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Prime Minister Vladimir Putin chairs a meeting of the Government Commission on High Technology and Innovations at the Gazprom VNIIGAZ research institute for natural gas and gas technologies

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Prime Minister Vladimir Putin's introductory remarks:

Good afternoon,

This is a regular meeting of the Government Commission on High Technology and Innovations. We continue working to identify and support areas of promising innovative growth in the Russian economy.

The government has come to control a large share of Russia's industries and infrastructure through companies such as Gazprom, which is world famous, in whose scientific research centre we have gathered today, and also through network companies, such as IDGC (Interregional Distribution Grid Company), FGC (Federal Grid Company), Transneft and Russian Railways, among others. Finally there are the state corporations such as Russian Technologies and numerous defence, nuclear, aircraft and shipbuilding, rocket and space companies - about 55 companies in total. The government has the right to place particular demands on their work.

We expect large enterprises to become the drivers of modernisation, raising the technological level of the Russian economy.

First, companies themselves need innovation. Almost all of them work in an environment that is highly competitive at home and even more so abroad. That means that either they modernise their facilities, surpassing their rivals, or sooner or later they'll cede ground to them. We have just visited a display of our achievements. There are many of them. I asked about their price only to hear that we are losing out a little to our Western rivals on price. Losing ground to them makes it difficult to penetrate global markets. As it is, it's already difficult, and you know it better than anyone, as they are creating a load of entirely artificial barriers that have absolutely nothing to do with the market. If we continue lose out to them, we'll never win. Yet we must win.

I'd like to stress that even those companies that are referred to as monopolies in their respective sectors of the economy are feeling the growing pressure of competition.

Second, the government is not just the owner, but also often the largest consumer of products and services, for example in weapons and military technology. Consequently we must ensure that the technology and equipment purchased with public money comply with the latest standards and are affordable.

Third, we expect natural monopolies and companies with government involvement to generate a high demand for innovative developments in the private businesses, place orders with universities and research centres to develop cutting-edge technology, and in so doing, help develop a market for high-tech products and services in Russia. It should be noted that Gazprom invests over seven billion roubles in science and new developments annually, and Rosatom over six billion roubles.

This is why the Commission on the Modernisation and Technological Development of the Economy made a decision to draw up programmes of innovative development for the largest companies with government involvement.

It's clear that these programmes need to be deeply integrated into these companies' business strategies. Assessment criteria need to be established in key areas. We all understand what these key areas are. They include energy conservation, labour productivity and reducing the negative impact on the environment. The main thing is that they deliver a highly competitive product and take a technological lead in their field.

It's not enough to mimic others' experience or others' models. That will mean we always lag behind. We have to come up with new products and hit an entirely new level. Simultaneously, it is vital that we improve management practices in innovative companies, and that we link the wages of their executives and managers with the end results achieved in terms of innovative development.

To ensure that this work doesn't fall through the cracks, and that these efforts do not end up just being the routine, formal, passive observation of ongoing processes, from next year company executives will regularly report back on the implementation of these programmes at these government commission meetings.

Let's get down to work.

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Ahead of the meeting, Prime Minister Putin visited the exhibition Innovations in the Largest Government-Owned Enterprises.