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Regular version of the site

Book chapter

Industrial and Innovation Policy

P. 183-194.
Yuri Simachev, Mikhail Kuzyk.

Industrial policy has always attracted significant attention in Russia among the political class, business people and experts.  An essential element of industrial policy is the orientation toward redistribution of rents in the economy – that is, the regular prospect of different sectors and players receiving direct advantages or benefits and political advantages in the near and long term determines the attractiveness of industrial policy to various interest groups. In periods of economic growth industrial policy was considered as an instrument of diversification of Russian economy, reduction of its dependence on oil and gas exports, and accelerated development of high-tech manufacturing and services. In crises periods industrial policy was more focused on supporting some large and systemic industries (such as automotive industry in 2009).

However, in recent years this principle has become less universal: in spite of the crisis the Russian government is making efforts to develop new sectors of the economy on the basis of disruptive innovation (under the so-called National Technology Initiative).

Of course, this is not the only factor in the appeal of industrial policy in the Russian political landscape.  Industrial policy, as a rule, is conceptually accepted and understood by Russian society – which is why politicians accord it especial attention. As is established, in Russia the paternalistic roots of state policy are strong, manifesting themselves in industrial policy. All the while, current social problems are front and centre by comparison with the strategic challenges of structural rebuilding, diversification and technological development of the Russian economy.

The possibility of appealing to the different interests of the population (including those associated with the perception of certain sectors of scientific and technological achievements of the Soviet period as key aspects of national pride) further strengthens the position of those who develop the industrial policy.  Russian society has a better perception of dirigiste principles and personalised or ad hoc management – as a sign of pragmatism and personal responsibility – than of various institutional reforms. Indeed, over the last three decades, a certain distrust of institutional reforms (the results of which are often difficult for the public to assess) has set into Russian society.

Finally, industrial policy does not have its own instruments and actually comprises the mechanisms of various other policies.  In relation to this, some experts try to tie or “bundle” industrial policy of one or other design together with certain necessary reforms in order to attract attention to this for politicians and support by society. Usually, in the discussion of industrial policy measures to develop competition, support SMEs, reduce administrative barriers, attract FDI, and protect property rights are proposed.

In book

Industrial and Innovation Policy
Edited by: I. Studin. L.: Palgrave Macmillan, 2018.