17 December 2008

The weight of innovation: "competent" numbers versus common sense

Is it possible to successfully and in a short time to put the Russian economy on an "innovative track" without clearly defining the key benchmarks?

Konstantin Kiselyov (left), Executive Director of the Open Economy Foundation, and Gennady Shepelev (right), Head of the Department of Programs and Projects of the Federal Agency for Science and Innovation, outline some likely arrows of the main movement "towards innovation".

Numbers vs their interpretationGennady Vasilyevich, there is an opinion of one rather competent organization, namely the Institute for Statistical Research and Economics of Knowledge of the Higher School of Economics, that the share of "innovative enterprises" in Russia is not higher than 10-11 percent.

According to another competent organization, the Ministry of Economic Development, the share of innovative industry in the country's economy is two percent. Of the EU countries, only Latvia and Bulgaria are comparable to us in this indicator, and then with a stretch.— Let's divide the question.

As for the numbers, they are probably correct. I do not question the data obtained by the Higher School of Economics or the MAYOR, but the conclusions that are being made (or implied) leave much to be desired.

Let's ask a simple question, who in Europe has their own spaceships? Who supported the launches to the ISS when no one in the world had the opportunity to fly there? Latvia and Bulgaria?

It is quite possible to set "competent" figures against common sense. The question is that either the statistical accounting methodology that the Higher School of Economics has adapted for Russia does not take into account something serious, or the interpretation is incorrect.

On the one hand, it is logical. But on the other hand, if we talk only about the civilian sector of research and development, then we can agree with the conclusions of experts.— I would first figure out how these figures are obtained.

A few years ago, one city claimed to be a science city. When we started analyzing statistics on this city, it turned out that it is no different from the average Russian city. They began to understand. It turned out that the enterprises simply did not fill out statistical questionnaires. When they were forced to fill out these questionnaires, everything fell into place, and the city received the status of a science city. There are weaknesses in the statistical accounting system, sometimes critical for evaluating complex objects. Therefore, with some kind of sample survey, I would check the statistics and how representative the source data is.

If people start interpreting things that they haven't figured out, they can draw any conclusions on the same data — for, against, in any direction. But if you try not just to count, but also to think, then the answer becomes not so obvious, and many things can be explained in a different way.

Innovativeness vs competitivenessRegardless of the reliability of statistical data, let's ask the question, why do we need innovations?

By the way, a few years ago, an attempt to ask such a question at a seminar at the Higher School of Economics led to the fact that they posted such information on their website: officials are against innovative development.

Generally speaking, innovation for the sake of innovation, by itself, is not needed by anyone in the world. For example, Swiss cheese is produced according to old traditional technologies, and God forbid to change these technologies! It won't be Swiss cheese anymore, but something else. Manufacturers are trying to keep the brand and not to let innovations in the form of new technologies. Not so long ago, the French also stood up to the death against the EU cheese production standard, which led to a change in the taste of traditional French cheeses. So, the appearance, taste, smell, packaging — everything is scrupulously kept in the same form as hundreds of years ago. A reasonable approach? In this particular case, absolutely.

Therefore, it should not be about the innovation of the product, but its competitiveness.

The first question is: how to measure competitiveness? I think it should be measured solely by the market share that a particular country or individual company has. If we say that Nokia occupies 30 percent of the mobile phone market, then it is clear: this is a competitive product. And, let's say, the attempts of AFK Sistema, as far as I remember, to come out with their phones ended in nothing.

But Sistema owns one of the leaders in the cellular services market, and this company is quite competitive and relies on innovation…— I do not argue and do not say that AFK Sistema (with all its businesses) is an uncompetitive organization.

But hardly anyone will demand a phone from MTS in the store - the attempt of this company to enter the market with its phones is generally known to few people. The situation is different in the market of mobile operators, and here MTS is one of the largest and best companies, at least in Russia. Moreover, just here "Mobile TeleSystems", if evaluated by market share, may be the most competitive. Therefore, the following question arises: what determines the competitiveness of the company?

Now, including at the instigation of the Higher School of Economics, we are being offered to accept an unambiguous conclusion that only innovations give an increase in competitiveness. I claim that this is not the case.

