The Role of Innovation Policy in Modernization

February 3, 2012


There was a very emotional discussion about innovation, as the global economic crisis has clearly shown that Russia’s place in the world depends directly on whether it will be able to carry out intensive modernization to reduce its current technological backwardness. However, there is no united position on how to launch full–scale innovation in Russia or the path to answering this problem.

Every aspect of modernization is being discussed in society – from the state of science and education and the level of technological and engineering culture to the private sector’s ability to perceive innovation.

The government is a vehicle of change, but it is not the only party that can change the situation. Russia needs a continuous dialogue, exchange of opinions, and organization of idea centers to ensure that the process of unavoidable change is as transparent and comprehensible as possible, and a joint effort.

Sergey Petrov said the need to innovate as a competitive strategy is not strong in Russia. It is easier here to bribe a bureaucrat than to innovate. But the government should not get involved. He thinks it would kill innovation.

Anatoly Chubais, by contrast, said the government needs to get involved, as nothing is possible without state involvement in Russia. He said they spent R230 bn and that the portfolio is comprised of more than 100 projects. In 2011, their combined revenues will total R27 bn and by 2017, combined revenues of RUSNANO projects will total R300 bn. He added that there is really nothing to kill. The sector is nonexistent.

Noubar Afeyan said that innovation is just competition; it is a competitive strategy. Innovators are like immigrants – they are very open to opportunities. However, they immigrate not in space but in time. The greatest innovation comes in the form of startup companies.

Dmitry Zimin, who spoke from the audience, said that in his 40-year career (30 years in the military and 10 with VimpelCom as founder of the company) he saw a big change in 1970. Previously, all innovation had to be sponsored by the government. But in 1970, it started to come from the market, Japan being the impetus of this trend. Mr Zimin thinks the state is a criminal and complained that some bureaucrats are corrupt. They own interests in the companies in the sector they regulate, and this gives them a huge competitive advantage.

Mr Chubais responded that not all bureaucrats are criminals; he mentioned that Vladimir Bulgak supported business development in the telecom industry, to which Mr Zimin was referring.

Kirill Dmitriev noted that innovations do not need to be large. He did not invent anything, he just executed on the plan to create a mobile phone company in Moscow. Gillette has followed a similar model of small innovations that require little research. Mr Dmitriev is looking for “conservative innovation” and “smart money”. Russia is inefficient, and innovative companies can change this.

An audience member noted that equipment at Russian universities is very basic and that investment should be made in education. This sentiment was echoed by another audience member, who said the state did not have to invest in a nanotechnology corporation, but should invest in education.

Mr Chubais responded to this by explaining that education reform is underway that will reduce the number of students by half. As a result, some schools will not survive. He thinks we need to wait five or six years before launching a program to support education, as some schools do not deserve support.

There were several other emotional comments from the audience:

  • State support is important.
  • Stop killing innovators. Let them survive.
  • Elites must support innovators.
  • Innovators are optimists.
  • Immigration is important.

Ruben Vardanian, in his closing remarks, summed it all up by saying: “Do not be afraid to change the world around you”.