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‘A Strategy Built with ‘Jokers’ Might in the End Come up Trumps’

How dangerous is the ‘beaten track’ effect in discussions on Russia’s science and technology (S&T) development? Is it enough to master new technologies without changing the institutions for the country to successfully enter global markets? Alexander Chulok, Deputy Director of the Institute for Statistical Studies and Economics of Knowledge Foresight Centre, commented on the key topics of a recent online discussion on ‘Russia’s place on the global technology map’, on the Russian science and technology website STRF.ru which attracted a wide range of pundits.

Coordinating the strategies

The STRF editors came up with a really important topic. Over the past year, there has been lively debate on almost all the major communication platforms in Russia about the plans for Russia’s future development for the next 10 to 15 years. The government is launching a National Technology Initiative, and working on an S&T Development Strategy. Some strategic documents outlining the vectors of development have been rubber stamped, among them the Forecast of Russia’s S&T Development up to 2030 approved by the Prime Minister. This list also includes public programmes, national and industry strategies, corporate concepts and forecasts. Many of these documents have to be coordinated, since they are often disconnected in terms of deadlines, aims, tasks and even results. According to the Federal Law 172 ‘On strategic planning’, this work needs to be done urgently.

Groups of stakeholders — strategic decision-makers in ministries, development institutions, and large businesses — create various strategic documents and see the future differently. It’s essential for all of them to agree on a general framework for how the future should look and some of its basic prerequisites. It’s important to take into account both the global challenges that will shape future markets, and the resources Russia already has. Everyone involved in the process must have their finger on the pulse, follow what’s going on  in the world, and distinguish threats from opportunities, and see how to use them to their advantage. This must be a dynamic optimization of the model over time.

Looking for unconventional solutions

The world is approaching a new technology paradigm, which means we must hasten to review the existing priorities of S&T development. Unfortunately we often fall behind the global pace of change, and not just by a step. For example, we are trying to provide for effective technology transfer and business participation in R&D, while a new model is already evolving globally, namely crowdfunding for innovations, which depends on engaging the populace. We are improving the effectiveness of existing businesses; while new markets are rapidly developing globally, which by capitalization may considerably outgrow the traditional ones. And many of them grow seemingly from nowhere, thanks to mass distribution of new technologies (for example, ‘uberization’ of value-added chains or the booming markets of entertainment, leisure and tourism).

The priorities of S&T development can’t be fixed and stay unchanged for years. We must be adaptive and proactive; we must regularly monitor the political, values-related, economic and ecological events that might influence the choice of a certain future scenario. We must also take into account the ‘jokers’ — unlikely events with big potential effects - and on the basis of all these observations, use foresight to make sensible predictions. If there were more resources, the issue of how to choose our priorities probably wouldn’t be as pressing. But when resources are short and the price of each error is high, this becomes key. Unfortunately, there are no simple or common solutions. Moreover, the solutions that seem such can be the most wrong.

The priorities of S&T development can’t be fixed and stay unchanged for years. 

Remarkably, the discussion on STRF revealed what is called ‘path dependence’ in institutional economics. For example, some of the participants expressed traditional formulas about low intensity of innovations and lack of business participation in them, about people’s unpreparedness for innovations, about Russia’s vast territory and difficulties with logistics and communications. The evaluations of the demand for Russia-based inventions and technology transfer were traditionally low. 

I believe we have this established practice of ‘traditional questions and answers’, because the culture of foresight is so underdeveloped. Foresight as an ideology, and for me it is even a kind of philosophy, gives us an opportunity to take into account various ‘jokers’ on the traditional path, and to ask correct (unexpected) questions, and search for answers to which can be the framework for priorities. A strategy built with such ‘jokers’ might in the end come up trumps and prove more successful and profitable than going back down the beaten track.

Building the institutional framework

Another important topic of this discussion was how to define the institutional framework for technology forecasting. Technologies don’t exist in a vacuum. At HSE, we were given an example illustrating this situation: as long as they clinch screws with hammers at our car plants, since it’s faster, no technology will take hold. This is about a culture of innovations.

A key role of institutions is to establish the ‘rules of the game’ in order to decrease transaction costs for the players and increase competitiveness in the economy generally. The existing system of institutions matches the existing technology paradigm, and it can’t be changed right away. The global trends and challenges, on the one hand, reinforce uncertainty and increase transaction costs, and on the other, alter the economy and society itself. The speed of such changes may considerably exceed the institutional environment’s ability to adapt. The resulting imbalance aggravates the ‘spiral of ineffectiveness’, limits the opportunities for development, and threatens the country’s position in the global division of labour.

I believe, it’s very important to speak about changing values, the institutional environment, about Russia’s preparedness for living in the new future in terms of both technology and institutions, and we need to negotiate the basic terms to build a culture of forecasting. I and my colleagues are ready to further develop and broadly discuss this range of issues at HSE and on other platforms.

This text at the HSE news portal