Vasily Shpak, Minpromtorg: "We should provide domination of the domestic ICT equipment in the market of the Russian Federation"

Vasily Shpak: It is essentially important to us not just to receive a part of technology transactions in the territory. It is important to us to receive an intellectual product as a transfer of technologies.

Vasily Shpak: The intellectual result is design documentation. What we will begin any localization with, is, first of all, a localization of design documentation that to our country, in the Russian company in which control belongs to the Russian tax residents, design documentation was transferred. It is necessary in order that the Russian company could according to this documentation not only make products, but also develop it, making corresponding changes, developing thereby engineering and design competence. It is the first step without which it is impossible to move further.

Vasily Shpak: It is clear, that we have not all technologies now. Where they are, we will require that in the maximum degree everything was made within the country, in perimeter of our borders. Where domestic is not present now, so there will be a step-by-step movement. Let's focus on that these technology repartitions at us appeared. It is clear, that we have no microelectronic productions of the most modern technology levels now. Means, we will create them. And as soon as they appear, we will impose requirements to products of the Russian origin: that products of the Russian origin incorporated that electronic component base (ECB) which is made at these Russian plants.

Vasily Shpak: Of course. We start the movement not from scratch. We know what we have and what is not present. Priorities are, on these priorities we also will build the movement of the industry. In particular, in January the Strategy of development of electronic industry is approved. Everything is well registered in it, both in the directions of technology development, and on the organizational moments.

Vasily Shpak: In the Strategy of development of electronic industry we designated our purposes: by 2030 to increase industry revenue more than by 2.5 times - to 5.2 trillion rub, first of all, at the expense of civil products (from 0.9 to 4.6 trillion rub) and also to increase export to 2.7 times - to 12.0 billion dollars. Market premises for achievement of these indicators are. Even electronics share in the cost of end products constantly grows in the traditional industries. For example, in the car it already makes 40%. Fast-growing sectors of digital economy are in parallel created. Therefore the main call for the industry – to build everything on domestic element base or on foreign that threatens technology sovereignty and security of Russia.

Now we create some detailed plan of strategy implementation. And under this plan we will adopt the corresponding regulations which regulate, in particular, localization process and also the state demand for this ICT products within the country.

Vasily Shpak: Work already actively goes. In particular, in the area storage systems (DWH): since the end of last year prohibition works to buy foreign products, the relevant governments (software) of the Russian Federation resolution No. 1746 was accepted on December 21, 2019. On it we are not going to stop. We should provide domination of domestic manufacturer in domestic market RUSSIAN FEDERATION. It is one of the purposes which is put in our strategy, and we to it go.

Vasily Shpak: According to the specified purpose we will raise requirements for localization. And those companies who wants to work with us including, foreign partners, should correspond to these requirements. And if does not want to correspond, let themselves look for in other sectors of activity.

Vasily Shpak: You are right. Electronics is such sphere which has global character. Moreover, on the world map there is today no such country which develops and makes all components of ready-made products. In terms of intellectual property, the most advanced country – the USA. It has a huge number of patents, including, on means of production, technologies and products of electronic mechanical engineering and also on materials, etc. Such countries and territories as China, South Korea, Taiwan, have considerable competences: everyone - in the technology chain, also continue them to develop actively. Our situation is more difficult, but, nevertheless, us have no place to disappear. It is necessary to begin to move in these directions.

We can move only due to presentation of requirements for localization to those who want to earn from our market until ourselves seize this technology. The way is this, I will note, not unique, it there passed all countries. Let's tell, 30 years ago in general nobody knew the words "Chinese electronics" because such phenomenon did not exist in principle, electronics was Japanese. By the way, to Japanese there was the same relation: it is "yellow" assembly, not "white". And 50 years ago and the Japanese electronics was not, without speaking about South Korea. All this occurred before our eyes. It is necessary to use experience of other countries.

Vasily Shpak: Let's specify. Really, we have no microelectronic factories which make crystals. And here radio-electronic production which begins with the level of printed circuit boards at us is not bad provided. There is a great number of producers who rather successfully work. There are also large contract producers who under the agreement will make the necessary equipment according to documentation of the customer. We have rather large number of these production capacities.

Vasily Shpak: With a number of technology transactions there are no problems: installation a component on the printed circuit board, soldering, packaging, check. All this in our country becomes. Another thing is that ourselves cannot make components. On it now also we focus attention. For this purpose, in particular, we build the microelectronic production.

I will emphasize that a key link of a production chain are domestic design centers without which design of EKB is impossible. To provide the advancing loading of our factories and, eventually, to lower an import share, we need to expand this network significantly. In addition, it is necessary to develop in a complex and other elements of an industry chain, including a CAD, materials science, production of clean gases, low-tonnage chemistry and, of course, the personnel.

