Leonid Gokhberg

STATE UNIVERSITY – HIGHER SCHOOL OF ECONOMICSSTATE UNIVERSITY – HIGHER SCHOOL OF ECONOMICS

Russian National Innovation System:Russian National Innovation System:Russian National Innovation System:

Trends and PoliciesTrends and PoliciesTrends and Policies

lgokhberg@hse.ru

NATIONAL INNOVATION SYSTEMS NATIONAL INNOVATION SYSTEMS NATIONAL INNOVATION SYSTEMS OF BRICS COUNTRIES PROJECTOF BRICS COUNTRIES PROJECTOF BRICS COUNTRIES PROJECT

2

Outline

The Soviet NIS model

Contemporary NIS• Innovation activity• R&D trends

Policy challenges• The New Economy goals• Reform directions

First steps towards the innovative economy

• Budgetary reform• Priority setting• New human resources programme

3

The Soviet NIS Model

Influenced by:• political and military objectives• considerations of international prestige• imbalanced sectoral structure of the national

economy

Centrally planned

Resource-based vs. goal-oriented growth

Poor emphasis on economic payoff of S&T

Lack of efficient adjustment mechanisms

Consequences:• Strategy of the entire front of R&D and oversized

R&D base• Disproportions in the disciplinary structure of R&D

Engineering >70% of R&D totals• Lack of resources in perspective S&T fields (life

science, ICT, etc.)

4

General R&D Trends in the Transition Period

Influenced by:• Changes in political and social objectives• Formation of market economy grounds• Economic recession, budget deficit, low

investment activity• Disintegration of the USSR• Unstable political situation• Integration into the world economy

Consequences:• Decrease in budget R&D appropriations• Lack of industry demand for R&D• Low compensation and prestige of R&D

employment• Discontinued intra-USSR partnerships• Decentralisation of decision-making• Development of international S&T co-operation

5

National Innovation System in Russia

PresidentPresident Executive Council for ScienceExecutive Council for Science,,Technology and EducationTechnology and Education

GovernmentGovernment Federal AssemblyFederal Assembly

Parliamentary Committee for Parliamentary Committee for Education and ScienceEducation and Science

Ministry for Education and Ministry for Education and ScienceScience

Other Other ministriesministries

Committee of the Federal Committee of the Federal Assembly for ScienceAssembly for Science,, CultureCulture,,EducationEducation,, Health and EcologyHealth and Ecology

Federal Service for Science and Federal Service for Science and InnovationInnovation

Federal Service for EducationFederal Service for Education

Federal Service for Intellectual Federal Service for Intellectual PropertyProperty ,, Patents and Trademarks Patents and Trademarks

Federal Service for Control and Federal Service for Control and Supervision of Education and ScienceSupervision of Education and Science

Regional boards for science and Regional boards for science and educationeducation

Regional Executive BodiesRegional Executive Bodies

State State ActorsActors FinancialFinancial ActorsActors

Russian Foundation for Russian Foundation for Technology DevelopmentTechnology Development

Sectoral andSectoral and nonnon--budgetary foundationsbudgetary foundationsState foundationsState foundations

Russian Foundation for Basic ResearchRussian Foundation for Basic Research

Russian Foundation for HumanitiesRussian Foundation for Humanities

Russian Foundation for Assistance to Small Russian Foundation for Assistance to Small Innovative EnterprisesInnovative Enterprises

Venture foundationsVenture foundations

Infrastructure InstitutionsInfrastructure Institutions Centers forCenters for S&TS&T informationinformation Centers for technology transferCenters for technology transfer Centers for Centers for technology and technology and

innovationinnovationTechnoparksTechnoparks,, incubatorsincubators, , consultingconsulting, , marketing and training marketing and training ffirmsirms ScienceScience cities and special economic zonescities and special economic zones

Knowledge InstitutionsKnowledge Institutions

Russian Academy of SciencesRussian Academy of Sciences

Branch State AcademiesBranch State Academies

HEIsHEIs IndustrialIndustrial R&DR&D institutionsinstitutions

State research centersState research centers

Private Sector Private Sector ActorsActors

EnterprisesEnterprises Concerns and associationsConcerns and associations

Industrial financial groupsIndustrial financial groupsNGOsNGOs

6

Innovation Activity in Industry, %

16.317.3

19.5

5.6 5.24.7 5

6.2

10.69.6 9.8

10.310.5

9.3 9.4

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

7

Innovating Enterprises in Industry by Economic Activity: 2005, %

9.35.6

84.3

6.12.6 3.3

31.4

23.5

10.7 9.311.9

13.5

26.823.8

8.2

3.4 4.2

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

1. Total2. Mining3. Food, beverages & tobacco4. Textiles & wearing5. Leather & shoes6. Wood7. Paper & printing8. Coke & petrol9. Chemicals10. Rubber & plastic products

