CC BY
54Manucharyan M.G.
PhD in Economics, Head of Department, Senior Researcher, The Institute of Economics, National Academy of Sciences
of the Republic of Armenia, Associate Professor, Armenian National Agrarian University
mg-meri@mail. ru
THE DEVELOPMENT OF INNOVATIVE ECONOMY IN ARMENIA:
TRENDS AND PROBLEMS
Keywords: innovations, economic development, innovation policy, technologies.
Ключевые слова: инновации, экономическое развитие, инновационная политика, технологии.
Innovations have become a powerful link in all sectors of the economy, a major driver of economic and social development. They not only provide an opportunity to raise the living standards of the population, to solve social and environmental problems, but they are also key cornerstones of the countries' geopolitical, military, economic power and independence. Knowledge of the processes of innovation development, creation of innovative technologies, the factors influencing them, the problems existing in them are necessary for the formation of a well-founded state policy, which can avoid obstacles arising during that activity, ensure the wide spread of innovation activities.
The events of the last decades show that the countries that have created the mechanisms of rapid development of science, technology, entered a new stage of the scientific and technological revolution, have ensured high rates of economic and social progress. For companies engaged in innovation, it is possible to clearly understand the specifics of the process of developing the latest technologies, management issues, approaches and ways to provide effective solutions to the latter.
The factors influencing the innovation process are constantly changing. If in the 50s of the last century there was a linear model of innovation in the West, according to which research and development was considered the only main source of innovation activity of the state, then from the 60s this approach began to change. First, market demand began to be seen as a determining factor. A comparative study of the innovation policy pursued by the Japan, United States, Western Europe, and the USSR shows that the emergence and spread of innovation in parallel with research and development includes national education and science systems, as well as many other factors: interrelationships between firms, producers, consumers, sources of funding, labor market, state policies, etc.
Such approaches towards innovation activity inevitably leads to the formation of the national innovation system, which implies not only a one-way causal connections to the scientific research and experimental works to innovative projects, but also, above all, a system of mutual links between economic, social, environmental and organizational factors. About 80% of the funds allocated to science from the RA state budget are allocated to basic research, only 20% to applied research, while, for example, in the USA, 16% of the funds are allocated to basic research, 26-28% - for applied research, and 65% for experimental design and technological development1. The development of innovation activities is also conditioned by the current legislation. The sphere is mainly regulated by the RA Law on State Support of Innovation Activities. The law mentions the main concepts of innovation, goal and objectives.
According to the mentioned law, the goal of the state innovation policy is to provide economic, legal and organizational conditions for innovation activities.
The issues of the state innovation policy are:
- Defining the priorities of the state innovation policy,
- Contributing to the technological upgrading of the economy, creation and development of innovative infrastructures,
- Creation of legal bases for cooperation between science, education, production and financial institutions in the field of
• • 2
innovation activities .
The law is also the basis for the implementation of innovation policy. However, the law needs to be revised as it does not address one of the key issues between education, science and production.
The above-mentioned law was followed by the decision of the Government of the Republic of Armenia of October 19, 2006 «On defining the priorities of the development of the innovation sphere», which approved 4 general priorities of the development of the innovation sphere in the Republic of Armenia:
1. Creation and development of innovation infrastructures,
2. Alternative energy sources,
3. High-tech developments,
1 RA Government 20.01.2005 N2 Protocol Decision «On the Concept of Innovation Activities in the Republic of Armenia» (in Armenian).
2 RA Law on State Support for Innovation Activities, 23.05.2006, HO-6-N, Article 6 (in Armenian).
4. Introduction and development of environmentally preferable technologies1.
Then this decision was followed by the protocol decision of the Government of the Republic of Armenia of December 25, 2014 «Priorities for the development of science and technology in the Republic of Armenia for 2015-2019» based on the development of science-oriented productions, can make the greatest contribution to ensuring the country's security, economic growth, scientific and technical development, social progress and increasing competitiveness2.
It can be said that the legislation related to innovation and innovative technologies is mainly shaped in Armenia, but it needs to be adapted to the current issues, conditions and global challenges.
There are many challenges to creating innovative technologies and investing in the economy. The development of the country's economy should be based on the development of scientific and technological innovation-oriented sectors. Here it is necessary to take into account the current trends in the modern world, the experience of countries that have achieved significant results, valuable international experience and modern methods of promoting research and innovation.
As the world experience shows, one of the key factors contributing to the scientific and technological progress and innovation activity is the innovative culture and environment formed in the organizations. For example, Booz & Co Consulting (now owned by PricewaterhouseCoopers) concluded in its 2011 Global Innovation 1000 report that organizations with a culture of innovation are more successful in innovation, and the strategy is consistent if the latter, and the staff and management are committed to innovation3.
