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President Vladimir Putin: Dear colleagues,

I am happy to see you here at the first meeting of this united council, the Council for Science, Technology and Education.

I hope that the systemic working dialogue between two groups, including here, within this Council, will help synchronise the necessary transformations in these areas, and ultimately contribute to a successful integration of science and education.

I would also note that we have come together at a time of complicated, sometimes heated and even controversial debate over what role the state should play in developing science and education.

These discussions began with property management issues but have gone far beyond purely financial, material and administrative problems.

I think our meeting today is very important and I hope it will be useful and timely. I hope for constructive cooperation between the state and the academic community now and in the future, both on strategic and applied, practical issues.

Our meeting is to discuss a fundamental issue of crucial importance – that of reproducing knowledge, a process in which science, education and, one could already say now, the modern Russian economy, all have their part to play.

Today, of course, we shall look at the broadest spectrum of issues that you think merit the attention of this meeting.

We must develop a competitive system for generating, disseminating and using knowledge in Russia. Only a system of this kind can become the foundation needed to support sustainable growth rates and a high quality of economic growth in the country.

You are all aware that economic growth in developed countries is directly linked to making use of intellectual capital. This is not a question of just knowledge, but skills, the skills to make effective use of modern organisational practices, patents, know-how, trade marks and so on. Intellectual capital is highly valued on world markets, much more so than raw materials, and more so even than a qualified labour force.

But in Russia, economic growth is still largely based on natural resources – resources that have finite reserves. No one, neither government agencies nor experts, are predicting any significant increase in science as a share of GDP over the foreseeable future. I am not saying that there will be no such increase, on the contrary, I hope that we are moving towards just such a development and that it will definitely take place. What I am trying to say is simply that the experts are not forecasting any real contribution of science to GDP, do not know what amount and what timeframe to expect and make no forecasts because they see insufficient grounds for them.

The situation has changed, however, in Russian science and education over recent years, and the academic community has come to see itself once again as a vital part of the national culture and of Russian civilisation as a whole. These changes, and the new economic situation, make it possible and necessary for us to plan how to develop our intellectual resources in a way that would not only bring results comparable to those gained through exploitation of natural resources, but could eventually significantly surpass them.

I say this here, in the presence of highly qualified specialists such as yourselves, who know the relevant trends and development figures for the world economy. I want to say from the outset that we are fully aware of the level of state commitments pursuing these objectives would entail. But, though we understand all the difficulties involved, the state is determined to move forward in this direction.

This will benefit scientific development and it will also benefit the economy. It is necessary for our people and this country’s future depends on it.

I would like to say a few words about fundamental science. Everyone here knows that if fundamental science is not developing, neither will we see any effective applied research. Also, fundamental science plays a vital role in helping to create an educated nation and establishing the conditions for the development of an independent and strong civil society.

Nominally, we have an entire ‘academic industry’, including some 3,000 institutes and research and development laboratories and six state academies, including the unique and venerable Russian Academy of Sciences. To put it in modern terms, we have a vertically integrated, multi-profile, national academic community.

Add to this almost 7 million teachers and students who represent an immense resource for developing science in the higher education sector.

But innovative industrial production accounts for only six percent of our total exports and there is still little demand on the domestic market for scientific output. This is despite the fact that research continues in Russia on practically every front.

State spending on science has increased almost four-fold over the last five years, from 1999 to 2004, and will come to 46.2 billion roubles at the end of the year. I know very well in just what conditions science worked through the 1990s, and you know even better than I, but there has been progress, visible progress. It is no longer possible to say that this is negligible. Yes, this money is still insufficient, but then, there can never be enough money, even in highly developed countries people say they don’t get enough money. And yes, this money is not enough for us, not enough to put Russia at the forefront of the scientific world. But with the help of this money we can find effective solutions to albeit only a few but nevertheless enough of the key objectives and priority tasks the country is facing.

The situation in science and education is improving slowly thus far. The more we spend money on science, the clearer it becomes that the main problem is not so much in financing science but in the need to adapt it better to today’s life and economic conditions.

Science and education issues have been previously discussed on numerous occasions, including by the State Council and the Russian Security Council. Objectives were set to reform sectors involved in generating intellectual capital and the corresponding programmes were approved. Overall, however, these programmes and instructions are not being implemented.

The same goes for improving relevant legislation and dealing with the question of integration of science and education. I hope that we will be able to have a frank discussion today regarding, if not all aspects of these issues, then at least the most important points.

There is still work to be done in deciding how to adapt and preserve the advantages Russia has while at the same time making the country part of the Bologna process. In particular, this concerns academic degrees and titles and many other issues of which you are all aware.

Our country produces a good number of highly qualified mathematicians, programmers, physicists and biologists, but many of them are forced to look for work in foreign organisations. We know that this is the general problem of people going where the money is. Western Europe also has an outflow of capital to North America, where one can earn more, but Europe is aware of this problem and partly offsets it by attracting our intellectual resources. We need to draw our conclusions in this situation and react to what is happening. Of course, the simplest solution is to pay more, but this is not always possible. However, there are many feasible solutions, and if we want to have a worthy place among the world’s highly developed economies, we need to work together and pursue national goals. We need to take into account not just corporate and immediate interests, but also the long-term interests of science and the nation as a whole.

Fundamental science should set out to not just preserve the leading scientific schools, but also to develop new areas of research that are in keeping with the general world trends and promise potential breakthroughs – research that could also help lead to a breakthrough for Russia.

The time is ripe in applied science for creating major research-and-development centres that can concentrate government and business resources in cutting-edge areas of science and technology.

Progress is already to be seen in that state-run research centres are functioning well now and innovative mega-projects are now in their second year of work. Information technology and communications are developing intensively. We need to study this experience closely and make wider use of it.

Today I would particularly like to look at one important issue. We all agree on the need to preserve, strengthen and develop the Russian Academy of Sciences’ influence in Russia and on the world knowedge market. The Russian Academy of Sciences is, without any exaggeration, the country’s historic and national treasure, a treasure created by dozens of generations of people and whose destiny is not indifferent to the country’s educated citizens.

We therefore expect of the Academy not just revision, but a carefully planned and effective modernisation, adapted to today’s circumstances and also forward-looking. We expect proposals for a decisive restructuring. And if this is the case, we are ready to provide maximum support for the Academy’s revival as an authoritative and undisputed centre of attraction for the entire academic community – not just a revived Academy, but a stronger Academy.

We also intend to carry out an effective restructuring of the state-run scientific sector based on the principle that the state should participate in scientific organisations only in the interests of declared public objectives. Above all, for ensuring development in crucial areas of fundamental science and technology. I hope that our Council will make the necessary contribution to this work and will assist this process.

In conclusion, I would like to note that the Education and Science Ministry, which develops policy in these areas, is currently obliged to concentrate on dealing with the most pressing problems in science and education and also other organisational and property management problems.

I therefore ask you to provide the ministry with all the assistance it needs. Of course, criticism is useful and correctionsshould be made where necessary, but I hope to see constructive work together, including a joint analysis of the consequences of proposed measures and an objective forecast of what effect the decisions and documents under preparation will have on economic growth and on the state of Russian science once implemented.

This concludes my introductory remarks. Thank you for your attention.