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The Development of Innovative Startups in Russia: The Regional Aspect

Abstract

This paper examines some of the topical issues related to the development of innovative startups in Russia. The authors propose a methodology for assessing the viability of innovative startups, which, if implemented, may help new startups survive their first three years of business. The paper shares the findings of a study of the latest trends on startups both in Russia and overseas, analyzes the degree of activity with which startups are emerging, and explores specific characteristics of entrepreneurs developing their business from scratch, like gender and age. The authors analyze the specificity of Russian practice in terms of developing and implementing the fundamental idea of a startup and provide a rationale for the need to enhance the current legislative framework, which is inhibiting the development of this promising area. The paper also determines the major sources of funding for innovative startups in Russia and shares the findings of a comparative analysis of ratios in the volume of funds borrowed to implement startups. At present, there is a concern about the lack of proper mechanisms for assessing the viability of innovative startups, as well as about the ability to effectively attract outside funding. Among the novel and promising ways to attract investments to help implement startups in the Russian market is crowd-funding. Employing this tool is currently hampered by the lack of proper organizational and legislative regulations respecting this kind of activity. The development of startups in Russia may facilitate boosts in the population’s economic activity levels and help create more jobs. It is to help this cause that the authors have developed a specific methodology for assessing the viability of innovative startups.

Mikhail Yakovlevich Veselovsky, Alla Vladimirovna Nikonorova, Natal'ya L'vovna Krasyukova, Inna Vladimirovna Bitkina, Aleksandr Annayarovich Stepanov

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