Russia's Global Competitiveness Improvement Discussed on Gaydar Forum


Russia's Global Competitiveness Improvement Discussed on Gaydar Forum

RVC took part in the VI Gaydar Forum held in Moscow on January 14-16, 2015. The participation agenda was formed bearing in mind the challenges that have faced the Russian economy recently. These include restrained dynamics of productivity growth and slowing economic growth, as well as increasing technological gap on the back of the country's weak integration into international added value chains and lagging behind the global technological trends. Participants in RVC's panel discussion "Institutional Modernization of Russia - What's the Role of Innovation?" have discussed the ways to improve the global competitiveness of Russia and the necessary steps to update the institutional environment and create favourable conditions for the development of innovations.

The event was moderated by Igor Agamirzyan, CEO of RVC. The following persons have also taken part in the discussion: Mikhail Abyzov, Minister of the Russian Federation for Relations with the Open Government, Gleb Nikitin, First Deputy Minister of Industry and Trade of the Russian Federation, Oleg Fomichev, State Secretary and Deputy Minister of the Russian Federation for Economic Development, Alexandr Auzan, Dean of the Faculty of Economics at Lomonosov Moscow State University, Vadim Makhov, President of the group of companies "United Heavy Machinery Plants", Andrey Sharonov, Vice-Chancellor of Skolkovo Moscow School of Management, Alexandr Idrisov, President of Strategy Partners Group, Vladimir Knyaginin, Director of the Center for Strategic Research “North-West” Foundation, Maxim Pavlushin, Chairman of the Board of Directors at Link Capital Investment Bank, and Irvin Studin, Professor at the Institute of Social Sciences at the Russian Presidential Academy of National Economy and Public Administration (RANEPA).

The lack of favourable institutional environment is one of the main obstacles to development of the modern technology market. The inconsistency of some crucial administrative processes at the state level is affecting development of innovation stronger than the lack of money or infrastructure. For example, this inconsistency results in inefficient spending of public funds in support of the innovation infrastructure and barriers to cooperation between companies and universities, large corporations and small technology startups. Currently, developed economies' view of the innovative system and innovative development priorities are evolving. The main task is not to build up elements of the innovation infrastructure, but build the most favourable institutional environment for business and innovation activity - create regulatory, legal, and other conditions needed.

As part of the discussion, the experts have talked of what state-wide tasks could be solved by the institutional approach to innovation development and what steps should be taken to facilitate transition to this model. The following steps has been mentioned as key measures to build favourable institutional environment and develop the innovation ecosystem: activation of the demand for innovation from the government and large corporations, tax incentives, development and implementation of measures to consolidate the cultural, educational, and innovation policy, and introduction of effective contracts for top managers of state-owned companies.

Panellists drew attention to another important feature of innovative economy development - dependence on culture and mentality. According to experts, the low rate of modernization in Russia is inter alia due to a high level of uncertainty avoidance (fear of future risks), high disassociation from the government, and aggressive individualism with low negotiability. The experts believe, that the combination of these three circumstances "lock" the development. To eliminate these we should combine our cultural and educational policy with a policy of innovation.

The issue of dependence on culture and mentality is "a big issue," said Igor Agamirzyan. "By tradition, we take the innovation purely technologically. There is a well-known contradiction between what we call Technology push and Market pull. We consider innovation not as a response to market demand from the consumer, but as proposed technology. Thus, we're talking all the time about implementation, technology transfer, and commercialization of research. To put it mildly, this looks quite strange. It should be vice versa. Research should be brought from the upper level - mentality should come first, then culture, informal institutions, demand, and only then an order for technology should be generated."

Another challenge critical to building an effective innovation ecosystem is involvement of the scientific community in innovation and integration of universities and research institutes into a single innovation ecosystem. Two discussions with RVC representatives held on the third day of the forum were focused on the knowledge economy.

In the discussion "Barriers to Commercialization of Research," Igor Agamirzyan named one of the main problems of the domestic economy - rejection of knowledge as the primary productive force. This problem is exacerbated in modern conditions with a significant increase in the value of intangible assets. RVC' CEO stressed that experts that put their "individual stuffing" in products made - engineers, designers, and marketers - create the principal added value now. "We should understand that intangible assets are more expensive than tangible ones. Any resources that are not unique in their offer cost nothing, and in this sense the drop in oil prices is only the beginning of a long-term trend," said Igor Agamirzyan. He believes that to change the situation and improve respect for intellectual labour and business in Russia, it is necessary to minimize the regulation of the sector by the government and make a mass promotion campaign aimed at creation of a positive image of the modern scientist and entrepreneur.

In turn, Evgeny Kuznetsov, Deputy CEO and Director of RVC Project Office, explained to the panellists of the discussion on "Creating Knowledge Economy in Russia - Universities, Companies, and Institutions," the changes that are necessary for the transition to the stage of the economy, in which the main factors would be development of knowledge and human capital. In particular, it is important to transform the environment and focus on creating innovation ecosystem, rather than infrastructure. Corporations must move to a model of open innovation, and universities should become a driver of changes in the institutional environment. According to Evgeny Kuznetsov, in many countries, institutions of higher education in collaboration with major corporations and investors have already given a powerful impetus to effective innovation development of entire regions.

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