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The development of TIZ last year was associated, first of all, with the elabora tion of a great number of normative legal acts (a total of more than 40), necessary for providing solutions to issues relating to the construction of technical infrastruc ture (including for regulating the procedure of rendering services in the sphere of urban development and land relations in the territories of those zones). The second area of the governments activity was the formation of appropriate organizational structures capable of ensuring the interaction between the federal executive bod ies and regional authorities, as well as bodies of local self government. In particu lar, the supervision councils of special economic zones were created. At the same time, the initiatives coming from below were not numerous, which can be seen by the low number of organizations willing to become the zones residents. In the Tomsk TIZ, only one resident was registered, while the other three TIZ had two residents each72. Such results can be explained by the fact that so far the attitude of the business community to technology implementation zones has been quite guarded. As shown by a survey conducted by the Association of Managers, the ma jority of businesses (67%) chose the position of expectant observers, 11% of the respondents displayed a negative attitude to the very idea of a TIZ, and a similar number are prepared to participate in the zones development73.

Ordinance of the Government No. 328 r of 10 March 2006.

Sources: The composition of residents of the TVZ: Dubna http://www.rosez.ru/sezdubna/ rezident.html; Zelenograd http://www.mostvz.ru/node/10; St. Petersburg http://www.rosez.ru/ zonespb/rezidents.html; Tomsk http://www.rosez.ru/zonetomsk/rezidents.html.

The survey took place in October and November 2005 among 150 companies working in various segments of the market. Source: National Report Informatsionnoe razvitie osnova uskorennogo rosta ekonomiki Rossiiskoi Federatsii (Information development is the basis for an accelerated RUSSIAN ECONOMY IN trends and outlooks The adequacy of the measures that are designed to promote innovative de velopment can be assessed by analyzing the parameters of innovation receptive ness and innovation activity of Russian businesses.

The Innovation Activity of Businesses The formal induces applied for measuring the innovation activity of businesses have remained in Russia at a low level. By the index of expenditures on intra firm research and development, which demonstrates the economys ability to absorb acquired knowledge by turning it into new commodities, services and technologies, Russia falls behind not only developed industrial countries, but some developing countries as well. According to the World Bank, companies expenditures on re search and development, measured as percentage of sales, amounted in Russia to 0.3%, while in the countries with growing economies China, Brazil and India this index was in the interval of 0.462.5%.

Various studies of the level of innovation activity at Russian enterprises have should that it is sufficiently high; however, many innovations represent, in fact, small improvements designed to help a company to survive, and not to promote its development. The majority of companies spend their resources on the improve ments of existing product (43%) or improvement of an existing process (32%)74.

The number of strategic innovators among the innovation oriented Russian com panies is approximately 9%, while in the EU countries approximately 22%75.

Therefore, not the fact itself of certain measures being implemented by a company, that may be placed within the category of innovation activity, is important, but the level of expenditures on such measures and, primarily, expenditures on research and development. And here, the overall picture is far less optimistic: companies expenditures on research and development in this country do not exceed 8% of to tal expenditures on technological innovations, whereas in European countries it amounts approximately to 20%. Companies expenditures on purchases of patents and licenses are even lower less than 2%76.

Several reasons for the low innovation activity in the national economy can be pointed out. Firstly, it is the monopolist status of many Russian companies. Recent studies have shown that monopolists that is, those who take up more than 50% of growth of the Russian Federations economy). M.: Assotsiatsiia menedzherov (Association of Man agers), 2006, p. 37.

National Report Informatsionnoe razvitie osnova uskorennogo rosta ekonomiki Rossiiskoi Fed eratsii (Information development is the basis for an accelerated growth of the Russian Federa tions economy). M.: Assotsiatsiia menedzherov (Association of Managers), 2006, p. 30.

Arundel A., Hollanders H. (2005). EXIS: An exploratory Approach to Innovation Scoreboards.

http://trendchart.cordis.lu/scoreboards/scoreboard2004/pdf/EXIS.pdf.

Kuznetsov B., Kusyk M., Simachev Yu., Chulok A., Tsukhlo S. Osobennosti sprosa na tehnologicheskie innovatsii i otsenka potenstialnoi reaktsii rossiiskikh promyshlennykh predpriiatii na vozmozhnye mehkanizmy stimulirovaniia innovatsionnoi aktivnosti ( The peculiar features of the demand for technological innovations and an estimation of the potential response of Russian indus trial enterprises to the potential mechanisms for stimulation of innovation activity) // VII International Scientific Conference Modernization of the economy and the State. M.: HSE, 5 April 2006.

Section Social Sphere the national market for their main product comprise approximately 20% of all Russian companies. It should be borne in mind that this domination takes place on very narrow and specific markets probably even niche markets77. There also ex ists a negative relation between innovation activity and a companys monopolist status. In a monopolistic sector, in absence of any external competition, the de mand for innovations must inevitably be low. Thus, innovation passivity is associ ated with the weakness of external and internal stimuli, namely an insufficient com petition level. Studies have shown that the level of innovation activity is much higher at those enterprises which have to compete with imports, as well as at those that work on foreign markets (export their product). Therefore, demonopolization must become a major goal, if technological backwardness is to be overcome.

Secondly, it is the structural problems faced by the Russian economy and the domination of raw materials sectors. Sectors where product is constantly changing (being upgraded or improved) display the highest demand for innovations. Raw materials sectors are less inclined towards innovation processes, despite the fact that the leading producers of oil, gas and raw materials do promote the develop ment of both their own research and development and of their outsourcing. Never theless, the high oil prices remain a serious destimulating factor.