To be competitive, an organization must have good production resources? Must. Qualified personnel? There should be. Should there be financial resources to support the production process? Must. And then comes, in my opinion, the most important thing — the availability of a promotion system on the market.

Our innovation theorists, for the most part, do not understand at all (although they teach the public something in their lectures) that they still need to be able to enter the market. Take the Chinese. Do they have highly competitive products in terms of consumer quality? No, their goods can be extremely cheap, sometimes just unusable. But in terms of how they promote them on the market, the Chinese are just great. I do not take the products of the PRC, in which it is very difficult to spoil, because the quality level is set by foreign technologies, and if a person carefully washes his hands before getting up to the assembly line, then everything will be fine. I take clothes, furniture, toys, cars — all of them are of poor quality, sometimes just dangerous. But they came out with this product to our, and not only our, market!

How does China enter the market? Due to cheapness, aggressive promotion, a competent approach to the buyer. With this example, I want to show that it is possible to have a reduced level of one resource, but to get the end result with another. Among these resources in Russia, the most disastrous (for most innovative firms) is the ability to sell their products.

Fence vs InnovationThat's probably why we can agree with both our president and the Prime Minister, who, even against the background of the crisis, talk about joining the WTO.

With all the political costs, this is a kind of understandable way that many countries (and China in the first place) use in order to actively enter foreign markets.— That's right!

But at the same time, you still need to have the appropriate mentality, skills, and skills. Our scientists have never learned to trade. This is not their fault, but a misfortune, because no one in the Soviet Union studied this. A Western scientist is brought up in an environment where there is an understanding that you need to have the ability to sell your product, in this case, knowledge. Even a pure fundamentalist should promote his idea somewhere — not just write an article, but give it to the best magazine, advertise, go to a dozen conferences. And our people think like this: "I published once, and then everyone should come to me and say what a good fellow I am."

They won't come, and they won't quote.— That's right.

It's the same with the application. Here he has a good piece of hardware that gives out (in the laboratory) good indicators. But who knows about this piece of iron? No one. He reported among his own scientists, and sits happy, he was applauded. And 70 percent of production workers (this was calculated in the Interdepartmental Analytical Center) do not know what is happening in the field of science on their subject. Here's the answer! According to the interpretation of the theorists of innovation, which scientists repeat after them, our industry is "immune to innovation." And this problem is partly due to the fact that our scientists do not promote their achievements in industry. Is this a serious resource for increasing their competitiveness?

Serious. Scientists say, "No one orders us anything."— Of course, he does not order, because even what is offered by our science industry is mostly "second freshness", if we take it by world standards.

Why would a business need such a product if there is a choice?

So, if we return to the resource problem, then the question of the ability to trade your products is one of the key ones. At least for Russia.

As for innovations, I mean by them the scientific result brought to the finished product, that is, what has entered the market, and for which people have already started paying money. I had a discussion with an academician of the Russian Academy of Sciences who said: "My laboratory produces a dozen and a half innovative developments a year." I'm asking: "What is innovative?", and I get the answer: "Something that could be introduced into the industry." But this is not an innovative development yet! Probably, this is still just a scientific development of one or another level of quality.

My favorite example: if there is a forest, can we say that it is furniture? Maybe furniture, or maybe firewood or a ship. That is, it is a certain potential that still needs to undergo additional processing in order to become one or another result. If a tree went to a furniture factory, it will become furniture. If it went for firewood, it means it will become fuel. Etc. Innovation is the end product of a process in which scientific knowledge is only the first stage.

So, the new knowledge that the company can apply at home is also one of the resources that allows it to increase its competitiveness.

Now the question is: I have a collapsed enterprise, a territory without a fence. I'm starting to produce something useful for the farm in the amount of 50 units per month. Will they steal it from me (in Russia)? For sure! I can put up another dozen machines, hire more people, implement a more productive innovative system and start stamping not 50 units of products, but 100. But half of them will still be stolen, which will put an end to investments in innovation. The second option: I put a fence around the enterprise, hire security and stop stealing. At the same time, I get the same 50 units of production. Which option is cheaper? What will work faster and more efficiently? Of course, the fence!

