Russian ministry proposes mechanism to ensure demand for software in exchange for private investment in development
MOSCOW. March 15 (Interfax) - Russia's Digital Development Ministry is proposing a new form of support for Russian software companies where they would develop software for customers' needs with private investment and the government would ensure demand for this product and, possibly, preferential treatment in government procurements, Deputy Minister Maxim Parshin said on Tuesday.
"We plan to focus attention on attracting nongovernmental investment in IT. Specifically, through the implementation of a 'market in exchange for investment' mechanism where a company assumes responsibility for developing a product and the state ensures guaranteed demand for it," Russoft reported Parshin as saying at a meeting of the association's government relations committee.
Parshin also spoke about this proposal on Tuesday at a digital transformation forum organized by the Russian Union of Industrialists and Entrepreneurs. He said the grants that are provided to support software development are an exceptional measure of support and the 'market in exchange for investment' formula could be the future.
This mechanism calls for developers to enter into agreements with the government under which the developer would assume the obligation to develop their own product for the needs of industrial customers, Parshin said. "In other words he will make not what he can, but what's needed. This will be confirmed by the customer - the market," he said.
The agreements would specify the features of the software to be developed and a schedule for its development, he said. The Digital Development Ministry and the ICT Import Substitution Competency Center "are prepared to act as arbiters between some sort of unrealistic expectations [of customers] and capabilities [of developers]," Parshin said.
The government, in turn, would pledge in the agreements to grant certain preferences for market access, he said. These could be preferences in access to government contracts through the "second is redundant" formula for companies deemed systemically important, priority access to critical information infrastructure or other instruments of support, Parshin said.
"We're proceeding from the assumption that a company that has received the status of systemically important, in signing such an agreement with the government, understands the preferences that the state can grant and, in future, when and if the product corresponds to the declared result, will certainly be able to find financing on the market. We understand this, we're already in a dialog with the largest and smaller companies. We understand that there is great interest," Parshin said.
He said changes to the law On Information have already been drafted that propose to stipulate the status of a systemically important IT company.
He also called for the development of investment instruments, nongovernmental investment, including venture capital financing and other forms of investment and direct financing. "We're proceeding from the assumption that there is money on the market, that the most promising target of investment is IT," Parshin said.