Workshop and Report Presentation: "Igniting Innovation: Rethinking the Role of Government in Emerging Europe and Central Asia"

Moscow, October 10, 2011 – Today, a workshop on the role of government in promoting innovation and the role of innovation in the Russian regions was held at the World Bank’s Moscow Office. The workshop was devoted to the launch of the World Banks’ new report “Igniting innovation: Rethinking the role of government in emerging Europe and Central Asia”,  which was presented by Gerardo Corrochano, World Bank Director, Finance and Private Sector Development in Europe and Central Asia, and Innovation, Technology and Entrepreneurship. Mr. Corrochano’s presentation was followed by a lively and substantive discussion with participation of Oleg Fomichev, Deputy Minister in charge of innovation at the Ministry of Economic Development and Igor Agamirzyan, General Director, the Russian Venture Company.

During the discussion it was noted that the Russian economy would benefit from a more innovative enterprise sector.  In the past decade, Russia’s dependence on exports of oil and gas has risen significantly, with resulting risks for future competitiveness and negative impacts from oil price volatility. Without greater innovation the economy will remain dependent on a narrow range of industries, particularly those related to the extraction of natural resources.

Several participants of the workshop emphasized that in order for Russia to become more innovative and to move away from a reliance on natural resources, policymakers need to address several bottlenecks that have slowed the country’s transition to a knowledge-driven and entrepreneurial economy. Recently, the fragility of the competitiveness of Russian enterprises has become increasingly visible with competition from countries such as Brazil, China, and India.

"There is a strong connection between technology absorption and innovation, and long-term, self-sustained economic growth,” said Gerardo Corrochano. “Russia lags the OECD and other large middle-income countries in R&D output, including in the lower number of patents and scientific publications it produces per capita. It actually spends more on R&D than most EU15 countries for each U.S. Patent and Trademark Office patent it generates. At the same time, the number of innovative small and medium enterprises in Russia is small."

"The Russian Government understands the need for the economy to become more innovative,” said Pedro Alba, World Bank Country Director for Russia. “In its efforts to boost innovation the Government has been encouraging the growth of companies that produce goods with a high degree of added value and use cutting-edge technology. Two of its biggest projects in this area, the science park at Skolkovo and the push to develop a nanotechnology industry, are key to this strategy. Skolkovo has so far attracted some large international firms such as Nokia and Intel, which have promised to conduct research at the site; while Rosnano, the state-funded body for investing in nanotechnology, has recently been making investments in a range of companies at home and abroad."

"The World Bank is supportive of the Government’s drive to increase innovation in the Russian economy,” concluded Pedro Alba. “We think this will help with generate greater economic diversification and competitiveness, and the World Bank will continue to assist the federal government, as well as the regional governments in their development of innovation policies."