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The Kremlin’s Soviet legacy handicaps its innovation policy. Privatisation, property right reforms and market building after 1992 in the wake of a “brain drain” failed to eradicate all the deficiencies of the Soviet command economy (Fonotov, 2013, p. 35). Legal instability weakened the effects of market-oriented measures (Fonotov, 2013, pp. 36–39). A collapse of “innovation industries” made it difficult to implement innovation policy. As a result, fixed assets sharply diminished and equipment obsolesced during the 1990s. Innovation capacity declined due to poor state leadership, inadequate commercialisation, defective implementation and bias towards the defence sector.

Russia’s innovation strategy depended on the state sector from the outset of the post-Soviet period because of its backward Soviet era production base, traditional Soviet education/industry–university cooperation and poor linkages with the international division of labour. Russia’s over-dependence on natural resource exports (Figure 1) and technology imports (including foreign intellectual property) further impaired innovation.

Figure 1:Change of export structure.

Note: Oil price indicated in the right axis, and both shares are indicated in the left axis.

Source: Rosstat, http://www.gks.ru, accessed on 1 May 2019.

Russia tried to overcome these debilities in the 2000s with three long-term strategies:

•The first was “The Russian Federation Socio-Economic Development till 2010” drafted under the Ministry of Economic Development and Trade in 2000, when Vladimir Putin became President. Even though this strategy stressed modernisation, unrealistic assumptions impaired implementation (Dmitriev and Yurtaev, 2010, p. 109).

•The second strategy was “The Russian Federation Long-term Socioeconomic Development till 2020” drafted by the National Research University Higher School of Economics and the Russian Presidential Academy of National Economy and Public Administration (Mau and Kuziminov, 2013). It had 6 parts and 25 chapters. The new economic growth model and social policy were at its centre. The government chose not to officially adopt the 2020 strategy and informal implementation was perfunctory for a host of reasons including political machinations, administrative shortcomings, conflicting specialist views, lobbying and stakeholder opposition (Belanovsky et al., 2016; Polterovich et al., 2017).

•Thereafter, “modernisation” became the dominant theme. Despite the rapid economic growth (recovery) in the first half of the 2000s, Russia failed to reduce its heavy dependence on natural resources. The “resource curse” is difficult to break. “Putin warned of the danger of Russia turning into a third-world country” (Tsygankov, 2014, p. 117) and tried to avert the danger with neoliberal macroeconomic stabilisation and economic recovery, but did not succeed.

In May 2009, the Council for Economic Modernisation was established to promote and oversee breakthroughs in energy efficiency, atomic power, space, telecommunications, medical technologies and strategic information technologies. The Science City, Skolkovo, and “national champions” phenomenon exemplify this initiative.³ Strategy 2020 announced in March 2012 emphasises the need for innovation-driven growth and human capital development. The government adopted a new policy for “Innovative Development Strategy to 2020” (approved on December 8, 2011, No.2227-r, hereafter the “Development Strategy 2020”) and the “State Program for Science and Technology Development” (December 20, 2012). The latter programme codifies the tactics for fulfilling “Development Strategy 2020”. It stipulates that 3% of the GDP must be dedicated to R&D until 2020 to sustain fundamental sciences and finance priority fields. The approach mimics the mixed model of the Asian development driven by technology transfer from leading countries. The policy includes unrealistic targets like massive high-tech job creation.

Russia wants to move towards a growth strategy compatible with state capitalism. It has become more autarkic, prodded by Western economic and Kremlin counter-import sanctions. The economic sanctions from the West and Russia’s own counter-sanctions built barriers against imports and international financing. Shrinking external economic relations brought about cancellations of military technology collaborations, military/civil technology purchases and joint R&D efforts (Afontsev, 2015, p. 22). The government regarded “the forced import substitution” policy as an anticrisis measure and drafted numerous counter-initiatives such as state projects, preferential taxes, subsidies, preferential credit, loan guarantees and state orders. It drafted numerous industrial policies to accelerate domestic production. However, forced import substitution did not spur innovation and may have stifling consequences over the long term (Afontsev, 2015, p. 34). The Board of Audit pointed out that import substitution did not satisfy domestic equipment demands (Zagashvili, 2016, p. 146). The lack of domestic import substitutes hindered the substitution process, and high import prices impeded innovation.

The new strategy has become a key force for economic diversification (Mizobata, 2017). On the instructions of the president, the draft of “Strategy for the Science and Technological Development of the RF till 2035” was drawn up by the Center for Strategic Research on May 5, 2016, in parallel with the national security strategy (Ministry of Economic Development, 2016, p. 22). The draft addressed the following issues: the national security threat; global changes in technology; accumulated structural imbalance in the Russian economy; changes in labour markets, social sphere and healthcare; environmental sustainability; food security; the intensification of international competition; and energy efficiency. The main strategic threats to the national economy are poor competitiveness, high dependence on external economic circumstances and technological laggardness. Russia’s relatively high technological backwardness and dependence on foreign scientific equipment supplies jeopardise national security.

The updated version of the “Development Strategy 2020”, update strategy till 2035, limns three alternative long-term strategies for Russia: (1) a science and technology leader, (2) a leader in specialised sectors and (3) a nation dependent on the imported technology (Table 1). The first scenario is the most attractive because state innovation and industrial policy are indispensable for national security and development (Medvedev, 2016, pp. 6–7).

The presidential decree “Strategy for the Science and Technological Development of the RF” announced in December 2016 elaborated the policy’s principles, priorities and guidelines. It stressed the balanced growth of private investments targeted to exceed government funding by 2035. Moreover, the president signed the decree on “National Goals and Strategic Objectives of the RF through to 2024” (May 7, 2018) making population growth and reducing poverty as important priorities. Enhancing the national security (“Russian National Security Strategy” approved in December 2015) was declared an important innovational priority. The concept of national security covers a wide range of state and public security activities, including improving life quality and the economic growth. Science, technology and education are all considered indispensable for realising these purposes. In March 2019, the government adopted the latest national programme on “Science and Technological Development in the RF” from 2019 to 2030. It includes five sub-programmes: development of national intellectual capital; guarantee of global competitiveness of the Russian higher education; fundamental science for long-term development of society/state and competitiveness assurance; a comprehensive science and technology programme and an extensive innovation infrastructure.

Table 1:Basic scenarios of science, technology and innovation development till 2035.

Source: The draft of “Strategy for the Science and Technological Development of the RF till 2035”, p. 62.