OREANDA-NEWS. March 04, 2010. Opening remarks by Vladimir Putin: Ladies and gentlemen, colleagues,

Today we are holding a meeting of the Government Commission on High Technology and Innovation. I'd like to begin by saying that the government has decided to award prizes to outstanding young specialists in science and technology for 2009.

We have selected 30 young specialists (under the age of 33) successfully pursuing promising and important projects in priority sectors. These projects involve cancer diagnosing, resource and energy saving plasma technologies, and development of nano-structures in electronics.

I would like to congratulate the winners and wish them many future achievements.
Each prize is 500,000 roubles, and is awarded to a group of no more than five people.

As I have said, this is a meeting of the Government Commission on High Technology and Innovation. We have been working in this format for a year, and it has proved quite effective.

It is obvious, however, that the Commission needs to be given greater authority to handle the major issues it needs to resolve. It should have more influence in drafting state policy in the area of research and high technology. The Commission's decisions need to become binding for all government bodies, and their respective heads will be personally responsible for implementing these decisions. The Commission's staff will be expanded and restructured and its organisational capabilities extended.

I would like to inform you now that a Department for Science, High Technology and Education has been established within the Government Executive Office.

I believe this move is perfectly justified in the current situation, when we need to do more than just support post-crisis economic recovery. We need to improve the Russian economy's structure and increase its efficiency.

The government has announced its policy choice in favour of sustainable development based on innovation and modern technology. Important steps have been made to build a system of institutions and instruments for innovation and modernisation. But it should be recognised that very few projects are truly innovative. What we see ahead is monumental and demanding work involving tangible progress rather than slogans and appeals.

We must realise that innovative development is the responsibility of all ministries and agencies without exception, regional authorities, businesses, researchers and experts. This approach should be an axiom.

Russia needs to rely on its national advantages - of which we have many - and consolidate resources in innovative sectors that would define Russia's specialisation in the global economy.

So what should the Commission's main goals be?

First, we must continue creating institutional and other conditions for successful introduction of high technologies. We must remove more administrative barriers hampering innovative businesses, and continue modernising the state-sponsored segment of science.

Second, the Commission must give special attention to policies to attract capital to research and high-tech production projects. We have discussed the availability of long-term loans on multiple occasions. We admit that the country's economy currently runs a shortage of such loans. Artificial measures are not effective here. Yet, we must continue searching for solutions.

Another issue concerns the promotion of Russian innovative products and encouraging the demand for them on the domestic and external markets.

New knowledge and technology must not remain unused gathering dust. We know very well that such capital becomes depreciated and obsolete very fast.

To prevent this and to give the country an opportunity to benefit from new knowledge, we must create a comprehensive market of intellectual property. Also, we need to create, almost from scratch, mechanisms for the circulation of research and technical information, for making it maximally open and accessible for potential partners, investors and consumers.

In particular, we must create a database of R&D projects carried out under contracts with the federal executive authorities. It goes without saying that such a database must be absolutely open and accessible.

I also propose that we consider ways to organise regular publication of national reviews of innovative development in Russia. The ability to present one's possibilities and potential is vital for attracting qualified investors.

And lastly, one more important sphere, which the Commission must monitor unfailingly, is the elaboration of a budget policy that will suit the interests of innovative development.

I propose that we start our work today by considering the effectiveness of the use of state funds allocated for these purposes from different sources.

In 2010, we allocated some 1.1 trillion roubles, or over 10% of the federal budget, for fundamental and applied research, higher education, high-tech medical services, and federal programmes in aviation, space and nuclear energy (Rosatom). As you know, these are very substantial allocations.

In 2009, which was an extremely difficult year because of the global economic crisis, we increased budget allocations for these purposes by nearly 300 billion roubles compared to 2008, which was a better year economically. But we changed the policy of budget allocations and we did it in crisis conditions.

We will continue to try to increase the share of development items in the budget, but we will not succeed unless we learn to use available resources more efficiently and wisely.

For example, we have a powerful instrument of state purchases, but it is being used inefficiently and does not encourage suppliers to promote innovative business. That is very regrettable.

I believe that the innovative element must be made an obligatory part of the acquisitions programmes.

Potential suppliers and business must see that the government intends to buy only modern products, and that access to state orders will be granted above all to those who promote innovation.

Logically, these principles should also be applied to the purchases of our development institutions, large corporations, etc. The proportion of innovative projects in the loan portfolios of banks with state capital should increase. We are considering the idea for VEB to allocate a target quota for innovative projects.

Budget funds must work much more effectively in science. We have agreed long ago that this goal cannot be attained without profound reforms.

We have some 4,000 large research organisations and six state academies of sciences, but quantity does not always become quality in this sphere. In my opinion, it is right that we have decided to support first of all leading institutions, competitive research and educational centres.

Total financing of the development programme for research universities will amount to some 50 billion roubles. In addition, the government will allocate 90 billion roubles of targeted funds to the leading universities.

The idea of creating national research centres is being currently applied at the Kurchatov Institute. Such centres will be focused on the implementation of projects in the priority research and technology spheres.

We must abandon the system of financing research institutions through faceless budget estimates. We can no longer finance institutes that have nothing but a name and possibly a good history to their credit, or pay for research the results of which do not interest anyone, which overlap and or have been lying on the shelf since last century. This is a wrong, damaging, expensive and ineffective approach.

Instead, we must actively introduce project financing and use tenders for the distribution of budget allocations, and also use the services of objective and independent evaluators. This largely concerns fundamental research, because we know that such research does not produce quick results.

We are also supporting innovations through taxes. We have taken many decisions aimed at encouraging investment in R&D, technological retooling and creation of small innovative businesses.

However, some of our efforts are criticised, and with good reason, I think. It is said that the measures we are taking are either insufficient or ineffective. Therefore, the Finance Ministry must work jointly with the Ministry of Economic Development and other departments to analyse the situation once more, monitor the effectiveness of privileges and conditions granted, and propose ways to further improve the mechanisms and instruments of supporting this sector.