ANALYSIS OF THE EFFECTIVENESS OF THE REGIONAL INNOVATION SYSTEM. A CASE STUDY ON POLYETHNIC REGIONS OF THE RUSSIAN FEDERATION.

• Author: Panikarova, Svetlana
• Position: Case study

1. Introduction

   The modernization of the economy, which is focused on a qualitative change in the structure and sources of long-term economic growth, inevitably involves the modernization of the institutions which determine the development of national and regional innovation systems. Problems in designing innovation system institutions are particularly acute at the regional level. This is due to a high level of socio-cultural diversity and the characteristics of the economic, social and spatial development of individual regions.

   In the course of formation and implementation of innovative policy in the countries with a high level of a regional variety, it is necessary to consider all features of the regional innovation system, including institutional and socio-cultural characteristics of the region. Ignoring or undervaluing the institutional factors leads to serious problems of regional and national innovative development. The institutional characteristics of RIS of polyethnic regions of the Russian Federation were analyzed for an illustration of this thesis. Although polyethnic regions are researched in the paper, the offered methodical approach goes beyond this group of regions. This method can be applied in the countries with a high level of a regional variety (including geographical, economic, social, etc.) to the justification of innovation policy tools.

   The innovation systems of Russian polyethnic regions have been selected as the objects of the study in accordance with the following reasons:

   1. Polyethnic regions of Russia are more independent in justification of regional innovation policy than other regions thanks to the special subfederal status (republic or autonomous region).

   2. Polyethnic regions demonstrate a high level of differentiation in innovative development despite relatively equal initial socio-economic parameters, which allows for a thorough study of the reasons for such deceleration, especially in the field of the institutional support of innovation policy.

   The polyethnicity of the economic space is a historical feature of Russia, where representatives of more than 100 nationalities and ethnic groups reside in a vast territory. 29 of the 85 regions of the Russian Federation are polyethnic. In some cases, they have the special status of a national-territorial entity (autonomous region or republic). In others, the share of ethnic Russians living in these regions is less than 70% of the total population.

   Many publications have been devoted to assessing the innovation potential, innovation development and innovation climate in the regions of Russia. Currently, there are various systems of assessment for the innovation development of subjects of the Russian Federation, which are aimed at identifying the leaders of innovation development in Russia.

   Table 1 presents the positions of polyethnic regions in three ratings at the end of 2016: Association of the Innovative Regions of Russia (AIRR), Higher School of Economics (HSE), and National Association of Innovation and Information Technology Development (NAIITD). In the presented assessment systems (ratings), the approach of European innovation surveys (the European Innovation Survey, the Regional Innovation Survey and the Union Innovation Survey) is used as a starting point. Rosstat data is used as the initial information base for the regions of Russia.

   Table 1 shows that the positions of polyethnic regions in various ratings differ quite significantly. This especially applies to regions like the Republic of Chuvashia (ranked 5 in the HSE rating but only 37 in the NAIITD rating), Tyumen region (ranked 10 in the NAIITD rating and 40 in the AIRR rating), the Khanty-Mansi Autonomous Area (ranked 26 in the NAIITD rating and 68 in the AIRR rating) and the Yamalo-Nenets Autonomous Area (ranked 34 in the HSE rating and 77 in the AIRR rating). Researchers are unanimous regarding the regions of Siberia, the Far East and the North Caucasus. These regions occupy the lowest positions in all presented ratings.

   According to the results of the integrated assessments, polyethnic regions, with a few exceptions, are mostly falling behind in innovation development. Only 8 of the 29 regions rank in the first half of the rating; the rest noticeably lag behind the average Russian values.

   Therefore, study and assessment of the effectiveness of the functioning of the innovation development institutions in polyethnic regions is of great importance in the modernization of regional innovation systems, and the formation of adequate state policy tools to stimulate innovation development and qualitative economic growth.