There are different ways to solve the same problem — simple ("fence") and "innovative". Which one will you choose? Yes, the one that leads faster and cheaper to the result for obtaining more income by the owner. And in this case, probably every reasonable person will say: "To begin with, it's easiest to block the useless withdrawal of products." What do our firms offer? Implement, for example, some quality management systems. By the way, in one business magazine there was an article on the introduction of the "Kaizen" system at the enterprise. To begin with, the production staff began to lay out the tools correctly, and the company immediately increased labor productivity by 15-20 percent. Which is easier: to decompose the tool correctly or to introduce technological innovations? It is clear that it is easier to put things in order for a start. Actually, the stage at which we are now (I mean our Russian industry). In most cases, restoring elementary order is the easiest way to increase productivity and competitiveness. Naturally, this takes money, which is always a limited amount. But the efficiency of these costs is most likely higher at this time interval than the introduction of new technologies.

By the way, the same statistics say that since 1997 the total number of advanced manufacturing technologies used in Russian industry (own and imported) has increased 2.6 times (from 55.5 thousand to 141 thousand). At the same time, in the field of design and engineering, communications and management, the number of technologies has increased sixfold, and in the field of information systems — fourfold. Question: does all this cost money?

Launching your own projects vs implementing someone else'sIn fact, we are increasing productivity, we have industrial growth, GDP is growing.

It comes from somewhere! And not only due to the increase (until recently) in oil prices. Therefore, I would approach the problem by standing slightly above the situation with "innovations" and "innovative development". If we are developing, then let's look at how to accelerate it not only through innovation, but also at the expense of other resources.

By the way, this is only a kind of "fad" on product innovations. I was at the meeting of the G8 + G5 working group. (G5 is China, India, Mexico, Brazil, South Africa.) One of the areas of discussion is innovation. This working group gathers and thinks about how to develop this process. At the last meeting (held quite recently) A very interesting experience of Mexico was presented. Their patent office has made a website that anyone can access — free access, set a technology search there, and the system will instantly give him a result that is presented very clearly, according to the principle of traffic lights: red, yellow and green. If the green light turns on, then this technology can be freely engaged in production in Mexico — there are no patents that "cover" this clearing. If the light is red, then you can not do this freely, but you can buy a license from a company that holds patents operating in Mexico (the coordinates of the company are given). Yellow is an ambiguous, borderline situation, since there are several patent classifiers (Japanese, American and European). There is no talk about any "innovations" in our understanding. The question is simple: how to work correctly with patents for the organization of production in this country. You don't have to invent innovations, take a patent and implement it, organize production!

We have a long-term development concept, the so-called CDR, prepared by Elvira Nabiullina's office, signed by the Prime Minister. So in this text the word "innovation" occurs more than a dozen times, and the main scenario of the country's development is called "innovative". The concept has a certain set of measures and tools; there are priority areas, there are industries; there is a desire to multiply the contribution of high-tech exports to the total volume of foreign trade. You claim: "I agree with this, it is really necessary to increase the share, but it can be increased not with the help of mythical innovations, but with the help of elementary restoring order in those areas where growth is possible."— This is a somewhat one-sided interpretation.

I just haven't finished, there are still considerations on this topic.

Rolling back: there is a set of resources that allow the company to be competitive in the market. One of these resources is innovation. Other resources are listed. We are looking at the situation abroad, in Europe. Can you tell me how a French car differs from a German one — of the same class, at about the same price? Yes, you will never say. Color, upholstery, ashtrays are slightly different…

Virtually nothing. Odnoklassniki cars are now competing in exterior and interior design.— Of course!

And according to the essential indicators, what is there — "infinite warranty period", what is here — "infinite warranty period"; what is here — "safe movement", what is there. Then there are the same design delights. Manufacturers have "selected" all non-innovative public resources that they had to zero. They "fenced themselves in with fences", introduced "Kaizen", logistics and did everything that is supposed to be in a decent company. The only thing that has not been unified is the number of innovative solutions. That is why, first of all, innovations begin to determine their competitiveness. But this is subject to equality in other resources! Although they also work on other resources: otherwise, why would they go to Southeast Asia for cheap labor - let them introduce innovations.

Our companies have not reached this level yet. They still have some time that they can live in a "non-innovative" way.

