SCIENCE, TECHNOLOGY AND INNOVATION POLICY

REFORMATION TRENDS IN TRANSITION COUNTRIES ON

THE MODEL OF ARMENIA

Tigran ARZUMANYAN 2nd PhD School on Innovation and Economic

Development: Globelics Academy 2005, Lisbon, Portugal

23 May – 4 June, 2005

A LITTLE HISTORY ...

• During the Soviet period Armenia developed a ramified and actively operating system of research and technological institutions.

• These capabilities were oriented to a significant degree toward supporting the Soviet military-industrial complex and most of research institutions were well financed directly from Moscow.

After the collapse of the USSR...• The difficulties of a transition period,

worsening of the economic situation, destruction of previous economic, scientific and other connections, sharp decrease of a demand for a traditional Armenian production (including intellectual) have unavoidably led to the sufficient reduction in the activities of many scientific and technical subdivisions and relevant S&T capacious productions/industries.

PROBLEMS FACEDreduced budget allocations to R&D, mainly

used for salaries and covering growing operating costs;

sharp reduction of total number of research staff and slowdown of inflow of young specialists to science and technology resulting in deficiency of practicing scientists in the 25-40 age bracket;

emigration of qualified Armenian specialists to the developed foreign countries or other sectors of the economy.

DYNAMICS OF GERD/GDP %

(1990-2002)

0,5

0,3

0,2

0,3

0,2

0,1 0,1

0,2

0

0,1

0,2

0,3

0,4

0,5

0,6

1990 1996 1997 1998 1999 2000 2001 2002

Source: National Statistical Service of Armenia, 2003. Statistical Yearbook of Armenia, www.armstat.am

FINANCIAL ALLOCATIONS TO R&D

Gross Domestic Expenditure on R&D

• (GERD) was 0,2 % of GDP in 2002

• In 2002 GDP was around 50% of GDP 1990 in nominal values;

• Governmental funds according to type of activity: – about 70% to basic research

– about 27% to applied research

– about 3% to experimental developments

Source: National Statistical Service of Armenia, 2004. Statistical Yearbook of Armenia, www.armstat.am

124 122

73

46 44

10194 96

8288 91 96 99

0

20

40

60

80

100

120

140

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

NUMBER OF R&D INSTITUTIONS (1991-2003)

NUMBER OF RESEARCH PERSONNEL(1997-2003)

20000

7716 81336528 7309 6965 6737 6277

0

5000

10000

15000

20000

25000

1990 1997 1998 1999 2000 2001 2002 2003

Source: National Statistical Service of Armenia, 2004. Statistical Yearbook of Armenia, www.armstat.am

S&T INFRASTRUCTURE

Parliamentary Commission for

Science

Department of Science Ministry of Education and

Science

Presidium of National

Academy of Sciences

Science Departments of Relevant

Branch Ministries

R&D Institutes

University R&D

Subordinated R&D Institutes

Source: Compiled by the author

MAIN R&D INSTITUTIONS OF ARMENIA

NATIONAL ACADEMY OF SCIENCES

- Total number of Institutes - 40

Including:

• Division of Physical, Mathematical & Technical Sciences - 13 Institutes, in the fields of ICT, Physics, Nuclear Physics, Astrophysics, Radiophysics &Electronics, Geophysics, Engineering Seismology, Mechanics, Mathematics, Geological Sciences, etc.

NATIONAL ACADEMY OF SCIENCES (2)

• Division of Natural Sciences - 16 Institutes,

in the fields of:

Biotechnology, Medical Genetics, Environmental Studies, Neurochemistry, Chemical Physics; Fine Organic, General and Inorganic Chemistry, Microbiology, Physiology, Ichthyology, Zoology, Physiology, Hydroponics, Botany, etc.

NATIONAL ACADEMY OF SCIENCES (3)

• Division of Humanities and Social Sciences - 11 Institutes, in the fields of:

Archaeology, Ethnography, Oriental Studies,

Philosophy, Sociology, Law, Economics,

History, Armenian Studies, Art History,

Linguistics, etc.

MINISTRY OF EDUCATION AND SCIENCE

• 20 national universities supervised by the Ministry of Education & Science

including:

Yerevan State University, Medical University,

Engineering University, Agricultural Academy, etc.

• About 70 private universities established during last years

OTHER BRANCH R&D INSTITUTIONS

• Ministry of Trade & Economic Development About 40 institutes (Yerevan Physics Institute, Institute of Biotechnology, Institute of Optic-physical Measurement, Institute of Applied Chemistry, etc.)

