Tools for Strategic Planning of Regional Innovation Development Discussed at the HSE

The Institute for Statistical Studies and Economics of Knowledge gathered experts on regional management and innovation development in Russian regions for a workshop held on 25 April, 2013 at the Higher School of Economics.

As demonstrated the recent HSE XIV April Conference, and specifically some of the discussions organised by the ISSEK, there’s an obvious need to discuss opportunities for regional innovation envelopment, and the RF regions’ specific contributions to building the national innovation system.

Artem Shadrin, Irina Makieva, Leonid Gokhberg and Ivan Blagodir

The above issues were discussed by quite an impressive group of participants: speakers included heads of relevant divisions of federal government ministries (Ministry for the Development of the Russian Far East, Ministry of Economic Development), development institutes (Vnesheconombank, RVC), CEOs of joint public-private companies (Rustech), and HSE experts. The workshop was chaired by Leonid Gokhberg, first vice-rector of the HSE and director of the ISSEK.

The ministries’ plans

Practically all top-level officials of the Ministry of Economic Development’s Innovation-Based Development Department were present at the workshop. Artem Shadrin, head of the department, reviewed the existing and forthcoming mechanisms for supporting innovation activities, both supply- and demand-based, putting the accent on regional authorities’ opportunities and objectives.

The representative of the Ministry of Economic Development proposed two ways to increase demand for innovative products: 1) by establishing a quota for high-tech products in government procurement in the regions, and 2) via close cooperation of regional authorities with federal development institutes. According to Artem Shadrin, the following actions by regional authorities would contribute to increased supply of innovative products: promoting the bottom-up flow of innovation projects by creating and developing innovation infrastructure (business accelerators, business incubators), and increasing cooperation with universities. He believed it would be very important to promote secondary vocational education, and bring its standards closer to local businesses’ needs.

Regions should pay particular attention to developing and supporting clusters, specifically prepare standard programmes for their development in line with relevant methodological recommendations. A clear and detailed presentation of cluster development strategy would enable its participants to become more “visible” in international markets, and more attractive to external investors and public-private companies.

Pavel Rudnik

Pavel Rudnik, deputy director of the Ministry of Economic Development’s Strategic Innovation-Based Development Department, spoke in detail about government support provided to pilot territorial innovation clusters. E.g. in 2013 1.3 billion roubles were allocated for this purpose, and in the next year the amount may be increased to 5 billion roubles. The speaker stressed the requirement introduced by the ministry, that cluster development programmes must be funded jointly with the regional authorities (out of their own budgets). Pavel Rudnik suggested that regions may be able to apply for participation as early as the current summer.

Development institutes’ positions

Irina Makieva

Irina Makieva, deputy chairman of Vneshtorgbank, spoke about the more serious mistakes occurring in cluster development programmes, which may decide the outcome of their consideration by development institutes and banks. Her list of “most frequent” mistakes includes the following: low overall quality of applications; lack of common vision and common strategy, and as a consequence, insufficient coordination of various cluster projects and low impact on the regions’ socio-economic situation; low level of organisational development; orientation towards securing a subsidy; low interest in loans and credits; and lack of own project funding.

Andrei Vvedensky, director of RVC’s Infrastructural and Regional Development Department, noted that his company was ready to support clusters in a number of ways, specifically help them to develop their service infrastructure (e.g. RVC participated in creating web portal for aircraft construction and shipbuilding cluster in the Khabarovsk Region); provide technology brokering services; and improve management practices in business incubators and industrial parks. The RVC representative shared Irina Makieva’s opinion regarding low quality of cluster management. According to him, officials of relevant regional ministries are frequently given responsibility for clusters’ development, and they have more than enough other duties in the first place.

Companies’ role

Alexander Kashirin, head of Innovations and Strategic Development Department at Rustech State Corporation, spoke about a new model for interaction of organisations – members of the corporation (600 companies, 220 research institutes and design bureaus) and regional stakeholders in the innovation activities sphere.

Dmitri Stupin, deputy general designer at RTI, Inc., commented on a possible role large high-tech real sector companies might play in establishing cooperation with regional research-and-production clusters. It’s a well-known fact that leading innovative companies usually prefer to operate in regions where the factors most significantly affecting the companies’ production (labour, infrastructure and intellectual resources) are highly developed. Regions, in turn, compete for attracting such companies, since presence of advanced production facilities leads to creation of highly paying jobs and increased revenues to regional budgets. If a region was marked to host a strong cluster, that might prompt large companies to establish production there – which in turn would contribute to further development of the cluster.

Expert support by the HSE

Vasily Abashkin, senior researcher at the HSE’s ISSEK, spoke about the most common problems negatively affecting efficiency of Russian clusters. He divided the problems into two groups: 1) those “in-built” into the cluster policy, which become apparent immediately after launch, and 2) those arising in the course of the policy implementation.

The expert included the following problems into the first group: “compulsory” inclusion of cluster-related issues into strategic documents; attempts to accelerate development of all existing and potential clusters immediately, in one big push; lack of trusting dialogue with regional business structures; lack of clear priorities when shaping regional cluster policies, and insufficient integration of such policies with other aspects of regions’ socio-economic development.

In the course of implementation of cluster development programmes, frequently arise such problems as lack of sufficiently qualified and skilled teams to efficiently pursue cluster policy; cluster management’s dependence on financial and administrative support by regional authorities; inadequately planned joined projects, etc.

The second part of Vassily Abashkin’s presentation described a set of recommendations on shaping regional cluster policy presented by the HSE to Tula regional authorities in the course of preparing the region’s Strategy for Socio-Economic Development until 2030.

The main principles of preparing innovation development strategies for Russian regions were described by Mikhail Goland, head of the HSE ISSEK’s section Private-Public Partnership in Innovation Activities. In particular, he spoke about identifying industry-specific priorities for supporting innovation activities, taking into account the following: 1) promising R&D results achieved in the region, and its investment potential; 2) development programmes for the region’s largest companies and clusters; 3) federal development strategies for industries, technological platforms, national-level Foresight studies’ results. When setting priorities for innovation development, it’s important to avoid the “technological short-sightedness” trap, noted the expert. E.g. regions’ heads frequently believe that innovations can be created only in the so-called high-tech industries, and plan for their preferential development – even if the region doesn’t have sufficient potential for that.

Mikhail Goland completed his presentation by describing certain mechanisms for adopting and updating innovation development strategies, stressing that there must be public debates on them involving representatives of business community, leading research and educational organisations, relevant non-profit organisations, while the actual text must be adjusted and updated every 3-4 years.

Evgeny Kutsenko, senior researcher at the ISSEK, presented a major HSE project “Rating of Russian regions’ innovation development”. Having described the objectives of the regions’ innovation development study and analysed key relevant international and Russian ratings, the expert defined specific features of the approach to composing an innovation development rating of the Russian regions proposed by the Institute for Statistical Studies and Economics of Knowledge.

Oleg Karasev, deputy director of the ISSEK’s Foresight Centre, presented the final paper of the workshop; he spoke about the road map methodology and its potential for optimising management of regions’ innovation development. The presentation was of a purely practical nature, summarising the significant experience gained by the ISSEK experts in the course of Foresight studies and development o road maps for Russian regions, clusters, largest public-private companies, and the federal government.

Material composed by Evgeny Kutsenko