Intellectual resources as innovation development factor

The current meaning of the term “intellectual resources” is the result of scientific understanding of the socio-economic practices of leading countries of the world. This concept accumulates critical propositions of many theories that have been strongly promoted from the middle of the twenti- eth century: human capital, labor capacity, knowledge economy, and other concepts of postindustrial society, a society in which the economic structure, people’s motivation, product distribution mechanisms, attraction of investments, management technology undergo dramatic changes.

The condition of the Russian economy today, despite some positive results from anticrisis measures taken by the authorities, clearly shows the futility of export-raw model of the country’s development and the need of transition to an innovative model. In recent years, the country's leaders often declare that “in the coming decades, Russia should become a country whose prosperity is ensured not so much through commodity but through intellectual resources: “smart” economy, which creates a unique knowledge, export of the latest technology and products of innovation”[19].

With the formulation of the problem of the domestic economy transition to the innovation way of development the category of “intellectual resources” appeared to be in the center of the problems discussed on the pages of theoretical and practical scientific publications, conferences, symposia and other forums. Scientists identify the essential features, the composition and structure of intellectual resources; the methods of their level assessment and development mechanisms are being worked out. There are differing points of view on these issues. A new section of management science that meets the requirements of the knowledge economy has appeared – it is intellectual resources management. However, the category of “intellectual resources” has not yet received a clear scientific identification. There are both expansive and narrowed interpretations of this concept, as well as the definitions which are intermediate between them.

Within the expansive approach intellectual resources are considered very close to the category of “human potential”. And there are strong arguments for this based on established methodologies for evaluating and calculating the human development index (HDI). This index as is known accounts the assessments of the level of education (literacy) of population, health (life expectancy), the impact of economy (per capita income) specially converted (for comparability) according to countries. According to recent data, computed under the auspices of the UN, Russia ranks 73 in the HDI (tab. 1).

HDI can be an important indicator characterizing the degree of the country’s economy development and intelligence of its people. But the HDI does not allow identifying clearly the internal factors of growth of intellectual resources of the country.

Within the narrowed approach the basis of the concept of “intellectual resources”, as a rule, are indicators of the country’s richness of scientific personnel, the unit cost of science in the whole country and per researcher, development of material base of science and its infrastructure. Such an approach when compared with that of leading countries makes it possible to determine not only the state but also targeted areas of intellectual resources. It has significant advantages in terms of practical determination of future goals and milestones for achieving them.

A striking manifestation of this approach was the report of the Director of the Institute of USA and Canada S.M. Rogov, “Russia should become a scientific superpower [22]. Unclaimedness of science as a threat to national security” at a meeting of the Presidium of RAS in April this year. The key findings of the report are so principled and capacious that we should distinguish them in a special frame.

Table 1. Components of HDI in Russia

Indicators	1992	1999	2000	2004	2006
Adult literacy rate (%)	98.7	99.6	99.6	99.4	99.4
Life expectancy (years)	70	66.6	66.1	65.2	65.2
GDP per capita (doll. USA)	6,930	7,100	8,377	9,902	13,205
HDI index	0.858	0.755	0.781	0.797	0.806
Place in the UN rating	34	55	60	65	73
Source: UN Reports on Human Development for 1994, 2001 – 2003, 2006 – 2008 (publication year of the index means that it applies to the data two years ago).

From the report of corresponding member of RAS S.M. Rogov at a meeting of the Presidium of RAS April 16, 2010

• 1.    On the state of funding of Russian science:

• –    The share of Russia accounts for less than 2% of world expenditure on R&D by purchasing power parity and the 1% by exchange rate...Russia lags behind the USA in expenditure on R&D 17 times, behind the European Union – 12 times, behind China – 6 times, behind India – 1,5 times...

• –    On public expenditure on R&D per capita ($ 86) Russia lags 4 – 5 times behind the leaders and on private spending ($ 40) – 15 – 20 times...

• 2.    On the stages of development of science in Russia:

• –    In the first phase the objective is to bring R&D spending to at least 2% of GDP (1% due to state funding and 1% from private expenditure) in the next few years. In 2012 Russia can and should come to the 50% of the level of leaders for the costs per a researcher – about $ 50 billion a year in the prices of 2010.

• –    In the second phase (up to 2020) R&D spending should reach 3% of GDP – 75% of leaders for the costs per a researcher to provide access to the average level of 70 – 80 billion dollars a year.

• –    In the third phase (mid-XXI century) R&D expenditures of Russia must keep up to 4 – 5% of GDP (100 –

• 1 20 billion per year in constant prices), which will allow entering a group of world leaders for the costs per a researcher.

