Transcript of Sergei Ivanov's speech:
Ladies and gentlemen, distinguished members of the State Duma,
The subject of today's Government Hour is undoubtedly one of the most pressing and vital for Russia. And considering the economic situation - I think you understand what I mean here - I would even say that this issue will decide the fate of the country. These are not mere words. This is not mere rhetoric.
The government has made a principled choice to focus on large-scale technological modernisation, transition the economy to a model for development based on innovation and create a competitive national innovation system. This choice was followed by several specific measures and resolutions.
In 2009 President Dmitry Medvedev outlined five priorities for the country's economic modernisation. I imagine that you know all of them, and that I do not need to repeat them.
A presidential commission for the modernisation and technological development of the Russian economy has been created. The Government Commission for Advanced Technology and Innovation has been in place for more than a year, and, incidentally, last week Prime Minister Vladimir Putin became its chairman. And even before that, the government established the Department of Science, High Technology and Education, whose head, Alexander Khlunov, is here today. Finally, the Council of General and Chief Designers and Leading Scientists and Professionals in High-Tech Sectors of the Economy has also been working intensively.
The goals and objectives of our innovation policy have been formulated in a series of strategic documents that apply to all levels of government. First and foremost, these are the Strategy for Long-Term Social and Economic Development through 2020 and the Guidelines for the Initiatives of the Government of the Russian Federation through 2012. Moreover, this also includes the so-called specialised strategic documents, the most important of with are the Strategy for the Development of Science and Innovation in the Russian Federation through 2015 and the Comprehensive Programme for Scientific and Technological Development and Technological Modernisation of the Russian Economy through 2015.
Furthermore, our approach takes into account the long-term forecasts of scientific and technological progress and the list of critical technologies and technologies that are continually evolving. In late 2009 the Government Commission for Advanced Technology and Innovation acted on a proposal by the Ministry of Education and Science (Andrei Fursenko reported specially on this issue) and drafted a new presidential decree outlining the scientific and technological priorities and official lists of critical technologies for the Russian Federation. The decree is expected to come into force this year.
Clarifying our priorities enables us to concentrate government and business resources-and I would like to stress the business here-on improving existing technology and creating the new technology needed to accelerate economic growth and strengthen the country's security and competitiveness.
On the whole, these measures are intended to improve the efficiency of government-supported scientific institutions and increase the returns on budget allocations for research and development.
Speaking of science, at present there are about 4,000 scientific research institutions in this country, including 2,600 government-funded scientific institutions and, of course, six government-funded scientific academies. These organisations employ more than 800,000 people, nearly half of whom are researchers. These are some impressive figures.
Let me add that in recent years spending on science has been growing in real terms together with GDP. Here are some figures: fundamental science received 800 billion roubles in government support, while applied science, including institutional research and development and research and development funded through Federal Targeted Programmes, received a total of 128 billion roubles. This is a lot of money.
Moreover, our fiscal spending-and let me emphasise that this comes out of our budget-on research and development is considerable, being comparable to that of other countries such as the Untied States, Germany, France, Korea, and even higher than such spending in Britain and our partners in the BRIC group. One often hears that there is not enough government funding for science and research. But this is no longer the case, and fiscal spending on science has now reached a fairly high level. Nevertheless, at times we fall behind in science and research funding from off-budget sources such as private corporations etc., which is a fraction of what many other countries spend.
Here we are lagging far behind. I admit that. Still, we should make a distinction between fiscal spending and spending on science, education and innovation, which in most developed countries comes from entities besides the government, above all major industrial companies. So, we have yet another problem, although we are very well aware of it.
Furthermore, speaking of fiscal spending, quantity has yet to translate itself into quality.
The following figures speak volumes about fundamental science in this country. In 2007 Russia accounted for 2.42% of all publications in recognised international scientific journals, which puts this country in 14th place, on a par with Brazil and the Netherlands. The figure for citations is 1.32%, which puts us in 19th place, on the same level as Israel.
The main problem with our support for fundamental research is the low level of competitive funding, and that publicly funded organisations receive support based on cost estimates. Moreover, until recently, we supported not only strong and competitive teams, but also weak ones. And sometimes, I admit, by providing funding on the basis of cost estimates, we financed phantom organisations instead of actual scientific research. An institution could have a plaque that says that it carries out such-and-such research, and it therefore receives funding based on its cost estimate. But nobody bothers to find out what this institute has actually accomplished. We will no longer support bogus entities.
The net result is a lower quality of research and poor performance by scientific institutions overall. In 2008, Russia began a new initiative for the comprehensive modernisation of research and development and introduced a new system for organising scientific research. I can cite as an example the national research centres that we have begun to set up, particularly the Kurchatov Institute, which served as the guinea pig for the new funding scheme.
A serious effort is under way to remove the administrative barriers that prevent the establishment of a full-fledged intellectual property market and the emergence of a knowledge-based economy in this country. You are well aware of the results: several federal laws in the field of corporate law were passed to stimulate innovation in 2008 and the first half of 2009.
In addition, according to a law that you all know, No. 217-FZ of August 2, 2009, public-sector research and educational institutions have finally been allowed to set up small innovative enterprises and commercialise the results of their research. That is a welcome if not long-awaited measure. We first raised this issue in late 2008 at the Government Commission for Advanced Technology and Innovation, which, incidentally, includes representatives from the State Duma and the Federation Council. We worked together to pass this law in spite of the cool reception to it on the part of the Finance Ministry. I am grateful to you for this.