Vasily Shpak: It is not a problem of "regluing of labels". We accepted government decree No. 878 of July 10, 2019. "About restriction of admission of foreign products for the public and municipal procurements". There is a speech about creation of the register of the Russian radio-electronic products (RAP). What is in the register is Russian. Relevant requirements are imposed to this equipment. And we set these requirements. If the equipment conforms to these requirements, it is included in the register and uses preferences at the public and municipal procurements and also purchases of the companies with the state participation. If does not correspond, does not get. All. The specified resolution speaks only about advantages in that market which is covered by state regulation: at the regulated market the state will behave so. Who wants to play in this market, owes these rules and requirements to execute.

Vasily Shpak: If to speak about our foreign partners, interest essential: they attentively study the events. Perhaps, some not up to the end believe that we will consistently bring the begun matter. But our practical steps, in particular, concerning DWH, and itself software No. 878, clearly and accurately show a trend on which we move. And we will continue this story.

Vasily Shpak: Figuratively speaking data are blood, and DWH is heart of IT systems. At information only three "aggregate states": storage, processing and transfer. Storage systems are responsible for one of these main aggregate states. But in DWH - a large number foreign a component. And since 2021 the requirement is introduced: domestic DWH will be called only storage systems with domestic microprocessors. All of us time will raise a bar of requirements, and for the same way we intend to go also by other types of the equipment: to telecommunication equipment, ADP equipment.

Vasily Shpak: At first we create the markets for our domestic manufacturers or for our foreign partners. They by our rules begin localization of the equipment, bringing together with design documentation of the right and intelligence to us - in those companies which work under the Russian laws and are residents of the Russian Federation.

The register of REP for what is created? In order that the producer of products from the register received preferences when purchasing. But on purchases buy not separate blocks, but finished products. And we receive design documentation on them. Further on the basis of this design documentation, defining, Russian or non Russian, we detail requirements, and we find out that and at what levels should be Russian.

Actually, in the direction of DWH we imposed a ban in order that preferences received those Russian companies whose products are in the register and which have own circuit engineering, own design documentation and who makes this DWH in the territory of the Russian Federation. All this is in detail described in software No. 719 of July 17, 2015. "About confirmation of production of industrial output in the territory of the Russian Federation". There, in particular, the concept domestic not only for radio electronics, but also any other products is defined.

We work with all industry organizations, sensitively we react to all those requests which are created by our industry. Our function as regulator is in developing domestic manufacturer.

Vasily Shpak: On the one hand, all perfectly understand what occurs. On the other hand, such big companies have a certain inertia that is obvious. Before recent time these companies built the information systems not proceeding from need of import substitution and assessment of these risks. Nobody expected that the situation will begin to change with such speed, and today's risks will begin to arise in such dangerous volumes.

Therefore now at the level of the state the possibility of preparation of directives for the companies is discussed with state participation which are directed to that these companies developed programs of risk minimization from the point of view of suppliers of ICT products. It is called the program of alternative deliveries. Its essence is that the large company cannot exclusively depend on one supplier as it causes the high level of risk for activity of the company in general. In terms of model of risks, it is reasonable to develop alternative deliveries, proceeding from certain ratios, say, 80:20, 70:30, etc.

Vasily Shpak: At all not. Recently a story with remote shutdown of pumps on gas pipelines of Gazprom which really occurred a few years ago emerged. On gas pipelines the equipment of foreign vendor was from the outside switched-off, and the company could not start it in work independently. Thus, the company incured serious additional costs – it was necessary to buy other equipment and to replace idle, - to stop the gas pipeline. Do you represent what it is risks for business company? Not to bring the matter to such situation, it is necessary to minimize the corresponding risks and to have in the territory the Russian supplier who will secure the company, including, against political risks.

Vasily Shpak: From state companies we in this direction already work with colleagues. There are very good examples. For example, Rosseti - the company which very actively is engaged in import substitution. I will notice that the energy sector very seriously began to think of import substitution though, it is obvious that all tasks not to solve in one step. Before the company comes to specific solutions, exact understanding of a situation should ripen in the heads of those persons which make these decisions. We with it help them. In particular, we will push state companies and the companies with state participation working on 223-FZ to a turn towards domestic production.

Vasily Shpak: Those products which are in the register of REP Russian and are produced serially. When we draw the corresponding conclusion, we check capability of serial production of products. It is clear, that any production has certain capacities, but it is produced in the territory of our country serially and is Russian by origin.

Vasily Shpak: Everything depends on a type of the equipment. On the majority of positions we have a requirement: that all main technology transactions in addition to design documentation too serially happened in our country. There are no contradictions. As I told earlier, these production capacities are. If it is necessary to increase release, it will be made.

