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Innovation-based Development: Prospects and Tools

The new issue of Foresight and STI Governance (2016, vol. 10, No. 4) presents the results of Russian-based studies to assess import substitution prospects, discuss the current state of the knowledge-intensive business services sector, and looks at the impact of fixed-term employment contracts on companies’ innovation activities. Furthermore, international experts share their methodological recommendations on boosting the effectiveness of European innovation policy, and designing technology development strategies.

The issue opens with a paper by Turkish experts Umut Yilmaz Cetinkaya and Erkan Erdil ‘Cohesion and Competition of Europe: Innovation Policy from the Perspective of Networks and Entropy’, suggesting a novel approach to the development of the European Union’s innovation policy. The authors analyse the efficiency of networking aimed at creating a common European research area. A major factor of EU countries’ competitiveness is gatekeepers’ ability to join global networks with low innovation potential and thus benefit from competing there. Focusing European strategies on promoting diversity and specific actors’ absorptive capacity, combined with filling structural gaps, would help to boost the efficiency of European research and innovation networks, while also ensuring more innovation in the EU.

A paper by Yuri Simachev, Mikhail Kuzyk, and Nikolay Zudin ‘Import Dependence and Import Substitution in Russian Manufacturing: A Business Viewpoint’ is focused on analysing import dependence on the part of Russian companies, as well as their motivations for switching to Russian products and technologies. A survey of company managers revealed that they were not happy with the high level of import dependence. At the same time, Russian import substitution policy places emphasis on putting in place missing links in the national production system, while advancing new knowledge areas, competences, and critical technologies move to the background. Such a strategy is likely to result in emergence of a growth model particularly vulnerable to currency exchange rate fluctuations. The authors believe that pursuing a proactive import substitution policy oriented towards emerging markets could change this situation.

In recent years, the knowledge-intensive business services sector has generated high added value, thus becoming a driver of innovative development in many countries. The authors of the study ‘Knowledge-Intensive Business Services in Russia: 2014–2015 Crisis Aftermath’, Veronika Belousova and Nikolay Chichkanov, assess the sector’s landscape in Russia on the basis of a survey of domestic companies, which provide such services. The researchers note that many companies have seen turnover go down, while there also have been widely varying growth rates and development trajectories of various segments of the sector (not just in Russia but in other countries as well). In addition, overall economic volatility doesn’t allow the knowledge-intensive business services sector to achieve sustainable growth.

Fixed-term employment contracts are commonly used in many countries as an HR policy tool that can help to optimise labour costs, improve personnel quality, and adapt to fluctuations of demand. Such practices promote companies’ innovation-focused activities, but, in the long term, due to reduced investments in human capital, the overall effect may turn out to be the reverse. The paper by Larisa Smirnykh ‘Is Flexible Labour Good for Innovation? Evidence from Russian Firm-level Data’ analyses which of the above effects prevail in Russia. The study’s empirical basis was provided by a survey of Russian companies of varying sizes operating in seven sectors. The author concludes that fixed-term employment contracts only have a limited positive effect on innovation activities.

Researchers from Iran – Mohammad Dehghani Madvar, Hossein Khosropour, Maryam Mirafshar, Abdollah Khosravanian, Adel Azaribeni, Morteza Rezapour, and Behrouz Nouri – present a structural plan for studying technological development dynamics through the prism of patent statistics in their paper ‘Patent-Based Technology Life Cycle Analysis: The Case of the Petroleum Industry’. Each particular technology’s status at any specific moment is indicated by its position within the S-Curve. The suggested methodology was tested by analysing the life cycle of CO2 injection technologies in the global oil and gas industry. The authors provide recommendations for further development of this tool, which they believe may turn out to be very useful for the analysis of any technological development.

Foresight and STI Governance Editorial Board