Russian Innovation is Running Out of Puff

Source from:  The Moscow News 05/13/2011

If you're looking for innovation in Russia, it's more likely to be lighting up a cigarette than blazing a trail into space, according to the Higher School of Economics. Tobacco companies have become the nation's leaders in new technology, leaving telecoms and oil refining choking on their smoke. Ironically, President Medvedev's innovation-hungry government is also intent on stubbing out cigarette sales. But they will need to find a new way to spark the country's boffins into life in other fields, with research showing that less than 10 per cent of Russian firms are "innovatively active". Elsewhere, smaller economies in Eastern Europe score 20-40 per cent on the same scale. Global concept, local gains Four in ten tobacco companies apply new technologies to their everyday work, thanks mostly to their links to multinational corporations. And that investment comes despite constant restrictions on advertising tobacco, plans to raise duty on cigarettes and proposed legislation to enforce more no-smoking zones in Russia. Anatoly Vereschagin, the head of communications at JTI, told Vedomosti the company invested nearly $380 million dollars over the last three years to modernise the production process. Making connections Telecoms manufacturers come second in Russia's list of innovators, with just over a third of companies introducing new ideas. And aerospace, a source of national pride in Soviet times, comes third with 33.6 per cent, followed by oil refining on 32.7 per cent. But that's well behind other economies, where innovative technologies run close to 70 per cent. Germany tops the charts ahead of Canada and New Zealand, while neighbours Finland (55.4 per cent) and Estonia (55.1 per cent) also score highly. State support Despite state backing for modern technology there is little sign of progress. And that has had a knock-on effect on technology exports: hi-tech sales have almost halved since 2003, according to the report. And nationwide a mere 16 per cent of companies are actually developing new technology. Enditem