| By: |
Irina Jormanainen (Department of International Business, Helsinki School of Economics.);
Rajneesh Narula (School of Management, University of Reading) |
| Abstract: |
Despite a well-developed science and technology base and considerable
industrial capacity during the soviet era, Russia has largely failed to create
a competitive industrial sector despite two decades of transition. This paper
seeks to understand why Russia has not succeeded despite having relatively
favourable initial conditions. We develop an understanding of its innovation
system and the interplay between the firm and the nonfirm sector. We argue
that – in any economy - when political and economic regimes were rapidly
reformed, there is considerable structural inertia associated with complex
interdependencies between the state, domestic firms and the formal and
informal institutions that bind them together. In the case of Russia, this
inertia has resulted in a system-wide lock-in, and industrial enterprises
continued to engage in routines that generated a suboptimal outcome. Market
forces did not result in the western-style innovation system, but a hybrid
one, with numerous features of the soviet system. A significant segment of
industry maintains a Soviet-style dependence on ‘top-down’ supply-driven
allocation of resources and a reliance on external (but domestic) network of
sources for innovation and capital. At the same time, ‘new’ firms and
industries have also evolved which undertake their own R&D, and utilise
foreign sources of capital and technology, and at least partly determine their
production and innovative activities on the basis on market forces. |
| Keywords: |
innovation systems, R&D, Russia, inertia, institutions, lock-in, transition, competitiveness |
| Date: |
2008 |
| URL: |
http://d.repec.org/n?u=RePEc:rdg:emxxdp:em-dp2008-70&r=cis |