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In northern Russia, innovators look to the forests and the sea

When pinpointing a region’s innovative potential, it may not seem entirely logical to look to a seaweed-processing plant preparing to celebrate its centenary. But Russia’s northern Arkhangelsk region is putting its hopes for its economic future firmly in its biological resources.

Two boys standing on the ice of the frozen River Dvina in central Arkhangelsk. The harsh northern climate results in wild berries and mushrooms that contain concentrated levels of nutrients, experts say. Photo: Sk.ru.

The natural conditions of Russia’s Far North dictate the conditions for developing the regional economy, says Alexei Kovalev, director of the Corporation for the Development of the Arkhangelsk Region (CDAR).

“It costs more to set up a small business here than it does in the neighbouring Vologda region, and that means a longer payback period,” he told Sk.ru on the sidelines of the Skolkovo Foundation’s two-day Startup Tour event in Arkhangelsk on April 10.

“This is a result of personnel costs: extra holidays and shorter working hours,” he said. Residents of the region, classified by the Russian government as part of the Arctic, are entitled to these perks under labour legislation to compensate for the region’s long, dark winters and cold climate.

“We also have the most expensive electricity in the country, and in terms of logistics, we have just one federal road from north to south, one railroad and a port that freezes. So we have to use what is unique to us,” says Kovalev.

And in the Arkhangelsk region, that means wild berries, mushrooms – and seaweed.

Alexei Kovalev, director of the Corporation for the Development of the Arkhangelsk Region (CDAR). Photo: Sk.ru.

Drugs from the sea

The CDAR, a regional development institute, is in the processing of setting up a bio-resources cluster whose anchor company will be the Arkhangelsk Experimental Seaweed Factory. The plant was set up in 1918 to produce iodine: many seaweeds are rich in the element, which had been in great demand in Russian hospitals for use as a disinfectant during World War I.

Now the plant focuses on kelp, a genus of brown algae whose scientific name is Laminaria, and fucus, another genus of brown algae, which the plant’s directors believe could be used to develop a range of life-changing drugs. Bacteria growing on fucus has been shown to produce a chemical that ate the deadly superbug MRSA

The Arkhangelsk Experimental Seaweed Factory produces health supplements and cosmetics, ranging from seaweed body scrubs, shampoos and toothpastes to supplements for restoring the balance in women’s hormones and ridding the body of dangerous heavy metal ions, as well as pet food supplements. The factory’s executive director, Alexei Korotenkov, claims its cosmetics are at least as good as those produced by international brands.

The factory recently changed hands after being bought by a group of investors, and its new directors say they are determined to make the plant innovative. There is no lack of support locally, including from Liubov Gorbatova, rector of the Northern State Medical University (NSMU).

“Seaweed contains a huge quantity of beneficial substances,” Gorbatova told Sk.ru at the Startup Tour.

“We’ve been working with the seaweed factory since the years leading up to World War II: their first treatment products were developed with input from NSMU,” she said. “Now we need to take new steps in technology, develop it all at a new level, and study the influence on animals and people. New products should appear. There are new inventions that we’re ready to start manufacturing, including treatments that contain seaweed.”

During the biomed track of the pitching competition held as part of the Startup Tour, two of the projects were for medical treatments based on seaweed, including an antacid and anti-ulcer drug based on Laminaria, and Gorbatova says that university students and staff have patents pending for algae-based inventions.

Liubov Gorbatova, rector of the Northern State Medical University in Arkhangelsk, says the vast bio-resources that grow in the region's extensive woodland are not being used to their full capacity. Photo: Sk.ru.

More than seaweed

The Arkhangelsk region’s bio-resources are not, however, limited to seaweed and algae.  

“We have a lot of berries and mushrooms on our territory, as well as our unique Ivan Chai [a tea made from rosebay willowherb also known in English as koporye tea],” says Kovalev.

“All these products contain more vitamins than in the south, so our wild produce is more interesting,” he said.

Coachloads of people already come to the Arkhangelsk region from Lithuania and Latvia to pick large volumes of berries and mushrooms, so the region simply needs to systemize their collection in order to bring in billions of rubles in revenue a year, said Kovalev.

