Post-industrial economy, its specific features and prospects of development

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Post-industrial economy, its specific features and prospects of development



• Table of Contents
• Introduction
• 1. Theoretical foundations of postindustrial economy
• 1.1 The concept and essence of the post-industrial economy
• 1.2 The main features of post-industrial economy
• 2. Development of Russia in the framework of the post-industrial economy
• 2.1 Problems of a post-industrial economy in Russia
• 2.2 The development and achievements of post-industrial russian economy
• Conclusion
• References
• 
• Introduction
• Today the theory of post-industrial society is one of the most widespread concepts that allow comprehending adequately the large-scale changes which happened in the western societies for the last thirty years.
• For this reason consideration of a subject "Post-industrial economy, its specific features and prospects of development” on the example of Russia is actual today.
• The analysis of the matter assumes consideration not only the theoretical aspects characterizing process of modern economic thought, but also problems of implementation of this process, and, as a result - ways of their decision.
• The purpose of a course work is the analysis of the main approaches to the problems of post-industrial economies in general and in Russia in particular, and also identification and the solution of the problems connected with this process.
• For disclosure of these problems it is necessary to solve the following problems:

• To reveal theoretical approaches to definition of transition process to post-industrial society

• Identify the main features that characterize the post-industrial economy;

• Identify the main directions of the formation of post-industrial society, in particular: indicators of becoming post-industrial society and the main problems of Russia to the transition to a post-industrial society.

Relevance of this course work consists in need of the analysis of efficiency of transition to post-industrial economic system in the Russian Federation. Object of research is the post-industrial economic system. A subject of research is the transition period to post-industrial economic system.

In this work are used empirical, historical and analytical methods:

• method of the analysis of economic literature

• researches of investment activity of the enterprises

• methods of the economic analysis and synthesis

• comparison method

• statistical analysis of data

As data source the statistical base of Rosstat was used.

• Coursework consists of two chapters. The first chapter deals with the theoretical part, which reveals concept and essence of the post-industrial economy and its main features. The second chapter is a practical part of the work. It is dedicated to problems of a post-industrial economy in Russia and development and achievements of post-industrial russian economy.
• The term "post-industrialism" arose at the beginning of the XX century in works of English scientists A. Kumarasvami and A. Penti, and the term "post-industrial society" was used for the first time in 1958 by D. Rismen. However the founder of post-industrialism is the American sociologist Daniel Bell (1919), who developed the complete theory of post-industrial society.
• The concept of the Information Society as a post-industrial stage of development of civilization began to emerge in the 1970s. Initially, the main provisions of this concept are reflected in the works of D. Bell, E. Masuda, A. Toffler, R. Drucker and were further developed by many authors.
• economy unemployment service

• 1. Theoretical foundations of post-industrial economy
• 1.1 The concept and essence of the post-industrial economy
• The concept of "post-industrial economy" has almost synonymous meaning - "post-industrial society", which is mostly used in political and sociological spheres. It is clearly that they are connected by the fact that the post-industrial economy is determined by economic relations that arise in the post-industrial society. A post-industrial society can be defined as a society in which an economic transition occurred from a manufacturing based economy to a service based economy, a diffusion of national and global capital, and mass privatization. The perquisite to this economic shift is the processes of industrialization of liberalization. This economic transition spurs a restructuring in society as a whole
• The post-industrial economy has created a new type of society. D. Bell, one of the classical writers on the subject, speaks of six stages of this process. These stages are:

1. A transition from the production of goods to the production of services. A post-industrial society no longer depends for its survival exclusively on the production of goods such as steel, machinery, house appliances or clothes but increasingly evolves towards such an economic structure which is based predominantly on a great variety of services: from selling of hamburgers and hot dogs to financial advice, consultancy and high technology. And although there is a wide spectrum of services provided by the private sector, government provided services constitute the core of the service sector in a post-industrial society.

2. Manual work ( including assembly line workers) declines in importance and that of professionals such as health professionals, consultants, chartered accountants, financial advisers, lawyers and the like becomes dominant. New areas of expertise, such as genetic engineering, family counseling, immigration services etc. become of special importance. Traditional manufacturing centres decline, creating what is known as `'ghost towns'' with hardly any inhabitants. Large armies of unemployed are created as a result of what is now known as `'structural unemployment''.

3. There is a growing importance of theoretical knowledge over the practical know-how which has now become a standard. Some trades such as shoe-making or baking are now vanishing giving way to new ones. Advances in such specialized knowledge create enormous needs for innovative solutions. Ethical aspects of such issues as cloning, transplant of human organs and the ensuing trade thereof, euthanasia or adoption of children by same sex couples urgently await solutions. There is the ever pending issue of the deteriorating environment, refugees, terrorism, etc., which have definite impact on the economy.

