of investments in PPP projects at the beginning of 2018 was about 2.7 trillion rubles, 1.8 of which are private investors' funds. While in a number of developing countries the total volume of investments contracted in existing PPP agreements can reach 10-18% of the current size of the economy, in Russia this figure does not exceed 3%.
Production became the leader among the sectors of the Russian economy in terms of the number of projects involving foreign direct investment in 2017. Industrial enterprises create almost 25% of high-quality jobs, and each of them initiates the emergence of one or two new jobs in other sectors of the economy. Today, the production capacities of global economic leaders are returning to their historical homeland.
According to the government strategy of social and economic development of St. Petersburg until 2035, the industrial production is expected to double and the share of innovative products in the volume of production should grow up to 45%.
In developed countries, the share of the creative sector in GDP is already between 5 and 9%. The formation of the creative sector is closely interrelated with urbanization and the development of "smart cities" which attract highly qualified specialists from the sphere of culture and high technologies. According to EY, the share of creative industries in the city's GDP in London and Berlin is 6% and 8% respectively, while in St. Petersburg this figure is still 1%.
In megapolises, there is a transition to an "urban" type of consumption - an increase in the demand for quality food products. The food industry is one of the main budget-forming components of the city's economy. The modern food industry was formed due to the high investment attractiveness of the city. By production volumes, the food industry is just as significant as the machine building, construction industry, automotive industry. The city is one of the largest Russian centers for the production of beer and tobacco products, confectionery, and dairy products. Global competition in the agrifood economy is growing, and the development of the food industry without a reliable raw material base is impossible. The introduction of sanctions and the depreciation of the ruble led to a steady growth of the domestic agro-industrial complex. Despite the risks, agriculture is becoming an attractive area for investment, although profitability in different segments may be significantly different.
In the 21st century, when human capital became one of the drivers of the world economy, the importance of health care is growing. Given the Russian characteristics such as critical condition of fixed assets, low life expectancy, high mortality of men of working age, the need for a breakthrough development of the medical and social sphere is undeniable. Health financing per capita is 3.2 times lower in comparison with developed countries. The situation of budgetary restrictions reduces the level of accessibility and quality of medical care, which may lead to a social explosion, so the demand for the economic efficiency and productivity of medical services.
Expenditures of the federal budget on health care should double in 2019-2024, up to 4-5% of GDP. Increase in the efficiency of the use of these funds can be achieved by attracting private investors to the industry. In 2017, private investment in healthcare amounted to 50 billion rubles.
According to a study by McKinsey, by 2020 the number of smart cities on the planet will increase to 600. St. Petersburg ranks 88th in the international SmartCitiesIndex rating from EasyPark for 2017. Indicators of smart cities adopted by the Economic Commission for Europe include quality and availability of public resources, innovative infrastructure, safe and comfortable environment. Development of the infrastructure will allow integrating digital technologies into the urban economy.
Environmental pressure is increasingly manifested in megapolises. The intensity of the industrial sector of cities is becoming a key factor affecting the quality of the urban environment. Solutions in the sphere of technological re-equipment, introduction of low-waste technologies, economic and technical control of environmentalization can become significant factors in improving the quality of life of citizens.
Cultural projects in modern cities can be the driving force of socio-economic development; they can create prerequisites for the development of related industries - tourism, hotel, transport. New museums are able to increase the event and communication density of urban spaces, expand the effective time of interaction with objects of attraction. Can cities contribute to private investment flows in cultural projects? Are there any effective schemes for the successful monetization of museum projects, or the contribution of patrons is the only option?
According to the Ministry of Industry and Trade, light industry in the Russian Federation is growing steadily; an active modernization of the light industry is taking place. The largest players of the industry are moving into new niches, setting up the production of high-tech fabrics and non-woven materials for the construction of houses and roads, for the needs of agriculture and automotive industry, medical and furniture industries.
Enterprises of light industry have three main challenges - modernization of production, expansion of the line of manufactured goods and creation of new high-tech materials on a synthetic basis. The last point is also important because by 2025 more than 60% of light industry products based on such materials will fall on related industries - aircraft construction, construction, automotive industry, medicine.