Russia on the Path Towards a New Technology-Industrial Policy: Exciting Prospects and Fatal Traps

Abstract

The article aims to discuss the practical problems and inconsistencies of industrial policy in Russia since 2000, to analyze positive and negative experiences, and to draw up some lessons which are essential for a new technology-industrial policy.

The evolution of approaches to industrial policy in Russia is considered, which results particularly in convergence between innovation and industrial policies. Basic state interest groups are revealed, whose interaction determines the industrial policy design. The authors compare two recent significant industrial policies: in automotive industry and nanoindustry. On this basis, we highlight some prerequisites for successful policies.

The following main lessons are drawn:

First, global experience shows that the requirements for industrial policy and its opportunities change significantly with time. Such policies in any given country and at any particular point of time need new ideas and solutions; it is extremely difficult to replicate the success of different countries’ industrial policies.

Second, examples of successful industrial policy typically aim to enter a foreign market, become globally competitive, and attract foreign investment. The implementation of industrial policy without definite and sufficient conditions for the free entry and exit of major players and without the participation of foreign partners is doomed to merely simulate progress, to have strong informational asymmetry, and to create antagonist images of what is actually happening in the economy in the eyes of the society and the public authorities.

Third, the problem of correctly assessing the scientific and technological potential is of great importance for implementing technological-industrial policy.  Numerous assessments appear to be unreliable since they do not take into account changes in business demand for technology. The tendency to use the legacy of past decades sometimes becomes a political problem, blocking new approaches and the development of international technology co-operation.

Fourth, a negative attitude towards particular policies should not be regarded as a ‘taboo’ against studying related issues. Due to the fact that for a long time in Russia it has been as if ‘there were no kind of industrial policy’, the country now has a low quality of both industrial policy and  research.