When a good science base is not enough to create competitive industries: Lock-in and inertia in Russian systems of innovation

Narula, Rajneesh and Jormanainen, Irina (2008). When a good science base is not enough to create competitive industries: Lock-in and inertia in Russian systems of innovation. UNU-MERIT.

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  • Author Narula, Rajneesh
    Jormanainen, Irina
    Title When a good science base is not enough to create competitive industries: Lock-in and inertia in Russian systems of innovation
    Publication Date 2008
    Publisher UNU-MERIT
    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 non-firm 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 sub-optimal 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.
    Keyword Innovation systems
    R&D
    Russia
    Inertia
    Institutions
    Lock-in
    Transition
    Competitiveness
    JEL O32
    O14
    P31
    L52
    Copyright Holder UNU-MERIT
    Copyright Year 2008
    ISSN 1871-9872
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    Created: Wed, 11 Dec 2013, 16:23:30 JST