11. Other non-metallic mineral products12. Basic metals, fabricated metal

products13. Machinery & equipment14. Electrical equipment, electronics,

instruments15. Transport equipment16. Furniture, manufacturing n.e.c.17. Recycling18. Electricity, gas & water

8

Ranking of Innovation Objectives (Effects): 2006

2.3 2.2

1.81.5 1.4

1.6

2.32.0 2.1

1.61.8

2.11.8

2.2

0.0

1.0

2.0

3.0

1 2 3 4 5 6 7 8 9 10 11 12 13 14

Product innovation1. Enlargement of product

range

Enlargement of new markets:2. Russia3. CIS countries4. EU/EFTA countries5. US and Canada6. Elsewhere7. Quality improvement

Process innovation8. Production

flexibility9. Increase in

production capacities

10. Reduction of labour costs

11. Reduction of material & energy costs

Market innovation12. Enlargement of

markets

All innovation13. Reduction of

environment pollution

14. Concordance with modern standards

9

Efficiency of Innovation:Low Competitiveness

²

²

²

²

²²

²

²

²

²

²35.6

47.4

58.3

38.5

27.031.5

48.8

22.8

37.7 37.6

0.91.21.42.22.32.83.13.43.95.06.4 7.0

Sw

eden

Ger

man

y

Fin

lan

d

Den

mar

k

Fran

ce

Au

stri

a

Ital

y

Gre

ece

Spai

n

Po

rtu

gal

Expenditure on technological innovation as a per cent of total salesInnovative products as a per cent of total sales

Rus

sia

²

10

Innovative vs. Non-Innovative Enterprises: 2006, %

0.50.52.32.3otherother

14.434.2Share of enterprises belonging to industrial groups

1.21.22.02.0EuropeanEuropean27.027.060.660.6nationalnational71.271.23535.2.2MarketsMarkets: : regionalregional18.521.3

Share of employees with a university degree

50.449.6Investment

52.048.0Sales

61.738.3Employment

90.69.4Number

NonNon--innovative innovative enterprisesenterprises

Innovative Innovative enterprisesenterprises

11

Policy Agenda:R&D Landscape in Russia

Research institutes – a principal form of R&D organisation~ 63% of R&D personnel (55% in 1990)

R&D-performing institutions by type

255255449449Industrial enterprisesIndustrial enterprises

417417453453Higher education institutionsHigher education institutions

5858593593Construction project and exploration Construction project and exploration organisationsorganisations

482482937937Design Design organisationsorganisations

2049204917621762Research institutesResearch institutes

3622362246464646TotalTotal

2006200619901990

12

Russian Science: Lack of Correspondence Between Demands of Business Sector and Society (% of GERD)

Priorities

24.724.735.435.4Industrial developmentIndustrial development

General advancement of knowledgeGeneral advancement of knowledge

EnvironmentEnvironment

HealthHealth 2.02.03.23.2

0.90.91.61.6

12.512.5

19941994

21.021.0

20062006

Institutions

USAUSA

EUEU--2525

ChinaChina

RussiaRussia

50501212 [1 [1 billionbillion $]$]272719901990

141422226464

21211010 [11.5 [11.5 billionbillion $]$]686820052005

1717

4 4 [0.97 billion[0.97 billion $]$]

UniversitiesUniversities

6969

66

EnterprisesEnterprises

1414

9090

Research institutesResearch institutes

13

R&D Personnel

819888

1061

391426519

442 387 354

7475101

0

200

400

600

800

1000

1200

1995 2000 2006

Total

Researchers

Supporting staff

Technicians

Thousand

Supporting and other auxiliary personnel: 43%R&D personnel without a university degree: 38%

14

Transition Towardsthe Innovative Economy

Conception of a Long-Term Development – 2020

Institutions

1212--131366--77LLabour productivityabour productivity growth rates, %growth rates, %

