The role of the State in national system of innovation in Russia

1
The role of the Statein national system of
innovation in Russia
Tatiana Kuznetsova Director, Centre for ST,
Innovation and Information Policies, Institute
for Statistical Studies and Economics of
Knowledge, Higher School of Economics E-mail
tkuznetzova_at_hse.ru
Thiruvananthapuram, India, August 19-21 2009
2
Current socio-economic context completing
transition to the market economy and transforming
of the socio-economic and political system

• Democratisation and liberalisation, lowering the
  level of social confrontation, development of
  civil society elements
• Implementation of market self-regulation
  instruments and institutions
• Setup of a new public administration system,
  lowering barriers for business activity
• Strengthening Russias global position

3
Current economic trends( of the previous year)
2005 2006 2007 2000-2007 2008 (est) March 2009 / March 2008
GDP 106.4 107.4 107.6 107.0 105.6 90.5
Consumer price index 109.9 109.0 112.0 113.6 114.1 101.3
Industrial production index 104.0 104.4 106.0 105.8 102.1 86.3
Capital investment 110.9 113.7 120.0 112.5 109.1 84.6
Real cash earnings 112.4 113.3 110.3 111.6 102.7 99.9
Real average monthly wages 112.6 113.3 115.8 115.0 109.7 94.3
Retail turnover 112.8 113.9 115.0 111.6 113.0 96.0
Turnover of services purchased by the public 106.3 107.6 107.2 105.7 112.8 96.7
Exports 133.1 124.7 116.5 122.1 140.2 -
Imports 128.8 131.3 136.8 124.6 134.9 -
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Internal restraintson the development of
Russias economy

• Economic growth, quality of life ensured by
  earnings from exporting oil, gas and raw
  materials
• Structural misbalances, technological gap with
  leading industrial nations
• Monopolisation on local markets, low incentives
  to advance productivity and competitiveness
• Inadequate protection of ownership rights
• Lack of incentives for a pragmatic coalition
  between business, government and public
• High regional differentiation
• Significant inequality in income distribution and
  social infrastructure development

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Major indicators of the ST complex
2000 2003 2005 2006 2007
GERD at constant 1989 prices (bln roubles) 3.3 4.8 4.6 4.9 5.6
GERD as a of GDP 1.05 1.28 1.07 1.08 1.12
FBA on civil ST at constant 1991 prices (bln roubles) 2.00 3.22 4.16 4.54 5.5
FBA on civil ST as a of GDP 0.23 0.31 0.36 0.36 0.4
RD personnel per 10 000 employment 138 130 122 122 135
Patent applications with the indication of Russia in Russia (thousands) 28.7 30.7 32.3 37.7 39.4
Patents granted (thousands) 17.6 24.7 23.4 23.3 23.0
Technology balance of payments (mln of US dollars) 20.6 -428.7 -564.8 -595.0 -796.0
RD institutions 4099 3797 3566 3622 3957
among them industrial enterprises 323 264 231 255 265
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Gross domestic expenditure on RD
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Interim conclusion

• RD sector in Russia still developing along
  rather conflicting trends

• growth of funding
• preservation of strong position
• in basic RD and
• in certain priority fields of applied RD

• -
• stagnation of the national ST
• preservation of the Soviet model
• Russian science is relatively large (vis-à-vis
  its scientific and technological outcomes)
• centrally directed and
• government-financed

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Organisational structure

• The network of RD-performing institutions and
  its scale have remained nearly intact over the
  recent years

• Their number 3,957 ( 2007), only 2.5 lower
  than ten years ago
• Institutional features are also rather
  sustainable
• RD sector is dominated by research institutes
  (51.5 of all units, 60 of RD personnel) and
  design organisations (12.6, 22.5, respectively)
  
• Research and design organisations are legally
  independent of universities and businesses only
  265 industrial enterprises (6.7 of RD units,
  7.1 of RD personnel) and 500 universities
  (12.6 and 5), regularly engaged in RD

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GERD growth
Positive trends Positive trends Positive trends
GERD increase 1998-2007 more than 20 times at constant prices more than 2 times 1998-2007 more than 20 times at constant prices more than 2 times
Negative trends Negative trends Negative trends
Russia Other economies
GERD ( of GDP) 1.07 (2006) 1.12 (2007) Israel 4.65 Japan 3.39 USA 2.62 China 1.42
GERD (PPP) 17.1 bln. (2006) 25.1 bln. (2007) 17 times lower than in USA 7 in Japan 4 in China 3.3 in Germany 1.5 in Britain
BARD (PPP) 12 bln. (civil RD, 2006) 2-2,5 times lower than in France, Germany, Britain 3,5 than in Japan 14 than in USA
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Productivity competitiveness loss
Publication in World Scientific Journals Russia 2.42, 11th position in the world (1995 7, 1980 3) China 9.13, 2nd position (1995 1.6, 14 position)
Technology exports Russia 0.63 bln Finland 3.8 bln Austria 6.1 bln USA 85.9 bln
Resident patent applications Russia is lagging behind Japan 12 times, USA 7.8, Korea 3.4 times
Share of the global hi-tech market Russia 0.28 Gong-Kong 5.44 Singapore 4.58 Korea 3.85
Innovative activity of enterprises Russia 9.3 EU from 14.7 (Latvia) to 69.7 (Germany)
Share of innovative products in total sales of industrial products Russia 1.28 Germany 5, Finland 3.9, France 3.1
Share of innovative products in total industrial products Russia 2.9 Germany 25.5, Finland 23.7, France 20.7
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ST and innovation policies

