When we introduce a company, we usually begin by talking about what it has to offer the local market. But when it comes to Frost & Sullivan, which positions itself as a global organization that encompasses “all regions and industries,” it’s perhaps better to ask the following: why is your company interested in Moscow?
F&S is an international company that has over 40 offices all over the world. We work across all continents, implementing research and consulting projects in over one hundred countries. However, the key focus of our company is high-tech markets or markets that apply a lot of advanced technologies. In this sense, I would not limit our attention to Moscow. Of course, the Moscow market is huge and appealing, but we usually don’t discuss it separately from Russia as a whole. In spite of specific problems in the Russian economy, a number of industries are experiencing rapid growth. Even given the current climate, companies are considering plans for development, plan to introduce new products and services on the market, think about finding international partners, expanding abroad and updating their development strategies. We provide our clients with consultations across all of these areas. Of course, the crisis had an impact on our business, but this doesn’t mean that our number of clients dropped. It’s just that the list of services our clients has shortened.
Under what circumstances did Frost & Sullivan first appear on the Moscow market? Or on the Russian market, since you prefer that?
F&S has been working with Russian clients since the beginning of the 2000s. Until 2011, we worked through the company’s London and Warsaw offices. In March 2011, we opened an office in Moscow. In 2009-2011, we were actively consulting companies across different sectors - microelectronics, automotive, mechanical engineering, pharmaceuticals - and this determined the decision.
Out of the areas that are relevant for Russia (and the Moscow region as well), you have highlighted the problem of municipal solid waste management. Why have you focused on this?
The issue of municipal solid waste (MSW) management has been a problem for Russia and for Moscow in particular for a very long time. Our company works with the leading foreign players in this sphere, tracking new MSW treatment technology and analyzing specific infrastructure projects. Currently, Russia has all the conditions necessary to start resolving the problem of MSW management via the construction of additional disposal sites (the ones in and around Moscow don’t have any more room for expansion) as well as via MSW processing and therefore shift to business models that are fundamentally new to Russia, including the generation of heat and electricity from MSW. Due to increased interest toward this sphere from Russian clients, we are ready to offer them our expertise when it comes to this issue.
Households in Russia pay a lot less for garbage disposal than people who live in other developed Western countries. Can this specific industry develop here in spite of the general population’s limited economic opportunities?
Yes, fees for the removal and disposal of solid waste in Russia are fairly now. However, the implementation of new technology isn’t connected solely to the raising rates. The imbalance between payments for the transportation and disposal of solid waste needs to be fixed (there are high fees for transportation, while disposal is paid for with whatever is left over), the legislative framework that would provide a “green tariff” for the use of energy generated from solid waste processing needs to be refined, and so on. In this case, the increase in the cost of MSW disposal will not be as significant. In return, we will put a stop to the growth of waste disposal sites and the contamination of groundwater and soil. This is why it is important to take the environmental costs into consideration.
What technologies and solutions out of those available in global MSW management practices are the most applicable to Moscow? How are your approaches differ from those of other companies that specialize in this sector?
As we already discussed, we work with different companies in the MSW processing sector. We have clients who use combustion technology, bio-fermentation and pyrolysis. The implementation of these techniques depends on a number of different factors: the morphological composition of MSW, the presence of opportunities to invest in high-tech projects, the availability of separate collection of household waste, etc. In this sense, it makes sense to point out that Moscow will probably use an integrated approach that combines several techniques (combustion and low-temperature pyrolysis, for example).
We have to admit that Moscow has been “exporting” waste to neighboring regions for decades. Now, because the capital has expanded, MSW disposal facilities and dumping grounds are technically within city borders. They are located around construction sites and new transportation routes. In your opinion, how much is required in terms of time and resources in order to get rid of these unwanted neighbors?
“Exporting” solid waste to neighboring areas is not a problem that is unique to Moscow. A lot of big cities have done this, and continue to do it today: New York, London, Dubai, Mexico City, Tokyo - all of these cities have disposal and processing facilities in neighboring cities and states. The expansion of disposal facilities has been a problem for a long time. Right now, it is difficult to assess what the total cost of processing all MSW recultivating the city dumps, but it is obvious that complete recultivation may take dozens of years and require billions of rubles in funding. On the other hand, projects like this increase the investment appeal of the whole territory and have a positive effect on the city’s image.
Frost & Sullivan experts track emerging technologies. What kind of selection criteria do you use? Are there innovations that caught your company’s attention in Russia?
Every year, there is a list of the top 50 technologies that are the most appealing in terms of monitoring, research and investment. The 50 emerging technologies rating is based on an analysis that takes into account many factors, including patents, the technology readiness level, the degree of a market’s development, potential for future development and scaling, etc. Selection and analysis are done by our company’s analysts, who regularly cooperate with scientists, inventors, entrepreneurs, investment funds and so on.
Our clients have technologies that are in-demand globally. Continuous commercialization of inventions is not yet a strong suit of Russian companies and research centers, but even in this area we can see a willingness to improve the process and help increase the number of innovative technologies and solutions.
In your opinion, how transparent is the Moscow Government and other city organizations? How receptive are they to the initiatives, ideas and principles promoted by Frost & Sullivan?
Moscow is implementing a large number of innovations, including green innovations, across multiple sectors: information, transport, construction and others. Innovative infrastructure facilities are being erected and programs that support entrepreneurs working in tech are in place. On the other hand, much like any big city, Moscow takes a level-headed approach to implementing new solutions, since it is necessary to maintain a balance between innovation and providing for the stable operations of various city systems.
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