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The draft National Report on innovations in Russia was presented at "Open Innovation" Forum

29.10.2015
РВК

The draft National Report on innovations in Russia was presented at "Open Innovation" Forum

On October 29, the draft National Report "On innovations in Russia" was presented at "Open Innovation" Forum. The report provides a qualitative assessment of the current state of the Russian innovation ecosystem and the effectiveness of the last years reforms, as well as defines key areas for federal innovation policy adjustments.

The National Report was developed by order of the Council for economic modernization and innovation development of Russia by the Russian Ministry of Economic Development with the participation of the Expert Council under the Government of the Russian Federation, RVC and The Boston Consulting Group international consulting firm.

According to the report, the innovations are the major effective tool ensuring a long-term economic growth against the working-age population reduction, outflow of capital and other external and internal challenges that Russia has faced in recent years. As part of the Strategy for Innovative Development adopted by the Government of the Russian Federation in 2011, the basic elements of innovation ecosystem were created in the country: one of the Europe's largest venture capital markets was created, institutes for development started their operation, territorial innovation clusters emerged. In recent years, Russia has substantially strengthened its position in key ratings assessing the level of innovation.

However, despite the progress made, there is still a small share of innovative products in the total volume of goods produced in Russia - stable 8-9% over the past three years against 15% in the leading countries, a low productivity is noticed – twice lower in comparison with the most competitive economies in the world.

The Report's authors recorded five main barriers to further enhancement of the effectiveness of Russian innovation ecosystem.

First, the development is carried out within a broken innovative system which results in the "flow" of specialists and innovations from Russia. Business projects developed by the local venture capital market, have no opportunities in Russia and leave the country. It turns out that the state's investment in human capital work for competitiveness of foreign economies. With an acceptable number of start-ups – at the level of Western European countries – the specific quantity of Russian innovative companies is three or more times lower than in the leading countries. And these companies show a low susceptibility to technologies (investments in intangible assets in Russia are 3-10 times lower than in the leading countries), the current demand is covered mostly by imported technologies. Thus, Russia has weak positions in the stages of innovation "funnel" (added value chains), where the success is a must.

Second, the innovation system weakness is caused by the undeveloped institutional environment: low level of competition, unpopularity of scientist and entrepreneur professions, insufficient protection of innovative companies property rights.

Third, there is no common current vision of technological priorities, no coordinated technology policy. The priorities are in most cases determined by separate industrial strategic documents sent from the "bottom to the top" without any mutual coordination or a clear agreement with market needs.

Fourth, both innovation and technology policies are created ad hoc, each policy development and implementation is managed at random both at the documents level and at the level of management system (authorities, institutes for development).

The fifth barrier is the lack of a unified system of methodologies for monitoring and assessment of innovation ecosystem volume, quality and cost-effectiveness of innovations.

In order to solve these problems, it is proposed, first of all, to optimize the innovation management system: to improve coordination between the innovation process participants, to appoint a single administrator for the current innovation policies at the level of federal executive authority, to adjust the existing mandates of the institutes for development - in order to eliminate duplicate functions and to support uncovered objects of the innovation ecosystem, as well as to engage the business community into the innovation process.

The next step is to develop common, agreed priorities of innovation policy, as well as to establish uniform standards for monitoring and its implementation assessment. It will require a more detailed and updated Innovation Development Strategy, as well as its integration with the Social and Economic Development Strategy being developed and other documents of general and sectorial planning. Within the Innovation Development Strategy, it is critical to create a unified set of industry and market priorities, taking into account evaluation of the promising industries and markets of the future. One of the tools to create a technology policy may consist in implementation of the National Technology Initiative, which will introduce markets demands and needs to the state technology agenda.

In order to eliminate the reasons of the innovation ecosystem break, the Report's authors recommend to develop and to launch tools aimed at improvement of the R&D costs return, to encourage a greater ideas and inventions competitiveness by attracting and re-exporting talents, to accelerate the transition cycle from basic research to the applied one, to reallocate state support in favor of the priority technologies. Moreover, it is necessary to create mechanisms to support growth of the existing innovation companies, including by stimulating demand for their products from the major corporations and export support.

The authors consider that for the further development of the innovation ecosystem a set of measures is required to attract private capital, remove administrative barriers, ensure systematic protection of the innovation companies owners and investors rights. It is also necessary to conduct a large-scale federal campaign, aimed at promoting and stimulating research and entrepreneurship.

The next step will include discussion of the draft National Report on Innovations in Russia by expert community, and it will be introduced to the Russian Government thereafter.



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