Template-type: ReDIF-Paper 1.0
Author-Name: Narula, Rajneesh
Author-Email: r.narula@henley.reading.ac.uk
Author-Workplace-Name: Henley Business School, University of Reading
Author-Name: Jormanainen, Irina
Author-Email: Irina.Jormanainen@hse.fi
Author-Workplace-Name: Department of International Business, Helsinki School of Economics
Title: When a good science base is not enough to create competitive industries: Lock-in 
	 and inertia in Russian systems of innovation  
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.
Classification-JEL: O32, O14, P31, L52
Keywords: innovation systems, R&D, Russia, inertia, institutions, research and
	 development, lock-in, transition, competitiveness
Series: UNU-MERIT Working Papers
Creation-Date: 2008
Number: 2008-059
File-URL: https://unu-merit.nl/publications/wppdf/2008/wp2008-059.pdf
File-Format: application/pdf
File-Size: 275 Kb
Handle: RePEc:unm:unumer:2008059