Only in this case Russia will be able to return to the number of scientific superpowers in the XXI century, to become one of the centers of power in a multipolar world.

In the transition to a post-industrial innovation-based economy the significance of other intangible assets dramatically increases – the creative energy of staff, the spirit of entrepreneurship in business, economic institutions that foster innovation. We should note that this aspect of intellectual resources doesn’t have standardized assessments yet. But, being a part of the challenges to innovation economy, it requires a search for appropriate methods of measurement.

We believe that significant progress towards the development of scientific methods of integrated assessment of intellectual resources has been made in the recent works carried out under the guidance of Academicians V.L. Makarov, P.A. Minakir, V.V. Ivanter,

A.I. Tatarkin [7, 12, 18, 23]. An important contribution towards resolving this problem was made by Professors A.E. Varshavsky, S.D. Valentey, N.I. Ivanova [1, 6, 9, 13] and other famous domestic scholars and economists.

In principle, it is important to note that local researchers agree that the all-Russian economic and social processes are shaping the future of each region. Therefore, forecasting the development of intellectual resources of any region is impossible without a fairly tight linkage with expected performance in Russia as a whole.

However, for innovation mesoeconomics it is crucial to examine the levels of the current state of intellectual resources in the region and their ways out to the requirements of innovation paradigm of national development. In this regard we will focus more on what is done by our Institute of Territories’ Socio-Economic Development of RAS (we should note that the status of the Institute had been received only a year ago, it was established on the basis of the Vologda Scientific Coordination Centre CEMI RAS).

Since the mid 1990’s we began to study changes in the state and factors of development of the regional scientific, technical, and labor capacities, the functioning of health and

Table 2. Directions of research held by ITSED RAS run in the monitoring mode [21]

Direction, theme The year of the research commencement Research content The functioning of enterprises and industries, agriculture, social environment, small business 1993 Study of economic and financial situation of enterprises, institutions and industries using the methods of statistical analysis and expert interviews Investigation of the conditions of healthy generation formation 1995 A unique panel study examining the effect of different (economic, social, health, etc.) factors on health and development of children from their birth until the age of majority. Currently, there are four cohorts (the oldest children are 14-year-olds) are under supervision Economic conditions and social well-being of the population in the region 1995 Regularly measurement (6 times per year) of public opinion in the territory of the Vologda region on the most important aspects of socio-political and economic life of the country and the region, life satisfaction, well-being of households. Single volume of sample is 1500 respondents The quality of labor potential 1996 Qualitative-quantitative measurement of labor potential using the index of “social activity”, covering such primary qualities as physical and mental health, knowledge and creativity, communication and social activity, cultural and moral level. Analysis of compliance with the requirements of the quality of labor potential of jobs Research, educational and human resource capacity of the region 2003 Measuring the dynamics of a multistage scientific-educational structure for training and retraining of highly qualified specialists to create the conditions for the identification and development of the abilities of talented youth in the region, promoting the use of achievements of domestic and foreign science and practice in various fields of economy, management, information technology as applied to regional and local governance, to economic entities of the regional and municipal economy, creating conditions for the practical application of scientific research in the development of innovative small businesses The development of information technology in the region 2003 Market research of software, assessment of status and monitoring trends in the development of telecommunication services in the region Socio-economic development in the region 2004 Tracking the dynamics and assessment of the economic and social development of the region, identifying threats and challenges of the environment, adjustment of strategic goals, milestones and priorities for development in the region due to changes in external and internal environment Economic conditions and social well-being of the population of regions in the North-West federal district 2005 Measurement of public opinion in 10 regions of Russia, located within the North-West Federal District on the most important aspects of socio-political and economic life of the country and the region, life satisfaction, well-being of households. Single volume of sample is about 6000 respondents (at least 400 people in each subject) Innovative development of the economy 2005 Regularly measurement and tracking the dynamics of scientific and technical potential of the region and the competitiveness of regional economies, the study of innovation in the region (a survey of 200 large and medium-sized enterprises), revealing the problems of building a knowledge economy education systems, as well as other socio-economic processes associated with the formation of intellectual resources (tab. 2). A distinctive feature of these studies is that we try to run them in the monitoring mode.

Taken research approaches are currently promoted in other regions of the North-West federal district.

Let us put forward some key issues that become apparent as a result of works associated with the formation and use of intellectual potential of the Vologda region.

• ► Low level of development of regional scientific and technical capacity, weak links of research institutions with the real sector of economy of the region.

• 3.5 thousand; in 1990 the Vologda Optical and Mechanical Plant employed 9 thousand people, and in 2009 it employed three times less. In many enterprises, until recently, there was a process of primitivization, deindustrialization, reducing automation.