This is not to say that the law has immediately proven effective. There are problems with the enforcement of the law; in this country things go smoothly only on paper, unfortunately. At the same time, we have already discovered some shortcomings and are working to eliminate them. For example, the federal budget law for 2010 and for the planning period of 2011 and 2012 has lifted the restrictions that prohibited federal public-sector institutions from using money from income-generating activities to set up businesses.
In summary, we can safely say that these measures made it possible to bring government-funded, research and educational institutions into our innovative projects, which has been a powerful stimulus for public-sector science.
At the same time, we are continuing our aggressive fiscal support for higher education. Ninety billion roubles will be allocated to support university science and innovation from 2010 to 2012.
Naturally, financial injections must be targeted if they are to be of any use. Let me say openly that we will treat different institutes of higher education differently. Not all higher education is created equal. For the most part, the government will support strong institutions that win competitive grants entitling them to additional federal support. This requires a high level of performance and a clear idea of the benefits of government support.
To assess the performance of scientific entities and their contribution to increasing innovation in the economy, in April 2009 the government passed a resolution establishing a procedure for assessing the performance of scientific entities engaged in research, design and civil engineering. This, by the way, is the first time this has been done, and the resolution has truly proved necessary and useful, already yielding some results.
The infrastructure for innovation is a separate topic. Over the next three years, eight billion roubles will be invested in various institutes of higher education to establish and develop business incubators, industrial parks, innovative technological and engineering centres, certification and technology transfer centres and shared-use, innovation consulting centres. The eight billion roubles will be disbursed as follows: three billion in 2010, two billion in 2011 and three billion in 2012.
The programme for creating industrial parks is continuing on a nationwide scale. A network of national research universities and national research centres is being created.
I have already mentioned the Kurchatov Institute, which will receive three billion roubles in support in 2010. A decision has been made to establish another five or six such centres.
Of course, there cannot be too many such centres, but there is a consensus within the Government that five or six is the optimal number.
Moreover, as set forth by presidential decree, we are establishing a national nuclear research university and a national technology research university based on two prestigious Moscow institutes: the Moscow State Engineering Physics Institute and the Moscow Institute of Steel and Alloys. Also, as a result of a competitive selection process among university research programmes, 12 institutes of higher education have been awarded national research university status. Funding for the programme to develop national research universities will be about 50 billion roubles.
Distinguished colleagues, as I have already said, the Presidential Commission has determined the government's priorities for technology and innovation. All in all, more than 30 projects have been prepared in five priority areas. The government will spend 10 billion roubles on these projects in 2010.
In addition, the Fund for Assistance to Small Innovative Enterprises in Science and Technology, better known as the Bortnik Fund, will also launch new programmes. According to the Budget for 2010 and the Planning Period of 2011 through 2012, 2.4 billion will be spent through this fund in 2010 alone.
So-called development institutions are another important way to encourage innovation in enterprises. Perhaps the best examples are Russian Venture Company, the state-owned Russian Nanotechnology Corporation, and Vnesheconombank, as well as special economic zones, especially technological innovation zones, where the number of residents is steadily growing. We must ensure that these innovation zones continue to attract a diverse group of excellent residents. I am speaking now as a former resident.
In addition, our goal of increasing the relevance of scientific research is also served by inviting the business community to help determine areas of further research and contribute funding for research and development, including through federal targeted programmes that deal with research and development.
Which brings me to what is probably one of the most important factors for our future success. We must establish an effective system for encouraging innovation, a system that produces real benefits for our financial expenditures and investments in know-how. Unfortunately, thus far we have little to show for our efforts.
Let me cite some statistics. According to the Ministry of Economic Development, for every rouble spend on innovation, 63% go to supporting knowledge, science and innovation, 36% to manufacturing high-tech products in their respective industries and one percent on commercialisation (marketing the product).
This is the breakdown of our spending, which is clearly unreasonable. The discrepancy stares you right in the face, as they say. Obviously, to fix the situation, we must use the extremely powerful tool of government procurement to encourage innovation. Procurement by federal, regional and municipal governments amounts to four trillion roubles. That gives you an idea of how powerful a tool this is.
Government procurements for national priority projects affects the purchase of medicine and the development of high-tech health care, as well as almost half of all federal targeted programmes, for example transport infrastructure construction. All of these projects require sophisticated, innovative products. Even if only some government procurements are used to support innovation, they will still have a huge effect.
The Strategy for Long-Term Social and Economic Development in the Period until 2020 and the Measures to Stimulate Innovative Activity by Enterprises (part of the Government Guidelines through 2012) both take into account the need to use government procurements to stimulate innovation.
Throughout 2009, attempts were made to amend Federal Law No. 94 (which I sometimes call ‘infamous'), which allows the Government to introduce special rules for types of procurement and specific purchases.
In addition, to make fiscal spending on science more effective, it has been suggested that the Ministry of Science and Education be given greater discretion in coordinating government spending on non-military research and development. This would involve introducing a supplement to the federal budget for the current fiscal year that would set apart all non-military spending on science. I think this measure is long overdue.
I think it is also necessary to set up a system for coordinating fundamental scientific research, both with other fundamental scientific research and with applied research carried out under federal and institutional targeted programmes.
The Programme for Fundamental Research in the Russian Federation must play a crucial role in this coordination, which would ensure targeted funding for fundamental research programmes. These programmes would be selected through a competitive process, naturally.
Ladies and gentlemen, in conclusion I would like to emphasise the following. In recent years the government has undertaken resolute measures to steer the national economy towards innovation. But we are obviously only at the beginning of an arduous journey. We face many challenges, and how we meet them will determine the future of the Russian Federation, for a knowledge-based economy relies above all on human capital, the value of which depends directly on the quality of this country's science and education.
Thank you.