1. S&T and Innovation Policy for Russia Prof. Leonid Gokhberg National Research University – Higher School of Economics Russian-Dutch University Partnerships: Shaping Innovative Academic and Research Agenda Moscow, November 15–16, 2012

2. Contents photo Higher School of Economics, Moscow 2012 Challenges for STI policy in Russia Strategy 2020: a new STI policy for Russia Key STI policy targets: 2013-2020 Recent STI policy agenda 2

3. Global challenges for S&T and innovation policy: moving to a new agenda photo Higher School of Economics, Moscow 2012 Challenges for science policy Selectivity Which fields to support and how much focus to give priorities? Shift from thematic priorities to socioeconomic objectives Concentration Which institutions or research teams to support and how concentrated should funding be? Sustainability Are the basic resources of people, money, infrastructure and institutions renewing themselves? Challenges for innovation policy Framework conditions IP framework, human resources, competition, health & safety, consumer regulation Mobility of knowledge, people, money, services, business Governance Open innovation model Coordination versus integration Moving towards a more horizontal and cross-cutting innovation policy approach A need for less conventional innovation policy Source: L. Georghiou 3

4. Challenges for STI policy in Russia Higher School of Economics, Moscow 2012 4 Challenges Consumption level depends on the income from raw resources and does not depend on labour effectiveness Enhanced paternalistic approach of public policy, « ignoration » of creative class Constraints Sectoral disbalance (focus on raw materials export, import of equipment, “traditional high- tech“) Domination of vertical organisation of manufacturing and technologic linkages Development of global cooperation, decrease of its costs, barriers and risks Increased speed of knowledge generation, new technologic fields and markets development Development of network model of interaction at global and national level Low competitiveness in the global arena Unfavorable climate for entrepreneurship and innovations Contre-innovative institutions Crisis of traditional models of social policy, stimulation of initiative and entrepreneurship Unsustainable model of integration into global economy Russia is a developed economy with educated population and high GDP per capita level on global scale

5. 5 Strengths STI is amongst top-level declared public policy priorities Implementation of new policy tools (tax incentives, innovation infrastructure, spin-offs at universities and R&D institutes, grants to involve leading scholars, etc.) Introduction of policy instruments providing support to the best (national research centers, research universities, etc.) Attempts to involve new actors (state-owned companies, leading universities, regional clusters, etc.) Growth in public R&D funding Weaknesses Absence of a strategic agenda (e.g. long-term vision) Tight budgetary constraints, socially-oriented budget Multiplicity and discoordination of “innovation” signals from the state “Imitation” of innovation economy institutions (“inflation of concepts”), low quality of policy implementation Slow progress in business environment and investment climate Too high expectations (in terms of scale and speed of achieving tangible results) Current STI policy in Russia: an overview Higher School of Economics, Moscow 2012

6. Innovative activity of enterprises 6

7. Gross domestic expenditure on R&D 7 Percentage of Gross domestic expenditure on R&D financed by industry, % Percentage of Gross domestic expenditure on R&D financed by government, % GERD (million $ PPP) USA401576.0 China178980.7 Japan140832.8 Germany86299.4 Korea53184.9 France49990.8 United Kingdom39137.8 Russia33725.2 Brazil26016.5 Canada24345.9 India24324.7 Italy24269.2 Netherlands12968.7

8. 8 Transition to innovation-based economy within the context of globalization Internationalization and openness of the Russian economy and its integration into global value chains at all levels Relief of existing “innovation cleavages” Education Business Science Institutional Cross-regional polarization by innovation activity Cross-sectoral differentiation of technological level and innovation activity Discrimination of certain social groups in terms of access to innovations Social Regional “Innovation сleavages ” Sectoral Strategy 2020: imperatives