Scientific and technical capacity in the Vologda region has not received significant development by reason of the economic specialization of the region in the Soviet era. In the region there were no departments of academic science. Among the existing departmental research organizations there was no competitiveness, struggle for leadership, and in the years

Table 3. Number of personnel engaged in research and development among the economically active population [20]

Region The number of economically active population, thousand pers. The number of the staff engaged in research and development, thousand pers. To reduce in the number of staff, engaged in research and development, in times Proportion of researchers in the total number of economically active population, in % 1992 2007 1992 2007 2007 to 1992 1992 2007 Russia 74,946 75,158 1,533 807.1 1.9 2.05 1.07 NWFD 8,095 7,640 233 103.9 2.1 2.88 1.35 Vologda region 686 693 1.767 0.469 3.8 0.26 0.07 of market transformation the scientific and technical capacity of the region has repeatedly declined (tab. 3).

Factory works on R&D are actually carried out only at the Cherepovetz metallurgical works JSC “Severstal” and chemical plants of Cherepovetz. The share of metallurgists and chemists now accounts for more than 2/3 of the region’s industrial production and almost 85% (2 billion dollars) of the regional exports [8, 24]. In the region’s industrial structure the share of manufactures of advanced technological modes reduced during “market” years (tab. 4) .

In 1990 the Vologda Bearing Plant employed 11 thousand people, and in 2009 it employed

Industrial production is not only changing slowly in the direction of more high-tech, labor-saving, science intensive industry, most important is that it is dramatically narrowing, squeezing the needs of highly skilled labor and, hence, depriving the region of a strategic prospective of development in production of technological structures of the XXI century, requiring a sharp increase of intellectual resources.

• ►    Stable trends of degradation in the level of professional knowledge and skills and their practical application are revealed.

Monitoring measurement of the quality status of employment potential of the region’s population conducted by ITSED RAS shows that the index of cognitive (knowledge) capacity for 12 years has a declining trend (the index includes the level of physical and mental health, need for achievement and sociability, cultural

Table 4. The share of branches of industry in industrial production in the Vologda region (in % of total)*

Branches of industry 1990 1995 2000 2005 2009 Ferrous metallurgy 43.9 58.2 66.3 72.0 54.3 Chemical industry 8.0 7.6 8.7 11.9 16.4 Total in first processing industry 51.9 55.8 75.0 83.9 70.7 Machinery 12.4 6.9 3.5 4.3 5.5 Timber, woodworking, pulp-and-paper industry 12.42 7.2 6.3 4.0 4.0 Food industry 9.6 6.0 6.1 6.4 8.9 Light industry 7.46 0.9 0.7 0.3 0.3 Total in second processing industries 29.48 14.1 13.1 10.7 13.2 * Author’s calculations. moral and creative level). However, seven of the 12 years of observations showed lower values than at the beginning of monitoring (fig. 1).

Reduction of the base level of general education and violation of continuity in the development of professional knowledge and skills are the main reasons for lowering of the cognitive potential. The training quality of university graduates is assessed as “high” by only a minimal part of employers (1%).

Our research results show that almost half of the region’s residents (47%) aren’t active in their professions. And more than 57% people under 30 years don’t work in their specialty.

• ►    Twelve-year study has also revealed a lasting decline in the creative potential index among the population of the region.

Moreover, creativity index, which is based upon people creative activity in the professional and everyday life, is the lowest among the eight main indices. Its general trend is decreasing (fig. 2) .

The downward trend in creative potential is common to all socio-demographic groups (tab. 5) .

The lowest index of population creative potential is caused by the lack of a developed innovation infrastructure. As a result less than 10% of people always invent, write or create something, but 45% of people usually do nothing.

Table 5. Creative potential indices evolution in the Vologda region [16]

Criterion	Group	1997/99	2000/02	2003/05	2006	2007	2008	2009
Territory	Area	0.587	0.590	0.573	0.581	0.558	0.571	0.572
Sex	Male	0.593	0.585	0.567	0.576	0.549	0.567	0.567
	Female	0.580	0.593	0.578	0.585	0.565	0.576	0.578
Age	Under 35 years	0.600	0.606	0.585	0.591	0.571	0.570	0.576
	Over 35 years	0.572	0.573	0.559	0.570	0.542	0.573	0.569
Education	Secondary	0.550	0.555	0.544	0.544	0.527	0.523	0.539
	Specialized secondary	0.570	0.578	0.555	0.567	0.549	0.578	0.558
	Higher and undergraduate	0.653	0.662	0.616	0.635	0.597	0.614	0.621

Table 6. Some characteristics of innovation activity organization at the enterprises in the Vologda region (in %) [20]

Indicators	2005	2006	2007	2008	2009
The share of enterprises where a design office is responsible for development and implementation of new goods	30.8	41.4	32.9	37.8	30.7
The share of enterprises which have a promotional systems of inventive and rationalization employees’ activity	42.9	33.3	36.5	37.8	36.4

We were carrying out the researches from 2007 – 2009. Their results showed that only a third of companies had its promotion system of inventive and innovation employees’ activity (tab. 6) .

