Russian fast-growing technology companies from the list of the so-called "national champions" have generally proved resilient during the coronavirus crisis. However, the consequences for them may be "delayed" and manifest themselves later, Natalia Popova, First Deputy General Director of Innopraktika, a non-state development institute, said at the St. Petersburg International Economic Forum.

She called the "national champions" the elite of the technology business, as the capitalization of the companies ranges from 500 million to 30 billion rubles. "So this is such a small and medium segment. They are quite impactful. For example, we recently conducted a survey and asked our "national champions" how they survived the covid," she said, noting that the results of the survey were positive for 87% of organizations.

Also, according to Popova, 33% of the companies managed to maintain the momentum of growth. However, 40% slightly slowed the pace, while maintaining a place in the "positive segment," and one in five participants were able to increase volumes in the pandemic.

The danger, however, is that the coronavirus crisis has deferred consequences for companies in this segment, as they tend to be in the middle of the chain because of the B2B segment activity, Popova said.

"The presence exactly in the middle of the technology chain gives a delayed effect. It is clear that after some time we will see the impact of the crisis on them," said the deputy head of the institute.

The World Bank has pointed out the great importance of such companies for the economy, said Popova. Russia also sees high potential in them because they may create the "driving force for the rest of the sectors" to overcome the crisis.

Speaking about the government support measures, Innopraktika representative reminded that recently the tax maneuver for IT-industry was accepted, and now export support measures are being discussed.

"At the moment, quite small funding is allocated, but, I hope, that from the end of this year and beginning of 2022, the amount of money on certification and homologation will increase, because for the exporter, entering a foreign market involves the fact that certification of each item of its product costs from 750 thousand rubles to 2 million. A company is not going out with just one product. Therefore, there is room for work here. We also need support from the tax regulation point of view," said the Deputy Director General.

She also drew attention to the fact that, although some measures are prescribed by law, they are not implemented in practice.

The companies themselves have previously stated that they need hard support. For example, additional funding is needed for research and development (research and development work). "This is indeed the case, because companies in this segment spend a lot of money on research and development. These expenses, of course, should be supported so that companies do not lose their financial stability and shock resistance," she shared, adding that as support, for example, grants or tax preferences in terms of an upward coefficient on writing off R&D expenses can be provided.

However, Popova said that soft support is equally important, as fast-growing companies often outgrow the SME segment in a short period of time. Then enterprise management issues that were relevant at the first stage of development cease to be relevant.

"There appears the so-called "valley of death", when companies seem to have established their production, occupied certain niches, but due to lack of management skills, lack of knowledge of markets, lack of understanding of how to expand these markets and export, a certain decline in dynamics or total collapse of the company happens. To avoid this, such soft support is extremely relevant," she said.

Especially for this purpose, for example, Innopraktika together with the SME Corporation launched a special training accelerator for 50 companies.

"Such support measures when the companies can reconsider their management processes, change the system, their vision of development in business and receive feedback from the professional community - it is no less important than hard support", - concluded the representative of the institute.

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Author: Ksenia Gustova