Therefore, it is not surprising that in the private sector enterprises of different countries, as well as in the leading scientific and educational institutions, great importance is attached to the formation and preservation of innovative culture. For example, the Research Innovation Strategy at the University of De Montfort (UK) provides a «dynamic environment - a pervasive research culture that encourages academic staff to undertake purposeful, innovative and rigorous research»4.The NorthWest University in South Africa, which has a special office responsible for innovation, its research and innovation strategy notes the improvement of the innovation culture as one of the main goals5. Moreover, many authors attribute Israel's success in the field of innovation and high technology to the innovative culture prevailing in those countries. An article published in Forbes magazine in 2013 states that being in the midst of hostile neighbors does not prevent Israel from having a creative, innovative culture that encourages the free flow of ideas, cooperation between individuals with different views. In this respect, Armenia is in almost the same situation.
The most immediate ways to contribute to the economic development of the country through innovation are the introduction of research and innovative results, commercialization, technology transfer to businesses. The education-science-economy connection, with its various manifestations, occupies a prominent place in the missions and strategies of the world's leading scientific-educational institutions, as it is considered to be one of the main goals of their existence. Thus, the Technion Institute (Institute of Technology, Israel), which has given the world a number of Nobel Prize winners and is the driving force of technological progress in Israel until 2045 for his design of a strategy aimed at private companies are more large-scale engagement through new construction areas, giving them Innovation Hubs. Technoparks, high-tech incubators, acceleration programs, business support centers and other similar structures play an important role in promoting innovation and serving its economic development.
In developing economies, including Armenia, economic diversification and the development of competing sectors are one of the most important issues, in particular as Armenia in transition is not only losing its scientific-technical base, but also is unable to integrate with the aforementioned economic processes thereby increasing the already existing technological isolation between Armenia and the countries with developed economies6.
Below is shown the share of innovation organizations in the total number of organizations by type of innovation:
The figure 1 shows that most business companies in Armenia are dissatisfied with innovations, do not tend to constantly update products, technologies are almost free from connections with research institutes, but at the same time do not rush to develop their own research and experimental structures.
In order to create an adequate environment for innovation, appropriate modern infrastructures, logistics, publicity and information mechanisms are needed. In order to create an innovative environment in Armenia, it is necessary to implement programs for the modernization and replenishment of logistics.
As a result of the analysis, we came to the conclusion that:
- The low level of development of the innovation infrastructure - all the factors hindering the process, to one degree or another are related to the activities of the state. In the conditions of limited state funding, as well as with the lack of own funds of organizations, the most important condition for the activation of innovation activities is the attraction of funds from nongovernmental sources for the commercialization of technologies. The formation of a venture and leasing system for financing
1 RA Government 2006 Decision N 1466-N of October 19, 2006 «On Defining the Priorities of Innovation Sector Development» (in Armenian).
2 Protocol Decision of the Government of the Republic of Armenia N 54 of December 25, 2014 «Priorities for the Development of Science and Technology in the Republic of Armenia for 2015-2019» (in Armenian).
3 Jaruzelski B., Loehr J., Holman R. The Global Innovation 1000: Why Culture is Key // Strategy+Business. 2011. Issue 65.
4 De Montfort University, RESEARCH AND INNOVATION STRATEGY 2013-17.
5 North-West University, Institutional Strategy for Research and Innovation 2008-2010.
6 Manucharyan M.G. Problems of innovative development of the economy of Armenia and the most suitable technologies for the agricultural industry // Наука и современное общество: актуальные вопросы, достижения и инновации: сборник статей IV Международной научно-практической конференции. - Пенза: МЦНС «Наука и просвещение», 2020. - С. 105-108.
technological projects will open up great prospects for attracting private capital in the field of innovation. In order to reduce the risks of private investors, it is necessary to provide appropriate state guarantees - state participation in venture funds.
6.00%
-5,10%-■
3,50% ■ __
. ■ I I
Figure 1.
The share of innovation organizations in the total number of organizations by type of innovation1
- The development of innovation activities is impossible without the protection of intellectual property, the necessary improvement of the normative-legal basis of protection, its introduction into economic circulation, production norms, standards, certification systems in line with world standards in this field. The education system is closely intertwined with the development of both the economy and all other spheres of public life, the ability of which to meet the educational needs of the society determines the prospects of the country's economic development.
- Training of scientific and technical staff in academic institutes, state scientific centers, universities, doctoral programs, training should first of all take into account the needs and priorities of the national innovation system.
In order to have a competitive economy with innovation orientation, it is necessary to create a culture of innovation, to increase the quality of innovation research, to ensure the interconnection of education-science-economy.
1 https://armstat.am/file/article/rep_inov_2017.pdf
