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Medvedev calls for R&D boost
Published: 25 December, 2009, 18:28
Edited: 27 December, 2009, 17:13
TAGS: Investment, Regional development, Economy, Finance
Russian President Dmitry Medvedev chaired his final 2009 meeting on the modernization of Russia's economy, calling for companies to boost their investment in research and attract foreign expertise.
Only two per cent of total investment by state corporations goes into research and development. That’s much less than in other market economies according to Russian President, Dmitry Medvedev, who says Russia would never be modernized without more spending on R&D.
“We welcome the creation of joint ventures with foreign partners to make innovative products. Moreover we need to attract foreign specialists – that’s crucial. We are smart people but shouldn’t be shy when attracting specialists from abroad.”
Both state and private companies are guilty of neglecting research. As proof, the president said global players in oil and gas invest more than $5 from each tonne of oil – while in Russia it's less than 40 cents.
That includes the country's biggest fuel producer Gazprom – although it claims to do more than other Russian energy companies.
“In 2008 Gazprom and its direct subsidiaries invested about 390 million dollars in research and development. In the first nine months of this year we've already invested over 406 million and it may grow further. We are in fifth place in the world in terms of the research to revenue ratio.”
Dmitry Medvedev promised tax incentives for those who boost R&D investment. But Gazprom’s CEO says there are limits to the need for R&D in oil and gas – and taxation would make little difference.
Gas provides 52 per cent of the country’s energy. Investment could help develop new energy products – but that would require the government to shift the energy balance.
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Using foreign specialists, tax relief for companies which are conducting R&D... -- finally some practical steps in the right direction. But, if Medvedev really wants to boost the country modernization, then he should unleash intellectual potential of Russian people, by decentralizing the economy and promoting small and medium size high-tech businesses. And the Russian borders should be open for world leading companies being able to compete with Russians. At the same time, the government itself should lead these efforts by investing into big programs (like, Sky Elevator, wireless power transmission, rapid transportation, or similar...) and creating big scentific and engineering centers across the country tied closely with the Universities and Colleges. Also, one more very important aspect -- supporting immigration. My personal experience (in the USSR, Russia, and the US) shows that the most effictive, dynamic, and innovative environment -- with multinationl teams. The country will be much better if foreigners would come in Russia not only to earn money, but with the desire to live there.
Medvedev needs to invest in innovators. Innovator can be everyone but very often will not have the resources to develop their ideas. Note that large companies grow by acquisition and small ones through organic growth. This is where the innovator is at small companies or individuals who have ideas but due to lack of funds can do nothing with them. Here is example how other countries are addressing this matter; www.spii.co.za Innovators are given up to 80% of the development costs in form of grants. And still this is very good business to the state.