This is a presentation on innovation and nanotechnology in Russia and China also comparing the development of Suzhou Industrial Park and Skolkovo.

1. Innovation and nanotechnology development
in China and Russia
Evgeny Klochikhin, PhD Researcher,
Manchester Business School, UK
CEELBAS Workshop on Russia’s Skolkovo in Comparative and
Historical Perspective, London, UK, 13 June 2012

2. Theoretical dilemmas
• Is BRICS an academically valid concept?
• What is the global innovation system: a firm-
centered network or a set of distinct NIS?
• How to apply the NIS approach in developing
countries: a heterogeneity discussion
• Can we transfer the transition experience of
CEE countries to Asia?

3. Research questions
• How Russia and China can exploit their science and
technology (S&T) history to promote indigenous innovation
development and resolve the weaknesses of the former
state planning system?
• Are there any particular complementarities between the
Russian and Chinese innovation that can contribute to their
socioeconomic development?
• What are the current and emerging opportunities for
mutual leaning between the two countries?
• What is the role of technology-based growth strategies in
this process?

4. Social and political status
of science and technology
STI policy system
RUSSIA and CHINA
Quality of STI and
technology transfer
System of IPR protection

5. Soviet S&T system
Strengths Weaknesses
• High profile and continuity of • Lack of S&T equipment in research institutes
• Inhibited information flows
science
• Separation of research and teaching
• Support of highly-qualified S&T • Technological ‘backwardness’
personnel • Low productivity and rates of ROI
• Weak technology diffusion
• Good level of theoretical research
• Risk averse culture
• Massive resource allocation to • Weak computing capability
S&T • Poor training of researchers
• Rampant departmentalism and political
• Block system of science funding involvement
• Prioritization of most important • Emphasis on the military
S&T projects • Corruption and nepotism
• Lack of enterprise autonomy
• Knowledge as a public good that • Reluctance to dissolve unsuccessful SOEs
can be freely used by all agents • Imbalance between risk and reward for
innovating
• Lack of mission-oriented approach
•
(Klochikhin, 2012) Low patenting activity

6. Historical perspective
USSR/Russia China
2003-present 1997-present
Reform Back on track
1980-1990s 1990s Post-
Tian’anmen Decline 1978-1992
Decline
1966-1976 Open Door Policy
1960-1970s
Cult revolution
STI frontier
1930-1950s 1950s
Lysenkoism S&T expansion
1949
1917
1911

7. From S&T to innovation:
system transition
• Linear (sciencetechnologymarket) to
complex innovation model
• Network creation and establishment of
brokers: MNCs? FDI? Government?
(Radosevic, 1999)
• Four pillars: the structure of economic
organization, price formation, decision
rules, and incentives (Lange and Taylor, 1938)

8. Opportunities for mutual learning
• Turning universities into research institutions
• Rethinking the state planning legacies
• Finding effective ways to employ state-owned
enterprises as major innovation actors
• FDI and knowledge spillovers – not an only solution for
innovation growth
• Development zones and SEZs: extensive vs. intensive
• Regional spread: more infrastructure investment
• Mega-projects: good strength of prioritization?
• Turning ‘brain drain’ into ‘brain gain’

9. China-Singapore Suzhou Industrial Park
• Covers 288 sq.km
• CAS institutes, 24 universities and colleges in Suzhou, 1,400,000
university students in Jiangsu Province
• China-Singapore agreement in 1992, launched in 1994
• Ownership: 52% Chinese govt, 26% Singapore govt, rest – private
investors
• Mostly manufacturing, since 2000 rapid building of innovation
capabilities (SISPark; Nanopolis-Suzhou, etc.)
• Good local embeddedness: Dushu Lake Higher Education Town - “18+
universities, 1 institute and multiple parks", 70,000 students
• Important zeal for innovation by local (SIP), regional (Jiangsu), and
central govt
• SIP govt is a separate authority NOT under the Suzhou municipality
• Many local incentives for start-ups

10. Major challenges: lessons for Skolkovo
• China pursues extensive growth strategies: no limits to the number of
industrial parks and SEZs (tax incentives are also massive and have
vague time limits)
• Industrial parks are nurturing ‘favorites’ and provide excessive funding
for incubators, which hinders competition with capable outsiders and
general market conditions
• Excessive political involvement in innovation development: all final
decisions are made by the local/central government
• Top-down approach: spontaneous clustering is more effective
• No clear rules for exits (aggravated by the problem of heavy political
involvement in all investment decisions)
• Poor networks: few independent service firms and venture capitalists
to ensure smooth tech transfer
• Low-tech is also important
• Poor diversification: e.g. nanomaterials are the priority but higher value
chain areas (nanodevices, nanobio) are underdeveloped

11. Nanotechnology
• Can it be implemented bypassing the major
system weaknesses and path dependencies?
• Can it help resolve the major challenges and
break the existing lock-ins in the
construction of effective national innovation
systems in transition economics?

12. Russia and China - nano
Russia China
Launch of the national nano 2007 2001
program
Significance of nano Highly important One of the areas to support
component in STI policy
Policy design Highly centralized Dispersed among diverse programs
and institutions, center and regions
Scale Several fields (mostly ‘Across the board’ (but mostly
nanomaterials) nanomaterials)
Regional spread Across the country Concentrated in several key regions
Commercialization Rusnano Tianjin Nanotech Industrialization
mechanism Base; Shanghai Nanotechnology
Promotion Center; Nanopolis Suzhou,
and others
Regular evaluations Annual, carried out by the Varied (basically part of larger S&T
Ministry of Education and Science policy evaluations)

13. Conclusions
• History matters
• System and policy path dependencies are two
distinct phenomena
• Policies in both countries are aimed at extensive
development (as opposed to intensive growth
strategies)
• Many opportunities for mutual learning between
Russia and China but not from the United States
• Nanotechnology is a fuzzy field with no clear
leader – every nation is exploring its own ways

14. Policy recommendations
• Need to overcome the extensive-growth bias
• More democratization and transparency of the
science, technology and innovation policy making process
with broader involvement of the academic community and
wider public:
a) involvement of a bigger circle of university researchers and think-
tanks into policy consultation and evaluation;
b) establishment of an independent agency that would openly
present the interests of the academic community at the top
political level
• Better legislation and regulation for the innovation process
• Development of private sector and reducing the role of the
state in the national economy: privatization is not the only
solution (competition, science-industry links, demand side)