Would small and medium-scale business enterprises like to become clients of an innovation centre? Perhaps they would if they knew what one was.
This problem came to light during research which was carried out at the end of last year and was aimed at studying the potential demand for innovation centre services.
 In developed industrial countries, such notions as “innovation centres” or “techno-parks” are well-known in business spheres, while in Russia each enterprise owner or director has his own understanding of these terms. For the last few decades Russian entrepreneurs have not given much thought to any innovations, as they have just been trying to survive in the severe conditions of Russian reality… Generally speaking only products which could bring instant profit or, at least, be cost-effective have been produced. Russian science has hardly received any financial support from the state because of a lack of funds. Of course, there have always been enthusiastic people working for an “idea’s sake”. And even when this “idea”, due to the enthusiasm of its designers, took some tangible form, in most cases it was not possible to put it into practice for the same reason – the complete lack of funds.
 Innovation centres in the West are called to make the development and application of new and expensive technologies available to small and medium-scale enterprises. By innovation centres, we usually mean the situation when the State supports and promotes scientific groups and enterprises which try to develop and introduce new advanced technologies and products. This government support can be of different varieties: scientific (wide access to scientific materials and libraries), financial (grants), an opportunity to use the equipment which is the property of the innovation centre, access to partnership search programmes and a chance to use subsidized premises for offices and laboratories located on the territory of the innovation centre.
What do we have in this respect? Many people might have heard of several recently created techno-parks. Some might have even seen them. But the level of these institutions still remains significantly behind those in the West.
They say though that “every nation deserves its rulers” and, apparently, the level of our techno-parks corresponds to the mentality of the majority of our entrepreneurs. The most noticeable result of the research mentioned above was that which concerned the quality of strategic thinking of our managers. What do they expect to get from an innovation centre or a techno-park? They expect to get the most essential things: an opportunity to reduce taxes, social allocations and rent (diagram 1). Such items as “programmes and services granted by the technological centre” and “neighbouring companies that resort to the same technological centre” occupied the very last position. Is not this real urge towards innovation multiplied by the understanding of the effectiveness of synergy, indeed?
 However, we should not accuse our countrymen of shortsightedness too quickly. The point is that two thirds of them do not know what an innovation centre is (diagram 2). As regards to the notion “innovation activity” itself – most companies claimed that their innovations deal with staff training (diagram 3), and only a few of them mentioned the development of new projects and research. Why is it so? Does not our present life inspire us to introduce innovations? Is it possible that at this modern stage of economic development in our country, innovations are considered to be a luxury and a waste of time? And even if this is the case, there is still an obvious deficiency in information about innovation centres and the opportunities they give. If our business owners knew that through innovation centres they could get not only instant reduction of taxation but also scientific investments into long-term development of their enterprise, the results of the research shown in the diagrams would not be so low.
WHAT DOES SCIENCE STATE?
In his article published with the Global Competitiveness Report Michael Porter describes causal relationship between competitive businesses and economic development and identified three stages of economic development*.
Successful economic development is a process of successive upgrading, in which a nation’s business environment evolves to support and encourage local firms in increasingly sophisticated and productive ways of competing. Nations at different levels of development face distinctly different challenges. As nations develop, they progress in terms of their competitive advantages and modes of competing.
In the factor-driven stage basic factor conditions, such as low-cost labor and unprocessed natural resources, are the dominant sources of competitive advantage and exports. Firms produce commodities or relatively simple products designed in other, moreadvanced countries. Technology is assimilated through imports, supply agreements, foreign direct investment, and imitation. In this stage, companies compete on price and lack direct access to consumers. They have limited roles in the value chain, focusing on assembly, labor-intensive manufacturing, and resource extraction. A factordriven economy is highly sensitive to world economic cycles, commodity prices, and exchange rate fluctuations.
In the investment-driven stage, efficiency in producing standard products and services becomes the dominant source of competitive advantage. Heavy investment in efficient infrastructure, business-friendly government administration, strong investment incentives, and better access to capital allow major improvements in productivity. The products and services produced become more sophisticated, but technology and designs still largely come from abroad. Technology is accessed through licensing, joint ventures, foreign direct investment, and imitation. However, nations at this stage not only assimilate foreign technology but also begin to develop the capacity to improve on it. Companies serve a mix of Original Equipment Manufacturer (OEM) customers and end users. Firms extend capabilities more widely in the value chain. An investment-driven economy is concentrated on manufacturing and on outsourced service exports. It is susceptible to financial crises and external, sector-specific demand shocks.
In the innovation-driven stage, the ability to produce innovative products and services at the global technology frontier, using the most advanced methods, becomes the dominant source of competitive advantage. The national business environment is characterized by strengths in all areas, together with the presence of clusters. Institutions and incentives supporting innovation are well developed. Companies compete with unique strategies that are often global in scope. An innovation-driven economy has a high share of services in the economy and is resilient to external shocks. Seeing economic development as a sequential process of building interdependent microeconomic capabilities, shifting company strategies, improving incentives, and increasing rivalry exposes important pitfalls in economic policy. The influence of one part of the microeconomic business environment depends on the state of others. Lack of improvement in any important area can lead to a plateau in productivity growth, and stalled development. Worse yet, it can undermine the whole economic reform process. When well-trained college graduates cannot find appropriate jobs because companies are still competing based on cheap labor, for example, a backlash against business is created.
Russia is at the investmentdriven stage. This also means that we have quite a long way to go to get the really innovation business surroundings.
* Michael E. Porter Building the Microeconomic Foundations of Prosperity: Findings from the Business Competitiveness Index
The Global Competitiveness Report 2004-2005. World Economic Forum. Geneva, Switzerland, 2004
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