• Objectives largely determined by a complex of
  various socio-economic and political factors
• Government was recently able to channel
  additional resources into this sector.
• Nation needs to deal with a whole set of
  complex issues simultaneously
• Dual challenge for ST and innovation policies
  to stimulate both sides of markets for innovation
  demand and supply

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New cycle of strategic documents and
implementation programmes

• Strategy for ST and Innovation in the Russian
  Federation until 2015 (2006)
• Federal Target-Oriented Programme Research and
  Development in Priority Areas for the ST Complex
  Development in Russia for 2007-2012 (2006)
• Presidents report On the Strategy of Russias
  Development until 2020 (2008)
• Conception of a Long-Term Development until 2020
  (2008)

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Key strategic agenda

• Despite their inevitable adjustment against the
  background of the global financial crisis, the
  outlined in these documents measures will in the
  long run allow to tackle the principal systemic
  problem of the national ST complex the
  combination of low efficiency in using resources
  (for RD) and insufficient demand for innovation
  from businesses.
• The ultimate anticipated result is growth in
  quality and scale of Russias ST output supplied
  and increased demand for technology and
  innovation from industry.

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Policy actions intended for ST and innovation
(Conception -2020)

• Promoting demand for new technology and
  innovation from companies
• Increasing the quality and scale of output
  offered by national ST
• Developing human capital in line with challenges
  and requirements of innovative economy
• Setting up an efficient system for selecting and
  implementing long-term ST priorities

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Major focus areas of national ST and innovation
policies

• Priority setting national ST Foresight exercise
  for 2025
• Support to nanoindustry
• Restructuring government RD institutions
• Evaluation of RD units performance
• Improving legislation for the protection of
  intellectual property rights and technology
  commercialisation
• Public-private partnership
• Tax incentives for RD and innovation
• Innovation infrastructure
• International ST cooperation
• Support to university research

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Restructuring government RD institutions

• Traditional domination of the state-owned
  budget-funded institutions (as in the USSR)
  remains one of the key features of the Russian
  ST sector
• Various types of commercial and non-for-profit
  organisations were allowed during the transition
  to the market economy, but there was little
  change with the respect to government RD
  organisations
• Nearly 43 RD organisations in Russia were set
  up and are fully funded by the government
• Legislation imposes strict limitations on their
  legal rights that in many cases contradict with
  both academic freedom and economic reality
• Government RD institutions, while claiming
  significant budgetary allocations, do not provide
  any guarantees for their efficient use, there is
  no link between performance and funding

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Evaluation of RD units performance

• Post-Soviet period research evaluation
  exercises have been limited to selection
  procedures for financing of competitive projects
  by government agencies and state science
  foundations RD institutions stayed intact
• To reverse the trend a government statement On
  the system of performance evaluation for civil
  RD organisations (2008) was adopted.
• Its main goals to establish procedures and
  criteria for regular performance assessments of
  government RD organisations and optimise their
  network.
• The regulation combines periodical statistical
  surveys (once in 5 years) with activities of
  evaluation commissions involving major interest
  groups (government agencies, business, academia,
  scientific community, NGOs)

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Support to university research

• National Priority Project Education
  competitive institutional grants to HEIs
  implementing innovative education programmes
  (2006-2007).
• Research universities initiative to support
  best universities as centres of excellence. Two
  HEIs in Moscow were recognised as national
  research universities. In 2009, a follow-up
  programme to select another 10-15 research
  universities in different ST areas started.
• Federal Programme Science and Education Manpower
  for Innovative Russia (2008) for 2009-2013
  various actions to attract young talents and
  highly-skilled professionals to HEIs and RD
  institutions.
• Federal law On Changes to the Selected Laws of
  the Russian Federation Concerning the Integration
  of Education and Science(2007) legal basis
  for different models of integrating science with
  university training

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Russian ST under the impact of global economic
crisissearch for new strategies

• The need to adjust innovative efforts of the
  government in view of the crisis is obvious and
  is confirmed by the anti-crisis practice of most
  of industrial nations
• These programmes normally focus on recovering
  macroeconomic parameters as well as on ensuring
  national competitiveness in the post-crisis
  period
• institutional reforms to overcome departmental
  miscoordination, to increase efficiency of RD
  organisations
• concentration of resources in the centres of
  excellence
• additional policy measures to expand
  opportunities for public research organisations
  and HEIs to participate in innovation activities,
  facilitate academic mobility, etc.

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Thank you!