4. Post-industrial societies increasingly seek dominance over technologies and efficient control over them. This relates particularly to nuclear technology which, despite its well-known deficiencies, is still perceived as the viable source of energy for the future.

5. To deliver all this, new intellectual technologies are being developed with the continuous drive for the search of innovative solutions which invariably change the way of our life.

6. All these developments lead toward a greater interaction between scientists and the technologies they create. Post-industrial societies are more and more dependent on the quality education. This creates an ever-growing need for specialized university knowledge as lower levels of education no longer make this interaction workable.

These are just a few aspects of the technological revolution that occurs daily, and the technological revolution creates an intellectual revolution. These societies which are unable to cope with the new levels of education and systemic change are the most certain losers in that race towards excellence. [5]

In post-industrial society the base of economic development changes. "As work and the capital were the central variables in industrial society, so information and knowledge become decisive variables of post-industrial society". It has diverse consequences for functioning of economy and society in general.

As the human factor gains essentially new value, the role of investments in "the human capital" in education, health care, vocational training sharply increases. Requirements of qualification of the worker increase, creative nature of work amplifies. According to some information, the share of the population occupied with mainly creative activity increased in the developed countries from 33-41% at the beginning of the 60th to 45-50% in the 80th. At the same time bases of work, which are characteristic for mature industrial society gradually are undermined. In those conditions "the partial, monotonous, monkey business was favorable to the companies. Now computers very often can do similar work quicker and better, and robots can do dangerous work. Old forms of work are less and less productive. Therefore there is an incentive and requirement to replace THEM".[1]

It is known that today the post-industrial era is considered to be one of the last economic waves. Then the question arises: “How did world economic system develop before the postindustrial era?”

In the ancient world, people engaged in gathering and hunting, using the products of their labor in order to satisfy their own needs. Such an organization is considered to be pre-economic society, because there was no market exchange.

The First economic era began with exchange operations - an agrarian economy where people exchanged material products produced with the use of manual labor.

With the emergence of factories and further invention and spread of machines, connect the beginning of the industrial era in which force was used mechanisms. The main achievements of this time - the division of labor, conveyor, mass production (about the middle of the XVIII century to the middle of XX).

The origin of the post-industrial era is considered to be the 1960s, when the number of employees in the United States exceeded the number of workers.

With the beginning of the XXI century some researchers have linked the onset of the creative economy in which information processing is offloaded to the computers, and the man will be the role of the creator of innovation. This so called "fourth wave".

What will happen next? Unfortunately, people are now the only tool for creation and introduction of innovations. With the advent of "artificial intelligence" can wait until post-economic era when no longer necessary to make decisions with limited resources, and this problem will be able to solve the cybernetic creatures.

The term "post-industrialism" was introduced into scientific use at the beginning of XX century by scientist A. Kumarasvami, who specialized in the pre-industrial development of Asian countries. The modern meaning of the term was first used at the end of 1950s, and widely accepted concept of post-industrial society was a result of the works of Harvard University professor Daniel Bell, in particular, after the release in 1973 of his book "The Coming post-industrial society."

In modern economic literature devoted to business practice, the term "post-industrial" economy comes out of a turn. Today, it includes more specialized categories. The greatest popularity was got by terms:

• 'Knowledge economy' and the main direction of "knowledge management",

• "Service economy" as a result of work in post-industrial society is mostly an intangible products, ie services;

• Innovative economy and innovation management, as intangible product, in fact, is an innovative, and after him there innovative material products.

• Information economy, as information is a basic commodity.[2]

The main sector of industrial economy is the industry and construction, and for the countries with post-industrial economy is characteristic a big share of tertiary sector (services) in structure of GDP. So in the USA in tertiary sector about 75-78% working are occupied. And rapid growth of this sector happens first of all at the expense of science and scientific service, education, culture and art, health care and physical culture, housing municipal services and consumer services, social security of development of the sphere of rest and tourism. In post-industrial society the main resources are knowledge and work. Creation of the economic relations requires ability to create and skillfully to use knowledge.

From here huge attention to production of knowledge (science) and carriers of this knowledge (highly educated creative and physically healthy labor). Often post-industrial society calls information lines of post-industrial economy:

1) Increase of a role of services respectively changes structure production and consumption);

2) Education level, mainly at the expense of after-school grows,

3) The creative relation to work, characteristic for highly skilled workers becoming the defining factor at a choice of a field of activity Material incentives pass into the background

4) Especially close attention to environmental protection;

5) An economy humanization (in the developed new conditions society seeks to make the economic investments which became for it main in knowledge and the person),

6) Informatization of society

7) Globalization.

