Go back

Putin announces 60% rise in state innovation spend

State companies in Russia are to boost their spending on innovation next year by 60 per cent to 1.5 trillion rubles ($50 billion), reports state news agency Ria Novosti.

“This year, companies with state stakes will channel about 950 billion rubles into their innovation programs. Next year, domestic demand for innovations driven by state companies alone will grow to 1.5 trillion,” the agency reported Putin as having told a commission meeting on national hi-tech industry and innovation.

In an article published in business daily Vedomosti on the same day, Putin said that Russia needs to rebalance its economy away from a dependency on oil and gas to hi-tech industries.

“To restore our technological leadership we must choose our priorities carefully. We should look at sectors like pharmaceuticals, high-tech chemicals, composites and non-metal materials, the aviation industry, information and communication technologies and nanotechnologies,” Putin wrote.

To achieve this, Putin said, the country’s state machinery needed to be reformed to foster competition, which was currently hampered by corruption.

“We must improve Russia’s business climate and the country’s attractiveness for long-term investments. Both remain unsatisfactory.

“In the past few years, on the initiative of President Medvedev, we launched a series of reforms aimed at improving the business climate. However, until now, no significant change has occurred,” Putin wrote.

“Speaking plainly, we still have system-wide corruption. The cost of doing business varies depending on your ‘proximity’ to specific individuals within the government machinery. In these conditions entrepreneurs quite rationally tend to find backers and strike deals with them rather then observe the law. Then, having made their deals, such businesses try to suppress competition,” he added.

Putin is canvassing for re-election in March.