The example is the Novosibirsk plant ELTEX which provided deliveries to socially important objects of the switches and routers last year. We, by the way, subsidized it according to software No. 109. Executing this contract, the plant worked in three changes throughout rather progressive tense to provide all big order. Other examples of powerful Russian serial production: Aquarius, T8, Mikran, the enterprises entering a radio-electronic circuit of Rostec: "Constellation", Avtomatika concern, Almaz-Antey concern, Schwabe holding, etc. There is a lot of enterprises, you will not list all. Actually, we can make in the country practically everything, in terms of end products. We in lower repartitions have problems. With microelectronics, materials, electronic mechanical engineering, computer design aids. Here we have a strong dependence on import, and a problem of the state, our ministry – to provide development infrastructure. And further let business works, earns money. Commercialization is a function of business.

Vasily Shpak: Statistics of state procurements is kept. We see that now in the majority there are purchases of foreign goods. However official statistics that in the purchased products domestic, and that import, no. Officially nobody analyzed it. Now we want to turn on this mechanism – to perform monitoring of all state procurements regarding the fact that exactly there foreign and that domestic is bought there. On the basis of available information it is possible to tell that about 22% of what is bought, provided with domestic manufacturer.

I will emphasize that it is a trouble not of domestic manufacturer. It not he cannot provide more than 22%. He can, but its products are not bought. For today we see that the industry is obviously underloaded, the stock on production capacities is.

Vasily Shpak: Of course. First of all, imposition of restrictions on purchase of foreign. It is the main help: that purchasers were forced to buy the Russian. Thus, we create the state order which is transformed then on all technology repartition: the companies were included into the market, began to deliver, began to make. And here we say: do you earn? Then let's increase gradually contents Russian a component - at cost - in a product: today not less than 30%, since the next year - not less than 50% and so on. As a result there is some system of relationship in the market when, on the one hand, the producer of products receives the market, and on the other hand, he for it undertakes the certain postponed obligations for increase in level of localization in the product.

Specific digits – different. In software No. 719 by each type of products there are own requirements, and on some - road maps. It is clear, that we will study all this "mechanics" further together with the enterprises, with the industry to detail, specify. But the fact that we will toughen it, in terms of requirements for localization it unambiguously. We make normative changes regularly. They are displayed on the website regulation.gov.ru. On this legal portal we, as well as any federal authority, are obliged to publish all preparing changes for public discussion. In general, I can tell that until the end of the year we expect to impose a ban at regulated markets for import.

Vasily Shpak: Let more carefully speak about complete import substitution. For today in the world, perhaps, there is no country at which all technology chain was inside. I think that hardly in the short term such country will appear. It is necessary to aim at controlling key technology repartitions. It is a security issue and technology sovereignty.

If to speak about barriers, then they in the heads. And, at all. At our producers which, perhaps, not so are sure of themselves how would follow. And at our potential buyers at whom once long ago sat down at the head: the Russian - it means expensively and badly works. Today it not so. Besides we will remember that the Chinese electronics about which 30 years ago nobody knew occupies today, on expert evaluations, 45% of the world market, American - much less. It is clear, that such way can be passed and quickly enough. But for this purpose it is necessary to change, first of all, a spirit in the head. It seems not about what is now, and volume where to go.

Vasily Shpak: More likely, stimulation. Knuth without gingerbread is not. I occasionally hear what never we will have the microelectronics because lagged behind forever. I categorically do not agree with such statement. Remember the Soviet space program. Who could believe that the country which just dropped out of the bloody war will begin to master space? Resources then, by the way, was less, than now. And it is not enough scientific and technical backlogs if to compare a situation of that time with space and present to microelectronics. And we have everything. We just should show a political will, consciousness and in this direction orderly to move.

Vasily Shpak: The most important - to understand how it is correct to treat it. It is possible to worry that me is violently forced to buy Russian, and I do not need it at all, and from it there will be no advantage. And it is possible to belong so: yes, I invest efforts now in technologies, solutions which, maybe, now slightly lag behind what I usually buy, technically, but I purchase the guaranteed protection against possible difficulties in the future. It is, you see, absolutely other approach. And it gives definite answer on a question why I should develop this alternative supplier. That then when it becomes strong and completely competitive, in comparison with the usual foreign supplier, it became me a reliable support - while I am deprived by non-market methods of sanctions of an opportunity to use that hi-tech equipment which is necessary for my activity.