Post-industrialization leads to changes in economies not only the certain countries, but also in the world economy in general:

1) The structure of production and consumption of world GDP changes, moving towards services;

2) The developed countries concentrate the attention on use of knowledge, labor, but not natural resources to the 3rd world trade the share of production of agriculture and a mining industry decreases

3) Quickly International trade in knowledge (The international transfer of technology) grows. The world's largest exporter of knowledge of the USA

4) The abundance and availability of economic information is combined with reduction in cost of means of communication and transport. This feature of post-industrial economy led to strong incentive for the International movement of the capital. [1]



1.2 The main features of post-industrial economy

The post-industrial view of the economy described by Bell and other writers focuses upon the primacy of services and the movement away from manufacturing production as the main activity of western economies. It recognizes three phases of economic development which are not unlike those proposed by Fisher and Clark: a pre-industrial, an industrial and a post-industrial phase.

Within each phase certain service activities are present. In pre- industrial economies personal domestic service is one of the major categories of employment. In an industrial economy, the growing services are those that support manufacturing, such as transport, distribution and banking. In a post-industrial economy a different kind of service economy is emphasized. These are referred to by Bell as the human and professional services: human services include health, education and social welfare, together with a range of personal services, primarily cultural and recreational; whereas professional services include research, development and other information-related activities.

Two other distinctive features of post-industrialism connected with are the rise of a service economy. The first is the shift to white-collar occupations, illustrated by the displacement of manual work by non-manual work. Within the white-collar category particular importance is attached to the professional, scientific and technical occupations.

These groups are considered to represent the key occupations in a post-industrial economy. They are the custodians of scientific and technical knowledge that, according to Bell, is shaping the direction of post-industrial change. Industrial society for Bell represents 'the co-ordination of machines and men for the production of goods. Post-industrial society is organized around knowledge, for the purpose of social control and the directing of innovation and change: and this in turn gives rise to new social relationships and new structures'.

The second feature is the shift in demand from material commodities to (immaterial) services. Bell, like Fisher and Clark before him, cites Engel's Law in of this shift in demand.

As the support incomes of an increasingly productive workforce rise and people's basic material needs are progressively met, their needs expand first for consumer durables and then for luxury items immaterial services, such as education health, leisure and the arts. And as these new demands are generated, the structure of the labor force shifts from the production of material goods to immaterial services to meet them.

Production and employment, therefore, are increasingly concentrated in the area of services, orchestrated by the key professional groups. Bell, however, offers direct evidence to substantiate no claim that there has been a shift in demand to services. Instead he infers from another piece of evidence the growth in service employment that from another piece of evidence, the growth in service that there has been a simultaneous growth in the provision of final (immaterial) services to consumers. This link, as shall see in the next section has been we contested.

Bell, as noted above, takes the figures for service growth as an indication of growth in the production of final services. In part, this failure to inter gate the issue of output is a reflection of Bell's conception of how societies change and how they are organized. He argues that societies are organized around what he refers to as certain 'axial structures'.

In industrial society, a goods-based economy, the 'axial structure' is 'economizing a way of allocating resources according to the principles of least cost, substitutability, optimization, maximization, and the like for economic growth. In post-industrial society a new 'axial structure has emerged which is reshaping the economic and social structure, that of 'theoretical know- ledge.

In this context knowledge and information are the strategic resource, the transforming agent behind innovations in the management and organization of the economy. In choosing to prioritize this characteristic, Bell draws attention to the occupational groups that he considers are in possession of this knowledge--the professional and technical. The changing groups pattern of employment therefore-the shift from blue-collar to white-collar occupations and the pre-eminence of professional and technical groups within the latter category is not merely a general feature of post- industrialism, it is one of central significance. The importance that Bell attaches to employment changes in the occupational structure, therefore, is not a random preference: it stems from his theoretical view of how societies change and which groups are the catalysts of change.

Two further general observations can be made about the view of economic change that is held by Bell and other post-industrial writers.

One is its association with the rather questionable linear model of economic change proposed by Fisher and Clark. Thus the latest post-industrial sequence is identified by a series of tendencies which collectively represent a new phase of economic development. The second concerns the nature of the break between a post-industrial era and a new post-industrial order.

Clearly post-industrial writers locate the dynamic of this new economic phase within the latest post-industrial sequence: it is an internal characteristic. In that sense the development of a post-industrial economy is unconnected to the forces which shaped industrial society. The changes, therefore, add up to a different kind of economic. The changes do not preserve an existing system set of economic structures: they represent an altogether different type of economy. The United States is considered to have entered this phase some- time in the 1950s: in Britain's case the date is less clear either in the mid-1960s or in the 1980s depending upon which aspects of service growth are emphasized. [6,105]

In post-industrial economy under the influence of scientific and technical revolution and the result of fast development of the sphere of information services occurs the increase of mass information. Thus the increase in volume of scientific information approximately by 4 times overtakes a population gain on the planet. In this regard before all firms there was a complex problem: how to provide economic strategy by information (economic development for the long period) and the scientific researchers conducted at the enterprise? The solution of this problem, naturally, demands big expenses, reliable sources and information channels, high professionalism of employees of information services.

