ESTABLISHMENT OF AN INNOVATIVE CLUSTER NETWORK

1. ESTABLISHMENT OF AN INNOVATIVE CLUSTER NETWORK

2. THE INNOVATIVE POLICY OF ST. PETERSBURG On January 23, 2008,the St. Petersburg government adopted its INTEGRAL PROGRAM of measures for implementation of the innovative policy in St. Petersburg in 2008-2011: • Staff training and retraining for subjects of St. Petersburg’s innovative policy; • Development of innovative infrastructure in St. Petersburg; • Design and implementation of St. Petersburg’s cluster policy in promising and innovative sectors of science, industry, and services; • Design of legal acts regulating government support of subjects of innovative business; • Support of innovative product export and support of demand increase for innovative products; • Attraction and support of investments in innovative sectors of the St. Petersburg economy; • Design and implementation of propaganda of innovative business ; • Support of implementation of earmarked federal programs in St. Petersburg; • Development of a special economic area of the technology and promotion type; • Development of an information technology park; • Development of the Russian Science City in Peterhof; • Development of the Foundation for Support of Development of Venture Investments in Small Businesses in the Research and Technology Field in St. Petersburg, a non-commercial organization

3. FOUNDATIONS OF ST. PETERSBURG’ CLUSTER POLICY The foundations of St. Petersburg’s cluster policy determine the goals, objectives, and formsof the common cluster policy of St. Petersburg and the functions of executive government bodies of St. Petersburg in support and development of clusters and cluster units in St. Petersburg. St. Petersburg’s cluster policy is St. Petersburg’s policy in establishing and supporting the development of clusters, which unite companies, organizations, and research institutions, the end goal of which is offering competitive products or services. The cluster policy includes legal regulation, administrative, market, and investment measures, finance and budget mechanisms, and information support.

4. NETWORK OF INNOVATIVE TECHNOLOGY CLUSTERS The ITC Network conceptimplies that the prospects of its development will be regarded as a model for establishment of a cluster structure in the industry of Russia. Like the Russian industry, the structure of the St. Petersburg industry sector does not have a distinct specialization and comprises practically all the known areas of industry. Likewise, the ITC Network of the St. Petersburg Industry has an integrating nature and is oriented towards gathering various specialized clusters (production of polymers, laser technologies, etc.), which will increase the potential of the industry in general (rather than its individual components). The profile of the ITC Network’s professional activity is development of innovative designs in the following areas: - Industrial production technologies and their transfer; -Industry management technologies based on the Industrial Subcontracting System. Project initiators: • OAO Arsenal Machine-Building Plant; • OAO Zvezda; • OAO Svetlana; • OAO Zavod im. Kozitskogo; • OOO NPO imeni Komsomolskoy Pravdy; • OAO LENPOLYGRAPHMASH; • OOO Polymer Institute; • St. Petersburg State University of Precision Mechanics and Optics; • St. Petersburg Industry Support Foundation; • St. Petersburg State University; • St. Petersburg State University of Economics and Finance; • Science City of St. Petersburg State University; • Institute of Regional Innovative Systems; • OAO Radar; • OAO Silovye Mashiny; • A managing company (coordinator). Conceptual structure of clusters: • Industrial interests of member companies; • Innovation and technology center(s); • Center of Strategic Planning and Coordination of Cluster Development (Expert Center); • Marketing Center; • Regional and International Subcontracting Center; • Professional Training Center; • Investment and Venture Foundation; • A managing company (coordinator); • Technology transfer center.

