Russian companies' expenses on outsourced R&D dropped significantly between 2009 and 2012. Businesses are cutting their non-priority and 'long payback' investments, which usually include investment in innovation. In contrast, the government's role in R&D financing has grown considerably with the implementation of additional measures to boost innovation. These are among the findings of a survey of more than a thousand Russian R&D institutions conducted by the HSE's Institute of Statistical Studies and Economics of Knowledge (ISSEK).
The study reveals that research institutions receive nearly half of their R&D funding from the federal government, while businesses contribute just one third.
In 2009, competitive bidding for government funds helped finance about half of all internal R&D costs in innovation-focused research centres and less than a third of such costs in research institutions not explicitly focused on innovation. By 2013, however, the share of government funds was almost the same between these two types of centres – in part, due to the government's policy of boosting the financial support of research and technology development. By contrast, the share of venture capital funding of innovative research institutions decreased fivefold, perhaps for a multitude of reasons, not just the limited availability of venture funding in Russia in general. "Research centre' involvement in innovation-focused R&D continues to be a struggle – at least in terms of financing through government grants or venture funds. A similar pattern was observed when surveying innovative businesses," says the ISSEK's monitoring report.
Facing an increase in government funding and a decrease in private investment, many research centres have refocused and switched from applied R&D to fundamental and exploratory research, and some have secured contracts under government programmes, including Federal Targeted Programmes. As a result, they now tend to produce many more academic publications and apply for more patents than before.
"Whether the current situation is the result of government's efforts to boost R&D is hard to say at the moment. However, it is one of the few apparently positive trends observed in our survey of applied research institutions," note the authors of the monitoring report.
They also emphasise that "basic research lays the foundation for breakthrough discoveries and technological innovation." However, Russia still lags far behind many developed countries in terms of applied R&D