Practical exit from the created situation is the organization of service consulting. There highly qualified specialists give advices and provide the latest information on a certain circle of questions. The consulting services are created in many companies, and small and medium-sized enterprises ask for the information help in consulting firms. There they receive the data necessary to them concerning anticipation of development of the markets of different goods and services, the prices in the world commodity markets and securities markets and so forth.

At the same time many firms create divisions which establish information relations with the outside world. These communications received the names "public relations". The enterprises achieve a benevolent assessment of their activity. For this purpose they use the press (information messages are published, letters are sent to editorial offices of newspapers, etc.), radio and television (interviews with employees of firm, reporting, etc. are conducted), they organize exhibitions, public performances etc. As a result good image (an external and internal image) of firm is formed.

The following list presents a selection of some of the major post-industrial developments that challenge the employment-friendliness of welfare states in specific ways:

· Massive unemployment since the 1970s: high rates of structural unemployment and labor-shedding strategies, such as early retirement, have dramatically reduced the labor market participation rate, especially in continental Europe. The low labor market participation rate becomes a particularly threatening problem for those countries that rely on employment for the financing of the welfare state, i.e. the continental regimes. In addition, the shift from industry to service as the major sector of employment puts into question the existing educational and skill regime that was designed to enable workers to participate in the industrial economy. Educational and training systems need to be adapted to provide employees with adequate skills and re-qualification.

· Difficulties for outsiders trying to enter the labor market: Labor markets and standard employment are strongly protected in the continental welfare states. It can be argued that this arrangement was functional for the efficiency of a coordinated market economy in the industrial age. In the current context characterized by structural unemployment and the growth of the demand for the participation of women in the labor market, however, strong employment protection may become particularly harmful to job creation and may drive a wedge between the interests of labor market `insiders' and `outsiders'. In this respect, an employment-friendly welfare state is likely to pursue specific policies to support outsider activation and employment for younger workers.

· Spread of atypical/precarious work: De-industrialization and the entry of women into the labor market have led to the spread of atypical employment. The spread of flexible work raises welfare state issues: employees in atypical employment relations face a greater risk of low income and poverty. In addition, the spread of flexible employment challenges certain welfare arrangements that penalize nonstandard employment. Hence, an employment-friendly welfare state would tend to encourage such forms of labor, but also provide new protection for these new types of jobs. Denmark and the Netherlands have probably become the most prominent examples of such a `flexicurity' strategy.

· Rising income inequality: As outlined above, the spread of post-industrial jobs leads to an increasing focus on particularly high- and low-skilled employment profiles. Scharpf and Schmidt (2000) and Iversen and Wren (1998) stress a similar point when arguing that full employment in a post-industrial economy necessarily comes at the price of greater income inequality. The trend towards rising inequality is likely to become most pressing in the Nordic and liberal worlds of welfare. In the Nordic welfare state, the new production structure may clash with the tradition of wage equalization. In the liberal world, the major problem is the rise in the number of `working poor'. An employment friendly welfare state, i.e. a welfare state that supports full employment and well-functioning labor markets, must provide adequate instruments for poverty prevention among the working population and/or adapted instruments of wage equalization.

· Feminization of the labor force: The entry of women into the labor force hits different welfare regimes in different ways. In the industrial age, women's labor market participation rates were already much higher in the liberal and Nordic welfare economies than in continental Europe, where the employment rates of women tend to be significantly below 60%. This low rate of female labor market participation was perfectly functional in the industrial era: it ensured full (male) employment and allowed the preservation of the social and normative ideals of a male breadwinner society. In the post-industrial era, however, the male breadwinner institutions clash with both economic needs and normative values. An employment-friendly welfare state favors policies that allow the conciliation of work and care obligations for parents by means of family and labor market policies in order to increase the labor market participation of women [3]



