Building an Innovation-based Economy in Russia: Political claims versus objective reality
Tatichek, Gleb (2015)
Tatichek, Gleb
Metropolia Ammattikorkeakoulu
2015
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-201602162292
https://urn.fi/URN:NBN:fi:amk-201602162292
Tiivistelmä
The purpose of this thesis is to evaluate Russia’s President Dmitry Medvedev plan to build an innovation-based economy in Russia. The study has established a logical chain ‘innovation-based growth – entrepreneurship – innovations – business environment’. This perspective helped to reveal the foundation for an innovation-based economy – a favorable business environment. It is argued that without a sophisticated business climate, there cannot be successful entrepreneurship and innovations and hence no innovation-based economy.
Thus the thesis evaluates three reports that assess Russia’s business environment. These are the Doing Business Report (2013), the Global Competitiveness Report (2013) and a Russian Business Climate report compiled by the Russian Union of Industrialists and Entrepreneurs (2014). Regardless of different methodological approaches, all three reports unanimously assert that the business climate in Russia is extremely unfavorable for entrepreneurial and business activities. Russia scored towards the end of the list for the majority of indicators.
Russia’s poor performance can be explained by several primary factors. First, Russia has undergone a traumatic transformation from a command economy to an economy based on free market principles. Second, it is a relatively young state with no collective memory in the society of living under the free market economy. Third, Russia inherited from the Soviet Union a highly misbalanced economy oriented on state procurement and military orders.
The thesis concludes that creating an innovation-based economy in Russia in the nearest future is highly unlikely, particularly due to the unfavorable business environment and unsustainable economic model. The two will always act as impediments for entrepreneurial activities and innovations, and consequently for building an innovative economy. Finally, the thesis suggests to a strategy of first developing a favorable business climate, which will naturally boost and attract entrepreneurial activity.
Thus the thesis evaluates three reports that assess Russia’s business environment. These are the Doing Business Report (2013), the Global Competitiveness Report (2013) and a Russian Business Climate report compiled by the Russian Union of Industrialists and Entrepreneurs (2014). Regardless of different methodological approaches, all three reports unanimously assert that the business climate in Russia is extremely unfavorable for entrepreneurial and business activities. Russia scored towards the end of the list for the majority of indicators.
Russia’s poor performance can be explained by several primary factors. First, Russia has undergone a traumatic transformation from a command economy to an economy based on free market principles. Second, it is a relatively young state with no collective memory in the society of living under the free market economy. Third, Russia inherited from the Soviet Union a highly misbalanced economy oriented on state procurement and military orders.
The thesis concludes that creating an innovation-based economy in Russia in the nearest future is highly unlikely, particularly due to the unfavorable business environment and unsustainable economic model. The two will always act as impediments for entrepreneurial activities and innovations, and consequently for building an innovative economy. Finally, the thesis suggests to a strategy of first developing a favorable business climate, which will naturally boost and attract entrepreneurial activity.