Innovación incipiente en economías emergentes: ¿puede traspasar Rusia sus barreras históricas? Emerging innovation in an e...
Sheila M. Puffer University Distinguished Professor Cherry Family Senior Fellow of International Business Northeastern Uni...
Coauthors
Russia’s Innovation Initiatives <ul><li>Emerging economies are developing national innovation initiatives </li></ul><ul><l...
Innovation Policy Objectives <ul><li>Develop a knowledge-based economy </li></ul><ul><li>Diversify away from dependence on...
Institutional Theory Lens <ul><li>Institutional theory has proven particularly useful in evaluating business & management ...
Resources for Innovation  <ul><li>Abundance of scientific & engineering talent </li></ul><ul><li>World-class strengths in ...
Barriers to Innovation <ul><li>Institutional weaknesses – formal and informal </li></ul><ul><li>Inability to move beyond i...
Four Stages of Innovation <ul><li>Basic research    new or improved technology </li></ul><ul><li>Product, service, or pro...
Models of Innovation <ul><li>Triple helix  (Etzkowitz): Role of formal institutions, particularly government, universities...
Russia’s Historical Barriers <ul><li>Resulted in an erratic experience with innovation </li></ul><ul><li>Good at invention...
Historical Example: Steam Engine <ul><li>1834: Cherepanov demonstrated first locomotive on European continent not imported...
Historical Example: Light Bulb <ul><li>1870s: Yablochkov’s light bulbs illuminated London & Paris, but German light bulbs ...
Historical Example: Airplane <ul><li>1912: Igor Sikorsky built the first multiengine passenger plane, but had to emigrate ...
Historical Example: Computer <ul><li>1952: Sergei Lebedev developed first electronic computer in continental Europe, but l...
Historical Example: Laser <ul><li>1964: Alexander Prokhorov & Nikolai Basov shared the Nobel prize with American Charles T...
Applying Institutional Theory Historically <ul><li>Formal institutions were totally inadequate to support most innovation ...
Russia’s Current Innovation Initiatives <ul><li>Raised as a national priority by President Putin & later President Medvede...
Four Foundations of Current Initiatives <ul><li>Creating an innovation ecosystem through formal institutional infrastructu...
1a. New Development Agencies <ul><li>1994: Fund for the Development of Small Enterprises in Science & Technology (Bortnik ...
1b. The Skolkovo Project <ul><li>“ Skolkovo Project Under the Foundation for Development of the Center of Research & Comme...
Skolkovo School of Management
2. Reform of the University System <ul><li>2008: System of national research universities and federal universities linked ...
 
3. New Physical Infrastructure & Regional Development Policies <ul><li>Special economic zones where resident companies rec...
4a. International Companies <ul><li>Intel in Russia for 20 years.Cisco has a similar history. Both committed to support su...
4b. International Agencies  <ul><li>The Enterprise Europe Network  </li></ul><ul><li>US Foundation for Economic Advancemen...
An Institutional Theory Lens <ul><li>North (1990), Scott (2008) both discuss formal institutions & informal institutions, ...
Barriers to Innovation: Historical <ul><li>Good at invention but poor at innovation.  </li></ul><ul><li>No formal institut...
Barriers to Innovation: Current <ul><li>Historical hangover from late 1980s until mid-2000s. </li></ul><ul><li>Attitudes t...
Breaking Through Barriers <ul><li>Creating the formal innovation ecosystem through institutional infrastructure is a good ...
But Questions Remain <ul><li>Most major initiatives are quite recent. </li></ul><ul><li>Virtually all deal with formal ins...
Conclusion (1) <ul><li>Despite substantial progress, it is still too early to determine whether Russia will be successful ...
Conclusion (2) <ul><li>Both formal & informal institutional changes are necessary to achieve Russia’s declared goals for i...
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Innovación incipiente en economías emergentes: ¿puede traspasar Rusia sus barreras históricas?

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Innovación incipiente en economías emergentes: ¿puede traspasar Rusia sus barreras históricas?
