However, forced import substitution did not spur innovation and may have stifling consequences over the long term (Afontsev, 2015, p. 34). The Board of Audit pointed out that import substitution did not satisfy domestic equipment demands (Zagashvili, 2016, p. 146). The lack of domestic import substitutes hindered the substitution process, and high import prices impeded innovation.
The new strategy has become a key force for economic diversification (Mizobata, 2017). On the instructions of the president, the draft of “Strategy for the Science and Technological Development of the RF till 2035” was drawn up by the Center for Strategic Research on May 5, 2016, in parallel with the national security strategy (Ministry of Economic Development, 2016, p. 22). The draft addressed the following issues: the national security threat; global changes in technology; accumulated structural imbalance in the Russian economy; changes in labour markets, social sphere and healthcare; environmental sustainability; food security; the intensification of international competition; and energy efficiency. The main strategic threats to the national economy are poor competitiveness, high dependence on external economic circumstances and technological laggardness. Russia’s relatively high technological backwardness and dependence on foreign scientific equipment supplies jeopardise national security.
The updated version of the “Development Strategy 2020”, update strategy till 2035, limns three alternative long-term strategies for Russia: (1) a science and technology leader, (2) a leader in specialised sectors and (3) a nation dependent on the imported technology (Table 1). The first scenario is the most attractive because state innovation and industrial policy are indispensable for national security and development (Medvedev, 2016, pp. 6–7).
The presidential decree “Strategy for the Science and Technological Development of the RF” announced in December 2016 elaborated the policy’s principles, priorities and guidelines. It stressed the balanced growth of private investments targeted to exceed government funding by 2035. Moreover, the president signed the decree on “National Goals and Strategic Objectives of the RF through to 2024” (May 7, 2018) making population growth and reducing poverty as important priorities. Enhancing the national security (“Russian National Security Strategy” approved in December 2015) was declared an important innovational priority. The concept of national security covers a wide range of state and public security activities, including improving life quality and the economic growth. Science, technology and education are all considered indispensable for realising these purposes. In March 2019, the government adopted the latest national programme on “Science and Technological Development in the RF” from 2019 to 2030. It includes five sub-programmes: development of national intellectual capital; guarantee of global competitiveness of the Russian higher education; fundamental science for long-term development of society/state and competitiveness assurance; a comprehensive science and technology programme and an extensive innovation infrastructure.
Table 1:Basic scenarios of science, technology and innovation development till 2035.
Source: The draft of “Strategy for the Science and Technological Development of the RF till 2035”, p. 62.
State-Led Innovation Policy and Policy Changes
Russia’s innovation policy is state led. The government finances innovation and promotes associated legal institutions, industrial policy and infrastructure. This makes Russian innovation strategy state-capitalist. The government influences the innovation activities of private firms, especially vertically integrated state corporations (Uvarov, 2013, p. 94). They are key players in education, R&D, entrepreneurship, venture capital and start-ups. State support is provided by the state development agencies (VEB for long-term financing institution), technology development support (Rosnano and RVC) and government crisis support (Ekspert, No. 3, 15–21 January 2018).
The National Innovation System (NIS) guides state-led innovation. Russia was a latecomer in developing an NIS. The NIS creates government research institutions and infrastructure. It mandates education, R&D, service, entrepreneurship and innovation infrastructure sectors as well as scientific cities and their organisation and government enterprises (Akinfeeva and Abramov, 2015, p. 136). Large-scale state corporations and vertically integrated state-owned enterprises play leading roles in innovation.4 The anti-competitiveness of the approach is rooted in traditional domestic networks (Fonotov, 2015). It is path dependent (Klochikhin, 2012)5 and a source of inefficiency requiring constant attention (Emel’yanov, 2013, p. 6).
The year 2014 was epochal. On April 15, 2014, the government adopted the state programme “Economic Development and Innovation Economy”, which included sub-programmes on improving the business environment, small-medium enterprises support and innovation. It strategically planned basic security and economic development tasks. Funding was channelled through special target programmes. Federal Law of June 28, 2014, No. 172-FZ “On Strategic Planning in the Russian Federation (RF)” became the legal framework for innovation and long-term strategy planning. The April 2014 state programme “Information Society 2011–2020”6 sought to improve the quality of life with information communication technologies, as did the presidential decree “Development Strategy of Information Society in 2017–2030”.
The National Technology Initiative (NTI) implemented this new strategy on December 4, 2014. It heralded the creation of new 100 billion dollar markets which will make Russia a global technology leader by 2035 (https://asi.ru/eng/nti, accessed on 1 May 2019) and establish the Agency for Strategic Initiative (ASI) in 2015. The Russian Venture Company served as an agent for the project office.
NTI differs significantly from prior programmes because it encourages private participation. It is a long-term comprehensive initiative for sustaining Russian enterprise leadership in high-technology markets based on private-public partnership (Idrisov et al., 2018, p. 12).7 Prominent companies involved in the project include AeroNet (aircrafts and space); MariNet (unmanned maritime transport); NeuroNet (development of Internet and biotechnology markets); EnergyNet (knowledge-intensive energy); AutoNet (unmanned transportation); HealthNet (medicine); SafeNet (personal security system); FinNet (financial systems and currencies); FoodNet (food and water); Digital design; New materials; Big Data and others.
“The Digital Economic Development Programme of Russia till 2035” (No.1632-r), developed in July 2017,8 makes the digital economy a core element of the innovation programme, following up on President Putin’s 2016 address (Bondarenko, 2018). The IT programme aims to make the Kremlin a key global player in the world by diversifying Russia’s economic structure with Big Data, e-commerce and smart-grid initiative. Putin envisions the digital economy eventually contributing 19–34% of the aggregate GDP growth.
The Ministry of Information and Communication was renamed the Ministry of Digital Development, Information and Communication in May 2018. It promotes ICT development. The national project predicts that domestic expenditures on the digital economy will increase from 1.7% in 2017 to 5.1% of the GDP in 2024. The core funding will come from the federal budget. The digital economy has been given pride of place at the core of innovation and growth strategy, which includes 5G mobile communications9 and network building between main cities (Profile, No. 19, May 21, 2018).
Russia has vigorously pursued its innovation policy after 2014, driven by fears of economic sanctions and petro shock crises. The Russian version of Germany’s “Industry 4.0” has become the core for the long-term economic strategy and the policy covers wide-ranging goals such as national security and improvements in the quality of life. It is also a device for vitalising innovation in the private sector.
