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Development Strategies and Policies of the Russian Government

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This paper is written to show the role of the Russian government in development of innovation growth in Russian Federation.. To show the role and the part of governmental intervention in development of innovation I would use some official statistic data. From it we could see that the role of the government in this sphere is big. To show and clarify the potential role of innovation policy in enhancing long-term productivity growth in Russia I would refer to the paper of Christian Gianella and William Tompson. The main problem – is to show, what is wrong in Russian Government’s strategy of developing innovation. Why the strategy does not work as it should? But for this I would introduce the past and absolutely new “The strategy of innovative development of the Russian Federation” and would try to distinguish the role of government in this question. (As “The strategy of innovative development of the Russian Federation till 2020 “is not published yet, I would refer to its project, which was approved by Russian Government in November 2011 and will be published soon) In this paper I would refer to some papers and a works that are connected to this question and a in the very end would introduce my point of view about the mistakes of the government and the reasons of not proper way of working the strategy, what is not rights in sphere of influence of government and in financing the innovation in my point of view.

1. Boosting innovation: the role of government
Thought Russia is one of the biggest country in the world, thought it has a great potential and huge resources (human, technical and natural) it does not use it in a proper way in the sphere of innovation. The part of exports of Russian high-tech products in the world is now holds only 0.35 % (Table 2).And it is not enough for country witch want to position itself as one of the developed and ponderable country in the world. The reason of such a small share begins from the historical events in Russia. The changing of system, different governments, unstable economic, political and social situation especially in the 90-s made there business – the country had too many problems, it had no time for innovations. But times chanced, and from 2000-s Russia started to pay more attention on R&D, the government tried to build new strategies and concepts to boosting the development of innovation .So, what did Russian government make?

As I have mentioned , the historical event made Russia too weak to be a real serious player on the world’s innovation market. As a result, government had to make not only the standard procedures of boosting the innovation, but also the extra tasks: “improving framework conditions for innovation, strengthen the mechanisms for inter-ministerial co-ordination on innovation issues, remove specific regulatory impediments to innovation, remove uncertainties regarding intellectual property rights (IPR), define a pro-innovation procurement policy”[4]. The government started to provide the active social and political activity to attract the attention for this question. The expanses for innovation development and growth from the federal budget became more and more higher with every year. The subsidies and grants for inventions, researches ad innovation development became more popular and bigger.

The barriers in international exchange of the technologies were reduced. The government started to realize the importance of innovation and began to direct more attention on this question But the role of Russia in innovation field in the world was anyway small. If to refer to the Table 1 we can see ,that the share of Russia is not big (especially taking to the attention the huge sides and human resources of the country). The big steps have be done to achieve the goal of Russia to be independent in the questions of innovation and be possible to dictate its own rule in this sphere on the global market.

2. Financing innovations ( government and business), ,“The strategy of innovative development of the Russian Federation” If to refer to the Figure 1 we can see, that the biggest part of financing the innovation in Russia– is the financing of the Government. Private business is also introduced in this branch, but its role is much lower than the role of government. The financing from abroad is also not big. If to compare this data to the data of more developed countries, that are introduce in a Figure 2 we can see , that the financing from the government in these counties is much lower, than in Russia, bur the role of private business is higher. It can show, that the conditions for business in innovations are not perfect in Russia. The Russia as a state in a head chair of government becomes to be a monopolist in the sphere of R&D. It is difficult to say surely is it good or bad ( we should consider to the attention the political traditions in the country, the mental and social features), but the fact is that private business or not very interested in this sphere, or has not has not comfortable conditions to make business in innovations.

The global economic crisis of 2008-2009 has complicated the implementation of the Russian innovation industry goals, the costs of the private sector on innovation were reduced and made the structural weakness of the Russian innovation system even more sharper [6]. Anyway, the sphere, which has not enough players, has bad competitiveness and not follows the profitable business-play rules has no incomes, and it is a problem. (If to refer to Figure 2 we can see, the competitiveness of Russian innovation products is too low, there is no Russian high-technology products on the world market, the share of medium-high technology is also small, the medium-low technology dominates in the export of innovation goods from Russia, and it shows, that the technical base and the channels of promotion of Russian innovation are weak) Today Russia has no chances to posit itself as an important and strong player on the world’s market of R&D. But what the Russian Government does to change this sad statistics?

It tries to spend more money on R&D, to support new researches and to change the image of the Russian innovations in the world. These days the new “Strategy of innovative development of the Russian Federation till 2020 “ was approved by Russian Government . According to this project, during the period from 2012 to 2013 it is planned to direct extra 140 billion rubles (about 6 billion euros) from the federal budget. The total budgetary expenditures, which in the next 10 years will affect innovation is estimated to be 15.7 trillion rubles (about 374 billion euros), including expenditure on education, science and other fields. Next year, only on sphere of space and telecommunications 161 rubles billion (4 billion euros) rubles will be sent. [6] The spending are huge! If to refer to the Table 1 we can see, that the part of governmental expenditures in Russia is mostly the same, as this part in more developed countries, but the total figure if spending is small. It is a serious problem.

