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Chukotka Autonomous Business

In 2020, the My Business center, formed on the basis of the Chukotka Development Fund, took first place among similar organizations in Russia in terms of the share of business entities covered - it amounted to 30% of SMEs working in Chukotka. You can come here with a "bare" idea, but come up with a business plan and real project support.

Olga Plotnikova, director of the Chukotka Development Fund, spoke about what support measures both beginners and entrepreneurs of Chukotka can count on, as well as projects and plans for the future of EastRussia.

Chukotka Autonomous Business
Photo: Chukotka Development Fund

- What was the 2020th year for the Foundation? Did you have to adjust plans due to the pandemic?

- 2020 for the Chukotka Development Fund kicked off with the grand opening of the My Business Center. Now businessmen of Chukotka receive state support measures with the assistance of the Chukotka Development Fund and organizations of infrastructure for supporting entrepreneurship in more comfortable conditions. The center has a modern design, a comfortable waiting area, a conference hall, a meeting room, a customer service area, and a customer self-service area. All modern digital services are available here, including video conferencing. Client workplaces are equipped with Internet access, multifunctional devices for scanning and printing documents, telephony. The electronic queue allows you to increase the speed of service, and the service quality assessment system provides feedback to the Fund's management and allows you to draw the necessary conclusions about how exactly the service was provided. We have launched a free hotline at 8-800-2010-800 and now it has become even easier for entrepreneurs to contact the My Business Center. And now there is a mobile application "My Business", and besides, the Foundation's website has been upgraded to a new version and has become faster and more colorful.

Opening of the center "My Business" - January 2020
Photo: "Chukotka Development Fund"

I consider the Foundation's priority task to popularize entrepreneurship and start a business, and, of course, support and develop small and medium-sized businesses. In 2020, despite the pandemic, the total number of small and medium-sized enterprises in the region grew by 5%. Of these, 57% registered a business after receiving the services of the Fund. Of course, the Foundation held information companies, training events and the provision of consulting services - we recorded that the growth of new entrepreneurs in the region increased by 62% when compared with 2019.

If we continue to cite figures, then in 2020 the My Business Center provided 2277 services to small and medium-sized businesses and individuals who showed interest in entrepreneurial activity. Of these, 1435 are information and consulting services and 842 are services in the field of education. Information and consulting services were mostly used by heads of small and medium-sized businesses, and individuals became the main audience for educational events.

And at the end of 2020, according to the Ministry of Economic Development, the My Business Center, formed on the basis of the Chukotka Development Fund, took first place among similar organizations in Russia in terms of the share of business entities covered - it amounted to 30% of SME organizations working in Chukotka. This is a very high indicator in comparison with other regions, and at the same time, an indicator that reflects the degree of trust of the business community in the Fund's team. For us, the first place is not only honor, but also responsibility to our clients. Now the need to maintain a leadership dynamic among the My Business Centers has been added to the list of priority tasks, and we expect significant growth in our clients' businesses. Their well-being and development means the creation of new jobs in most settlements of Chukotka, their investments, the services they provide - all this leads to an increase in the comfort of living for our fellow countrymen, our citizens in the Arctic.

Another significant moment for the team was the prize-winning place in the all-Russian championship in strategy and business management among the regional teams of the My Business centers. Several stages of the championship were held by the RANEPA with the support of the Ministry of Economic Development in 2020 in a remote format. The final of the game was held with a delay without the possibility of full-time gathering of teams, unfortunately. Nevertheless, the team of the “Center“ My Business ”of Chukotka was awarded the status of a bronze medalist. The development of the team of the Center "My Business" is also one of the priority tasks for us.  

- What can a resident of Chukotka rely on now, who comes to the Fund with a “naked” business idea? Is there a difference if a resident of another region applies to the Foundation with the same idea?

- The team of the Center "My Business" is focused on providing consulting services and comprehensive support for an investor of any level. Subject to planning an investment project on the territory of the Chukotka Autonomous Okrug, we are ready to provide the most complete coordination of the initiator and the connection of the maximum resources available in the region for business development. After all, the implementation of an investment project in Chukotka will create jobs in Chukotka. This is our main goal - to develop our region. The mission of the Fund, in our opinion, most fully reflects the essence of our work: “The idea is in business. Business is the result. By combining opportunities, experience, energy, we are bringing closer a common goal - the growth of the well-being of citizens ”. If the initiator applies to us for the implementation of the project in another region, then we will readily redirect the client to the “My Business” Center of the corresponding region. 

