16 September 2010

I love huge innovation plans!

Medvedev's plan: the president was presented with a roadmap for innovationUNOVA
On September 10, a new plan for Russia's innovative development was presented to President Dmitry Medvedev at a political forum in Yaroslavl.

"Yaroslavl Plan 10-15-20", developed by the New York Academy of Sciences and State Duma Deputy Ilya Ponomarev. The document describes 15 specific measures that will help build an innovative economy, and 20 key risks on the way to it. UNOVA got acquainted with the documents and found out what awaits Russian innovations.

All the measures described in the Yaroslavl Plan are designed for a period up to 2020 – this will fit into the 2020 strategy already adopted by the authorities. "This is a very short time, from the point of view of building an innovative economy," the report notes. – A recent Rusnano study showed that in the USA and Taiwan, the path from the beginning of transformation to entering the trajectory of sustainable development was 25 years, for Israel it was 20 years, and 10 years for Singapore and Finland. That is, if Russia manages to achieve similar results by 2020, it can be considered a rapid success."

The Yaroslavl Plan is an overview of the experience of five countries: Israel, Finland, the USA, India and Taiwan. He also analyzes the state of affairs in the field of innovation in Russia and gives 15 specific recommendations for the development of innovation, as well as gives 20 warnings made on the basis of mistakes and failures of other countries.

15 steps to build an innovation systemUnlike Israel, Finland and Taiwan, Russia is starting to develop an innovation policy in the presence of a strong education and developed scientific institutions established in Soviet times.

The presence of a potentially large domestic market brings Russia closer to the United States.

In all countries, without exception, the state played a key role in the development of innovation, which consisted in conducting a correct, flexible and adequately funded policy. Not a single innovation ecosystem has developed without the participation of the state, not a single one has "self-originated". This circumstance once again underlines the importance of conducting the right policy by the Russian leadership.

1. Define strategic goals based on the needs and strengths of the country.

The country's leadership should be united by a set of simple and understandable strategic tasks – challenges for society as a whole. Russia could make the most of its competitive advantages, not in order to catch up with other developed countries, but to become an undisputed leader in some areas.

I-II. Energy (it is proposed to combine alternative and nuclear energy, adding other aspects of energy problems):

• Russia needs to become a world leader, a supplier of breakthrough technologies in the oil and gas and nuclear energy. Russia is the world's largest producer of energy resources, energy
• Russia should become a world leader in all areas of Earth science (geology, geophysics, etc.) and climate research related to the topic of energy.
• Russia has a huge potential of the domestic market for energy-saving and environmentally friendly technologies.

III. Communications: Transport, telecommunications, space (it is proposed to expand the existing priority of the space and telecommunications industry)

• Russia should become a global logistics, transport and cultural bridge. It is located at the crossroads of Europe, the Middle East, Asia and the Pacific region.

IV. Biotechnologies, medicine and pharmaceuticals:

• Support the development of the production of advanced biotechnology and pharmaceutical products. By analogy with the policy pursued in India, to develop the Russian pharmaceutical industry, focusing it at first on the production of generics and providing preferences for the procurement of these drugs under state programs.

V. Strategic information and supercomputer technologies

• To change the tax legislation by reducing the social payments of enterprises working in the field of high technology, the main costs of which are PHOT, and which are currently forced to make disproportionately high social contributions.

2. Mobilization of support for change from society and elites.After the national strategy is defined and priorities are selected, it is necessary to convey the choice made to the population and enlist the support of key players.

The latter include public authorities, investors, businesses and leading scientists from around the world. Russia should: Form an international Scientific and Technical innovation council, bringing together politicians, leading businessmen, entrepreneurs, investors and scientists from different countries, who will constantly monitor the implementation of the presidential strategy and discuss the results achieved.

3. To prove a long-term political commitment to the implementation of the developed strategy.

Russia must:

• Establish a position directly accountable to the President of the Russian Federation Chief Technologist of the Russian Federation (Russia Chief Technology Officer), similar to the experience of the United States, who will be responsible for coordinating the acquisition and implementation of new technologies by government agencies and organizations.

• Establish a committee of auditors accountable to the Chief Technologist of the Russian Federation, consisting of internationally recognized experts, which will annually monitor the process of innovation implementation by state companies and departments, and link the payment of bonuses to the heads of these companies with the volume of innovations introduced.

• To form a research group of international experts accountable to the Chief Technologist of the Russian Federation, which will monitor the latest technological trends and develop mandatory technical policies for government departments and companies.