Sheila Puffer, Northeastern University, Boston, EE.UU.
Madrid, 16 de enero de 2012.
Ciclo de conferencias 'Actividad empresarial y crecimiento: una perspectiva internacional' En colaboración con el IE Business School

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Innovación incipiente en economías emergentes: ¿puede traspasar Rusia sus barreras históricas?

  1. 1. Innovación incipiente en economías emergentes: ¿puede traspasar Rusia sus barreras históricas? Emerging innovation in an emerging economy: Can Russia break through its historical barriers? Sheila Puffer Madrid, 16 de enero de 2012 FUNDACIÓN RAMÓN ARECES
  2. 2. Sheila M. Puffer University Distinguished Professor Cherry Family Senior Fellow of International Business Northeastern University, Boston, USA Seminar at Ramon Areces Foundation & IE Business School, Madrid January 16, 2012 Emerging Innovation in Emerging Economies: Can Russia Break Through its Historical Barriers?
  3. 3. Coauthors
  4. 4. Russia’s Innovation Initiatives <ul><li>Emerging economies are developing national innovation initiatives </li></ul><ul><li>Russian government now has a national innovation policy </li></ul><ul><li>Central government has committed billions of dollars </li></ul><ul><li>Regional governments have committed additional funds </li></ul>
  5. 5. Innovation Policy Objectives <ul><li>Develop a knowledge-based economy </li></ul><ul><li>Diversify away from dependence on energy & natural resources </li></ul>
  6. 6. Institutional Theory Lens <ul><li>Institutional theory has proven particularly useful in evaluating business & management in emerging economies </li></ul><ul><li>Formal institutional void has plagued most emerging economies </li></ul><ul><li>Informal institutions have filled that void </li></ul><ul><li>Institutional weaknesses, both formal & informal, are the fundamental barriers to innovation in most emerging economies, including Russia </li></ul>
  7. 7. Resources for Innovation <ul><li>Abundance of scientific & engineering talent </li></ul><ul><li>World-class strengths in hard sciences (math, physics) but less so in biological sciences </li></ul><ul><li>Strength in idea generation </li></ul>
  8. 8. Barriers to Innovation <ul><li>Institutional weaknesses – formal and informal </li></ul><ul><li>Inability to move beyond idea generation </li></ul>
  9. 9. Four Stages of Innovation <ul><li>Basic research  new or improved technology </li></ul><ul><li>Product, service, or process development  product design & prototype development </li></ul><ul><li>Commercialization (bringing products to markets or test markets/beta sites) </li></ul><ul><li>Entrepreneurship or company-building stage  new companies or new directions for existing companies </li></ul>
  10. 10. Models of Innovation <ul><li>Triple helix (Etzkowitz): Role of formal institutions, particularly government, universities, & companies (e.g., Silicon Valley) </li></ul><ul><li>“ The New Argonauts ” (Saxenian): Role of formal institutions and attracting overseas diaspora back to home countries (e.g., China) </li></ul><ul><li>National innovation systems (Kao): Systems orientation or eclectic approaches (e.g., Finland developing full-scale innovation system embracing research institutes & supporting institutions) </li></ul><ul><li>“ Boulevard of Broken Dreams ” (Lerner): Copying another model is seldom effective </li></ul>
  11. 11. Russia’s Historical Barriers <ul><li>Resulted in an erratic experience with innovation </li></ul><ul><li>Good at invention but poor at innovation. Traditional strength in basic sciences, & some product development, but weakness in commercializing scientific breakthroughs </li></ul><ul><li>Russians were active in inventions: steam engine, light bulb, radio, airplane, laser, & many other devices & machines </li></ul>
  12. 12. Historical Example: Steam Engine <ul><li>1834: Cherepanov demonstrated first locomotive on European continent not imported from England. Yet early Russian railroads imported rolling stock. </li></ul>
  13. 13. Historical Example: Light Bulb <ul><li>1870s: Yablochkov’s light bulbs illuminated London & Paris, but German light bulbs electrified Moscow & St. Petersburg. </li></ul>