5. 4 Cluster development strategy • Cluster goals and objectives • Restructuring principles • Management principles • Operation principles • Technical strategy • Marketing strategy Plan of design and implementation of the ITC Network strategic development project 2 Environment development forecast Plans of cluster companies Plans of potential companies 3 Goals of establishment and development of the ITC Network Analysis of current situation of the companies 1 4 Legalization of cluster establishment 9 Situation of companies after project completion Promotion of participants’ number increase 8Establishment of competitiveness enhancing programs 5 Plan of events for project implementation 7 6 Workgroup for project implementation • Implementation of cluster • development project

6. INNOVATIVE-TECHNOLOGICAL CLUSTER – CONSOLIDATION AND DEVELOPMENT OF INDUSTRY The purposes of creating and development of the Cluster: • to comply with market demands in regular supply of goods and services, produced by Cluster enterprises and meeting the latest quality standards; • to benefit from bulk purchase of raw materials; • to provide a proper staff training, market research and logistic and technological investigations as well; • new markets expansion, based on marketing activity and innovations; • to establish sustainable contacts with federal financial and credit institutions based on properly shaped Cluster image; • to provide a decent protection of commercial and proprietary interests of the Cluster participants.

7. INNOVATIVE-TECHNOLOGICAL CLUSTER – CONSOLIDATION AND DEVELOPMENT OF INDUSTRY Cluster key goals: • forming of unified technological basis in machine-building and metal-working industry based on the best worldwide technologies; • creating favorable conditions for continuous growth of current technologies, extending the scope of current technologies; • shaping an effective interaction between members and non-members of the Cluster.

8. ELECTRONIC SYSTEM FOR MONITORING KEY TECHNOLOGIES ESMTK – effective tool for Cluster proper functioning! ESMTK functions: • monitoring of the current technological equipment of the companies; • revealing of theleading centers of competence regarding to production processes among machine-building companies based on actualization matrix of the production Cluster of the industrial enterprises involved; • elaboration of managerial solutions on effective usage of the Cluster production potential; • prediction of the trends in the machine-building industry in view of the world fundamental tendencies.

9. ELECTRONIC INFORMATION SYSTEM FOR SUBCONTRACTING ESMTK is a unified and most complete source of actual information used for analyzing the current status of machine-building and metal-working industry, which will effectively assist in creating interaction between industrial enterprises worldwide.

10. INTERNATIONAL CENTEROF INNOVATION AND TECHNOLOGY • During Governor Valentina Matviyenko’s visit to Bavaria, an agreement was signed on establishment of an International Center of Innovation and Technology, which will be initiated by: • IMC/HM International Project Management • Institute of Regional Innovative Systems • Russian-German Polymer Institute. • The key investors in the project are: • Technischer Überwachungsverein Bayern Süd (TÜV Süd) World Trade Center (WTC) • Siemens • Daimler AG • Erlangen AG, a network of German industrial parks • CATELLA investment group • The partners of the project are: • The Government of Bavaria • Deutsches Ost Forum (German East Forum) • Technische Universität München (Munich Technical University)

11. INTERNATIONAL INNOVATIVEPOLYMER CENTER A project of construction of anInternational Innovative Polymer Centerat 41A Vyborgskaya Emb., St. Petersburg, is being developed at the International Center of Innovation and Technology. Further development of the project implies establishment of similar centers in other Russian cities. The head office will be in St. Petersburg.

12. INTERNATIONAL INNOVATIVE PROJECTSSVETLANA-OPTOELEKTRONIKA Svetlana-Optoelektronika is currently planning to build a plantwith European companies to make car components, products for utility companies and the Russian railways (RZhD), etc. The goal of the projectis achieving a significant rate of electric power saving in Russia through organization of production and use of a new generation of semiconductor power-saving lighting facilities and the Russian business gaining leadership in this area. According to this project, 6.8 million standard lamps per year are to be produced by 2014. At the start of the project, in 2008 – 2014, 26.5 million lamps will be made, which will save over 650 MW electric power and over 30 billion rubles. Moreover, the net present consumer’s earnings during the lamp’s lifetime (8 years) is estimated at 17 billion rubles. Atmosphere pollution will go down due to lower power consumption and fewer thermal power stations, which is of great environmental importance for the entire country.