9. Strategy 2020: key trade-offs & options for innovation policy Higher School of Economics, Moscow 2012 Model Project-based support of innovative activities in earmarked priority areas Redistribution of state functions to regions, development institutions, business associations Promoting cooperation at all levels Rigid hierarchy-based policy Priority support of the new economy («novel» high-tech, services, «green industries», etc.) Stimulating innovation in low-tech sectors Supporting non-technological innovations Markets Continuous support of high-tech sectors related to the former technology paradigm (aircraft, nuclear power generation, etc.) Differenciated policy instruments for specific economy sectors and types of innovators Universal instruments Focus on political arguments in decision-making Priorities/Criteria Thematic priorities Socio-economic objectives Technological and non-technological innovations to increase economic efficiency and to benefit from the Schumpeterian (innovation) rent – “innovation for business” Social priorities – inclusive innovations Functional priorities (design, engineering, technology transfer, networking, training, etc.) Stimulating mass innovation across all economy sectors Creating favourable environment for innovative companies and unfavourable one for non-innovative companies

10. Strategy 2020: proposed policy mix Higher School of Economics, Moscow 2012 10 MASS INNOVATIONS ACROSS ALL SECTORS Regulation of technology imports Enhancement of innovative focus of public procurement Incentives for innovating enterprises Support to small innovative enterprises ENHANCED EFFICIENCY OF INNOVATIVE POLICIES INNOVATION- BASED DEVELOPMENT OF TRADITIONAL SECTORS AND GENERATION OF NEW ONES Functional priorities: compensation of failures in the innovation cycle Decentralization of STI policies Enhancement of efficiency in resource utilization IMPROVED QUALITY OF INNOVATION SUPPLY Increasing efficiency of public R&D funding Improving R&D sector efficiency Incentives for business investment in STI Priority support to new economy sectors and to entry of innovative goods and services to growing markets SOCIAL FUNCTIONS OF INNOVATION Human capital development Support to creative class Integrating vulnerable population groups into innovative processes (inclusive innovations) Improving public perception of innovation Need for a long-term vision

11. 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Share of Russian publications in Web of Science journals: 3% (2011 – 2.06%) GERD-to-GDP-ratio: 1.77% (2011 – 1.12%) Share of Russian publications in the Web of Science journals: 2.44% (2011 – 2.06%) Budget of science funds: 25 bln roubles (2011 – 11 bln roubles) Share of universities in GERD: 15% (2011 – 8.4%) GERD-to-GDP-ratio: 3% (2011 – 1.12%) Share of non-budget expenditure in GERD: 57% (2011 – 32.9%) Patent applications per 10,000 population: 2.8 (2011 – 1.85) Russian universities in the Top-100 world leading universities: >5 (2011 – n/a) Salaries of researchers (200% of regional averages) Share of universities in GERD: 11.4% (2011 – 8.4%) Key STI policy targets for 2013-2020 11 Total investment increase by 25% over the 2011 level Total investment increase by 27% over the 2011 level Promoting Russia in the World Bank Doing Business Index: 20 th (2011 – 120 th ) President’s Decrees, May 2012Innovation Strategy, December 2011 Share of innovation sales in manufacturing exports: 15% (2011 – 5.5%) Share of innovation sales in manufacturing exports: 12% (2011 – 5.5%) Share of high-tech and knowledge intensive sectors in exports: 130% of 2011 level Promoting Russia in the World Bank Doing Business Index: 50 th (2011 – 120 th ) Innovation S&T Share of innovative enterprises in manufacturing: 15% (2011 – 11%) Labor productivity increase by 150% over the 2011 level Creation and modernisation of 25 mln jobs with high labor productivity Share of innovative enterprises in manufacturing: 60% (2011 – 11%) Higher School of Economics, Moscow 2012

12. Recent STI policy agenda: an itinerary action plan 12 S&TInnovation Partnerships between companies & RTD organisations/universities Innovation development programmes of state-owned companies Promoting networking: technology platforms, regionall innovation clusters, technology transfer (open innovation centres) Attraction of transnational high-tech companies, technology investors & competences to Russia; localisation of technology Technology & equipment imports Increasing efficiency of tax incentives for STI Priority development of globally competitive basic & applied research Mega-science (e.g. co-financing of 6 large research installations) Integration of Russian leading universities into global networks (e.g. Programme 5/100) International academic mobility: inward (leading international scientists) & outward (government- supported traineeships) Higher School of Economics, Moscow 2012 RF Basic Research Programme State Programme for S&T–2020 Reform of the HE sector ―Federal universities ―National research universities ―Closures & mergers ―Cooperation with companies Mapping national S&T/research evaluation  transformation of the government R&D sector: focus on centres of excellence

13. Thank you! lgokhberg@hse.ru