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An outflow of researchers, mostly of youngand early middle age (30-40 years) is still continuing though a pendulummigration has become dominant when people work abroad for a certain period oftime (on the average about 3 months in a year), being engaged mostly inexperimental studies with Western equipment, and then process and analyze theresults in Russia. Destruction of the experimental base of science has in factresulted in a situation when Russia can host mostly theoretical studies.

As for a long-term stay abroad, by now astable scheme of the emigration of young people has been gradually forming. Theexperience of the previous generations of the emigrating young has shown thatthe most rational is to get a higher and postgraduate education and to defend adissertation in Russia and then to go abroad at once to occupy apostdoctorate position for which there is no analogue in Russian science. Asa result, the number of young Russian researchers occupying postdoctoratepositions is continually growing leaving behind the growth rates of the numbersof students and postgraduates who go abroad to complete their education. It isunlikely that in the next two or three years this outflow will be limited byexternal factors, such as external market capacity. The USA and Germany– the principalconsumers of Russian researchers – are planning to considerableincrease their quotas which is conditioned both by the development of high-techindustry and by the predicted demographic slump.

The programs of supporting the young werecontinued in the year 2001, and the number of the initiatives in this sphere isgrowing. Thus, a presidential decree is being prepared on initiating anothernew program according to which young scientists will be allocated grants of atotal of 40 million roubles. The most active supporters of the young are theRussian Academy of Sciences, the Ministry of Education of the RF and theRussian Fund of Fundamental Studies.

One of the most successful, from the pointof view of effectively attracting the young into the sphere of science, currentinitiatives remains the President’s targeted program Integration which will be continued in theyears 2002-2006 although in a somewhat new edition. It is expected that thebrunt of supporting innovations will be borne by extrabudgetary sources.Besides, such measures as allocating to the young (under 35 years) specialgrants to cover their participation in academic conferences, including thoseheld abroad, and creating jobs at the laboratories of academic and branchinstitutes and innovation structures for young students and postgraduates anddoctorants from higher educational establishments. The latter seems to be anattempt to apply the postdoctorate position mechanism which is popular in theWest. So far the pattern of creating such jobs have not been fully elaborated.Thus, jobs are created or the period of the project, i.e. on the average forone year, and the Program does not specify what will happen to these jobs afterit is over. Certain doubts are also associated with the fact that again scienceas such is identified with academic organizations, and no attempts are made tosupport the creation of similar jobs at higher educational establishments whichwould have been more promising in the situation of an institutional reform.

Domestic businesses have also beenexpanding the forms and scopes of their support for young researchers. One ofthe most actively operating structures is Vladimir Potanin’s Charitable Fund. The purpose ofthis program is to find young people who are not only studying well but alsopossess leader’s andorganizer’s traits.In addition to scholarships, grants have been allocated for the development ofresearch and methodology at the departments and chairs with the largest numbersof scholarship-receiving students, so, as result, support is given to thestrongest groups engaged in research and education.

However to restore the personnelreproduction structure only to support the young is not is not enough. Asimilarly important factor is the ability to conduct research at astate-of-the-art level which can be provided only when adequate equipment andinfrastructure are available. However in 2001, just as in the preceding years,no consistent policy aimed at improving the material base of science wasconducted. The average age of the equipment applied in research today is 16years, and less than 12% of equipment are 1 to 5 years old. In 61.8% oforganizations in the three past years a certain renovation of their equipmentwas under way, where budgetary funds comprised only 10% of the totalexpenditures on this item24. Higher educationalestablishments in the past 10 years received no budgetary financing forreplacing their obsolete equipment applied in education and research. At thepresent moment certain hopes are associated with the development of the programElectronic Russia, as well as with the approval of the proposal not to imposethe VAT on imported research equipment and hardware for which there are nodomestic analogues. This will make it possible to allocate more funding forpurchases, considering the fact that the assortment of Russian researchequipment to a large extent is no rival for that produced in the West.

Because of the poor material base ofresearch and the absence of modern infrastructure, the results of research anddevelopment work are to a certain extent predictable. According to the ScienceCitation Index (SCI) published by the American Institute of ScienceInformation, the citation index of Russian scientists has gone down. To acertain degree this can be explained by the fact that work has been mostlycurbed in a number of promising areas, especially those that involve high costs(molecular biology, nuclear physics). At the same time the number ofpublications, especially with foreign co-authors, has grown. But this is mostprobably a reflection of the pendulum migration phenomenon and an increasedsupport through funds where the success of an application depends on a largestpossible number of foreign publications. By the gross index of the number ofpublications co-authored with foreign colleagues Russian research groups havereached the level of developed countries. Thus, according to SCI, 33.7% of allpublications in journals are co-authored with foreign colleagues. By way ofcomparison, French researchers publish 40% of articles with foreign co-authors,American – 20%.