- Since November 2020, the Fund has been providing sureties to self-employed residents of the county applying the Professional Income Tax. How does this mechanism work, and isn't the size of the surety too small - no more than 19 838 thousand rubles under one agreement for Chukotka?

- Indeed, a new category of subjects of legal relations has appeared, which allows individuals in the service sector to a greater extent to carry out their activities with minimal costs for reporting and administrative procedures. Of course, the experience is positive for the regions. The number of self-employed is steadily increasing in the Chukotka Autonomous Okrug and there is still potential for significant growth in the direction, for example, of self-employment of folk art craftsmen.

The limit of liability for one surety today is 20,1 million rubles. and 30,4 million rubles. for all guarantees for one borrower who is a small business entity. At the same time, the amounts of loans granted today by commercial banks and state microcredit companies to self-employed are not high enough, and provided that the Fund can issue guarantees for only 70% of the loan amount received, our established limit for one surety of one client does not have a limiting effect. 

- Which of the areas of your current work requires the most time and effort? What is more money?

- Today, the Foundation's team focuses most of its attention on motivating those who are potentially ready to launch their own project. And we noticed that people are best inspired by already started small businesses. At the same time, it is very important, even at the planning stage, to calculate the prospects of a business idea and possible risks of project implementation.

The recently opened Microcredit State Company helps to solve many issues with financing one's own business. Now, on the territory of the Chukotka Autonomous Okrug, one of the most demanded resources - money - has become more accessible to startups. Moreover, the Fund, having assisted the client in the formation of a business plan, is also ready to provide a guarantee for a loan for business development or replenishment of working capital.

Photo: "Chukotka Development Fund"

In addition to supporting start-up small business companies, our team focuses on engaging individuals in entrepreneurial activities, including youth. Today, priority activities have been identified in the region, support for which is provided as a matter of priority. The production of products with a higher added value, be it the processing of fish or wild plants, deer or sea animals, is considered the most promising. The processed products give an incentive to the development of one of the anchor areas of economic development in Chukotka in the future - tourism. After all, deep processing, when we talk about Chukotka, is tailoring - including traditional clothing, the creation of works of art from bone, horn, fur, the production of pharmaceuticals, such as dietary supplements. 

The first and only enterprise in Chukotka for the production of small boats of its own design is already operating and selling its products. Moreover, the products are certified, and the support of the Government of the region and the Chukotka Development Fund helped to achieve this. This is a significant and positive example for other entrepreneurs. We make every effort to involve individuals in especially remote settlements in business activities. 

 - What would you call the main result of the third interregional forum "Idea in business. Business in result"?

- The new topic raised by the regional team in 2020 is now showing the first signs of moving forward. At the site of the interregional forum “Idea - into business. Business as a result ”a conference dedicated to the development of small aircraft and unmanned technologies was held. The day before the conference, at the Plenary session in the teleconference mode, the Governor gave his consent to the development of unmanned technologies in Chukotka using an experimental legal regime. In order for the regime to take effect, it is necessary to take a number of steps and the region is preparing for them. The first initiator on the territory was the Russian Post JSC.

The possibilities of the region in the implementation of unmanned aircraft projects were discussed at the interregional forum of Chukotka “Idea in business. Business as a result "
Photo: "Chukotka Development Fund"

At the first stage, it is planned to deliver correspondence and parcels from sorting centers to post offices, where the postal employees are already accepting the cargo, and postmen deliver the parcel directly to the address. There are 23 routes under development with a cargo turnover of 450 tons. During the discussion of the idea, Igor Chebunin, Deputy Director General for Logistics of Russian Post JSC, noted that this is not a tribute to fashion, but a real urgent need, the ability to provide regular delivery with reduced terms for the residents of Chukotka.

The Chukotka Development Fund counts on a larger number of initiators of investment projects using unmanned technologies and the development of small aircraft in the region from small and medium-sized businesses. With the parallel movement of large companies, the chances for each initiator to better promote their project and expand the capabilities of commodity producers in small settlements are growing. This gives hope for the synchronous development of the tourism sector, which is the engine of related industries in any region.

A number of events within the framework of the interregional forum of Chukotka were aimed at popularizing the masters of folk art crafts. The maintenance and development of the traditional way of life, the preservation of cultural traditions, the formation of a positive image of the region in the self-consciousness of the younger generations, the formation of the image of the region through promotion in the media and cinematography, the involvement of young people in ethno-cultural events today are closely intertwined with the possibilities of citizens to increase their own income by becoming an entrepreneur or self-employed. The Arctic is today given special attention at the level of the Russian Federation and comprehensive support measures are directed by the Government of the Chukotka Autonomous Region for the comprehensive development of entrepreneurship in this area, the formation of new ideas and attracting investments in the small business segment.