Share of innovative products in total sales, %Share of innovative products in total sales, %

Share of highShare of high--tech sectors in value added, %tech sectors in value added, % 1818--20201010

2020--303066

20072007 20202020

Large enterprisesLarge enterprisesSmall firmsSmall firms

Government fundingGovernment fundingPrivate capital / venturesPrivate capital / ventures

Institutional barriersInstitutional barriersNetworkingNetworking

R&DR&DInnovationInnovation

Integration of institutions / policiesIntegration of institutions / policies

Companies / universitiesCompanies / universities

Nations Nations –– leaders of the New leaders of the New EconomyEconomy

Research institutesResearch institutes

Fragmented policiesFragmented policies

RussiaRussia

15

Transition Towardsthe New Economy

Orientation towards innovation in all domains of social and economic policy

Goals for the transition period

New Generation –Innovation Policy

From the Strategy of Development of Science and Innovationto the Strategy of Innovative Development

Launch of innovation in all sectors• including low-tech and services• local innovation• organisational and marketing innovations

Breeding of agents for innovation• Large companies-drivers• Medium enterprises: incremental innovation• Regional clusters• Small innovative enterprises

Creation of innovative culture

16

Creating the Innovation Economy: Directions of Reforms

Improving quality and increasing

supply from the S&T sector

Improving quality and increasing

supply from the S&T sector

Stimulation ofdemand for technologies

and innovation in theeconomy

Stimulation ofdemand for technologies

and innovation in theeconomy

Humancapital

development

Humancapital

development

² Efficient innovation² Support to the leaders² Complexity of reforms² Speed of reforms

² Efficient innovation² Support to the leaders² Complexity of reforms² Speed of reforms

• Government R&D sector reform

• Resources allocation:

- priorities

- centers of excellence

• Support to networks

• Government R&D sector reform

• Resources allocation:

- priorities

- centers of excellence

• Support to networks

• Promotion of market competition

• Support to innovators

• Innovation in the public sector

• Innovation infrastructure

• Promotion of market competition

• Support to innovators

• Innovation in the public sector

• Innovation infrastructure

• Education sector reform• Provision of an efficient contract, r ecovery of motivation

for scientists / teachers• Attraction and retention of young scientists

• Education sector reform• Provision of an efficient contract, r ecovery of motivation

for scientists / teachers• Attraction and retention of young scientists

Reform roadmap needed

17

Challenges for National S&T Policy

Institutional change• Centers of excellence: national research labs,

research universities (= incoming mobility centers)• Integration of science and education• Evaluation

IPR and technology commercialization

Involvement and adaptation of talents• Public prestige of scientific occupations• Incentives for university graduates

Career opportunities• Important target: age group 30-39• Replacement of inefficient scholars

Active role in international co-operation• Association to EU Framework RTD programmes

18

Increasing Budgetary Funding Efficiency

Structure of financing under limited resources• Institutional financing (e.g. leading universities),

projects, grants• Support of new institutional models (national

research centers, research universities, research and education centers, centers of excellence)

• Priorities• Long-term projects financing• System of grants

Peer review / evaluation

Non-public fund rising

19

Revision of S&T Priorities

Contribution to accelerating GDP growth and enhancing competitiveness of Russia’s national economyCapacity for enhancing Russia’s national security, including its technological security

Selection criteria

Methodology

technologies prioritiesproducts

Competitiveness, markets, production bases, investment required, qualified workforce

20

A Revised List of S&T Priorities

• Information and telecommunication systems

• Nanosystems industry and materials

• Living systems

• Rational use of natural resources

• Power engineering and energy saving

• Safety and terrorism counteraction

21

Federal Goal-Oriented Programme“S&T and Education Manpower for Innovating Russia” for 2009-2012 (emerging)

Objective – modernisation of manpower for science, education and high-tech sectors, e.g. by training, involvement and adaptation of young scholars

Support to:• Leading research & education centers• Research by leading professors and PhD students• Internal mobility in Russia• Participation in conferences• Research by young Russian scientists employed

abroad as guest scholars• Invitations to foreign researchers as guest

professors in modern S&T areas• Scientific projects at secondary schools• Investment in guest houses

Funding: 57.7 billion roubles

THANK YOU !THANK YOU !THANK YOU !THANK YOU !lgokhberg@hse.ru