Tax Incentives for R&D and Innovation: Demand versus Effects
Tax incentives have proven to be an efficient tool of state support for science, technology and innovation, and are used by many countries on their way towards sustainable development and enhancing global competitiveness. Fiscal stimuli are increasingly combined in a more flexible manner, thus contributing to attaining wider spectrum of objectives; means of international comparison and evaluating impact of these tools are actively evolving. However, despite the fact that for many countries the tax incentives are demandable and work effectively, Russia's situation is different. Based on the results of a specialized survey, the paper estimates the demand for R&D tax breaks from Russian manufacturing enterprises, research organizations and universities performing R&D. The study demonstrated that such a demand is generally low for all types of surveyed organizations, probably due to both the imperfection of the Russian tax legislation, which makes the considered tool inefficient, and low share of the organizations engaged in R&D and innovation. Among the most frequently noted demotivating factors were mismatch of organization’s activity to the terms of using a specific tax break, as well as unwarranted costs associated with the need to prove the right to use these breaks. When using a specific tax incentive, the research institutions typically seek exemption from VAT for R&D activities and patent licensing operations, as well as benefit to mainstream targeted grants. Universities engaged in R&D are more likely to turn to the benefits for grants and accelerated depreciation of fixed assets used for scientific and technological activities. The analysis showed that in Russia the public sector dominates among all categories of recipients of tax incentives for research and innovation. This situation is contrary to best practices and global trends in supporting research activities, which involve betting on strong national players (including startups and SMEs). It hardly allows STI tax incentives to be an efficient mean and provides a basis for the revision and optimization of these tools. This paper indicates possible further directions in the studying tax incentives, their classification, performance assessment and optimization to meet best practices, global trends, and the forefront of research in this area.
The research of trends of the development of the scientific bibliometric information in distributed databases as an application of the Kondratyev’s theory of cyclic dynamics of the socio-economic systems was carried out in this work. A structural analysis of resources of the intellectual information space was fulfilled and an algorithm for forecasting of the development of scientific and technological trends which basis on the analysis of equidistant time series’ distribution of patents in databases was designed. Indicators, which are reflecting the development of the potential of technology trends and the methodology for calculating ones, were built and represented.
This book presents nine case studies on small and medium-sized Russian innovative companies that received at different times financial support of the Foundation for Assistance to Small Innovative Enterprises in Science and Technology (FASIE). These case studies reveal 'live' experience in the setting up and development of innovative businesses in various fields: production of new products and materials, IT, industrial, scientific and medical devices, medical diagnostics. Various specific examples show the main problems faced by small innovative companies in raising financial backing for R&D and further commercialization and implementation of new products, technologies and services, as well as ways and means to address these problems in a different business environment. All case studies were elaborated on the basis of in-depth interviews with company executives within the framework of the project “Factory of cases”, completed by Higher School of Economics by commission from FASIE. The book also contains the review article, illustrating the specifics of innovative activity of small and medium-sized start-ups in Russia, and additionally provides brief analytical findings based on the results of the special study “Social profile of the modern russian innovative entrepreneur”, conducted by the Institute of Innovation Management in 2011. These collected articles are designed for innovative entrepreneurs and executives of small and medium-sized innovative companies, investors, managers and specialists of innovation support infrastructure.
In light of globalisation of knowledge generation, Science and Technology have opened up previously distinct borderlines now favoring overlapping if not merged fields. Hence innovation becomes more complex by bundling different technological solutions in new products, processes, services and business models, which stem from different scientific and technological roots. Thus spillovers are an essential precondition towards the establishment of new interdisciplinary fields of knowledge, science and technology. The paper reviews and synthesizes literature on spillovers, introduces a typology of spillovers and a taxonomy of spillover channels, estimates the economic impact of spillovers. Special attention is paid to assessing recipient’s capabilities to absorb new knowledge thus gaining advantages for own development. The author concludes that knowledge spillovers have a positive impact on performance of a recipient (company, country or region) as long as it possesses sufficient absorptive capacity. Spillovers might under certain circumstances lead to strengthening competition between knowledge recipients at the cost of the place of origin. Nonetheless the latter still is in a position to use instruments of legal protection of own knowledge (under certain circumstances), build on the existing competences and capacities and invest in the next frontier of knowledge and technology in certain fields and moreover create a boom in the field of knowledge and technology generated using marketing instruments extensively.