• 2. Development of Russia in the framework of the post-industrial economy
• 2.1 Problems of a post-industrial economy in Russia
• At the beginning of the XXI century an important problem for Russia is the choice and consecutive realization of long-term strategy of development. Relevance of a subject of break in post-industrialization for modern Russia is caused by fundamental change of all daily occurrence of the Russian society on a joint of the XX-XXI centuries, its institutes, norms, values, the purposes. Ontologic revolution of the Russian society as a result considerably outstripped at an actual stage development, both the states, and categorical and methodological devices of domestic social sciences. Continuing to operate often with "yesterday's" representations and modernist concepts of social science, the modern national state is powerless before calls of the future which is carried out here and now.
• The future of Russia is also connected with post-industrialism. Unfortunately, only after a failure within nearly 10 years of the carried-out radical reforms the top management of the country under the leadership of the president V. V. Putin recognized formation of post-industrial society in the main way on which there is all mankind and on which there is also Russia. In essence it means that the Russian Federation has to reorient strategy of the development according to requirements of post-industrial modernization of all country.[14]
• Post-industrial development of society leans on intellectual potential, modern technological base and the demand for skilled workers formed in the market.[15] In the Russian market in 1992 the total share of services in GDP for the first time exceeded a production share (52% - services; 46,2% - an industrial output). This tendency is observed and nowadays: 57,7% - services and 39,2% - goods in 2012. But, despite it, development of economy of Russia doesn't conform to qualifying standards to post-industrial society. This discrepancy is explained by the following:

· The share of workers with low qualification in Russia makes 25% of total labor;

· The share of the allocated means for education in the budget of the Russian Federation is less, than in USA, by 2,5 times, and is nearly 6 times one health care less taking into account that the budget of the USA is more, than the budget of the Russian Federation, by 20 times;

· The number of the citizens having a standard of living is lower than a living wage, for years of market existence increased by 30 times;

· Level of financing of the scientific sphere in the Russian Federation in comparison with 1990 was reduced in 1997 by 7 times, and in 2012 by 14 times;

· The share of expenses on research and development in 2012 made 0,42% of GDP;

· From 1990 to 2012 the sphere of science left 3,1 million workers, i.e. more than two third, in it working earlier;

· Continuous departure abroad of the intellectual capital is observed that by estimates of various experts since 1998 made 60-80 bln. dollars;

· The salary of the Russian scientists makes 7-10% of financing of their foreign colleagues;

· The volume of costs on production of knowledge in the Russian Federation makes no more than 5% of GDP, three quarters from which belong on education and training. [16]

After the collapse of USSR, it appeared that on a share of hi-tech production in export Russia takes the 50-55th place in the world. While the post-industrial world sells to other countries mainly information products which by definition aren't possessing a rarity, Russia exports 90% of the aluminum made in the country, 80% of copper, 72% of mineral fertilizers, 43% of crude oil and 36% of gas today(schedule 1), considerably reducing thereby the irreplaceable stocks of resources. In the conditions of accelerated in the west of technological progress Russia, along with many other countries, gets chance easily to get the latest information means and technologies (because of their reduction in cost in the world markets), but more and more obviously loses ability to create them.

Schedule 1. Exports of Russia.

However it is much more important that "the model of market reforms reproduces and increases this lag". [17]

Firstly, today the considerable part of a domestic production isn't oriented on domestic market and actually doesn't depend on scales of consumption of an industrial output within Russia.

Secondly, the economy has rigid deficiency of production investments.

Thirdly, the domestic industry doesn't make the majority of hi-tech consumer goods, competitive even in domestic market today. TV and radio equipment production is gathering from import accessories, production of computer hardware, mobile telephony, satellite communication systems, etc. completely absent. It is important to note that the so-called catching-up development in modern Russia is complicated also by that the state is not net- investor, but net-consumer disposing the arriving means very inefficiently.



2.2 The development and achievements of post-industrial russian economy

Currently, the Russian economy achieved the following results:

• Annual GDP growth on 5-6%;

• Revival of processing industry and agriculture;

• Elimination of budget deficit (though not so much due to the growth of its revenues, but rather because of spending cuts);

• More or less timely payments of a salary and pensions, a modest advancing of rates of their growth over rates of inflation;

• Growth of currency reserves of the country;

• Normalization of service of an external debt (in three years about 25 bln. dollars or nearly 1/6 of all external debts are paid);

• Revival of investment activity. [10]

However for an assessment of further development and achievements of the Russian business it is necessary to analyze development of national business and its prospects respectively. [18]

The matter is that the majority of the large companies carry out not only applied, but also basic researches.

So, in the USA private investments make more than 25% of total amount of costs of basic researches.

In Japan expenses of corporate sector reach nearly 38% of cumulative expenses on basic researches, and in South Korea -- about 45%.[17]

[15] In Russia the opposite picture is observed: financing of researches and development makes a little more than 20% of total amount of capital investments in R&D of corporate sector.

Large Russian business considerably concedes to large foreign corporations, both on absolute, and on relative expenses on research and development.

So, Russia is presented by only three participants in a rating of 1 400 largest on absolute costs of R&D companies of the world which annually is formed by the EU Integrated research center.

They are JSC Gazprom (the 83rd position), AvtoVAZ (620th) and "Lukoil" (the 632nd position).

