Industry spending on R&D goes into refinement, but not into product development

Data on science financing processed by the Institute for Statistical Research and Economics of Knowledge (ISSEK) of the National Research University Higher School of Economics demonstrate a sharp increase in the costs of research and development in processing in the “new reality” after the start of the military operation in Ukraine and the departure of Western suppliers – the share of such expenses in the total amount of expenses for innovation activity increased to 37.8% in 2022 from 27.5% in 2018. At the same time, as noted in ISSEK, the resulting innovative products are generally characterized by an insufficient level of novelty. Thus, newly introduced or subjected to significant technological changes goods, works, and services account for two-thirds of the output, while products new to the market account for less than a quarter (22.4%).

According to ISSEK, investments in research and development (RD) in processing in 2022 in constant prices increased by two thirds (65%) compared to 2018 – to 437.1 billion rubles. Their share in total costs for innovation increased to 37.8% (27.5% in 2018). At the same time, in companies in high-tech industries the figure reached 68.1% (39.2% in 2018), high-level medium-tech industries – 22.6% (19.9%), low-level – 39.3% (33.5 %), low-tech – 6.9% (5.2%). Note that, according to ISSEK, research and development expenditures in general for industry in the Russian Federation have been growing: thus, in 2022 the figure amounted to 29.8% of GDP, increasing from 24.1% of GDP in 2010. The increase in R&D expenditures in industry by 2022 was ensured by the redistribution of internal costs by reducing expenditures on space, Earth and atmospheric research, energy, and other economic and other purposes.

As follows from the ISSEK data provided to Kommersant, the greatest positive trend in the share of R&D costs in the total cost of innovation was shown by the repair and installation of machinery and equipment – in 2022 they amounted to 93.5% versus 19.4% in 2018; production of aircraft, including spacecraft, and related equipment – 86.2% versus 26.1%; other vehicles and equipment – 52.9% versus 13.6%; machinery and equipment not included in other groups—57.8% versus 31.4%. The share of R&D costs in printing and copying of information media decreased (from 79.1% in 2018 to 11.4% in 2022), in the production of medical instruments and equipment (from 64.5% to 26.8%, respectively), medicines and materials (from 52% to 25.3%).

As for the types of innovations being implemented, in 2022, product costs accounted for 57.8% of costs (in 2018 – 47%, in 2020 – 59.4%), process costs – 42.2% (53% and 40.6 % respectively). High-tech industries show the greatest interest in the former (79.2%). Insufficient attention to them can lead to a rather long product life cycle, experts warn—on average for manufacturing industries it is 8.7 years.

Also, according to their estimates, the created innovative products are generally characterized by an insufficient level of novelty: newly introduced or subjected to significant technological changes goods, works, and services account for two-thirds (67.5%) of its total volume, while products new to the market account for only 22.4% (including for the world market – 2%), for the improved one – 32.5%. R&D costs for creating new and improving existing products and technological processes in 2022 did not exceed a third of total costs for science, according to ISSEK (30%, in 2018 – 37.4%). Significant resources are spent on improving already used technologies – process innovations, experts emphasize. At the same time, achieving technological sovereignty requires product sovereignty, they add.

Venera Petrova