  14. 14. Historical Example: Airplane <ul><li>1912: Igor Sikorsky built the first multiengine passenger plane, but had to emigrate to the US to develop his Pan Am clippers, an early aviation success. </li></ul>
  15. 15. Historical Example: Computer <ul><li>1952: Sergei Lebedev developed first electronic computer in continental Europe, but limited to science & military. When computers were commercialized, Russia adopted IBM standards in 1974. </li></ul>
  16. 16. Historical Example: Laser <ul><li>1964: Alexander Prokhorov & Nikolai Basov shared the Nobel prize with American Charles Townes for the invention of the Maser & Laser, but Russia never commercialized products. </li></ul>
  17. 17. Applying Institutional Theory Historically <ul><li>Formal institutions were totally inadequate to support most innovation beyond the idea or invention stage </li></ul><ul><li>Informal institutions, especially an entrepreneurial culture, were absent or inadequate to support later stages of innovation like product development, commercialization, or company building. </li></ul>
  18. 18. Russia’s Current Innovation Initiatives <ul><li>Raised as a national priority by President Putin & later President Medvedev </li></ul><ul><li>Attempting to create an innovation ecosystem through developing a formal institutional infrastructure. </li></ul><ul><li>Investment in & restructuring includes government agencies, universities, & company involvement. </li></ul>
  19. 19. Four Foundations of Current Initiatives <ul><li>Creating an innovation ecosystem through formal institutional infrastructure </li></ul><ul><li>1. New development agencies started by federal government </li></ul><ul><li>2. Reform of university system led by Ministry of Education & Science </li></ul><ul><li>3. Regional development initiatives centered around new economic infrastructures </li></ul><ul><li>4. Activities of multinational companies & foreign aid agencies. </li></ul>
  20. 20. 1a. New Development Agencies <ul><li>1994: Fund for the Development of Small Enterprises in Science & Technology (Bortnik Fund) </li></ul><ul><li>2007: Rusnano - $10B capitalization to develop a nanotechnology infrastructure & fund training programs </li></ul><ul><li>Russian Venture Company - $1B for specialized sector-specific investment funds including new seed funds for companies to develop production operations in Russia </li></ul><ul><li>2007 - Russian Technology State Corporation – mostly defense </li></ul><ul><li>2011 – Russian Direct Investment Fund - $2B capitalized over 5 years by federal government to coinvest with private equity investors (China matched $1B) </li></ul>
  21. 21. 1b. The Skolkovo Project <ul><li>“ Skolkovo Project Under the Foundation for Development of the Center of Research & Commercializing of New Technologies” </li></ul><ul><li>Funded by federal government; C. Barrett, V. Vekselberg, cochairs </li></ul><ul><li>Visualized as a science city, with a techno park, R&D facilities for major Russian & international tech companies (e.g., Intel, Cisco, Microsoft, & Boeing) </li></ul><ul><li>Skolkovo Institute of Science & Technology, a graduate research university being developed with MIT </li></ul><ul><li>Skolkovo Moscow Graduate School of Management in operation for 5 years </li></ul>
  22. 22. Skolkovo School of Management
  23. 23. 2. Reform of the University System <ul><li>2008: System of national research universities and federal universities linked to the high-tech sector to become centers of applied scientific knowledge </li></ul><ul><li>2011: 29 national universities selected through a competitive process & established by presidential decree </li></ul><ul><li>Each university to receive $110m of additional funding over 5 years, doubling the overall budget for many </li></ul><ul><li>2011: An analog to the US Bayh-Dole act emphasizes importance of universities in commercializing innovation </li></ul>
  24. 25. 3. New Physical Infrastructure & Regional Development Policies <ul><li>Special economic zones where resident companies receive benefits (tax & other incentives) to encourage entrepreneurial activities. Four created in 2011. </li></ul><ul><li>Tech parks intended as new towns of 10-15k residents acting as full-fledged scientific & technological clusters. Linked to a large educational or leading scientific institution with goal of developing new technological products. In 2011 four parks existed, with nine planned. </li></ul><ul><li>Political support generally necessary to gain such favored designations. </li></ul>
