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Vladimir Putin:

Good afternoon.

Today we are to discuss the state of affairs in the innovation sphere. In other words, what we are talking about here is the strategy for ensuring quality growth in our economy, in industry and in science. Ultimately, what this comes down to is the formation of a genuine state innovation policy.

This is the first time we are examining this issue in such a systematic way. It is true that we have taken a whole number of serious decisions over recent years, and there has been real progress made, but there is unfortunately still a long way to go in this area.

The Security Council and other bodies have also looked at support for science and education on more than one occasion and have determined the main priorities for technological development.

What I want to inform you about today is what was discussed recently at the Presidential Council for Science. At that meeting I promised that we would take the appropriate decisions – significant decisions, even if still just small steps for now. I can tell you today that I have just signed a decree on material incentives for scientists and designers who have made big contributions to developing modern military arms and equipment. In accordance with this decree, specialists who have made particularly valuable contributions to the development of military arms and equipment will receive monetary grants of 20,000 roubles a month.

But overall, despite successes in some sectors, the Russian economy remains primarily raw materials-based. Our country accounts for less than 1% of the global market for science-intensive production.

We have built up a vast scientific potential, and we have qualified specialists and promising projects in practically every area of modern technology. But we have not yet learned to make effective use of this natural competitive advantage created through the efforts of several generations of scientists and designers.

The key problem is that we have not learned to transform our scientific discoveries and inventions into working capital. Russian investors show little business interest in them and they do not generate any significant revenue for their creators. Meanwhile, a considerable share of the scientific work that gets financed by the state budget remains outside modern economic and legal relations.

But putting money into science for which there is no demand is a waste of state funds and is a real threat to Russia’s national security, the threat of finding our country relegated to the sidelines of global technological development with the status of a donor of raw materials to the developed nations.

You know that the world economy’s growth today is being fuelled by constant improvements to services and technology. New technologies account for more than half of GDP growth in countries such as the United States, Japan and Germany. Economies like these are more sustainable and have long-term competitive advantages. They are more diversified and therefore have better prospects and greater stability. Only this kind of economy will enable us to win ourselves a worthy place in the global market.

For modern Russia, an innovative leap forward is a real key to rapidly modernising the country, and is a road that will take us towards a better quality of life for our people and a more competitive economy. Innovation policy should be one of our priority national projects, and like any project, it has to be carefully prepared before being launched.

In this context I would like to point out a few particularly important moments. Above all, we should not see innovation policy as being a clear-cut choice in favour of state support for a limited number of scientific-technological projects or economic sectors.

On the contrary, we need to look at the formation of principally new relations between science, business and the state, relations that would divide the authority, responsibilities and risks at every stage of the innovative process – from the scientific idea to the final product. In this respect, innovation policy requires that we take both state and corporate management to a new level.

Innovation policy also demands that we create the required infrastructure, including all the necessary management, legal and institutional elements. If we do not do this, we will not be able to develop the technological corridor leading from scientific discovery to market product.

This means we must come up with clear criteria for setting the priorities for innovation policy. We also will need to make long-term forecasts of innovation development both for the Russian economy and the global economy. This is necessary for us to be able to see where Russia’s accumulated intellectual and technological capital meets with trends on the world markets.

We also need to optimise the civil-legal turnover of intellectual property and create a real motivation mechanism for specialists and scientific teams. The current vagueness of the legal situation benefits neither the state, the scientists nor the scientific establishments, and it deters private business from investing in new innovations.

In this context, we must speed up introduction of the relevant bills to the State Duma, including the final part of the Civil Code, which deals with intellectual property and sets the balance of interests regarding intellectual property rights between the state, scientific organisations and the developers themselves.

Finally, we must have a clear idea of exactly what legal, financial and organisational resources we have for carrying out innovation policy and which incentive mechanisms we should build up and use in the state and private sectors.

I would like to emphasise that the state bears the main responsibility for forming and developing a modern scientific environment, for training specialists and financing promising fundamental research and much applied research.

We have already begun making use of our growing economic potential and are now increasing state investment in this area. But we also need to come up with effective forms of state incentives for innovative activities in the private sector.

We need to be bolder in moving away from old forms of preferential treatment that have now outlived themselves. The reasonable option here is to provide maximum economic freedom while creating favourable conditions for competition, including through developing systems of insurance, venture financing, international technological cooperation and also active diplomatic support for Russian designers and innovative companies on the international market.

Of course, these are just a few of the subjects we are set to look at today. I am sure that our discussion will be interesting, and I would now like to give the floor to Deputy Prime Minister Boris Alyoshin.