• Ministry of Health Care

10 institutes involved in various medical research

• Ministry of Agriculture

6 institutes

RESPONSIBILITIES OF EXECUTIVE BODIES

MINISTRY OF EDUCATION & SCIENCE

• Responsible for general S&T policy making in the country

• Management of Universities’ R&D

• Institutional & project based distribution of budget funding to all R&D institutions based on the decision of Expert Commissions (Peer review)

MEMBERS OF EXPERT COMMISSIONS

• Experts from each R&D Institution & University

• Scientific Councils of R&D Institutes and Universities elect experts

Problems

• Impartiality of decision-making is questionable (conflict of interests)

• Need for involvement of independent experts

NATIONAL ACADEMY OF SCIENCES

The Law assigns the Academy to:

• Manage R&D Institutes of NAS RA

• Coordinate basic research carried out throughout Armenia

• Act as official scientific consultant to the highest governing bodies of the country, proposals of which in the field of S&T are to be necessarily taken into discussion.

RECENT DEVELOPMENTS IN S&T&I

• During last years Armenian Government initiated steps to improve the situation and declared S&T and Innovation Policy as priority area for development.

• Law on Scientific & Technological Activity adopted in 2000 to regulate interrelations between research & technological organizations, state bodies and consumers of research outcomes. It states the need for promoting innovation and commercialization of research outcomes as main factor of economic growth.

RECENT DEVELOPMENTS IN S&T (2)

• In 2002 the Government also specified main scientific directions as priority areas for development as follows:– Armenian Studies;– Information Technologies– Basic research promoting applied research of vital

importance– Advanced Technologies (Biotechnology &

Nanotechnology)– New Energy Sources and New Materials– Risk Factors & Human Health

PROBLEMS

• Absence of S&T&I coordinating body at the highest governmental level;• Status of the academic institutes as non-commercial organizations as restricting factor to commercialization of R&D results;• The measures undertaken are mostly of declarative character and don’t provide real mechanisms for achieving the stated objectives;• Declared priority areas are very general and hardly to be developed all together by scarce funds allocated for R&D.

RECENT DEVELOPMENTS IN S&T (4)

Along with stated problems certain positive trends can be observed:

• According to officials, growth in IT sales has been nearly 20% per year during last years, accounting for 2% of the GDP (about $ 50 million USD in export revenues in 2003).

• Around 200 small private software companies have emerged in recent years, working primarily through outsourcing contracts with large Western software firms.

SUCCESS STORIES

• Enterprise Incubator Foundation founded in 2002 to assist:

• Building successful business incubation mechanisms for IT start-ups.• Stimulate growth in IT sector by providing interrelated services;• Drive Armenian technology products to international market;• Attract foreign investments.

SUCCESS STORIES (2)

• Open Source Armenia, initiated in 2003

• The project in Armenia in the IT area aimed at developing a community of IT professionals and exposing their potential to the world. • Provide organizational, legal, technical, management, marketing and financial support for the OSA open-source software projects.• Encourage development of hi-tech enterprises in the country.

SUCCESS STORIES (3)• Viasphere Technopark

• State-of-the-art technology park located in Yerevan providing infrastructure to local startups and ICT companies worldwide looking to extend their core development offshore;• Currently houses several US-based subsidiaries developing advanced technologies in variety of ICT fields.

CONCLUSIONS

• To ensure further development of S&T and Innovation processes in Armenia urgent reformation of the whole system is needed.

• Establishment of coordinating body (Council on S&T&I ) to develop system reformation recommendations and carry out enforcement;

• Creation of special state programmes directed to promoting academy-university-industry cooperation;

CONCLUSIONS (2)

• With presently available resources it seems to be very difficult for Armenia to sustain its robust and huge R&D infrastructure, particularly, in the field of basic research with sometimes overlapping research activities. This necessitates some realignment of the overall governmental research structure with the concentration of available resources for establishment of a few centers of excellence in the declared priority areas.

Armenia is a small country but it has a striking landscape and it contains

some awesome vistas

MATENADARAN

NORAVANQ MONASTRY -XII-XIV AD

Yerevan by night

THANK YOU!

Tigran ArzumanyanForeign Relations Department,

National Academy of Sciences of ArmeniaInstitute of Philosophy, Sociology and Law

E-mail:tarznip@sci.am