So, on April 14, 2021, within the framework of the interregional forum “Idea into Business. Business as a result ”in Pevek, a round table“ Ethnicity and graphics in the space of Chukotka's heritage. Exhibition management. Promotion on Market Places ”. The invited speakers were experts in the field of art and modern market promotion. The rector of the Higher School of Arts (Academy), Candidate of Pedagogical Sciences, member of the Union of Artists of Russia Guseva Polina Vadimovna and Associate Professor of the Department of Jewelry and Bone Carving Art, Head of the Bone Carving Workshop of the Higher School of Folk Arts (Academy) in St. Petersburg, Candidate pedagogical sciences Vasily Nikolaevich Kolobov. The main topic for discussion within the framework of the events of representatives of the business partner of the Foundation of the Higher School of Folk Arts (Academy) was the ways and opportunities for improving artistic skills and obtaining higher education in this area. The continuation of the work of the invited speakers was a round table in the city of Anadyr. Special attention among masters of folk art crafts and individuals interested in organizing their own business in the field of art was a master class on bone carving skills.

Photo: "Chukotka Development Fund"

An exhibition organized in Pevek and Anadyr became a harmonious addition to a number of events organized by the Foundation together with the Higher School of Folk Arts (Academy). Within the framework of the exposition, products of lace-making and bone-carving art by graduates of the Higher School of Folk Arts (Academy), as well as toys of the peoples of Chukotka, specially collected from the most remote villages of the region, were presented. We hope to support the growing interest in higher education in the field of art among the masters of Chukotka and probably even a branch of a higher educational institution in the region.

The demand for the works of Chukotka masters, design and promotion is a separate topic for the Chukotka Development Fund in the direction of the development of entrepreneurship in the field of folk arts and crafts. Vadim Evgenievich Dmitriev, a teacher and developer of interactive formats for the Bank of Russia, the Bolshoi Theater, Sberbank, Gazpromneft, Norilsk Nickel, Crocus Group, Russian Railways, Sokolov, Qiwi, Hyundai, invited as part of the Chukotka Forum, held round tables on branding. The ability to properly package goods in any area of ​​business is of great importance today. Simple ideas for increasing the attractiveness of the products of Chukotka craftsmen and ways of promoting them through online stores, exhibitions and fairs have become an important topic for event participants. We hope to see positive changes in the positioning of Chukotka entrepreneurs in the near future.

The theme of agricultural development and deep processing is supported by the Government of the Chukotka Autonomous Okrug. The Fund, for its part, contributes to stimulating investment in this area. After all, unique products from an ecologically clean region, be it food products made from venison or sea animals, garments made from fur leather, or works of art made of bone, horn or skins have a fairly high potential in the business and premium segments. Chukotka as a whole is unique and authentic and definitely not a mass segment. There are first positive beginnings in the production of these goods, which gives hope for the growth of the region's export potential. During the meeting between business and government within the framework of the Chukotka Forum, new opportunities were discovered for the development of production by small enterprises, as well as for the qualitative growth of tourism services provided in the region. It was found, in the process of dialogue, an understanding of the need for a high-quality study of the interaction of reindeer farms, as points of attraction for tourists to the region, with tour operators. Joint educational projects for guides, development of hospitality competencies, inclusion of publicly available resources - all this can provide an incentive to increase the quality and expand the range of proposals in the tourism sector. The result of the planned measures in this direction of the departments of tourism and agriculture of the region will become more affordable and high-quality services for guests of the region and a wider space for increasing the incomes of families of reindeer herders and residents of remote settlements. But this is precisely what is important for the development of the region as a whole and for increasing the comfort of living for citizens.

Another result of the Forum, and the overall efforts of the staff of the My Business Center, is the creation of an effective information field for business entities and individuals planning to carry out entrepreneurial activities in the region within the framework of a national project to support small and medium-sized businesses. The generation of new ideas for business with the assistance of the My Business Center gave an impetus to the implementation of significant projects in Chukotka in 2020.

Within the framework of the Chukotka Forum, 25 complementary events were held. The site can accommodate more than 150 participants. A number of permanent regional partners such as ATB Bank, Sberbank and the business community took part in organizing the Forum. With the support of the permanent partners of the Chukotka TASS Forum and the company Delovaya Sreda JSC, high-quality events were held and a report was generated on each of them. The result of the joint work carried out annually will be an appeal to the authorities in order to formulate the main issues that require attention and possibly adjustments in the list of state support measures for business. Now these issues are still in work, the results of which will certainly be covered in the media by the supervising departments.

