Modernization and innovation development of the border region (on the example of the Republic of Karelia)

The processes of formation and development of innovative economy in Russia and the Republic of Karelia are considered in the article. Theoretical justification for the reform of the main social and economic institutions with the purpose of activation of innovation activities is proposed. Some alternatives for the further economic development with consideration of current export conditions are introduced. It is shown that the interaction of public authorities, universities, research institutes, organizations and industrial enterprises at the level of “authority” - “science-education” - “production” is very weak, which is clearly insufficient for the fulfillment of the whole innovative potential of the Karelian economy and science. Existing state educational programs and continuing education for managers of organizations are not spread enough, especially in the field of innovation. One of the main results is that the government is the leading investor in fundamental scientific research, and with the help of its policy in the field of education it has a decisive impact on science and on the training of scientific personnel. It is shown that the development of scientific potential in Karelia is determined by the fact that the main source of funding of ongoing research and development works is the federal budget and a slight concern on the needs of the Republic of Karelia, the lack of demand for innovative projects and, as a result, the lack of competition as the main engine of innovation development.