1 Russia’s Innovation System in Transition Rio de JaneiroApril 25, 2007 BRICS National Innovation Systems:

2 The three key aspects The current Russia’s NIS still keeps features of the Soviet S&T system. Transition is not complete. Soviet Heritage The figures show some strengths as well as weaknesses of the Russia’s NIS in the market economy environment. Facts and Figures There are some actions being implemented and to be implemented to improve the current situation. State Policies

3 Soviet Heritage: Strengths and weaknesses  High mobilisation capabilities  High social status of scientists  No external effects on the basic research  Direct orientation to the national priorities  Lack of autonomy / initiative  Weak R&D at universities  R&D VS innovation  Lack of the “natural” selection mechanisms  Organisational inflexibility  Centralised control  Planning management  Political targets  Military priorities  Universal specialisation  Excessive unbalanced structure Key FeaturesStrengths Weaknesses

4 Facts and Figures: Institutional structure remains archaic and does not meet the market requirements Organisations providing scientific research and development - by type- by ownership Branch academies: 838 (23%)

5 Facts and Figures: Low R&D and innovation activity in the manufacturing sector Innovation activity level in the manufacturing sector, % To compare: Greece27% Spain37% Italy40% Portugal45%

6 Facts and Figures: Low R&D activity in higher education institutions (HEIs) R&D expenditures in organisations by source Researchers staff distribution by sector About 40% of HEIs provide R&D in Russia

7 Facts and Figures: More R&D, less innovation

8 Facts and Figures: Weak public-private relationships in R&D and innovation

9 Facts and Figures: Weak public-private relationships in R&D and innovation (continued) R&D expenditures in organisations by ownership

10 Legal framework modification  To regulate all aspects of government support to innovation activity  To coordinate all other related laws and regulations A special frameworking law  Core documents  Specific regulations (tax incentives, budgetary funding etc) Innovation activity regulation system Systematic correction of existing laws and regulations related with innovations and innovation activity according to the special frameworking law and the innovation activity regulation system. Garmonisation of existing related laws and regulations

11 Restructuring government S&T Large share of the government R&D sector is a real problem. Introduction of autonomous institutions can improve the situation. New organisational forms for public R&D institutions Low performance of the State science academies is defined by their current structure, legal status and management system. Strong academic community resistance is a real challenge. State science academies modernisation State universities (as well as private ones) are still separated from R&D. The education-R&D integration project includes a Law on integration and some other actions. Education – R&D integration

12 Improving government-private relationships Balancing incentives in VAT, IT and other federal and local taxes. Tax incentives Technopark policy Special economic zones Science cities Zones of excellence More efficient venture system. Special venture support initiatives of the Government Venture policy

13 THANK YOU FOR YOUR ATTENTION!