• Establish the position of the Chief Designer of Information Systems of the Russian Federation accountable to the President of the Russian Federation (Russia Chief Information Officer), who will be responsible for the implementation of the program for the creation of e-government in authorities at all levels. The basis of its work should be based on the developing IT market in Russia, and the list of public services provided by e-government should be determined on the basis of market demand by market players, similar to the US experience.

• To initiate a permanent forum for dialogue with society on the Internet, where to discuss all key issues taken by public authorities in the field of high technologies, seeking broad public support.

4. Coordinate national, regional and institutional policies for the implementation of the developed strategy.

In its regional policy , Russia should:

• Create a map of regional technological development indicating the existing competitive advantages and weaknesses of each region, as well as the selected priority areas for stimulating development.

• Develop a regional policy based on the strengths of the region in the fields of science, technology and production, concentrating resources where there is a good foundation, and avoiding attempts to create their own innovation systems in each individual region. Funds to support innovation should be directed to where the chances of success are greatest.

5. Understand the mechanisms of external and internal markets.

• Establish the Russian national export support agency in the form of a development institute operating on commercial principles and subordinate the current system of trade representatives to it.

6. Stimulate domestic demand for new technologies through the introduction of strict standards and technical regulations, regulatory measures and public procurement.

Following this lesson, Russia should:

• Wherever possible, in relation to the chosen strategy (for example, in the energy sector), to establish priority on the Russian territory of international technical standards and regulations (for example, the European Union), as well as quality and conformity certificates (for example, ISO).

• Amend the federal law on public procurement by creating a network of public procurement agencies — one for the federal level, and one for each region. Their task is to act as a single representative of authorities and state institutions, purchasing goods and services, taking into account not only price but also quality characteristics, consolidating public funds for the implementation of long–term projects in which local companies could participate.

• Create a leasing company under the management of Vnesheconombank to finance public procurement of products of Russian manufacturers.

7. Find a ratio between large and small companies and between multinational and domestic companies that promotes innovation. 8. To revive a meaningful state policy of conducting fundamental and applied research, ensuring the availability of both human resources and the latest technologies, which is vital to meet further market requirements.

To attract representatives of the world scientific elite to Russia, including those from the Russian Diaspora.The main thing for this is the reform of science funding, either through the existing RFBR, or through a new state institution.

To increase its human capital, Russia needs:

• Reform the grant system

• To reform the financing and functioning of universities.

• To establish targeted mortgage programs with zero entry fee, long maturity and low interest rates for scientists, researchers and employees of high-tech companies, allowing them to purchase decent housing, and through accreditation in the Skolkovo Project to extend this program to all scientists and researchers in Russia.

9. To create an international research university to solve the problems chosen as priorities in the presidential strategy, gathering the best and brightest representatives of world science and technology, working in close cooperation with industry and stimulating a culture of entrepreneurship.10. Establish clear rules for the ownership and disposal of intellectual property for research with state funding, contributing to the commercialization of research results.

11. Improve the legislation on the protection of intellectual property and create public examples of its implementation in the field of high technology.

• Create an international group that will analyze the current legislation regulating intellectual property and develop recommendations for its development.

• To declare a general patent amnesty in order to eliminate any uncertainty in terms of ownership of previously created intellectual property and to ensure the possibility of its commercialization.

• Create a national register of intellectual property indicating the name of the current copyright holders and the name of the developer institution.

12. Even a business born in a garage needs a normal business infrastructure for development.

However, the construction of office complexes, even with reduced taxes or simplified access to finance, is not enough for this task. The elements of the environment, commercialization and networking within the technopark or economic zone are crucial, and not constant state subsidies.

• To continue the development of existing technoparks in Novosibirsk and Kazan, making them finally financially independent from the state and supplementing them with missing services – housing, collective use centers, social infrastructure.

• Develop technology parks in other most promising cities, primarily in Tyumen, Nizhny Novgorod and Obninsk

• Create collective production facilities in technoparks for prototyping and organization of experimental production.

• To use the Skolkovo Innograd as a national innovation hub cooperating, rather than competing, with existing technoparks, universities and institutes of the Russian Academy of Sciences.

13. Provide financing at an early stage of the existence of enterprises, both directly and in the form of assistance in completing the stage of development of new technology and crossing the so-called "valley of death".14. Support and expand the private and venture financing sector.

To fulfill this task, Russia must:

• To make changes to the current legislation necessary for the work of venture investors and angel investors in the mode to which they are accustomed in other jurisdictions, including amendments to the law on joint stock companies and bankruptcy. Of particular importance for venture capital will be the permission to create limited liability partnerships in Russia (on the model of American limited liability partnerships, LLP) instead of the current form of ZPIF.

