Non-financial investments are characterized by such objects as new developments, methods and different innovations. Their presence and implementation provide with an active improvement and development process of a company, contribute to increasing of opportunities and attracting new clients.
Investments in non-financial assets are investments in updating and modernization of technical, industrial equipment, buying natural objects, patents and licenses. Data on investments in non-financial assets include information on the fact that developing countries have already been actively using this method of investment for many years (China).
Non-financial investments — topology
The structure of investments in non-financial assets is represented in form of particular types of non-financial investments. They include:
- Investment in base capital is money investment in development of equipment complex or buying new models for optimization and improvement of production process. In other words, a positive supply with technical equipment occurs.
- Investment in circulating objects – with the purpose of buying raw materials which are necessary for making factory goods.
- Long-term intangible investment is the riskiest variant, however, it is characterized by a high potential return in future. These investments include conducting prospecting work, developing computer systems, forming significance of an artistic plan.
Financial and non-financial investments have almost the same significance for the successful and perspective development of manufacturing enterprises. However, there are some cases when non-financial investments are more relevant and winning than financial support. Such investments in their natural material form are promptly placed and mastered at the factory. So, the terms of production processes launch are decreased and approbation costs are reduced. There is one more important aspect, which consist in the fact that inflation rate does not affect these investments.
The situation in Russia
In the Russian Federation the interest in non-financial investments has been developing for seventeen years, when in 2000 the copyright institute was activated. Current state statistics show the unprecedented popularity of such investments among Russian entrepreneurs, whose activity in this direction is stable.
As a rule, on the territory of Russia specialized investment organizations (funds) work with non-financial investments. A quite favorable thing should be noted – today Russian firms attract many foreign investors for tight and efficient cooperation because of their successful activity.