Vasily Shpak: Yes. We have good scientific and engineering schools. The people are creative, creative. Actually, in it is our main resource of development. Our fixed capital is a human capital. Besides, technologies change very quickly today. Actually transition to new technology from old is made in 7 - 10 years. And, there is not just a change of technical characteristics. Sometimes, really, we see change of technologies according to which this or that product is made. We endure now such moment when, in terms of development of new technologies, all development teams are approximately at one level. And taking into account that in the perspective directions we have an essential backlog, in particular, in the field of artificial intelligence, quantum computings and also other perspective directions, we can get up absolutely precisely level with world leaders. If the state and business together pay attention to it and will focus a resource there.

Vasily Shpak: You very much simplify a task. The factor of the personality, of course, is important. But there is still a big task: predict that will well go in the market and that will not go. Many technologies are born in each timepoint, but not everyone receives market continuation, not everyone finds the embodiment in consumer goods. Here it is important to analyze and understand ability as the structure of the market of consumption in what in what direction it is necessary to develop technologies changes. But anyway there is a risk element.

Vasily Shpak: I think that the choice of the specific directions of development is a task of business. Because, in terms of risks, a business task - to understand what is necessary finished goods. And a problem of the state – to provide infrastructure. That there were materials. That there was an electronic mechanical engineering which of these materials will make component base. That there were CAD systems using which clever design engineers will design new products. And here the final appearance of a specific item is a task not of one person and not the state in general. It is a problem of all industry.

Vasily Shpak: Certainly, we will rely on professionals – those who are already involved in creation of electronic means. Our task as regulator – to motivate them to join in the created cooperation chains, to fill spaces in them. And technology consortia will become the main tool for this work.

Of course, high capital intensity, a long payback period and fast change of technologies in the industry puts calls on increase in investment volume into the industry. It should be noted that in world practice the state and business divide necessary budget and off-budget investments equally. At the same time the state provides complex support during all investment cycle.

One of sources of attraction of the off-budget investments are production consortia which integrate all chain of cooperation of electronic industry. With participation of the main players of the market we already created consortia: on electronic component base, telecommunication equipment, ADP equipment. The agreement on creation of consortium of developers and producers of medical equipment is signed.

Such associations promote concentration of technology competences and resources for creation of national champions. And our task - to render them assistance at a development stage of new types of products through subsidies for research and development. At the same time the efficiency of interaction of the industry and the regulator is a pledge of the correct effective solutions.

Vasily Shpak: Yes, of course. We are engaged in it constantly. Now we discuss rather broad spectrum of initiatives in the considered area. So, at a meeting with the Russian Prime Minister M.V. Mishustin we worked production of digital tags (RFID) for excises on alcoholic products that will help the state with fight against counterfeit alcohol and will provide the industries additional revenue and significant loading of our enterprises. Known fact: China marked beer to load own electronic productions.

We also wait for the final decision on frequencies for a 5G. It assumes participation of our industry in creation of networks and information infrastructure on the domestic equipment.

At us the main regulatory measures which guarantee demand from the state for the Russian producers already work. The register according to which (via software of the Russian Federation No. 878 of 7/10/2019) advantage of domestic production and on 44-FZ (rule "Third wheel"), and on 223-FZ is provided is created. (preferences from the competitive price for 30%). Today, according to the decisions of the Russian Prime Minister M.V. Mishustin made at a meeting with the Russian President V.V. Putin we complete preparation of regulations on prohibition on admission to purchases of the wide list of foreign products which analogs we already release.

In general thanks to regulatory mechanisms alone (bans, directives), we will be able to increase sales of the Russian products from 200 to 780 billion rubles in 2024 and to increase the share in the markets of state procurements from 22% to 65%. At the same time the financial, tariff and regulatory support of the state will become an additional contribution to development of the industry.

As additional measures of stimulation of the industry we suggest to reduce the amount of social assignments to 14% - such preference already works at us in the country for software makers. We draft acts on introduction of utilization collecting.

Besides, it is necessary to exempt the component parts and EKB necessary for production of domestic production from the import VAT and the customs duties. And concerning import end products, on the contrary, to set barriers according to the nomenclature which is already mastered by us.

Vasily Shpak: In my opinion, it is a crafty conversation – about risks. Because a way on which we go now, absolutely not unique. So work everywhere. In China it is impossible to sell anything until you localize products in China by those strict rules which are accepted there. About the USA in general there is nothing to speak. There "Buy the American!" is dogma, it is just the law. Even if the label of the producer is Chinese, but all the same the American company owns documentation, intellectual property. Apple has no plants, but it is the American company, and Apple has all intellectual property and all main money which on it are earned around the world. And here those things which require a lot of work and give to the contractor not enough money, Chinese are allowed to be engaged in it. But times change. And the present policy of the leadership of the USA is directed to return of productions to the territory of the USA. Why? Because they see all technological hazards too, and try to return all technology chain on the territory. So such idea is not so our know-how. This requirement of time. And that country which in this field will succeed will get serious advantages further.