Our scientists proved the main aspects to move to smart, “moral economy”. The conceptual ideas of R.I. Greenberg, S.S. Gubanov, S.S. Sulakshina [2 ,3, 4, 10, 26] and other authors seem to be the most interesting.

There are well-known official ways to start an innovative economy. But, unfortunately, there is no real, logical, systematic policy to move step by step from export-commodity model of economy to high-technology economy at the moment. S. Gubanov [3] considers that the production of machine tools is being regressed and we have a situation of deindustrialization in Russia nowadays because we continue to maintain high profitability of raw materials’ production and export and low profitability of manufacturing sectors.

The last researches of the Institute of Socio-Economic Development of the RAS are devoted to contemporary challenges and risks.

One of them is a program-oriented approach to the development of intellectual capacity, research, technology and innovation environments.

A draft of the long-term target program “Development of scientific and technological capacity in Vologda oblast until 2025” has been created in ITSED RAS. The main indicators of general variants of this project are presented in table 7.

The calculation of the necessary expenses for the first stage of the Program has been done. The total cost should be doubled in 2012 as compared to 2009. It will depend not only on increasing of the budget financing, but also promoting of a private sector’s spending on research and development.

According to our calculations the implementation of the Program activities will have increased the share of shipped innovative products from 8 to 35% by the end of the period and the proportion of organizations engaged in technological innovation – from 8 to 50%. The numbers of the personnel engaged in research and development would increase up to average rates for the North-West federal district, but, unfortunately, the regional government doesn’t set such problems.

The development of integrated scientific and educational structures that ensure the using of modern scientific knowledge, teaching technologies and the continuity of the educational process at the each level of education.

It is important to create the conditions for consolidation of the highly skilled staff in the Russian regions and to reduce the outflow of the most talented young people not only overseas but also to the large urban areas. There is a form

Table 7. Target indices of scientific and technology development and innovation activity in the Vologda region in 2009 – 2025 [20]

Target index Unit of measure Scenarios First stage Second stage 2009 2012 2015 2020 2025 Numbers of personnel engaged people Inertial 590 650 710 850 1,000 in research and development activity Active 640 870 1,150 2,100 3,500 Research and development costs, mill. rub. Inertial 205 275 400 700 1,200 sum total Active 265 560 1,175 3,000 7,200 regarding to GRP % Inertial 0.08 0.1 0.12 0.15 0.2 Active 0.09 0.15 0.25 0.4 0.65 Technological innovation costs, bill. rub. Inertial 4.28 4.43 4.58 4.82 5.06 sum total Active 4.45 5.05 5.85 7.4 9.75 regarding to GRP % Inertial 1.75 1.81 1.87 1.97 2.07 Active 1.8 2.04 2.36 2.98 3.95 The volume of shipped innovation bill. rub. Inertial 23.9 35.7 54.4 106.5 208.3 production, sum total Active 29.1 52.7 99.8 186.3 364 Regarding to the total volume % Inertial 9.8 12.3 14.8 18.9 23 of shipped production Active 11.2 15.6 22.8 27.6 35 A share of technological innovation organizations in the total amount of examined organizations % Inertial 10.7 14.3 17.9 24 30 Active 12.9 19.9 26.8 38.4 50 of a regional scientific and educational center to achieve these goals.

The scientific and educational center has been opened in the Vologda region to create the conditions for personal and professional development of talented young people, to improve the training and retraining systems of new scientific, managerial and engineering personnel and also to use in the region the achievements of domestic and foreign science and practice in the different spheres of economy, management and innovative technologies [17].

We convinced the Governor of our region and the President of the RAS to ask the President of Russia for assisting in creating of the material-technical base of scientific and educational center. As a result the project has been realized. The Research and Education Center of Economics and Information Technology (REC) has been operating in the ITSED RAS since 2003. The Research and Education Center of Economics is an innovative structure, it concludes a multilevel system of training and retraining of highly qualified specialists for science, business entities and regional authorities (fig. 3) .

Table 8 presents evidence on how the SEC shall provide the continuity of the educational process in the chain of “school – college – graduate school”.