Now the myth about innovative development, which determines everything, is surfacing again. What we have been talking about means that it does not define everything. And if it does, then only when everything else has already been used. So that's what our theorists forget. Or rather, they do not understand, because they themselves have never traded pies, did not manage their own money and did not take risks, but taught others how to do it. They only read foreign books, share "foreign experience". So, if we bring our economy to the level where all the simple technologies of development and growth are involved, then we need to take fellow theorists and ask them for advice "where should we move so that this percentage rises?". But, I assure you, the theoretical comrades will not answer you anything… By the way, not only ours, but also foreign ones.

Roof over your head vs machine toolsThen why did our native state build these — officially they are called "elements of innovation infrastructure", and speaking in Russian, some organizations that seem to be called upon to implement something under their roof, starting with state corporations and ending with technoparks at universities?

— So it follows directly and unambiguously from the answer to the previous question.

If an organization lacks some kind of resource (production, personnel, financial), it must take it somewhere, or leave this area, because there will be nothing without the right resource anyway. Infrastructure is an opportunity for enterprises to get the missing resources. There is a so—called "technological infrastructure" - technoparks, business incubators, innovation and technology centers - which makes it possible for a small enterprise to get a roof over its head. A large enterprise that has its own production buildings does not need a technopark (in the most common variant). Only a small enterprise needs this resource.

A few years ago, the Ministry of Economic Development decided that all the strength is in business incubators, no other infrastructure is needed. They promoted the program, invested good money, fortunately they have a wallet at hand. And now, if you read the reports from some regions, small businesses are simply not recruited to fill business incubators! You don't need so many business incubators anymore! There is already another restriction, except for the roof over your head.

I have a business angel friend who said in Samara the summer before last: "We don't need office space for small businesses, but production! So that there is where to put the machine, to put the exhaust from it."

So for the same purpose, in fact, special economic zones and innovative ones have been created…— Excuse me!

Will he go from Samara to Tomsk or Zelenograd?

Well, we have made conditions there for local residents, as well as for large companies — they can use them! And where to go to a small entrepreneur from another city who will not leave his apartment, will not leave his family to go somewhere - to the same Tomsk?

A resource for a small enterprise should be, as they say now, within walking distance. So that he took the subway, got out two stops later and ended up at his workplace. That's what you need. Small businesses need to be given production resources, not office resources. If you look at the statistics of the same Bortnik Fund, which small enterprises are most promoted in our country, most often apply to the fund? IT people. Why? Because what happens to the computer? Wherever you put it, there's your workplace. Then you can already do business. And you can't put a big machine anywhere: the sanitary and epidemiological station will not allow it, and the locals are unlikely to be delighted.

Here is the business angel I mentioned, he also promotes innovations: he made OCD, made a prototype, and now he says: "I need to do production. And where will I go? There is no space for production!".

But after all, the same Viktor Vasilyevich Avdeev from Moscow State University, who created the company "Unimtek", is engaged in production not in Moscow, but in Klimovsk near Moscow."That's right.

But, excuse me, how much money was given to him for promotion? And he did not immediately leave Moscow, but only received a significant turnover, which allowed him to purchase the necessary areas.

I don't want to speak for him, but I think the VIP project helped him a lot.— Exactly!

Give this amount to any small entrepreneur — not one will be promoted. He was lucky. I'm not saying he didn't do anything. But he was given such a push that helped him develop. Try to do what Avdeev did without money. You won't! It was a very serious project. Here, as I think, I should say thanks to Andrei Alexandrovich Fursenko, who was the ideologist of the VIP. Avdeev is a good example of how everything can be done with the availability of resources, including financial ones.

But there are other examples when even with good finances, projects did not work out because there were failures on other resources. By the way, he moved production from Moscow, becoming not a small, but rather a medium-sized enterprise. The question of moving, I think, was determined by the cost of production facilities in Moscow and the Moscow region.

"Our" vs "their" problemsIf we talk further about infrastructure, then the most in demand, in my opinion, would be the one that would solve our problem of promotion to the markets.

In the West, this problem does not exist on the same scale, and no Russian theorist, of course, talks about it, because he knows and discusses only "foreign" experience.