Governments around the world place great hopes in innovation in their search for new sources of growth and for responses to grand challenges, such as climate change, new or re-emerging infectious diseases, accelerating urbanisation, ageing, food security, and availability of clean water. However they must devise their relevant support policies -- including through sponsored research within public research institutes -- taking into account that innovation processes are currently undergoing a major transformation. New innovation patterns include a broadening scope of relevant activities, a growing importance but changing nature of scientific roots of technological development, a stronger demand-pull, the emergence of new local and national STI powerhouses, and the rise of more open and globalised innovation networks. They translate into new opportunities but also constraints for policies to enhance the contribution of public research institutes to national innovation performance. The article derives the main policy implications regarding the desirable evolution of the mission, research focus, as well as the funding and steering of public research institutes, with a special reference to Korea.
The aim of this paper is to conduct an empirical investigation and reveal what types of modernization strategies and characteristics of regional institutional environment are likely to be associated with different trajectories of firms’ performance in 2007-2012. Using hierarchical cluster analysis we revealed the typical trajectories of firms’ sales growth and found that the dynamic of sales for more than 90% of firms can be described by just two types of performance curve: (a) crisis decline-recovery and the stable growth and (b) crisis decline with weak recovery and stagnation. We test three hypotheses that (1) companies that invested a lot in modernization and restructuring of business before the crisis were more likely to successfully overcome the crisis shock, and (2) that location of firms in the regions with better institutional environment could also matter for the likelihood of successful recovery, and (3) firms with foreign ownership are more likely to overcome quickly and successfully crisis shocks and continue growth in post-crisis period. We found the firms that invested more prior to the crisis are more likely to have positive post-crisis dynamics of sales. Active restructuring accompanied by the rise of the number of employees in pre-crisis period was also a significant factor associated with propensity to be a member of successful cluster. We proved an evidence that firms in the regions with less level of corruption (both administrative and everyday) were more likely to successfully overcome the crisis shock. Contrary to the studies in other countries we found no evidence of significant positive role of foreign ownership.
Sustainable development is an important concept for modern policymakers. To encourage people and businesses to act more responsibly and work towards sustainability, the states may introduce the tax incentives aimed respectively – at achievement certain goals in technological, ecological and social areas. EAEU Member States – Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia – adopted some tax measures which may be described as aimed at sustainable development, mostly in respect of personal development, R&D and their implementation. However, the paper shows that the efficiency of these measures is inconclusive, as the indicators in respective areas change differently than could be expected based solely on tax measures.
The paper contains a review of the on-line services’ contemporary state, which are providing access to scientific data bases of patents and publications in magazines. On the example of a family of screen’s technologies (CRT, LCD, PDP) were shown the development and the replacement of technological trends in that branch of researches. This analysis was performed on the base of time series of the patent data via methods of the data mining.
The paper examines the structure, governance, and balance sheets of state-controlled banks in Russia, which accounted for over 55 percent of the total assets in the country's banking system in early 2012. The author offers a credible estimate of the size of the country's state banking sector by including banks that are indirectly owned by public organizations. Contrary to some predictions based on the theoretical literature on economic transition, he explains the relatively high profitability and efficiency of Russian state-controlled banks by pointing to their competitive position in such functions as acquisition and disposal of assets on behalf of the government. Also suggested in the paper is a different way of looking at market concentration in Russia (by consolidating the market shares of core state-controlled banks), which produces a picture of a more concentrated market than officially reported. Lastly, one of the author's interesting conclusions is that China provides a better benchmark than the formerly centrally planned economies of Central and Eastern Europe by which to assess the viability of state ownership of banks in Russia and to evaluate the country's banking sector.
The paper examines the principles for the supervision of financial conglomerates proposed by BCBS in the consultative document published in December 2011. Moreover, the article proposes a number of suggestions worked out by the authors within the HSE research team.
We address the external effects on public sector efficiency measures acquired using Data Envelopment Analysis. We use the health care system in Russian regions in 2011 to evaluate modern approaches to accounting for external effects. We propose a promising method of correcting DEA efficiency measures. Despite the multiple advantages DEA offers, the usage of this approach carries with it a number of methodological difficulties. Accounting for multiple factors of efficiency calls for more complex methods, among which the most promising are DMU clustering and calculating local production possibility frontiers. Using regression models for estimate correction requires further study due to possible systematic errors during estimation. A mixture of data correction and DMU clustering together with multi-stage DEA seems most promising at the moment. Analyzing several stages of transforming society’s resources into social welfare will allow for picking out the weak points in a state agency’s work.