By Yanchao Li, Maria Karaulova, Oliver Shackleton and Philip Shapira
In the arenas of science, technology and innovation, two of the world’s largest emerging economies – China and Russia – have placed great emphasis on seizing early opportunities to develop and exploit strategic emerging technologies. These technology and innovation policies are being implemented in the context of, and are indeed part of, the transformations of economic structures and other innovation system aspects in these two countries, including changes in institutional frameworks, governance approaches and actor roles. In our ESRC project on Emerging Technologies, Trajectories and Implications of Next Generation Innovation Systems Development in China and Russia we are building a conceptual framework to investigate the factors that influence the returns to technology and innovation policies in each of these countries.
There are multiple points of comparison between China and Russia, including a shared legacy of centrally planned regimes and more recently economic reforms and market orientations. Three decades ago, there were many similarities between the two countries in science and innovation. National economic shares of investment in science and outputs of scientific papers were comparable. In both countries, the Academies of Sciences dominated the institutional research landscape, while universities focused mostly on teaching. Large state companies occupied most of the major economic sectors, driven by goals of production. Particularly since the 1990s, both China and Russia have sought economic transformation with greater use of market incentives, and each has developed policies to modernize and reform science and innovation. Today, there are similarities in the strategic goals of their respective innovation policies – and both countries engage in active innovation policy learning from US and European models.
Nevertheless, it is evident that present day China and Russia now diverge significantly from each other in science and innovation system performance. China has undergone a striking transformation in R&D capabilities, greatly expanding the share of its economy spent on research, rising to one of the world’s leading source of scientific publications, developing a number of globally-recognized research universities, and seeing the emergence of innovation as a source of growth among larger companies and new entrepreneurial start-ups alike. In contrast, Russia has struggled to maintain its research infrastructure, particularly since the decline of the oil-fuelled economic growth of the early 2000s and the economic consequences associated with recent geo-political tensions. Overall, by almost all innovation indicators, Russia now lags. Yet, these differences between the two countries cannot be explained only by macro-level events. We also identify the importance of institutional and micro-level factors within innovation systems themselves. Our research frames the problem of micro-macro systemic interactions in an iterative way through which actor expectations and subsequent strategies shape innovation policy implementation processes in an institutional context – which, in turn, influences the next round of an expectations cycle and bears on whether trajectories follow path dependency or open up path plasticity (see Figure).
Our research draws on interviews with a wide range of innovation actors in China and Russia including established firms, new start-up enterprises, central and regional government officials, scientists, think tanks, and managers of science parks and incubators. We have used focus groups and workshop and conference engagements alongside individual and group interviews. We also draw on secondary data, such as organisational documentation, bibliometric sources, and other available statistical data. We have focused research on emerging technologies, such as nanotechnology and synthetic biology, so as to track developments through the lens of a leading-edge, high priority new technology.
While our research is ongoing, we do have some initial findings. Evident in both countries are factors of path dependency – including deep-rooted legacies of administrative behaviour and hierarchical top-down oversight that carry over from prior phases of central state planning. At the same time, path plasticity – where actors stretch institutional boundaries and more flexibly overcome constraints – is stronger in China. For example, while one Chinese research university we visited does not officially encourage faculty to form companies notwithstanding central government guidance to allow this, faculty are informally associated with start-up-companies, at times through their graduate students. Indeed, actor perception of plasticity (as seen in China) is conducive to entrepreneurship, while actor conformance to path dependencies can stifle such activities (in Russia).
The importance of plasticity is also seen in differences in openness to internationalization and mobility of scientific and entrepreneurial talent. While maintaining strategies of “innovation with Chinese characteristics,” science and technology in China has become much more open to international knowledge exchange. An example is the prominent role of returnees in the innovation process in China, bringing with them transnational experience and active linkages with international innovation and business communities. “Over the years, the government has invested a lot in education and sending students abroad,” commented one interviewee. “These graduates and returnees are gradually showing their contribution to the society.” Russia is more circumspect when it comes to internationalization. While many Russian scientists have moved to other countries, relatively few move back – in part because of differences in the availability of resources but also because it is often hard for returnees to be re-accepted, notwithstanding government policies to encourage return migration. Instead, the Russian approach has been to promote internationalisation through established collaborations with compatriot scientists abroad – this has been a feature of many international cooperation programmes in recent years, although one consequence is that Russia captures fewer domestic innovation spillover benefits from these international linkages.
There are differences in perceptions of the roles of respective government in innovation processes. Maintaining good relationships with government officials at all levels is de rigueur in China. Government linkages often lead to special status designations, tax incentives, and support for research and facilities for high technology enterprises. This can be the case too in Russia, but we also see the increased importance of intermediaries in facilitating communication, trust building, and access to resources. However, as trust in government institutions is low, private companies tend to abstain from government initiatives and policies, even eschewing available tax breaks for science-based enterprises. Quasi-governmental brokers serve as a buffer between the aggressive state and mistrustful companies. “We prefer to work with foundations rather than with the government,” one Russian small enterprise told us. Interestingly, some of these foundations are funded by government itself. Others are privately funded, although the status of some foundations established by private donors has now become uncertain in Russia. A current case involves the Dynasty Foundation – a sponsor of research, education, scientific prizes and exchanges founded by a wealthy Russian business philanthropist – which has fallen into difficulty with the Russian government. Here, a seemingly flexible initiative designed to overcome problems in state science support has encountered the limits of government tolerance in the current Russian system.
Overall, the innovation actors in these countries now have different expectations, as well as differences in access to resources and capabilities. In some cases, similar weaknesses are evident in both countries, for example in encouraging innovation-based collaborations between large and small firms. Yet, while combinations of flexibilities and rigidities are present in the institutional and governance frameworks of both China and Russia, the greater opportunities for path plasticity now available in China have helped significantly to improve its innovation performance outcomes.
Further work is continuing in our project through to September 2016 both to elaborate the conceptual framework and to develop evidence and insights from our field work and other analyses.
All authors are associated with the Manchester Institute of Innovation Research, Manchester Business School, The University of Manchester, UK, and the Project on Emerging Technologies, Trajectories and Implications of Next Generation Innovation Systems Development in China and Russia (ES/J012785/1). Yanchao Li is a Research Fellow, Maria Karaulova and Oliver Shackleton are doctoral students, and Philip Shapira is Professor of Innovation, Management and Policy. For further information, contact: email@example.com