Evolution of the Russian innovation system: Narratives and the impact on economic growth

Abstract

The Russian innovation system is lagging behind the developed countries in terms of many parameters. In the paper, we identify the specificities and patterns of this system evolution by analysing the narratives of its actors. Methodologically, we take advantage of the synthesis of narrative economics and original institutionalism. The methods include narrative analysis, in-depth interview, and econometric analysis of how sub-indices referencing the innovation inputs and outputs influence the economic growth. The data comes in two types: qualitative ones from 27 in-depth interviews conducted from April to August 2022 and quantitative ones from the Global Innovation Index 2021. Based on a linear regression model with an innovation input and output interaction component we find that despite their proven positive impact on the economic growth, the return on innovation outputs decreases with an increase in inputs which indicates the presence of positive externalities. The research findings demonstrate that the factors "institutions", "human capital and research", "infrastructure", "market and business sophistication" combined into the innovation input sub-index of the Global Innovation Index, are associated with the functioning of increasing return mechanisms in the economy. We identified the following main malfunctions of the Russian innovation system based on a qualitative analysis of in-depth interviews: lack of consistency, poor quality of institutions and legislation imperfection, science underfunding along with excessive control, selectivity of the state innovation policy. The results confirm the necessity of studying narratives for gaining a more complete understanding of how and what stable constructions are used by actors to explain the problems related to the formal and informal institutions of the Russian innovation system.