The NIS of Armenia: Achievements, Challenges and Recommendations for the Future Presentation by Rumen Dobrinsky

The National Innovation System

Armenia’s achievements Vision, political will and support  Building the NIS is a strategic objective of the Government  Conctere strategy to pursue this vision (the 2011 Concept Paper …)  Systemic approach: NIS as system in the context of other national targets as priorities

Armenia’s achievements (contd.) Clear targeting to tailor the NIS to the national specificity of Armenia  Targeting a strategic niche: «Armenia as an R&D center of supranational corporations»  Understanding of the main constraints of the national context (small, land-locked economy; limited national resources)  Timeline: starting from the areas with greater chances of successs  Understanding key national assets (strong science base, diaspora, traditional values)

Armenia’s achievements (contd.) Coordinated policy approach in building the NIS  The NIS Concept integrates other already existing strategic initiatives (Strategy for the development of science up to 2020; Strategy of Export-led Industrial Policy, etc.) Emphasis on some of the building blocks of the NIS that are seen as priority (“NIS pillars”)  Legal base, education, physical infrastructure, financial infrastructure, business capability)

Armenia’s challenges Challenges related to past legacies and the national specificity  Economic structure that was build entirely in the context of Soviet division of labour – market based restructuring still under way  Disconnect between research and national industry (largely related to past legacy)  Small economy context – the only viable economic strategy is by efficient integration into the global economy

Armenia’s challenges (contd.) Challenges related to the uneven transition experience  Current governance structure is the result of somewhat hectic reforms during the past 2 decades  Significant fragmentation of functional responsibilities: numerous public institutions are tasked with such responsibilities

Armenia’s challenges (contd.) Challenges related to the current NIS structure  A number of building blocks that are vital for a well functioning NIS are just non-existent and it will take significat time to build them  A number of linkages that are vital for a well functioning NIS are just non-existent and (The main among them is between education/science/R&D and industry) it will take specifically targeted polic actions and time to establish them  Some building blocks and linkages that are part of a NIS are not relevant for the national context of a small economy like Armenia – need to consider them in the context of internationalisation

Some unresolved problems - direction of possible recommendations Narrow understanding of “innovation” (mostly R&D-based) still prevails and this affects the NIS strategy No intentions/plans to resolve the issue of fragmentation of governance and existing coordination problems No clear and consistent intentions as to how to address (in the context of the NIS concept) the main existing problem of the disconnect between education, science and industry  The disconnect in the governance of R&D and innovation reinforces the disconnect between the two sub-sectors! Most of the ongoing efforts and future plans are related to the supply side; very little attention is paid on the role of demand in the NIS

Some unresolved problems - direction of possible recommendations (contd.) Current NIS Concept Paper has a rather narrow scope – does not address all the necessary building blocks and linkages needed for an efficient NIS A rather narrow vision of the vital role of internationalization for the future of the economy and NIS (global value chains are missing!) Excessive reliance on aid in the NIS strategy: risks of 1) aid addition and 2) capture by private interest While Armenia is moving on a number of fronts in establishing a NIS, these still reach only a tiny proportion of the potential NIS stakeholders – more ambitious goals are needed as reagards outreach