The partiesepence of private sector in the R&D sphere is too small, but this innovation “burden” is too have only for the federal budget. (why business don’t take a big part in this question I will try to demonstrate in the part “What is wrong”) One new, and from my point of view important, novelty of Russian Government is to develop not only Russian innovations, but also the name of Russian innovation as a brand [7] The policy of positing Russia on a world market is so, that the image plays a big role. The task of government today is to involve the young generation of Russian scientist to introduce the Russian innovation in the world and promote the Russian innovation brand as a high quality product. For this goals the special innovation zone Skolkovo was created by the government of D. Medvedev 3. What is wrong

“The government is getting serious about innovation but heavy-handed intervention could kill inventiveness, rather than supporting it”.[1] Every try of Russian government seems good and important from the first look, but what happens, when all ideas and concepts stat work? From the general ,everyday problems, that the innovator face while providing R&D is the problems with law. The legal juridical system is not perfect in questions ,connected to the R&D. Let’s look through one small example to understand, why the laws give no chance for Russian innovation develop in Russia. If you are a new innovator and you want to present your invention in Russia the difficulty as follows: for the certification of technology in Russia it is necessary to show design, and to make it, innovators must make the first introduction, that is, an industrial design. And in order to sell in Russia, they have to present the company as an foreign one, an foreign website with foreign technology. This incorrespondance in the laws make confuses and provoke the young innovators to develop their researches in foreign countries.

The other problem , which not allowed the innovation sphere to develop in a proper way is the taxes system. Actually, according to the Russian law the taxes for the innovation activities must be much lower that for the other types off profitable activity. But it does not work in real life. The corruption system and incompetence of tax services sometimes create big problems to the innovators in their natural right of having tax exemptions. Why private business does not want to work in the sphere of R&D? it seems strange that the private sector is nor interested in R&D production. Naturally , it is o competiveness and high-profitable sphere, the investments in innovations is very popular and wanted in many countries. But not in Russia. The problem here is not only in difficulties with laws and taxes, but also with unprofitability, reliability , risks and very high costs. The unpredicted changes legal system , big influence of government, too small demand of Russian innovation products in Russia and all over the world make the sphere of R&D unattractive for the investors and private sector. One more problem – is a very poor technical base for developing R&D.”

In many respects, Russia has excellent conditions for fostering innovation. Its education system is good and it has trained many mathematicians, research scientists and technical personnel who now successfully work in start-ups and established technology companies in Western Europe, North America, Israel and elsewhere. While its research institutions, mainly passed down from the Soviet era, suffer from a lack of funding and a brain drain, they are still operational and capable of producing great ideas.” [1]. No doubt, the creation of such projects as “Skolkovo” and “Rusnano” ( Russian Nanotechnology Corporation) will help to solve this problem, but the perspective is so-long that not everybody believe in its success .

4. Conclusion
As we can see from the context of this paper, the Government of Russia plays a really big role in a development and growth of innovation of the country. Historically it happened, that this sphere had not a proper attention from the governmental side, and as a result now plays not a bid role on the world market of innovation. But to change this situation the government of Russia stars to make a big important steps. I am approximately sure, that even if the actions on Russian Government are not always right – they are very needed and important for the R&D sphere in Russia. I am also sure, that the development of Russian innovations can positively effect on the development of innovations all over the world. Russia has a big potential, but it is not competitive on the market.

Higher competitiveness of this part will be useful for further innovation development in other countries, in international cooperation. Russia wants to posit itself as a strong player on innovation market, and even as this goal is in a long-term perspective, it is a very noble goal, because the development of any sector of economic, production, politics or whatever can be without innovation development. I think, that such project of Russian Government as “Skolkovo-Gorod” is a huge step of achieving the goal. I’m sure, the bigger spending of federal budget on the sphere of innovation and more serious and deep attitude to the Russian R&D from the side of government will make their business in a nearest future.


[ 1 ]. Skolkovo i-Gorod, a special innovation zone outside Moscow meant to become Russia’as Silicon Valley. More recently, the Skolkovo concept has been expanded, and its economic and tax benefits will be to available not only to companies physically located in the so-called innovation city but also in numerous research facilities around the country. [1] [ 2 ]. The example was taken from the protocol of official meeting of D.Medvedev and representors of “Skolkovo” project on 29 October 2011 in Moscow http://strf.ru/material.aspx?CatalogId=223&d_no=43130

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