13. INTERNATIONAL INNOVATIVE PROJECTSOF SVETLANA-OPTOELEKTRONIKA, Bi Pitron,AND THE ST. PETERSBURG STATE UNIVERSITY OF PRECISION MECHANICS AND OPTICS SVETLANA-OPTOELEKTRONIKA, Bi Pitron, LOMO, and NPO KP have been cooperating intensively with the St. Petersburg State University of Precision Mechanics and Optics and the Technical University of Ilmenau, Germany, in the establishment of a learning and research laboratory for automated product assembly; they are analyzing and designing mechanisms for adaptation of the German model of retraining for technical university teachers and experts at engineering centers; they are also designing a project of establishing an information and management cluster environment or enterprises for production of innovative technical items. In May 2008, the St. Petersburg State University of Precision Mechanics and Optics, the Tekhpribor aviation instrumentation company, and Haas Automation, an American company, opened a training and production center in St. Petersburg as part of this strategy.

14. INTERNATIONAL INNOVATIVE PROJECTSPOLYMER INSTITUTE The Russian-German Polymer Institute was established in 2001 as part of the Transform program that is funded by the German government with the Wuerzburg Polymer Center (Germany) and the St. Petersburg Chamber of Industry in Commerce. At present, it is a leader in R&D in polymer processing. Project goals: • collection, analysis, and classification of information on design and use of modern construction polymer materials in world practice; • research and practical seminars on opportunities of construction polymer materials and new technologies of their processing; • design of innovative technologies of construction polymer creation and processing, production of test lots, and their promotion.

15. INTERNATIONAL INNOVATIVE PROJECTSENGINEERING POLYMER CENTER In November 2007, the Engineering Polymer Center was opened at 37 Vyborgskaya Emb., St. Petersburg. It is a joint project of OAO RZhD, St. Petersburg State University, and the Russian-German Polymer Institute. The Engineering Polymer Center and the Polymer Institute are working on 10 R&D projects for OAO RZhD together with the St. Petersburg State University and other leading universities of the city. On November 27-28, 2008, the second research and practice conference on the prospect of using new materials on railways took place at the Chemistry Department of the St. Petersburg State University.

16. THE CLUSTER OF MEDICAL PRODUCT DESIGNERSAND PRODUCERS The cluster’s missionis creating Russian equipment and consumables for modern high-technology methods of treatment of heart diseases and canter. The project initiators areNPP Burevestnik, OAO, the State Research Center of RF “Central Research and Development Institute of Robot Technology and Technical Cybernetics,” NPO KP, NPF Pilot, and OOO Rosanalit. Scientific guidance and medical support of the projects are provided by the St. Petersburg State University, the St. Petersburg State Medical University named after I.P. Pavlov, and the 2nd Clinical City Hospital. • Projects in process: • blood circulation systems for patients who need artificial circulation; • blood oxygenators for full-flow and auxiliary oxygenation; • stents for coronary artery bypass surgery.

17. THE CLUSTER OF MEDICAL PRODUCT DESIGNERSAND PRODUCERS Each year, about 35,000 open heart surgeriesare performed in the Russian Federation while the potential demand is up to 500,000 per year (according to surgery required per person calculation standards in Western countries). The gap is mainly caused by problems with Russian healthcare funding and absence of Russian equipment and consumables for treatment. Moreover, auxiliary blood oxygenation is used more and more often today for cancer treatment. The import substitution aspect of the project is very desirable for Russian producers of new medical equipment from the economical point of view (raw materials and components are bought in Russia, production capacities are used and expanded in Russia, the taxation base increases, and new jobs are created).