• Remove the ban on investing in foreign high-tech companies from Rusnano and the Russian Venture Company and oblige them to place a certain significant percentage of available funds in the Russian NASDAQ.

• Allow a Russian Venture Company to enter foreign venture funds as a limited partner, provided they come to Russia.

15. To stimulate a culture of entrepreneurship.The formation of the image of the country as a whole is not highlighted in a separate recommendation.

However, it plays an important role in attracting investors, entrepreneurs and other talented people and enterprises needed by the country. Public relations should not be underestimated in the context of creating an innovative economy.

To conclude the analysis of positive international experience, the following are the most important lessons learned from the failures that have befallen different countries on their way to building an innovative economy. We list them as warnings to the Russian leadership.

20 main warnings for RussiaFrom the consideration of the Israeli experience, we have learned the following:

1. In the early stages, subjectivity and the presence of strong leadership figures in development institutions are more useful than following rigid formal procedures. However, over time, managers must create mechanisms that work sustainably without them;

2. The lack of domestic demand needs to be compensated by external demand. Studying and meeting the technology needs of multinational corporations with the help of startups directed by technology brokers can play an important role in the overall scheme of the development of an innovative economy;

3. The potential of the diaspora should be used without inflated salaries, simply by offering opportunities that are not inferior to foreign ones to live in comfortable conditions and conduct interesting projects, communicating with colleagues who are equal to themselves;

4. Domestic demand for innovative products is better supported by public procurement, rather than using administrative resources to force the private sector to do so.

5. Business incubators, technology parks, SEZs and other similar elements of physical infrastructure should be perceived as the same startups, with a non-zero probability of their unsuccessful development.

From the consideration of the Finnish experience, we have learned the following:

6. Technoparks and incubators, including those located inside universities, can and should be self-supporting enterprises at the same time and act as an important tool for supporting innovation.

7. One should not be afraid to include foreign companies in support programs, as well as local companies registered in international jurisdictions, if they create technologically intensive production and jobs in the country.

8. Betting too much on one company that is the face of the country (in this case Nokia) makes the entire innovative economy of the country vulnerable to market changes.

From the consideration of the US experience, we have learned the following:

9. Government funding for research and development is a critical means of stimulating innovation, it was it that created the renowned innovation ecosystems of Silicon Valley and Boston.

10. A strong university system is crucial to ensure the flow of technology and human capital for innovation. Universities should not only conduct basic research, they should also pay special attention to the application of research results in industry.

11. The innovative ecosystems of the USA were formed in those few places where all the necessary components were already available, and all attempts to reproduce these ecosystems where individual elements were absent had extremely limited success;

12. Despite the large capacity of the domestic market, long-term economic success is impossible without studying and working in foreign markets;

13. Only a combination of younger and more established companies generates a healthy and flexible innovation ecosystem that can evolve to adapt to market changes.

14. For the development of the venture capital system, direct public financing of funds at early stages through SBIC-type programs has proved to be critically important.

From the consideration of the Indian experience, we have learned the following:

15. The innovation sector, especially in terms of offshore programming, can be created as a special environment, connected primarily with international markets and independent of the structural problems of the local economy. However, without communication with local customers, its growth will not cause economic growth and will not affect the competitiveness of the country as a whole;

16. The policy of protectionism hinders the growth of innovation in comparison with an open and fully integrated system in the global economy. However, government policy requiring foreign companies to create local production facilities and research units as a fee for entering the country has a positive impact on the domestic economy;

17. Participation in the global economy requires reliable and comprehensive legislation on the protection of intellectual property rights.

From reviewing the Taiwanese experience, we have learned the following:

18. The top-down approach to creating an innovative economy works successfully, but only if both public services and local businesses understand the sales markets and growth prospects of their sector. The same strategy can have devastating consequences if an approach that has proven successful for one industry is mechanically transferred by officials to another, without understanding the principles of its work.

19. The state can play an important role in the process of creating and financing new technologies for use by local businesses experiencing a lack of funds or in conditions of increased market risk, but only if this work is initiated from below and the results of the development are immediately returned back to the private sector upon its completion;

20. Multinational companies often act as sponsors of the creation of a national innovation economy, but they are unreliable partners in economic crises.

(Except for the full text of the document presented below,
for those who are unable to read so many letters, 
here is a very concise summary of the "Medvedev Plan" – VM.)

Portal "Eternal youth" http://vechnayamolodost.ru16.09.2010

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