A public-private partnership in the period of structural reforms of the space industry

Regional and branch economy

Currently, the sphere of production, modernization, maintenance and utilization of any high-tech products, including space, military and special equipment faces the task of attracting private investments, primarily by using the mechanisms of public-private partnership.  Russia has traditionally had no predisposition for allowing the private sector to implement projects in the space industry. Years after the collapse of the USSR, the aerospace industry had no properly formed institutional environment, with the industry essentially isolated and excluded from the system of market relations allowing to effectively reduce costs. Cost optimization was not a priority when the respective federal targeted programs were introduced, partially due to a peculiar structure of financing for different types of projects. However, in the last decade, there has been a noticeable trend of the situation changing. This paper gives a definition and reveals the industrial specifics of the processes shaping the public-private partnerships in the Russian space industry. We present a review of global trends in these areas and specific success stories of private companies cooperating with the state acting through the Russian Federal Space Agency and the RKP enterprises in the recent years characterized by the structural reform of the space industry management. The article is dedicated to the problem of the interaction between the interests of the state and business throughout innovative development in the form of a public-private partnership (PPP), and examines the prospects for the development of PPPs using the example of the space industry as one of the key high-tech sectors of the Russian economy. The examples from foreign and Russian practice illustrate the dynamics of the interaction between the public and the private sector in the space industry, as well as the emergence of new tools aimed at overcoming obstacles in implementing PPPs during the structural reform of the Russian space industry.