New industrialization: Moscow industry development

On October 7, the capital celebrates the Day of Moscow Industry. There are more than three thousand industrial enterprises operating in the city, which produce almost everything - from sweets and ballet pointe shoes to space engines. Enterprises established decades ago modernize production, introducing new technologies and creating new products. At the same time, small and even microenterprises are developing in the capital, innovative developments of which are also conquering their market segment.

 

Mosprom of 2021 sample

Moscow is an excellent example of a megapolis, where small high-tech industries (compact and eco-friendly) are successfully developing together with enterprises with almost a century of history. Many of them appeared after 2010: enterprises producing robots, smart chips, 3D printers, and modern composite materials were added to the traditional oil refining, mechanical engineering, light and food industries. In many ways, this was made possible thanks to the efforts of the Moscow Government focused on developing innovative industries.

What is being produced in Moscow today? 20.5 percent of enterprises, that is, more than 600 companies, are connected with the sphere of radio electronics and instrumentation. This is precisely the science-intensive sphere in which the capital's research institutes and research and production enterprises work. Almost nine percent of enterprises are engaged in printing industry, and eight percent in mechanical engineering, the produce road construction and agricultural machinery, as well as cars.

Eight percent of the companies work in the consumer goods, chemical industry, and are also engaged in the production of building materials. The food and beverage industry employs 7.8 percent of enterprises. In addition, 53 enterprises are engaged in the aviation industry, and 24 are developing the rocket and space industry.

Made in Moscow products are successfully sold not only in the city and regions of Russia. The capital's enterprises also produce to export. In 2020, Moscow's high-tech companies shipped 30 billion dollars worth of products abroad, which is 44 percent more than in the same period of 2019.

Moskva Technopolis

In 2005, the Moskva Technopolis special economic zone (SEZ) was created in Zelenograd. It was supposed to become a platform with favorable conditions for high-tech enterprises. And the project turned out to be successful: today Moskva Technopolis consists of five sites and about 200 companies employing more than 13.5 thousand people.

Innovative enterprises arrange their scientific and technical laboratories and production facilities in the special economic zone. Residents, and 88 companies have already received this status, create developments, technologies, invest in production and successfully sell their products, including for export.

 

The benefits and preferences provided by Moskva Technopolis help companies to achieve such development. Among them are a reduction in income tax to two percent, a zero rate of property tax and transport tax, a free customs zone regime that provides duty-free imports, preferential land lease conditions. In addition, residents have the opportunity to buy a land plot for one percent of its cadastral value upon completion of the construction of their facility.

Thanks to such benefits, enterprises can direct more funds to research and innovation. Residents of the Moskva Technopolis have registered 175 patents for utility models and inventions. Almost 70 percent of new developments relate to electronics and high technology. These include devices for detecting moving objects, methods for manufacturing electronic elements and circuits, devices for calibrating microscopes, protected computers, and new solutions for drones.

Technoparks for large and small enterprises

More than 40 modern sites for innovative productions have been created in Moscow. Technoparks offer to enterprises the facilities adapted to various types of activities including laboratories and ‘clean rooms’, as well as testing and certification centers. And of course, benefits and preferences for development.

Technoparks house completely different production facilities and scientific and technical laboratories. More than two thousand companies are already renting space in technoparks, and 1,402 of them have already received the status of residents. At the same time, 81 percent of all residents are micro companies or small enterprises. The demand for technoparks is also indicated by the fact that today a little more than only one percent of the areas are free. Last year alone, 102 enterprises came here.

Which enterprises are located in technoparks? Almost a third of companies (31 percent) are engaged in scientific research and development. 21% are manufacturing sector enterprises: they produce computers, electronics, optics, equipment. Another 15 percent are engaged in information technology. By the way, some technoparks, for example, Phystechpark, Otradnoye, Gorizont and Vodny Stadion, have become real centers of attraction for IT enterprises.

Last year, eight Moscow technoparks were included in the VI national rating. Among them are the TechnoSpark Nanotechnology Center (first place), Moskva Technopolis SEZ, Kalibr, Slava, Strogino, Polyus, Elma and Mosgormash technoparks.

The capital's high-tech industries are also united by the Moscow Innovation Cluster (MIC), created in 2019. This is an ecosystem for those who want to create a new product or service and are looking for partners to implement the project. On the i.moscow portal, you can find services and resources for development, apply for subsidies, find a room for rent. More than 30 thousand participants have already joined the MIC.

"In the Moscow Innovation Cluster, the industrial sector is represented by more than 2,500 participants. The capital's industrialists are our partners in various technological contests. On the basis of their enterprises, developments are being tested as part of pilot testing," Alexey Fursin, Head of the Moscow Department of Entrepreneurship and Innovative Development, said.

Preferences for development

The Moscow Government supports actively the industry and its modernization, providing various benefits and preferences. Residents of technoparks and the Moskva Technopolis Special Economic Zone, industrial complexes and investment priority projects can reckon on them.

For example, since 2016, large manufacturing plants and enterprises engaged in research and development can receive the status of an industrial complex. To do this, they must meet a number of criteria, including investments over the past five years, requirements for minimum wage, average wages and revenue.

Industrial complexes can reckon on a reduction in the regional part of the income tax from 17 to 13.5 percent, on rent benefits for land plots owned by the city to 80 percent, on a reduction in the property tax rate by 50 percent and land tax by 80 percent.

In 2021, three more organizations received this status, and 61 industrial complexes in all operate in the capital. At the same time, over the past five years alone, they have invested about 34.3 billion rubles in the Moscow industry.

In addition, a wide range of benefits are valid for technoparks. Their residents and tenants can pay a reduced income tax of 13.5 percent. The property tax rate is also reset, and the rent for land is 0.01 percent of the cadastral value. Technoparks and their residents can get:

- subsidies for payment for interest on credit for the development of the technopark's property complex (up to 300 million rubles per year);

- subsidies on equipment financing loan (up to 200 million rubles per year), - subsidies for reimbursement of the leasing costs part (up to 100 million rubles per year):

- subsidy for utility connection (up to 100 million rubles).

The above support measures are available for industrial complexes and investment priority projects.

In addition, for industries with the status of an investment priority project, the income tax is reduced from 17 to 13.5 percent, the property rate is reduced to nothing, and the rental rate for a land plot is reduced by 99 percent.

The city helps enterprises not only to develop production, but also to sell products, including abroad. For this purpose, the Mosprom Export Support and Development Center and the Moscow Export Center have been created. If the MEC was conceived to support small businesses, then the Mosprom center interacts with medium and large businesses - exporters of industrial products and products of the agro -industry.

Despite the different directions and forms of support, the task of both organizations is to help to establish links between the capital's production enterprises and potential buyers from abroad, as well as to promote goods and services abroad, including by conducting business-missions and organizing Moscow companies collective show-benches at international industry exhibitions. In addition, acceleration programs and webinars organized by the Moscow School of the Exporter are held for exporters.