For comparison: in a rating of Fortune Global 500 among 500 companies of the world on volumes of revenue of the Russian companies it is twice more - 6, and among 1 400 leading world companies on revenue of representatives of Russia some tens.[10]

There are few reasons for such a bleak picture. The key problem is particularly low demand for innovation in the Russian economy as well as its inefficient structure - excessive bias towards the purchase of finished equipment abroad at the expense of introducing their own new developments.

Balance of trade in Russian technologies from positive in 2000 ($ 20 million) steadily declined and in 2009 was minus 1.008 billion dollars.

Approximately at the same time, the country's leaders in the field of innovation achieved a significant increase in surplus of balance of Technology (USA 1.5 times, 1.9 times in the United Kingdom, Japan 2.5 times).

Otherwise generally also couldn't be, taking into account a difference in number of innovatively active companies.

In 2009 development and deployment of technological innovations was carried out by 9,4% of total number of the Russian industrial companies (see schedule 2). For comparison: in Germany their share equaled 69,7%, in Ireland - 56,7%, in Belgium - 59,6%, in Estonia - 55,1%, in the Czech Republic - 36,6%.[20] Unfortunately, in Russia is low not only a share of innovatively active enterprises, but also intensity of costs of technological innovations which makes 1,9% (a similar indicator in Sweden - 5,5%, in Germany - 4,7%).



Schedule 2. Specific weight of Russian companies implementing technological innovation

Source: Rosstat [10]

Other important problem is imitating character of the Russian innovative system focused on loan of ready technologies, but not on creation of own breakthrough innovations.

Among the countries of OECD Russia has a dubious honor to take the last place on a share of the advanced companies- innovators - such among the Russian innovatively active enterprises only 16% in comparison with 35% in Japan and Germany, 41-43% in Belgium, France, Austria, 51-55% in Denmark and Finland are. It should be noted that the most numerous type in Russia (34,3%) of passive technological loans is on the verge of disappearance in economically developed countries of Europe (about 5-8%).

Thus except quantitative lag of the Russian companies on the level of innovative activity there is also considerable structural problems in the organization of management of innovations at the level of firms.

On an indicator "ability of the companies to borrow and adapt technologies", calculated by the World economic forum, Russia in 2009 was on the 41st place from 133 - at the same level with such countries as Cyprus, Costa Rica, the United Arab Emirates.[14]

The problem of low level of innovative activity in Russia is in addition aggravated with low return from realization of technological innovations. Growth of volumes of innovative production (in 1995-2009 for 34%) at all doesn't correspond to rates of increase in costs on technological innovations (for the same period three times) (see schedule 3).

As a result, when in 1995 the ruble of innovation costs accounted for 5.5 rubles innovative products, in 2009 this figure had fallen to 2.4 rubles.

It is also necessary to note as one of important factors the total low level of costs of research and development. Expenses on them in 2008 in Russia are estimated at 1,04% of GDP against 1,43% of GDP in China and 2,3% in the countries of OECD, 2,77% of GDP in the USA, 3,44% of GDP in Japan.

Source: Rosstat, OECD Main Science and Technolodgy Indicators, May 2010. In these conditions growth of the budget financing of researches and development, which took place in recent years couldn't lead to noticeable increase of innovative activity of the Russian companies.

From 2005 to 2009 the share of means of domestic business sector in internal costs on researches and development decreased from 30,0 to 26,6% at increase in a share of means of the state from 61,9 to 66,5% (see schedule 6).



Schedule 3. Specific weight of innovative goods, works, services, in a total amount of the shipped goods, done works, services of the organizations

Source: Rosstat



Schedule 5. Chronic insufficient funding, costs of research and development in Russia,% of GDP

Source: Rosstat, OECD Statistics Portal

Schedule 6. Innovative postindustrial profile of Russia

Source: Rosstat, OECD Statistics Portal



* the Triad patent family - the patent for the invention registered by the European patent bureau (EPO), Bureau of patents and trademarks of the USA (USPTO) and Japanese patent bureau (JPO)

** Tertiary degree - formation of the third level, including training at universities, colleges, professional schools

Reduction of a share of business sector in financing of research and development is substantially caused by a poor development in Russia of system of public and private partnership at implementation of innovative projects business: the share of the companies receiving the budgetary financing on these purposes makes only 0,8% in Russia.

For comparison: in Germany - 8,8%, in Belgium - 12,7%. Also insufficient support is given to creation of small innovative business.

The volume of programs of Small Business Technology Transfer (STTR) and Program Small Business Innovation Research (SBIR) in the USA makes 2 billion dollars, in Russia the "innovative" component of the federal program of support of small innovative business is equivalent to about 67 million dollars, the sizes of Fund of assistance to development of small forms of the enterprises in the scientific and technical sphere - about 113 million dollars.[21]

The volume of costs of business on innovations in Russia and in developed countries: The total volume of costs of the Russian corporate sector on research and development is twice less, than the largest in Europe on expenses on researches and development of Volkswagen corporation (2,2 billion against 5,79 billion euros)

The foreign companies on average spend for research and development from 2 to 3% of revenue.

