Innovation, Finance and Funding in the Russian NSI Thiruvananthapuram, India, August Natalia Gorodnikova

2 Contents Financing: dynamics & scale Innovation activity & output Existing financial instruments Financial system and NSI Further policies

3 Gross Expenditure on R&D GERD, % to GDP Planned Actual

4 Federal budget appropriations for civil R&D Current pricesConstant 1991 prices (million rubles, before 1998 – billion rubles)

5 Innovation activity & output

6 Structure of expenditure on technological innovation

7 Innovative SMEs’ activity & output

8 Innovation efficiency

9 Innovative G&S markets Share of innovative G&S in total sales, %

10 Existing financial instruments Direct funding: Budgetary funding Programme funding Grant funding Private / foreign foundations PPP projects Venture funding

11 Existing financial instruments (cont.) Indirect funding: Federal taxes -VAT -Income tax Regional / local taxes Advanced mechanisms: simplified taxation

12 Role of the financial system Share of internal funds in expenditure -on R&D: 30% -on technological innovation: 86% Reason – lack of alternative sources -Difficult access to credits -Underdeveloped grant system for innovation -Poor venture support

13 Further policies Technological modernisation: -New approach to public purchases -Advanced priority setting -Tax reforms -Industrial sector sanitization -Selective assistance

14 Further policies (cont.) Institutional adjustment: -Single concept for the tax reform -Targeted budgetary reform -Single concept for direct funding R&D sector development: -Reorganisation (sanitization) of R&D institutions structure -Assistance to commercialisation -Mobility boosting

15 Thank you!