Therefore, we must first understand the problem that needs to be solved, namely: what resource is missing. And then to create infrastructure for this problem. And we have this infrastructure "molded" on the basis of foreign experience. They make technoparks — let's make technoparks too! And if you think about it, then the word "technopark" in different countries means completely different things. In the same Germany there are two (!) concepts of a technopark. In West Germany, this is a way to promote the development of scientists in the industry. And such a technopark is being created at the university, they take young guys, under the guidance of a professor, they launch a small innovative business. In East Germany, a technopark is, as a rule, a banal job creation, but it can be anything — as long as people don't hang out on the streets. In the West, technoparks solve not the problem of creating technological infrastructure, but a completely different one — different in different situations.

And no one sets tasks for infrastructure in our country. Therefore, it turns out that the technopark is just an opportunity for a small enterprise to get space. He has practically no other options, and the small enterprise has been sitting in the technopark for as long as it exists, without developing, since there is no money to expand the area. And on the other hand, as a rule, there are practically no production areas in free access.

Technology transfer centers?— A difficult question.

They were also copied from foreign experience, when it became clear that technoparks did not solve the problems they were created because of. I believe that if technology transfer centers (TTC) are set up to promote developments and products, there is a benefit in this. The experience of their creation in the regions is completely different, because people need to be specially trained for this task. At one time, they gave money for the creation of centers, but they did not give money for personnel training.

The most successful CTT network was created in the Volga Federal District — there was the most successful situation with personnel. The network still exists, and there have been significant results. Based on the results of the "START" program of the Bortnik Foundation, we showed how effectively it works — three times more effective than without it.

Now the CTT system will quietly fall apart, because no one brings the task under it. More precisely, there is a task, but funding has been stopped. By the way, the same function is now being hung on business incubators as on CTT. But just like in technology transfer centers, there are few people who know how to perform this function correctly. And this is another issue that should be urgently addressed.

Venture funds?— Our main "venture capitalists", it seems, have never been engaged in business either.

And when they were allowed to do venture business, they, in my opinion, began to do funny things. They, for example, swap supply and demand. They believe that those small businesses that go to them for money are in demand. And I say an offer. The demand is from large enterprises that can buy developments promoted by venture capitalists. There are practically zero of them! Then the following question arises: what kind of business (venture or other) can there be with a zero market? Explain to me! It can be called a hobby, charity — anything, not a business.

According to my estimates, a production company that can seriously play venture business and buy ready-made developments from a venture fund on the market should have an average of a billion dollars in annual turnover. Consider how many companies we have with a billion—dollar turnover - this will be the entire market for venture business. By the way, it will immediately become clear why this business has not developed seriously anywhere except in the USA, and where it has developed, it is closed to the American market.

By the way, our first venture funds, created in the 90s, went, as you know, into traditional areas of activity, where there was real demand.

In the West, the state does not work for venture capital, but it works for us. That's how the economy works.— That's what I'm saying.

If we seriously talk about innovative development, then we should not try on other people's glasses, as in Grandfather Krylov's fable, but look at what problems we have, and already offer solutions for them.

To do this, of course, you need to have statistical data. Only their interpretation should not be an end in itself, but a tool for analyzing real problems.

Table 1. The level of innovation activity of organizations in Russia, 2006-2007
 The number of organizations that carried out innovative activities,
units 1)
The level of innovation
activities of organizations,
percent
 twothousandsixtwothousandseventwothousandsixtwothousandseven
Total2806284110,610,8technological innovations
249024859,49,4
marketing innovations6156562,32,5
organizational innovations8579113,23,5
1 Organizations that have implemented several types of innovations are counted once in the "total" line

Table 2. Key indicators of organizations that carried out marketing and organizational innovations, 2006-2007Marketing
 


innovations

Organizational
innovations

 

twothousandsix

twothousandseven

twothousandsix

twothousandseven

Volume of innovative goods, works, services, million rubles234240,6

307272,8

319793,4

390905,6

as a percentage of the total volume of shipped goods, works, services

25,9

26,9

14,7

10,3

Costs of technological, marketing and organizational innovations, million rubles30187,7

42453,4

73154,9

89017,3

including:

technological innovations

28553,3

39808,9

70930,1

84603,8

marketing innovations

1056,4

2092,4

431,9

985,0

organizational innovations

578,0

552,2

1792,9

3428,5

Source: "Innovation activity in Russia in 2007"STRF.ru

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17.12.2008

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