Shift in the activities of R&D institutions

Under the impact of the transition to a market economy, activities of R&D in-stitutions are gradually changing (Table 2.6). This process is connected with the tendencies of R&D institutions to reorganize themselves to adapt to the new eco-nomic environment and particularly to survive under severely unfavorable financial conditions. These changes have altered the four major R&D sectors.

Academy Sector: The USSR Academy has been transformed into the Russian Academy of Sciences (RAS). The RAS has largely retained the commanding position of its USSR predecessor and maintained administrative control over the activities of its research institutes. To date, the Academy has not signifi-cantly changed the structure and bureaucratic organization it had in the Soviet era. Using its considerable political influence, the Academy has managed to retain its budget financing better than other R&D sectors. Government financ-ing has largely been in the form of support to basic research. Basic research amounted to 58 percent of the Academy’s 1994 expenditures, up from 52 per-cent in 1990 (Figure 2.1). Applied R&D continues to account for more than one-third of the Academy’s activities. Academy institutes have maintained some participation in budgetary-financed goal-oriented S&T programs. As a result, the Academy sector somewhat increased its proportion in the total value of applied R&D between 1990 and 1994. With respect to development, Academy institutes are usually not competitive with industry R&D units, so this is a minor activity accounting for only 7 percent of the 1994 Academy R&D effort. In 1994 an attempt was made to establish a new administrative body – the Technological Academy – to manage defense R&D institutions.

The measure would have significantly increased the Academy’s role in applied R&D, but it was defeated.

Higher Education Sector: The recent economic difficulties have reduced the role of university R&D as R&D is no longer considered an economically

“profitable” activity and has become a marginal one in many universities.

R&D is no longer carried out at 40 percent of higher education institutions, and the 150 newly established private universities have little interest in R&D.

The higher education share in GERD declined from 6 percent in 1990 to 4 percent in 1994.

The universities’ share in basic research increased (in both absolute and relative terms) because applied R&D performed on contracts with industry decreased sharply, leaving them more dependent on budget funds for basic research. The share of basic research in overall R&D in universities doubled and by the beginning of 1995 had reached 39.6 percent, almost 10 times higher

Total Academy Higher

education Industrial

R&D Enterprise 0

20 40 60 80 100

0 20 40 60 80 100

Total Academy Higher education

Industrial R&D

Enterprise

0 20 40 60 80 100

Total Academy Higher education

Industrial R&D

Enterprise

Development Applied research Basic research

%%%

1990

1992

1994

Figure 2.1. Percentage distribution of R&D conducted within R&D institutions by type of activity and sector of performance.

Table 2.6. Percentage distribution of R&D value performed within R&D institu-tions by type of activity and sector of performance.

Higher Industrial

Academy education R&D Enterprise Total Basic research

1990 62.4 12.9 23.8 0.9 100.0

1992 66.4 16.8 16.7 0.1 100.0

1994 58.2 13.3 28.4 0.1 100.0

Applied research

1990 10.6 11.0 75.7 2.6 100.0

1992 18.1 7.8 72.1 2.0 100.0

1994 15.2 6.2 76.7 1.9 100.0

Development

1990 2.4 2.0 88.7 6.9 100.0

1992 1.7 1.5 89.1 7.6 100.0

1994 1.5 1.3 87.5 9.7 100.0

Total

1990 10.5 6.1 78.5 4.9 100.0

1992 13.6 5.1 76.2 5.2 100.0

1994 12.6 4.2 77.0 6.2 100.0

Source: CSRS, various years; discrepancies in totals are due to rounding.

than the sector’s share in the national R&D total. Universities, however, are having difficulties competing with Academy institutes in basic research and with industrial organizations in applied R&D; therefore, they are gradually losing their position in the overall R&D effort. Universities carry out few de-velopment activities. In 1994 they accounted for 1.3 percent of all dede-velopment spending (Table 2.6).

Industrial R&D: This sector has retained its share of GERD of over 75 percent.

Industrial R&D institutes have retained strong links with enterprises, usually in the framework of institutional structures that have partly replaced branch ministries such as associations, financial industrial groups, or large conglom-erate firms. As a result, these institutes have responded to the short-term requirements of enterprises. Their share of long-term research has declined as enterprises have little interest in financing such activity, given the current fi-nancial situation. Deterioration of the fifi-nancial position of the large industrial R&D institutes, however, has forced them to increase their efforts on basic research financed by the government (especially in the case of the defense industry), thus competing directly with Academy institutes for support. As a

consequence the Academy sector’s share in Russian basic research declined from 62 percent in 1990 to 58 percent in 1994, while the share of industrial R&D institutions increased from 24 percent to 28 percent (Table 2.6).

Enterprise Sector: This sector, with a relatively small proportion of R&D, has increased its emphasis on development activities. Development constituted 80 percent of enterprise R&D activity in 1991 and 91 percent in 1994. These R&D activities are usually financed by the enterprises themselves. There was a modest increase in the enterprises’ share of the total R&D effort from 4.9 percent in 1990 to 6.2 percent in 1994 largely because some enterprises needed to maintain their in-house R&D units (Table 2.6).

At the aggregate level these changes have led to an increase in the share of basic research in total GERD from 8.8 percent in 1990 to 16.9 percent in 1995. According to this indicator, Russia comes close to the leading industrial countries; the share of basic research in total national R&D is 13 percent in the United Kingdom and Japan, 14 percent in the United States, 19 percent in Germany, and 23 percent in France (National Science Board, 1991, p. 344). It is important to note that the increase in basic research is only in its share in total R&D. Expressed at 1990 prices, Russian basic research in 1994 was equal only to 23 percent of its 1990 amount.

A new methodology, developed by the Centre for Science Research and Statis-tics (CSRS), to survey Russian R&D by OECD standards allows us to glance at the sectoral pattern of R&D in Russia. This new sectoral classification is based on the performance of R&D rather than its financing (see Annex 2 for a description of the sectoral classification).

Data on R&D performance show that the enterprise sector dominates Russian R&D. Its share in 1994 accounted for 66 percent of GERD, almost the same as the OECD average of 67.4 percent in 1993. It matches the indicators of large economies such as the United States, Japan, Germany, the United Kingdom, and France (OECD, 1995a, p. 22). The internal composition of the enterprise sector in Russia, however, is different from that in the OECD, as it comprises mainly independent research institutes working for industry rather than enterprises. The share of the government sector performing R&D in Russia was 28.1 percent of GERD in 1994. This is double the OECD average (12.7 percent in 1993). The R&D activities of the Academy of Sciences accounts for most of this difference.

The share of the higher education sector in Russia is small in comparison with other industrialized countries. In 1994 higher education institutes represented 5.9 percent of GERD; the share in OECD member countries was, on average, 3 to 4 times higher. Russia’s private nonprofit sector comprises only 7 research institutions contributing less than 0.1 percent of GERD in 1994 compared with 2.9

percent in OECD countries. The rise of scientific societies, nonprofit foundations, and institutions should contribute to the growth of the nonprofit sector’s R&D efforts.