Innovation and Competence Building systems in Russia Brics-workshop, Aalborg, February 12–15, 2006

2 Peculiar features of post-Soviet era Consumption crisis of the 80ths Collapse of the high-tech industry and research periphery of the military-industrial complex (first half of the 90ths) Painful decline of the GDP ( %) Shifts towards extracting branches Dominance of political lobbying Instability - ‘long’ investment is risky

3 Recent trends related to economic development Booming domestic consumption goods market Grow in personal services for expanding middle class Intensive development of. IT Preconditions for development of institutional infrastructure for modernising NIS

4 Some barriers hampering NIS development Lack of long-term and cheap financial resources for venture projects Inefficient system of R&D organization Weakness of market oriented institutions of innovation transfer Inconsistent government innovation policy

5 Innovation Companies / universities Small firms Private capital / ventures ~ 80% of R&D personnel (55% in 1990) Innovation Companies / universities Small firms Private capital / ventures ~ 80% of R&D personnel (55% in 1990) R&D Research Institutes Large enterprises Government financing R&D Research Institutes Large enterprises Government financing Nations - leaders of the New Economy Russia

6 Institutional structure Research institute – principal form of R&D organisation R&D Institutions by Type Total Research institutes Design organisations Construction project and exploration organisations Higher education institutions Industrial enterprises

7 Primary fields for Government S&T and innovation policy (a) Promotion of technology transfer (b) Favourable environment for S&T activities and direct support to S&T (c) Development of PPP (d) Favourable innovation climate (e) Professional education and training (innovation management) (f) Ensuring long-term sustainable technological development (a) Promotion of technology transfer (b) Favourable environment for S&T activities and direct support to S&T (c) Development of PPP (d) Favourable innovation climate (e) Professional education and training (innovation management) (f) Ensuring long-term sustainable technological development

8 Major stages of S&T policies and their impact “Marker romanticism” (early 90s) - systemic crisis in S&T (reduction of funds, personnel, the liquidation of S&T organizations) “Market formalism” (mid 90s) - deep stagnation. Urgent measures to prevent full disintegration of S&T sector “Market pragmatism” (2000s) - serious risks of refusal of long-term programs and projects in favor of short and middle-term ones “Marker romanticism” (early 90s) - systemic crisis in S&T (reduction of funds, personnel, the liquidation of S&T organizations) “Market formalism” (mid 90s) - deep stagnation. Urgent measures to prevent full disintegration of S&T sector “Market pragmatism” (2000s) - serious risks of refusal of long-term programs and projects in favor of short and middle-term ones

9 Primary fields for Government S&T and innovation policy (a) Promotion of technology transfer (b) Favourable environment for S&T activities and direct support to S&T (c) Development of PPP (d) Favourable innovation climate (e) Professional education and training (innovation management) (f) Ensuring long-term sustainable technological development (a) Promotion of technology transfer (b) Favourable environment for S&T activities and direct support to S&T (c) Development of PPP (d) Favourable innovation climate (e) Professional education and training (innovation management) (f) Ensuring long-term sustainable technological development

10 Identification of national S&T priorities for innovation and economic growth Major instrument – priority areas and critical technologies Government Commission on S&T Policies approves 8 Priority S&T Areas and 70 Critical Technologies evaluation by more than 1,000 leading Russian experts Russian President approves 9 Priority S&T Areas and 52 Critical Technologies expert evaluation and revision (7 Priority Areas and 35 Critical Technologies) Major instrument – priority areas and critical technologies Government Commission on S&T Policies approves 8 Priority S&T Areas and 70 Critical Technologies evaluation by more than 1,000 leading Russian experts Russian President approves 9 Priority S&T Areas and 52 Critical Technologies expert evaluation and revision (7 Priority Areas and 35 Critical Technologies)

11 A revised list of S&T priorities 1. Information and telecommunications systems 2. Nanosystems industry and materials 3. Living systems 4. Rational use natural resources 5. Power engineering and energy saving 6. Transportation technologies 7. Safety and terrorism counteraction 1. Information and telecommunications systems 2. Nanosystems industry and materials 3. Living systems 4. Rational use natural resources 5. Power engineering and energy saving 6. Transportation technologies 7. Safety and terrorism counteraction

12 Recent S&T and innovation policy documents The foundation of government S&T policy of the Russian Federation (2002) The foundation of state policy of the Russian Federation for development of innovation system (2005) The strategy of the Russian Federation in the field of science and innovation (2005) The foundation of government S&T policy of the Russian Federation (2002) The foundation of state policy of the Russian Federation for development of innovation system (2005) The strategy of the Russian Federation in the field of science and innovation (2005)

13 Gross domestic expenditure on R&D (GERD) RussiaKoreaGermany Total, bln. PPP USD Per 1 R&D employee, thous. PPP USD % of GDP Basic research as % of GERD : bln. rubles (43.8% of 1990)

14 World R&D indicators by regions (per cent) OECD North America US Europe Asia EC Developing countries Japan Asian NICs China Latin America India CIS Oceania Russia Central & Eastern Europe Africa South Africa Arab States Researchers Expenditure on R&D

15 GERD per an R&D institution (million 1989 rubles) Structure of R&D expenditure (per cent) EnterprisesUniversities Russia65 EC Japan7115 US7514

16 Urgent actions Institutional change Elimination of administrative and legal barriers Increase of budgetary funding efficiency Involvement of young talents Promotion of R&D commercialisation

17 Increase of budgetary funding efficiency Structure of financing under limited resources Institutional financing ( e.g. leading universities) / projects / grants Support of new institutional models (research universities, research and education centres, centres of excellence) Priorities Long-term project financing Transition to larger-scale complex projects System of grants Peer review / evaluation Open calls Non-public fund rising

18 Implications for future research What are major challenges for BRICS countries in the long run Scenarios Opportunities and threats Strategies towards using available S&T and innovation capacities for building competence How to identify national innovation priorities and public policies towards their implementation Identify priorities for cooperation between BRICS countries