Leaders' indicators are significantly higher. According to the EU Integrated research center, average intensity of expenses on research and development (the relation of costs of research and development to revenue) 1 400 of the largest by the amounts of investments into researches and development of the world companies in 2009 made 3,5%. [22]

Despite reduction of the amounts of financing of R&D because of crisis, intensity of costs on innovations of the largest corporations, on the contrary, increased.

Despite reduction of the amounts of financing of R&D because of crisis, intensity of costs on innovations of the largest corporations, on the contrary, increased.

By estimates of the consulting company Booz, costs of 1 000 largest corporations of the world on research and development in 2010 in relation to 2009 were reduced by 3,5%, however average intensity of expenses increased from 3,46 to 3,75%. In other words, in the conditions of the falling market and reduction of sales of the largest corporations of the world reduced costs on own researches and development far not first of all (for example, investments of the considered corporations were reduced in 2010 by 17,1%, and administrative expenses - for 5,4%), and the share of costs of research and development in cumulative expenses of corporations was increased.

On the contrary, acceleration and expansion of the research and development front are considered by world leaders of business as a priority for ensuring sustainable post-crisis development of the companies.[23] [15]

According to research of rating agency "Expert RA", before crisis the volume of expenses of R&D in revenue of the largest Russian companies "Expert-400" made about 0,5% that is 4-6 times lower, than at the foreign companies of a rating. In two years, in 2009, this indicator was reduced more than twice - to 0,2% of the cumulative income of the companies.

Leaders in the volume of investment into research and development in Russia are the engineering companies, but even theirs relation of costs of research and development to revenue doesn't exceed 2% . In less technological sectors lag is even more.

For example, the relation of expenses of JSC Severstal on research and development to revenue of the company in 2009 made 0,06%. At the same time the similar indicator of metallurgical corporation ArcelorMittal (Luxembourg) made 0,6%, that is in 10 times more; Nippon Steel (Japan) - 1%; Sumitomo Metal Industries (Japan) - 1,2%; POSCO (South Korea) - 1,3%; Kobe Steel (Japan) - 1,4%; OneSteel (Australia) - 2,5%

By estimates, in 2010 expenses of corporations on research and development began to restore quickly, however innovative activity of large business will return on pre-crisis level -- it will mean only preservation of a gap with technologically advanced companies of the world.

Russia's largest companies that implement innovative projects: 80% of the largest companies of Russia aren't ready to represent results of the innovative activity in detail.

As practice shows, large Russian companies are not ready to speak specifically about the innovative achievements yet. According to researches of innovative activity of large business conducted by rating agency "Expert RA" in 2010-2011 it is ready to open data on corporate innovative projects about 40 companies.

Among the leaders of the Russian business realizing innovative projects are "Lukoil", "RusHydro", SUEK, the Russian Railway, AFK "System", IDGC Holding, FGC UES, "Rosoboronprom", "Power Machines", "Sukhoi Civil Aircraft Company", GAS, Tractor Plants concern are presented.[24]

At the same time JSC Gazprom, TNK-BP, "Surgutneftegas", "Norilsk Nickel", "Evraz Group of SA", NLMK, "MegaFon", "Aeroflot-Russian Airlines", "Transaero", S7 Airlines, AvtoVAZ, ALROSA, "Inter RAO UES" and a number of others refused providing information.

From the point of view of number of projects most actively innovations take root in mechanical engineering, information and communication sector, metallurgy, energy and a chemical complex. According to our mini-research, in each of these branches at least 4 innovatively active companies are presented. Worse affairs are in fuel industry.

From oil industry workers declared introduction of innovative projects only "Lukoil" and Novatek, and in the coal industry - only SUEK. As for examples of introduction of innovations in other branches, they are single

Table 1. Number of realized and ongoing projects in the largest Russian companies for 2009-2011 in a branch section

Branch	Number of companies	The total number of presented projects	Number of realized projects	Number of ongoing projects
Fuel and energy complex	9	39	20	19
Power engineering	4	12	7	5
Aircraft and helicopter engineering	3	8	2	6
Automotive industry	1	1		1
Agricultural machinery industry	1	6	3	3
Transport	5	15	6	9
Telecommunications	4	8	1	7
Metallurgy	7	16	10	6
Refractory materials	1	1		1
Chemicals, petrochemicals	5	22	10	12
Wood processing industry	2	4	3	1
Food industry	2	12	5	7
Total
12 branches	44	144	67	77

Source: according to the questionnaires sent by the companies during the research conducted by "Expert RA"

Innovations of the Russian large business: deficiency of breakthrough projects. The analysis of projects about which the large participating companies of a rating "Expert-400" considered it necessary to report within research of innovative activity of large business and which these companies regard as innovative, shows that a priority of innovative activity of large Russian business are so-called improving or catching-up innovations.