Thirdly, a certain problem is associated with the fact that indirect regulation has so far not been directed at the promotion of innovations. Presently, the tax sys tem is neutral in respect of the goal of innovative development. The problem is rep resented not only by the absence of several norms, but by the need for a serious improvement of tax administration.

Thus, venture financing, technoparks and zones are important, but they are not the key mechanisms for supporting innovative enterprising. For big companies, indirect regulation measures are more effective, while in the interaction of the gov ernment sector of science an important aspect is the clarity and lack of controversy in the norms regulating the rights to intellectual property.

Regulation of the Rights to Intellectual Property Created at the Expense of Budget Funding In late 2006, Part IV, Section VII of the RF Civil Code, entitled Rights to results of intellectual activity and means of individualization, was adopted. It was to re place the six basic laws on intellectual property (IP).

Part IV of the Civil Code, nevertheless, has failed to ultimately clarify the situa tion existing in the sphere of regulation of the rights to intellectual property created at the expense of budget funding (Chapter 77 of the Civil Code Right to use results of intellectual activity as part of single technology). The greater part of the Code builds upon the European concept, from which it follows that the rights to IP initially belong to the author, and only in some instances they may be transferred to the B. Kuznetsov. Vliianie konkurentsii i struktury rynkov na razvitiie i povedenie promyshlennykh predpriiatii; empiricheskii analiz (The influence of competition and market structures on the devel opment and behavior of industrial enterprises: an empirical analysis) // International Scientific Con ference Modernization of the economy and the State. M.: HSE, 5 April 2006.

RUSSIAN ECONOMY IN trends and outlooks employer, which should be specially agreed upon. At the same time, in Chapter it is implied that the fact of financing represents the grounds for rights to arise. And thus it is the State who becomes that economic subject which in each specific case resolves the issue of transferring the rights to IP.

In Item 1 of Article 1546 of Chapter 77, Rights of the Russian Federation and subjects of the Russian Federation to technology, the conditions are determined under which the right to a technology should belong to the Russian Federation. If a single technology has been created to satisfy the needs of state defense or secu rity, and also in an event when the RF, prior to the creation of a single technology or afterwards, has undertaken the financing of the works involved in bringing the sin gle technology to the stage of practical application, then the right to the technology should belong to the RF. And finally, if the performer of works has failed, during the period before the expiry of six months after the completion of the work of creating the single technology, to execute all the actions necessary for the exclusive rights to the results of intellectual activity, which are part of a technology, to be recog nized as belonging to him, or for such rights to be acquired, then the RF should be come its owner. Firstly, it should be noted that the use of the terms defense capa bility and national security is not quite lawful, because the Civil Code regulates only the civil normative legal relations. Secondly, the transfer of the rights to IT to the State in the event when it has undertaken to finance the works may, in effect, be interpreted broadly that is, that the rights should be transferred to the State no matter what the actual volumes of funding from the state budget have been.

Thus, presently it is not easy to estimate as positive the general conse quences of the introduction of Part IV of the Civil Code in respect to the rights to in tellectual property created at the expense of budget funding. Meanwhile, the pro tection of property rights, including intellectual property, represents an indicator that can significantly lower a countrys rating in terms of its competitive capacity. In 2006, according to the World Economic Forum, Russia moved from the 53th place that it had occupied in 2005 to the 62nd, while being the 114th in terms of the level of property rights protection.

Indirect Regulation of Innovation Activity The discussion of measures aimed at creating indirect incentives was going on quite actively throughout last year. The Presidents Administration, in coopera tion with representatives of the RF State Duma, developed a package of draft laws, which incorporated 14 new laws and amendments to prevailing legislation. Result ing from it having been coordinated with representatives of various departments, this proposed package was cut rather extensively. The draft federal law On making amendments to Part II of the RF Civil Code in the part of creating favorable tax con ditions for financing innovation activity was approved at the governments meeting in late January 2007. In this document, it is envisaged that five amendments should be introduced into the Civil Code:

On exempting from VAT the incomes on patents and licenses to innovation technologies (Article 149);

Section Social Sphere On excluding, from among the objects of taxation to be levied by the profits tax, the funds received on a reimbursable basis by research organizations and funds for the support of science and education (Article 251);

On including into the costs on which the profits tax is to be levied, a part of funds spent on research and development not only by research organizations, but also by innovation oriented organizations (Article 259);

On expanding the list of expenses by the amount of which the taxpayer applying the simplified taxation system should diminish the amount of received incomes (Article 346.16);

On raising the amount of standard expenditures in the form of deductions to the Russian Fund for Technological Development (RFTD), as well as to other de partmental and interdepartmental funds for financing research, from 0.5% to 1.5% (Article 262).

As can be seen from this list, the regulation measures are aimed mainly at supporting small sized enterprises and research organizations, and have no bear ing on the incentives existing for big businesses. The increased amount of deduc tions to the RFTD is important, however this measure is not a critical one either, be cause enterprises can, but are not obliged to make any transfers to departmental and interdepartmental funds. Thus, the suggested package of measures, although is does represent a positive shift in the sphere of incentives for innovations, is, nev ertheless, not radical. The poll conducted among 570 industrial enterprises by the IET in October November 200578 showed that the majority of those enterprises be lieved that the most effective incentive for innovations was the incremental tax ex emption. The incremental tax exemption is the diminishment of the taxable base for the profits tax by a certain percentage of the annual increment of an enter prises expenditures on research and development. This type of exemption is widely applied abroad, and it is most efficiently applied as an incentive for compa nies orientated toward dynamic growth of innovations and expenditures on re search and development.

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