TY - JOUR

T1 - Impact of the funding structure on R&D in cases of European Union and Russian Federation

AU - Alpatov, Gennady

AU - Gusarov, Kirill

AU - Korostyshevskaya, Elena

PY - 2021/2

Y1 - 2021/2

N2 - Research background: Many contemporary empirical studies and theories of economic growth have revealed the dependence of innovative development of countries on the adequacy of funding for innovation. However, much of the empirical literature has discussed the issue of innovativeness without assessing the impact of the structure of funding sources on the success of the innovation process. Purpose of the article: The aim of this paper is to prove the hypothesis of the inefficiency of innovative systems in which the proportion of public investment is high compared to private investment. In Russia, the share of public R&D funding is 67%, and the EU average is 33%. Methods: Based on the empirical research, we have compared the EU Horizon 2020 program with Russian VEB Ventures programs, conversion and digitalization programs of the Industrial Development Fund and found out how the structure of funding sources for these programs affects the success of their implementation. Findings & Value added: The results of our research show that a large share of public funding is not the cause, but the result of low private innovation activity and a lack of private investment. Significant reasons for their shortage were identified: the economic feasibility of purchasing ready-made solutions on the global market instead of funding research; cheap labour; adverse business climate. Thus, a high share of public financing of innovations in a country can serve as an indicator of the existence of serious reasons for restraining innovative development.

AB - Research background: Many contemporary empirical studies and theories of economic growth have revealed the dependence of innovative development of countries on the adequacy of funding for innovation. However, much of the empirical literature has discussed the issue of innovativeness without assessing the impact of the structure of funding sources on the success of the innovation process. Purpose of the article: The aim of this paper is to prove the hypothesis of the inefficiency of innovative systems in which the proportion of public investment is high compared to private investment. In Russia, the share of public R&D funding is 67%, and the EU average is 33%. Methods: Based on the empirical research, we have compared the EU Horizon 2020 program with Russian VEB Ventures programs, conversion and digitalization programs of the Industrial Development Fund and found out how the structure of funding sources for these programs affects the success of their implementation. Findings & Value added: The results of our research show that a large share of public funding is not the cause, but the result of low private innovation activity and a lack of private investment. Significant reasons for their shortage were identified: the economic feasibility of purchasing ready-made solutions on the global market instead of funding research; cheap labour; adverse business climate. Thus, a high share of public financing of innovations in a country can serve as an indicator of the existence of serious reasons for restraining innovative development.

KW - innovations

KW - public funding

KW - private funds

KW - the Horizon 2020

KW - research and development (R&D)

UR - https://www.shs-conferences.org/articles/shsconf/abs/2021/03/shsconf_glob20_07004/shsconf_glob20_07004.html

M3 - Conference article

VL - 92

JO - SHS Web of Conferences

JF - SHS Web of Conferences

SN - 2261-2424

IS - 92

M1 - 07004

T2 - The 20th International Scientific Conference Globalization and its Socio-Economic Consequences

Y2 - 20 October 2020 through 21 October 2020

ER -