One of the undoubted successes of the past year can be called the project of the tannery. It was implemented within the framework of the program for the development of the agricultural sector of the Department of Agriculture and Food Security of the Chukotka Autonomous Okrug. The building was erected, the necessary equipment was installed, and a successful test was carried out. 

Employees of the tannery in the village. Amguema at work
Photo: "Chukotka Development Fund"

In 2020, three structural divisions of the Fund at once: the Competence Center in the field of agricultural cooperation and support for farmers, the Entrepreneurship Support Center and the Export Support Center helped the plant with expert advice and project branding. At the beginning of 2021, work began on training personnel in skin dressing technologies.

In addition to the entrepreneurial component, the projects proposed for implementation have a bright social orientation: the goal is to improve the living conditions of citizens not only in Chukotka, but also in the country as a whole.

The topic of social entrepreneurship is only gaining momentum in Russia. Chukotka, for the first time last year, held the Best Social Project competition under the auspices of the program of the Ministry of Economic Development and with the support of the Department of Finance, Economics and Property Relations. This year the Foundation has held a number of educational events. We hope to see more participants in the regional stage of the competition by the end of the year and send more applicants from Chukotka to participate in the federal stage of the competition.

- Did the staff of the Foundation and its "wards" take part in the recently held VI Congress of the indigenous minorities of the region? What initiatives?

- Of course, we took part, and our wards! How else? After all, a third of the population of Chukotka are representatives of indigenous peoples. Of the 20 events held within the framework of the Congress, our business trainings aroused high interest. After all, concrete ideas were worked out on them, for example, the opening of an ethno-cafe in Chukotka, the processing and sale of wild plants, the development of private reindeer husbandry and a poultry farm in remote areas of the district.

In addition, we set a course to increase the volume of the export component in the segment of sales of small and medium-sized businesses in the district. Among our "discoverers" of international trading platforms, it is predictable that there were masters of folk art crafts of Chukotka. That is why the site of the congress became the place where representatives of indigenous peoples and I were able to discuss in detail what support mechanisms exist in the district and how they work.

Of course, many projects turned out to be tied to tourism. On the one hand, we are far away, but these unique conditions of the “end of the earth”, skills and abilities of indigenous peoples are our powerful trump cards and incentives. It is they who create the uniqueness of the region, and everything that the locals create here - from new ethnically oriented clothing brands, to growing vegetables in permafrost conditions, from products of bone carvers, to trophies of sea animals hunters.

- Back in 2017, for VEF, the Fund took part in the preparation of an investment project for the development of the Pyrkakay stockworks, and in January 2021, Roman Kopin and the head of Seligdar, Konstantin Beirit, signed an agreement on long-term cooperation. Is it too long a journey? How did the project progress?

- Yes indeed. The region's proposal for potential investors was presented at several sites at the federal level of Russia and international sites. For a large project with a high concentration of tin and the potential for the development of consuming industries (potential buyers), the path, I think, is quite acceptable. There is an investor today. An accomplished investor who understands his capabilities and is ready to bring life to our region through the activities of his enterprise. I believe that the regional team under the guidance of the Governor has worked quite effectively. There will be an increase in investments in the region, there will be jobs.

- What are your and the Fund's expectations from 2021?

- In 2021 we have the most important expectations - to see the first drones in the sky of Chukotka and the first unmanned delivery of cargo to the destination. This event will give hope for the accelerated expansion of the narrow link, our transport accessibility. As soon as there is movement to improve transport accessibility, we, with the assistance of the Government of Chukotka, will be able to give a more significant incentive for the development of small businesses in small settlements, small food producers, processing of wild plants, deer, sea animals, folk art craftsmen. And a lot, we hope positive other things that the development of tourism will bring.

Of course, we are moving in other directions as well. So, this year, the main efforts of the Fund's team are aimed at increasing the quality of previously launched projects by helping them in advertising and forming their own brand, in creating online stores and preparing photo and video materials for them, in a qualitative transformation of the existing sites of our clients and creation of new Internet resources, as well as their translation into foreign languages. The initiators of new projects in Chukotka have an unprecedented wide range of tools for starting their own business, for high-quality growth and for using a choice of one of three preferential zones. The increase in the number of business entities following the results of the 1st quarter. 2021 speaks of a positive mood of the business community, which means we will grow, we will expand the range, we will contribute to the positive image of the region together with business. 

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