18. THE CLUSTER OF COMMUNICATION SYSTEM DESIGNERS AND PRODUCERS The cluster’s missionis designing a system model of the process of online communication system design and production. Initiators and participants of the project: • NPO KP • Interset-TSS • STsPS Spektr • Glosis-Servis • Engineering Polymer Center • Instrumental Technologies • Engineering Technologies

19. STRATEGIC OBJECTIVES OF THE PROJECT • Design of a corporate communication system concept • Design of equipment for departmental and corporate communication systems • Design of director and online dispatching communication systems • Design of technical means for intellectual networks • Design and supply to member companies of software and hardware configurations for implementation of the project according to the accepted system model of the process • Design and support of databases of the necessary standardized components for project work • Design and test production of communication system element casings • Design and production of technical tooling for serial production of casings

20. INTERNATIONAL INNOVATIVE PROJECTSLENPOLYGRAPHMASH In June 2008, during the St. Petersburg Governor’s visit to Bavaria, a Memorandum of Cooperation was signed between the St. Petersburg State Polytechnical University, Siemens AG, and the Munich Technical University. In this project,OAO LENPOLYGRAPHMASHdoes applied research in design of new printing technologies. The results of these studies and possible technical solutions will be the subject of experimental development at the Innovation and Technology Center of OAO LENPOLYGRAPHMASH. The Innovation and Technology Center of OAO LENPOLYGRAPHMASHis a technically closed collective use structure, which isthe key part of the Innovation and Technology Cluster.

21. Product and Technology Manufacture devices of own development –devices of the control of high-voltage circuit breakers of all types and voltage ratings and transformers. Market share in Russia~ 94% Devices are recorded in State registries of Russia, Ukraine, Kazakhstan, and Belarus.

22. Search for partners: • Creation (on our base) of the service center on repair and service of electrotechnical devices for Siberia and the Far East regions • Fulfilment of orders for development, designing and production of electrotechnical devices • Creation of assembly production of devices of different functions

23. ESTABLISHMENT OF AN INNOVATIVE INFRASTRUCTURE The next step in implementation of these and other international innovative projects will be establishment of design centers, the so-called “clean rooms”, collective access centers, certified laboratories, and expert examination centers that are needed for development of innovative infrastructure in science and production. It will raise the competitiveness of Russian companies, increase their technical potential, and create conditions for further cooperation of Russian and European companies in production of innovative products and services.

24. From 1995 „STREAMER“ Electric Company recommended itself as a leader in development and integration of the protection devices against the lightning overvoltages on the transmission lines. Our research results were admitted by the leading specialists in this field all over the world.

25. More than 10 years the protection device for electric lines of 6-10 kV – Long-light flashover arrester (LFA) is in the successful exploitationLFA has Patents in 12 countries, which includes Germany. Now there are more than 170.000 of LFA in exploitation. LFA is applied as a protection device against the lightning overvoltages by such big companies as FSK EES, Lenenergo, Gasprom, Russian Railways, Lukoil, Tumen Oil Company, Kubanenergo and others.

26. General operational principles of LFA: General operational principles of LFA: Defence of insulator against lightning flashovers Long discharge chanel shaping Segmentation of the discharge chanel into constituent parts. Arcing fault prevention. Main merits: Protection against the lightning overvoltages Preserving wires against burning out Protection against intertip of EL High reliability: currents creep OUTSIDE the device

27. LFA, photo of overcurrent release during the induced voltage

28. Insulator-arrester (35 kV) In the experimental operation there is now a Multicameral arrester. Its usage is possible at any voltage.

29. THE NETWORK OF INNOVATION AND TECHNOLOGY CLUSTERS The International Center of Innovation and Technology Svetlana-Optoelektronika Institute of Precision Mechanics and Optics OAO RzhD Polymer Institute SPb State University NEW PROJECTS NEW PROJECTS NEW PROJECTS OAO LENPOLYGRAPHMASH SPb State Polytechnical University NPO KP NEW PROJECTS NEW PROJECTS INNOVATIVE INFRASTRUCTURE SPECIALIZED LABORATORIES NEW FACILITIES NEW FACILITIES CLEAN ROOM COLLECTIVE ACCESS CENTERS DESIGN CENTERS NEW FACILITIES NEW FACILITIES

30. THANK YOU FOR YOUR ATTENTION! S.I. Tsybukov Deputy Chairman of the Board St. Petersburg Chamber of Industry and Trade t. (812) 542-15-21 E-mail: tsybukov@kp-plant.ru