The Organization for Economic Co-operation and Development report on Russia, published on June 6, urges the Russian government to step up protection of intellectual property rights, strengthen competition and invest more in research and development to boost innovation and entrepreneurship across the economy.
The report also recommended membership in the WTO for better access to global markets in engineering services, such as aerospace, software, and information and communication technologies, the areas where Russia has witnessed growth in recent years.
While praising the current government momentum on innovation culture, the report is critical of Russia’s innovation system, which it claims is undermined by low levels of R&D and innovative initiatives in firms, lack of competition and corruption, and weak infrastructures and regulations. The report also cited the unbalanced emphasis on high tech at the expense of low tech and service sectors as a liability for the economy at large.
A key recommendation is boosting public spending on R&D, which stood at just 1.03% of GDP in 2008 down from a peak of 1.28% in 2003 and far from the OECD average of 2.33%. Furthermore, increased accountability and efforts at performance management are mentioned as factors that would increase the value of existing investment as well as enabling more firms to benefit from public R&D.
Russian legislation on intellectual property rights, in effect since 2008 and in line with that of other developed countries, was criticized for poor enforcement, especially for lack of transparency in court decisions concerning copyright.
In addition to standard recommendations on stimulating competitivness, reform in public administration, cutting bureaucracy and improving financial regulations the report suggested the Russian state rethink its policy on state consolidation of enterprises, which often dominate their industry sector in Russia. Opening up state companies to partial privatization, according to the report, would provide them with greater access to foreign know-how and accelerate the modernization agenda.