The student groups for studying at the branch of St. Petersburg State University of Engineering and Economic in Vologda are formed from the pupils who were well in scientific disciplines. 40% of school leavers, who had trained in the Research and Educational Center, entered the economical universities last year. After graduating from the university young specialists begin to study a post-graduate course in economics and management in the ITSED RAS. After defending their PhD theses, Masters of Science can work in the scientific field and continue to improve their skills by studying in doctoral candidacy.

With the lapse of time the SEC can become a sort of the lyceum in Tsarskoye Selo. The gifted children not only from Vologda and our region but from the neighboring regions will be trained in the competitive environment here. In addition to the replenishment of scientific personnel the SEC can become one of the mechanisms and sources to form the modern managerial elite. We consider our region should have three or four “high schools” of this type.

Figure 3. Structure of the Scientific and Educational Center of the ITSED RAS [17]

Scientific and Educational Center

Optional courses in schools

Main departments of universities

Post-graduate study and doctoral candidacy

Staff training and retraining

Highly-skilled staff

Problem centers (technoparks)

Applied problems research

New knowledge

Table 8. Students changes in the Scientific and Educational Center, ITSED RAS

Indicator	2004	2005	2006	2007	2008	2009
Number of students	94	160	250	290	310	370
Number of students	97	194	390	542	557	800
Number of post-graduate students	34	32	36	39	46	46

Ensuring of “lifelong” continuity of professional knowledge using modern scientific approaches to training and retraining.

For this purpose it is necessary to open a public educational institution. That’s why the Vologda branch of ENGECON is elaborating legal and organizational issues to open the Institute of Regional Development as a part of the Scientific and Educational Center. The Institute will be established by the regional government under the supervision of the Russian Academy of Sciences. The purpose of the Institute will be target training of highly qualified specialists for the regional and municipal governments and economic entities. So we will train the regional administrative elite.

The Vologda Corporate University has been running for two years on the basis of the Vologda branch of ENGECON. The main objective of the Institute is to provide ongoing training. First of all the best graduates should be brought up to the level of the high school MBA graduates (Master of Business Administration). Also the University must promote effective knowledge of management, transfer the best practices, make a system of personnel development at the enterprises, improve professional skills of the workers, technicians, managers and retrain them. The University is advising people on relevant issues.

Creation of integrated structures providing the link between economic needs and the level of the latest achievements of domestic and world science (a sort of “synergistic growth centers of innovation”).

The Innovative Solutions Centre (ISC) which is being formed in the Innovative Economy Department of the ITSED RAS will present such a structure. It is planned to develop on the basis of the Centre for Technology Transfer (CTT), established in 2005. This organization is an associate member of the Russian Technology Transfer Network (RTTN). More than 12.5 million rubles were invested by CTT in the development of innovative projects of regional enterprises and organizations in 2008 – 2010.

The objectives of RIC are arrangement of conditions to increase the added cost of regional products, intensification of intellectual property in our region, increasing of the average personal income and consolidated budget receipts in the region.

The Centre should provide current and future needs of regional enterprises and organizations for innovation and stimulate them for innovative activity. It also should arrangement conditions for the commercialization of the intellectual products which are made in our region and increase the human resource of innovation sector through training and involvement the gifted young people.

The novelty of a proposal is contained in the practice of the Centre that won’t use only the existing or emerging innovative proposals as basis but current and perspective needs of the economic entities and the whole region. Also it is necessary to use the best practice of the organizations leading in the sphere of technological transfer. Another advantage of the Centre will be the laboratory and pilotproduction facilities. The modern equipment will allow to have a vicious cycle of innovative products’ creating at the same place there.

Nowadays the project is supported by the regional government and leadership of the RAS. This fact is reflected in the joint agreement. It will be released at full capacity necessary to solve actual problems of innovative development of the territory next 4 or 5 years.

Thus the real experience of economics development in the regions, that hadn’t academic departments before, proves that the systematic and comprehensive approach to perform the tasks makes it possible to create a certain scientific core. This core can become the basis of the regional innovative infrastructure that will ensure all the processes of modernization and elimination of backlog of the country in terms of competitiveness.

In conclusion we would like to return to the report of a Corresponding Member of the RAS S.M. Rogov. We consider it is possible to reduce the gap in scientific and technological capacity between Russia and the advanced countries and our country will have opportunity to become a scientific superpower if the task of phased development of Russian science become pivotal both on the federal and regional levels.

It is necessary to remake all the system of public life and civil society for the talented specialists and innovators. Slowly but steadily their values will become the values by the whole society. Then the modernization that is aimed at the transition of economy to innovation type of development will become a system process of social everyday life in all its multifaceted manifestations.