Russia?s state-controlled companies shy away from investing in RandD

Russia?s state-controlled companies shy away from investing in RandDThe Medvedev Cabinet?s ?coercion to innovation? has produced little result, and it is government coffers, not corporate ones, that have paid for most revamping.

?Coercion to innovation? ? a term coined by the Russian business media for the Medvedev cabinet?s policy of incentivizing Russian state-controlled businesses and overcoming their general non-receptiveness to modernization ? has produced little result, and it is government coffers, not corporate ones, that have paid for most revamping. This is how Mikhail Gershman, a senior research fellow at Moscow?s Higher School of Economics, portrays Russia?s top-down innovation in an article published earlier this month in the journal Foresight Russia (available online only as a teaser). East-West Digital News, the international resource on Russian digital industries, reports an overview of the study. In his in-depth analysis of 44 state-controlled companies, Gershman finds that in 2011 the firms spent 41.5% of their innovation budgets on new equipment and less than 1% on the improvement of business processes. Some of the equipment purchased stood idle, as there was ?virtually no funding? for personnel training and retraining (less than $500 per staff). Puff and bluff invention activity R&D spending accounted for 34...





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