2007 Russia-2020: Technological Modernization XI International Economic Forum in Peterburg

A new stage of development Today, a new agenda is formed. The focus shifts from stabilization to sustainable growth. Oil “windfall profit”-based growth opportunities present today are obviously exhausted in the mid-term perspective In addition, new critical long-term challenges arise: demography – labor scarceness and ageing population lead to a к быстрому росту пенсионной нагрузки. There is also a range of migration challenges; technology – a start of a new technology age in developed countries. ЦМАКП 2

Challenges and limitations on growth perspectives Insufficient focus on top research priorities; Lack of adequate researchers in some areas; Lack of shared vision of technological development by government, business and research society. Widening rift between fundamental and applied science, and between demand from business and applied science Need for venture institutions supporting large projects; Distorted motivation for business innovations ЦМАКП 3 Energy: More capital-intensive extraction means less return on prospective investments; A rise in demand for edge-cutting technologies as resource extraction is harder in new fields/deposits. Shipping: Competition wth China (TRACECA is almost complete, km left); конфликт с другими направлениями использования опорной транспортной сети (Транссиб); Hi-tech capabilities:

4 Research potential Russia is among top 15 research spenders (PPP-based); Russia is the third on number employed in science after U.S. and China по численности занятых в этой сфере; Russian science retained ability to conduct contemporary research in wide range of areas ЦМАКП Technological modernization is a key : realizing competitive advantages in science and technology mass industry modernization

ЦМАКП 5 The scope of research potential Domestic R&D spending (PPP- based USD bn, 2004) R&D employment (thousands, 2004)

ЦМАКП 6 Research potential: resource concentration R&D spending on a person employed (PPP USD ‘000, 2004)

ЦМАКП 7 Research potential: cost and result Hi-tech exports and R&D spending (as % of GDP, 2001) Loss from cost-result disparity in innovations is estimated at USD bn. per year. Unrealized technology export gains account for USD bn. per year, while undervalued exports account for another 1 USD bn. Loss from cost-result disparity in innovations is estimated at USD bn. per year. Unrealized technology export gains account for USD bn. per year, while undervalued exports account for another 1 USD bn.

8 Research potential: goals for Russia 1.To secure developed markets position: products should conform to quality and technology standards; customer needs should be a priority; life-long service and maintenance for production. 2. To provide sustainable growth 3-5% yearly energy intensity decrease; 6-7% yearly labor productivity increase; energy industry development measures – new APP development, extraction under unfavorable natural conditions; gas transit from arctic zone. 3. To realize national technological achievements and advantages: aerospace industry (WIG craft, supersonic passenger aircraft, гиперзвуковые ЛА); nuclear energy (fast neutron reactors) ЦМАКП

9 Research potential: internal goals Required efficiency growth (%)

10 Research potential: development strategies 1.Catching-up scenario Provide the needs of business, energy industry and national defense with minimum risk: intensive research on a limited scope of technologies needed by energy industry and Ministry of Defense; development of innovation system to select and adapt imported technologies. 2. Local leadership scenario Emergence of a strong national R&D system. Active participation in hi-tech markets based on technological advantages: edge-cutting technological achievements realizing competitive advantage in research and emergence of new markets; launching global projects lead by Russian enterprises; developing R&D institutions to match ongoing R&D to business demand. ЦМАКП

11 National competitiveness New R&D policy Combining institutional and project approach new technology monitoring system; shared vision of future developments by business and government (technology foresight); focus on a limited number of breakthrough projects with sizeable system impact; forming national innovation infrastructure. Institutionalization of technology market, including intellectual property protection; providing incentives for hi-tech upgrade of the industry.

ЦМАКП 12 Research potential: probable impact from implementation Capabilities for increasing export of machines and equipment (USD bn)

ЦМАКП 13