It is more correct to call many of the realized projects "modernizative", but not "innovative". Most of them are designed to strengthen existing competitive advantages or to reduce the technological lagging behind foreign competitors, and not take up a new market niche and certainly not to create new markets. And come to this conclusion companies have by themselves, realistically assessing the true novelty introduced in their production innovation (see. Table 2).

Table 2. Comparison of created products / technologies / services with the best analogs (number of projects)

Branch	In the Russian market	In the world market
	Surpasses the basic parameters	Corresponds to the best analogues	In general doesn't concede to analogs and has lower price	Surpasses the basic parameters	Corresponds to the best analogues	In general doesn't concede to analogs and has lower price
Fuel and energy complex	24	11	4	10	17	12
Power engineering	9	3			11	1
Aircraft and helicopter engineering	6	2		4	4
Automotive industry	1				1
Agricultural machinery industry	6				4	2
Transport	6	6	3	2	9	4
Telecommunications	6	2		2	4	2
Metallurgy	10	5	1	2	11	3
Refractory materials	1			1
Chemicals, petrochemicals	16	5	1	2	19	1
Wood processing industry	2	1	1	1	2	1
Food industry	2	8	2	2	7	3
Total	89	43	12	26	89	29

Source: according to the questionnaires sent by the companies during the research conducted by " Expert RA"



The purpose of the majority of projects -- mass release of new production of a traditional sort, but in other price segment (in higher price group) and higher confirmed quality.

That is the large companies don't seek for revolutionary breakthrough, "removal of cream" in the new market and for creation of such markets. As a rule, they solve a problem "to rise by one step". Exceptions, such as the project AFK "System", "Creation of a complex of JSC Binnofarm on development and production of biotechnological and pharmaceutical medicines", the project of FGC UES on creation of a high-temperature superconducting cable power line or the joint project of ONEKSIM group and Yarovit holding on creation of the new city hybrid car, are extremely rare.[24]

A significant part of the projects, which are positioned as "innovative" - are innovations "of Russian scale," which in reality are just implementations of technological solutions used in developed countries. For example, MGTS presented as an innovative project "Construction of broadband network ADSL, ADSL2 +» (trademark networks in Moscow "Stream") really was an innovation for the Russia telecom market. However it is impossible to forget that the ADSL technology was created in the early nineties in USA, and by the time of start of the project of MGTS in the world were hundreds of networks based on its broadband access.

One more striking example - the project of JSC Sitroniks (AFK "System") "Creation at Mikron plant (Zelenograd) productions of integrated schemes with topological norms of 180 nanometers on plates of 200 mm". It will only allow to reduce lag of the Russian microelectronics from world leaders of branch from 7 generations to 2[3]. Already today TSMC companies (Taiwan) and Global Foundries Inc. (USA) mastered production of chips with design norms of 40 nanometers.

By innovations "in scales of Russia" it is necessary to recognize projects of JSC SUEK (creation of the Russia's first enterprise of the full cycle which is carrying out as extraction of waste of thermal power from all available tanks and their warehousing, and processing of waste in a wide line of production on the basis of hollow fillers), JSC Integrated Energy Systems ("The program of automation of a control system of production economic activity of the generating divisions of "IES-Holding" on the basis of SAP systems" and "Introduction of modern methods of diagnosing of gas pipelines") and many others.

The majority of the projects presented in research of " Expert RA" within which new products or services have to be created, are focused only on domestic market. Often their only task is to import substitution. Thus the large Russian companies seek to take a place in the Russian and world markets in the price range between production from China (restriction from below) and production from the USA and Europe (restriction from above).[13]

From the formal point of view innovative projects of large business correspond on subject to 5 priority directions of innovative development of economy:

1) Energy efficiency and energy saving, including questions of development of new types of fuel;

2) Nuclear technologies;

3) Space technologies;

4) Medical technologies;

5) Strategic information technologies.

Energy efficiency and energy saving. One of the largest investors in innovative projects in the "energy efficiency and energy saving" direction as showed research, is JSC RusHydro. In particular, in 2010 the company finished the project on development of the orthogonal turbine intended for low-reverse applications on wave, wind power, tidal, low pressure stations.

Use of these turbines at tidal stations will allow to provide the highest efficiency of stations and to decrease in prime cost of 1 kW of the electric power. Wind turbines and hydroelectric power station on the basis of orthogonal turbines considerably will expand the range of application of technology and will increase efficiency of stations.

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