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Innovation Policy and Economic Actors: State, Market and Enterprise

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  • Satoshi Mizobata

    (Institute of Economic Research, Kyoto University)

Abstract

The paper analyses the contemporary Russian innovation policy and innovation system, and posits that Russia needs to overcome considerable barriers in order for it to become a sound innovative society. After its transformation, Russia changed its innovation policy from government-led to market-led. In the midst of weakened international competitiveness and economic decline, however, its policy has spontaneously changed to one of ‘governmentalization’, showing path-dependent evolution. Throughout the 2000s, the government introduced a succession of innovation modernization programs, but the results appear limited, and the macroeconomic indicators explain how the country continues to be mired by its traditional backwardness, as evidenced by its heavy dependence on energy exports, poor high technology exports, outdated equipment, and other such factors. As a theoretical framework for understanding the innovative society, I apply the ‘market quality theory’, in that market quality determines the content of innovation institutions and barriers they face. Market quality can be measured by institutional arrangements (infrastructure, strength of the ‘rule of game’, and its enforcement), institutional complementarities, and transaction costs. The specificity of the Russian market indirectly characterizes its weakness in market quality, as seen in international rankings such as the Global Competitiveness Index, Corruption Index, and so on. Thus, Russia’s innovation institutions have their specificities and instabilities, and owing to the weak market quality, misuse of institutions, and government failure, its innovation policy has become ‘governmentalized’ instead of following the path of marketization with high quality. Market quality and state/government quality are one and the same. The quality of its state/government is poor owing to its present form of governance and social mistrust. In order to overcome these barriers, I stress on the need for social innovation as a key measure for enhancing the quality of the market/state.

Suggested Citation

  • Satoshi Mizobata, 2017. "Innovation Policy and Economic Actors: State, Market and Enterprise," KIER Working Papers 965, Kyoto University, Institute of Economic Research.
    • Handle: RePEc:kyo:wpaper:965
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    File URL: http://www.kier.kyoto-u.ac.jp/DP/DP965.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Privatization; innovation; market quality; policy; institution; path-dependent; Russia; government; infrastructure;
    All these keywords.

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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