Another index of good results, as far asapplied works are concerned, is commercialization of the results of researchand development works. In 2001 the connection between science and thedevelopment of technologies remained weak enough, and the demand on the part ofindustry decreased. As of March 2001, the share of innovation-activeenterprises among large and medium-sized ones had been reduced to 3.1% of theirtotal number. In the year 1999 the number of innovation-active enterprises wastwice as much (6.2%). Thus, now the innovation activity level is approximately10-12 times lower than it used to be in the USSR in the 1980s, and 15-20 timeslower than in the developed Western countries. The rate of infrastructuredevelopment has become slower, now new sources of financing appeared. The mosteffective sources of support for innovations have remained the state funds -the Fund for encouraging small businesses in the sphere of science andtechnology (Fond Sodeistvia) and the Russian Fund for TechnologicalDevelopment (RFTD). However this activity is disastrously small-scale, as, forexample, the budget of the Fond Sodeistvia is only about 1.5% of the statebudget allocated for civil science. The annual volume of the sums distributedby the RFTD is also moderate and comprises about 20 million dollars -considering that is one of the few funds existing in the country which suppliedresources for the development of interdisciplinary innovation projects. Amongforeign investors of high-technology businesses the leading role belongs to theEBRD and the USA Administration25. In particular, they arethe principal investors for Russia’s venture industry, but this can also be regarded as a drawbackbecause at the present time high technology venture business in Russia stronglydepends upon foreign sources and is oriented mostly at loans, with a very smallpart of the assets being invested in the shares of developing technologicalcompanies. As for Russian sources, the Venture Fund created last year wasto receive from the state 100 million roubles but in reality only a sum of 50million roubles was allocated, with a considerable delay. This, in its turn,delayed the development of regional venture funds. Only as late as in October2001 the creation of three regional funds - in Moscow, Dubna and Tomsk - wasannounced.

The development of Center for InnovationTechnologies (CIT) was approaching in the year 2001 a certain landmark: it hadalready become obvious that among their participant firms not all wereefficient, and therefore the problem of attracting small-scale businesses tothe CITs had been replaced by that of excluding therefrom ineffectiveenterprises. One of the possible solutions currently suggested for the CITs setup at higher educational establishments is to transform the former intoeducation/research/innovation complexes according to the internationaltechnopark model. The Ministry of Education is planning to allocate targetedfunds for establishing 13 such complexes because so far the CITS attached tohigher educational establishments have been only modestly successful. One canspeak only of singular instances of positive experience achieved by certainhigher educational establishments in some regions.

At the present moment the sphere ofcommercialization of technologies does not possess either the necessarycritical mass of financing from different sources or the infrastructure whichhas resulted in a slowdown of innovation activity. Besides, several morefactors should be taken into consideration. Firstly, the number of developmentprojects possessing a commercial potential has to a certain extent beenexhausted. Secondly, small-scale businesses no more have that easy access tothe material and intellectual property previously accumulated by their parentresearch-and-technology organizations which used to be open to them in earlyand mid-1990s. At the same time the problem of regulating the rights forintellectual property created fully or in part at the expense of budgetaryresources has not yet been solved.

The results of the year 2001 have shownthat the sphere of science is still too far from being one of the prioritiesfor the state policy; nevertheless is developing, and some positive trends haveappeared. Firstly, at least the situation as regards manpower is no moredeteriorating, and the personnel structure is to a greater extent compatiblewith the market conditions which have become an unavoidable environment forscience. Brain drain is no more a one-way process and is resembling more andmore not an outflow of manpower but rather its mobility. Secondly, a constantprocess of looking for and creating new institutional forms is under way.Cooperation between sectors in becoming closer, a reform of the RAS has beenoutlined. Thirdly, the sources for financing science are becoming more diverse.Fourthly, the information support of research has considerably improved, theInternet servicing and a system of electronic libraries are developing.Finally, the legislative base of the sphere of science is gradually developing,as well as its fitting into the common legal space of the country.

2.6. Foreign economicactivities

Pursuant to the World Trade Organization'sannual report, the quantum of the world trade grew by only 2% in 2001. In 2000,the trade growth accounted for 12%. The slowdown of the world trade operationsreflects the general tendency for deceleration in growth, which became evenmore pronounced after September 11. The WTO experts had revised their originalprojections downward. In May 2001, the WTO still expected a 7% increase in theworld trade operations. It is possible to identify three factors that havetriggered off the reduction of the world trade turnover, i.e. the plunging USimports, the declining demand in Western Europe, and the general downturn ofthe world high technologies market.

According to the Bank of Russia, the volumeof Russia's foreign trade in 2001 amounted $156.5 bln., reaching its peak levelin the past 10 years. As compared to 2000, the scope of foreign tradeoperations had grown by 4.1%. The export balance of trade accounted for $49.7bln., being 18% down on the 2000 index. In 2001, Russian exports reached $103.1bln. (a 2.3% reduction), and the imports accounted for $53.4 bln. (an 18.9%increase).

Figure 45

Data source: the Goskomstat ofRussia.

Foreign trade relationsbetween Russia and non-CIS states

Russia's principal trade partners are thoseforeign states that do not belong to the coalition of newly independent states.In 2001, the share of non-CIS states in the RF foreign trade turnover accountedfor 82%, including 86% of exports and 73% of imports.

The total volume of trade between Russiaand non-CIS states in 2001 amounted to $128 bln., showing a 4.3% growth against2000. The expansion of trade should be attributed to a significant boost in theimports value, which exceeded the 2000 index by 28.1% and amounted to $40.3bln.

Exports continued to grow during the firstsix months of 2001 and by the period end exceeded by 5.7% the index of therespective period in 2000. However, in July the curve went downward. As aresult, in 2001 Russian exports to non-CIS states dropped by 3.9% against 2000and accounted for $87.7 bln.

The reduction in exports value was causedby the fall of average contract prices for many of the exported Russiancommodities. Most seriously affected by the drop of export prices were nickel(31.9%), iron ore (12.7%), aluminum (10.6%), potash fertilizers (10.5%), andcopper (8.4%).

Figure 2

Data source: the Goskomstat ofRussia.

Table 35

Average export prices for basic commodities(USD per ton)







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