   The goal of this study is to develop a systems-based approach to assessing the effectiveness of the institutional structure of regional innovation systems based on a functional cost analysis of innovation development institutions, as well as to identify the factors which determine the quality of regional innovation institutions.

   This goal is relevant due to the insufficient development of the scientific tools which allow us to assess the quality of innovation development institutions and identify existing institutional dysfunctions, traps, atrophies and degenerations emerging in the process of innovation. Their development is caused by the formation of the institutional environment and the specifics of the regional socio-economic system, which limits opportunities for institutional design in the regional economy.

   The study consists of several parts. The first part provides an overview of existing approaches to understanding the institutional nature of regional innovation systems (RIS), and describes the economic categories used in the study. The second part describes the methods and techniques of the study. The third part is an evaluation of the author's approach to assessing the effectiveness of RIS institutions. The fourth part is devoted to the analysis of shortfalls in the institutional environment of regional innovation systems of polyethnic regions in Russia. The final part contains conclusions and recommendations on the adjustment of innovation policy in the studied regions.

2. Literature review

   The concept of an 'innovation system' was first used by Lundvall in 1985 (Lundvall, 1985). Later, the idea of a national innovation system was developed in the works of acclaimed scientists (Furman et al., 2002; Boschma and Lambooy, 2002; Lundvall, 2007). In addition, the concept of a sectoral innovation system (Breschi and Malerba, 1996; Malerba, 2004) and the concept of local/regional innovation systems (Cooke, 1992; Cooke, Uranga and Etxebarria, 1997; Isaksen, 2001; Cooke and Memedovic, 2003; Iammarino, 2005) were introduced.

   Scientists use different approaches to define the concept of a 'regional innovation system'. Cooke (1992) emphasizes that the essence of identifying the 'regional innovation system' category is the ability to lay the foundation for an extended discussion about the financial possibilities to stimulate innovation and to institutionalize education and a culture of innovative production in the region. Nelson (1993) defined a regional innovation system as a system which includes a set of regulators and practices which ensure the production of innovations.

   According to Cooke (2013), the regional innovation system includes two sub-systems: (a) a subsystem for the application and use of knowledge, represented mainly by commercial firms; and (b) a subsystem of knowledge generation and diffusion, which includes non-profit organizations as a general rule (mainly, the education sector and academia). Leydesdorff and Strand (2013) distinguish three functions of national and regional innovation systems: (a) the achievement of economic growth, (b) the production of technological innovations, and (c) the state regulation of the scientific and technical progress. Doloreux (2002) stresses the importance of the availability of innovative energy in the region (provided mainly by knowledge-generating enterprises and organizations), and emphasizes an important ability of the regional authorities' system--to promote and support interactions between organizations involved in the innovation cycle. Some researchers propose defining a regional innovation system as an interactive, dynamic structure that provides cooperation in regional production (Lambooy, 2002; 2004) or even as a complex of adaptable systems (Cilliers, 1998; Pavard and Dugdale, 2006).

   The author defines a regional innovation system as a set of organizations and institutions whose main functions are the generation, commercialization and introduction of knowledge into the region's economy.

   The core of the regional innovation system is formed by scientific and educational organizations, innovative business and regional and municipal authorities providing the implementation of scientific and technical policies, as well as regional innovation institutions which set the rules, norms and mechanisms by which they function, and that ensure the implementation of research and development work.

   In a broad sense, the term 'institutions' refers to the formal and informal rules of a society which define relationships between people (Veblen, 1898). In a narrow sense, this term refers to organizational units and procedures (Commons, 1924). Institutions make up the main part of the social capital--a key factor in economic growth. The main function of institutions is to structure relationships between economic entities. The institutional structure consists of a set of institutions. The institutional structure is closely connected to the institutional environment, which consists of system-forming rules.

   In accordance with the terminology developed by North and Davis, the institutional environment is a set of fundamental political, social and legal ground rules that establish the basis for production, exchange and distribution (North, 1997). The institutions of a regional innovation system perform the...