“There is even a system developed for processing pine needles at a molecular level to obtain medical treatments from them. All this will be in the bio-resource cluster,” he added.

Gorbatova agrees that the region’s potential lies in its bio-resources.

Wild berries are found across northern Russia. Photo: Deposit Photos.

“We have huge resources that are not being fully used: bio-resources that grow in the woods,” she told Sk.ru. “It’s no secret that things that grow in the north have to take in everything they can – vitamins, microelements etc. – in the short space of the summer, to concentrate it all in order to survive the autumn, winter and spring, when it’s cold. So the concentration of these elements in northern bio-resources is much greater than those found in the Moscow region, for example,” she said.

Ruslan Altaev, development and key partners director within Skolkovo’s biomed cluster, said there was great potential for cooperation between the Skolkovo Foundation and the emerging Arkhangelsk region bio-resources and biotech cluster.

“We could cooperate in the following areas: seaweed (including mariculture), industrial farming, and renewable energy sources based on bio-resources,” Altaev told Sk.ru following a visit to the Arkhangelsk Experimental Seaweed Factory.

Long-term partners

The Arkhangelsk region and Skolkovo already have a fruitful history of working together. A cooperation agreement was signed between the regional government, the CDAR and Skolkovo last year.

“Several clusters are being formed in Arkhangelsk, and some of our startups [prosthesis maker Motorica, ExoAtlet and Krisaf, the maker of a VR simulator for the rehabilitation of people with cerebral palsy] are already actively collaborating with one of them – the social cluster – on services for the rehabilitation of disabled people,” said Altaev.

ExoAtlet, which makes medical exoskeletons that help disabled people to walk again, carried out part of its clinical trials in the region with the help of the CDAR last year. It and the other startups were selected for cooperation with the social cluster after a day of presentations of Skolkovo startups at the NSMU, said Kovalev.

And cooperation is by no means limited to the Skolkovo Foundation’s biomed cluster, said Alexander Okunev, head of Skolkovo’s regional development department.

The local authorities are actively trying to attract IT projects for the development of tourism, such as the Skolkovo startup Piligram XXI, the developer of a mobile app that uses augmented reality and is designed for the tourism industry. The CDAR is also interested in Skolkovo projects related to the timber industry and woodlands preservation.

“The CDAR has started working with our Lesnoy Dozor project,” a system for monitoring forests and the early detection of forest fires, said Okunev.  “There is also good potential for joint projects in the field of aquaculture,” he added.

The Arkhangelsk Experimental Seaweed Factory is home to a museum depicting how the algae is collected before it is taken to the Solovetsky Islands for drying out. It is then processed in Arkhangelsk. Photo: Sk.ru.

A northern Skolkovo

“It’s a two-way process,” says Kovalev of the working relationship between Skolkovo and the CDAR: the CDAR does not just wait to be presented with interesting Skolkovo startups.

“If we have a problem we need to solve, such as the removal of snow, we can tell them [Skolkovo] what we need, and they either offer us what startups they have working in that area, or the clusters tell their startups what there is a demand for,” he said.

Kovalev said another potential area of cooperation between the two development institutes is that of energy. The region is always on the lookout for ways to reduce its electricity costs, he said, and Skolkovo has a cluster devoted to energy-efficient technologies.

In the long-term, the CDAR’s ambition is to become a representative office of Skolkovo in the Arkhangelsk region.

“We want to take on the functions of Skolkovo for our potential innovators, so that we could use the same resources as Skolkovo does [such as tax breaks, mentoring services and intellectual property registration] to help entrepreneurs here,” Kovalev, who is also a regional representative of the federal Foundation for Assistance to Small Innovative Enterprises, told Sk.ru.

He welcomed the arrival of the Startup Tour, the Skolkovo Foundation’s annual roving quest for talented tech startups across the country, which was being held in Arkhangelsk for the first time.

“For us the Startup Tour is the innovation bouillon, which needs boiling so that the froth will form on the surface, and can then be skimmed off. That froth is the people who are really prepared to do something new; they just need some motivation,” he said.