  25. 26. 4a. International Companies <ul><li>Intel in Russia for 20 years.Cisco has a similar history. Both committed to support sustainable development of innovation. </li></ul><ul><li>Microsoft Russia assists new companies using Microsoft software platforms. Offers competitive grants to startups. </li></ul><ul><li>IBM, Boeing, Alstom, Bouygues, EADS, Nokia, Philips, Siemens, & the Tata Group, etc. </li></ul>
  26. 27. 4b. International Agencies <ul><li>The Enterprise Europe Network </li></ul><ul><li>US Foundation for Economic Advancement & the Rule of Law </li></ul><ul><li>New Eurasia Foundation </li></ul><ul><li>American Councils for International Education </li></ul><ul><li>National Council for East European & Eurasian Research </li></ul>
  27. 28. An Institutional Theory Lens <ul><li>North (1990), Scott (2008) both discuss formal institutions & informal institutions, with Scott developing three pillars (regulative, cultural-cognitive, normative); as well as formal institutional voids (Khanna & Palepu, 1997). </li></ul><ul><li>Recognized as valuable for analyzing emerging economies (Ahlstrom & Bruton, 2006), companies & strategies (Peng & Heath, 1996), entrepreneurship in transition economies (May, Puffer, & McCarthy, 2005), & the development of national innovation policies (Barbosa & Faria, 2011). </li></ul>
  28. 29. Barriers to Innovation: Historical <ul><li>Good at invention but poor at innovation. </li></ul><ul><li>No formal institutional support for innovation beyond idea stage from government, universities, or enterprises. </li></ul><ul><li>No informal institutional support, lack of an entrepreneurial culture, business viewed as suspect & immoral. Traditions aimed at circumventing formal institutions. </li></ul>
  29. 30. Barriers to Innovation: Current <ul><li>Historical hangover from late 1980s until mid-2000s. </li></ul><ul><li>Attitudes toward entrepreneurship & business begin to change but entrepreneurships & SMEs still comprise only around 10% of Russian economy. </li></ul><ul><li>Federal government innovation initiatives highly centralized (e.g., Skolkovo), and motivation suspected by citizens. </li></ul><ul><li>Still no strong culture for entrepreneurship. </li></ul><ul><li>Instititutional support beginning, particularly formal, but informal support like cultural understanding & acceptance of entrepreneurship still lagging. </li></ul>
  30. 31. Breaking Through Barriers <ul><li>Creating the formal innovation ecosystem through institutional infrastructure is a good beginning. </li></ul><ul><li>Initiatives involve coordinating activities of the federal government, regional governments, university system, & companies. </li></ul><ul><li>Russian government soliciting involvement of international firms & government agencies, particularly from the US but also from Europe, China, & India. </li></ul>
  31. 32. But Questions Remain <ul><li>Most major initiatives are quite recent. </li></ul><ul><li>Virtually all deal with formal institutional restructuring. </li></ul><ul><li>Informal institutional barriers remain. Limited culture of entrepreneurship. </li></ul><ul><li>Rampant corruption, bureaucratic barriers & bribes still affects Russian entrepreneurs and prevents the return of a diaspora who could add substantial value to the later stages of the innovation process. </li></ul>
  32. 33. Conclusion (1) <ul><li>Despite substantial progress, it is still too early to determine whether Russia will be successful in developing a sustainable innovation economy. </li></ul><ul><li>Need to dismantle the institution of rampant corruption </li></ul><ul><li>Need to support a culture of innovation & entrepreneurship through removing bureaucratic barriers to starting & growing businesses, & providing incentives </li></ul>
  33. 34. Conclusion (2) <ul><li>Both formal & informal institutional changes are necessary to achieve Russia’s declared goals for innovation, developing a knowledge-based society, & diversifying away from energy & natural resources. </li></ul>

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