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Taco C.R. van Someren · Shuhua van Someren-Wang Strategic Innovation in Russia Towards a Sustainable and Profi table National Innovation System Strategic Innovation in Russia ThiSisaFMBlankPage Taco C.R. van Someren (cid:129) Shuhua van Someren-Wang Strategic Innovation in Russia Towards a Sustainable and Profitable National Innovation System TacoC.R.vanSomeren ShuhuavanSomeren-Wang Ynnovate Ynnovate Hilversum,TheNetherlands Hilversum,TheNetherlands ISBN978-3-319-41080-7 ISBN978-3-319-41081-4 (eBook) DOI10.1007/978-3-319-41081-4 LibraryofCongressControlNumber:2016950914 ©SpringerInternationalPublishingSwitzerland2017 Thisworkissubjecttocopyright.AllrightsarereservedbythePublisher,whetherthewholeorpartof the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilarmethodologynowknownorhereafterdeveloped. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publicationdoesnotimply,evenintheabsenceofaspecificstatement,thatsuchnamesareexempt fromtherelevantprotectivelawsandregulationsandthereforefreeforgeneraluse. Thepublisher,theauthorsandtheeditorsaresafetoassumethattheadviceandinformationinthis book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained hereinorforanyerrorsoromissionsthatmayhavebeenmade. Printedonacid-freepaper ThisSpringerimprintispublishedbySpringerNature TheregisteredcompanyisSpringerInternationalPublishingAGSwitzerland Contents 1 TheChallenge:RenewaloftheRussianInnovationSystem. . . . . . . 1 1.1 StrategicInnovationReplacesTechnology. . . . . . . . . . . . . . . . . 1 1.2 TheRelevanceofStrategicInnovationforRussia. . . . . . . . . . . . 4 1.2.1 NotDiversificationbutRenewalofDomesticIndustries IsKey. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 1.2.2 FutureWorldSociety. . . . . . . . . . . . . . . . . . . . . . . . . . 5 1.2.3 Sustainability. . . . . . . . . .. . . . . . . . . .. . . . . . . . . .. . 6 1.2.4 GeopoliticalPowerShifts. . . . . . . . . . . . . . . . . . . . . . . 7 1.2.5 MarketEconomyquovadis?!. . . . . . . . . . . . . . . . . . . . 7 1.3 RussianHeroicbutUnknownInnovationHistory. . . . . . . . . . . . 8 1.4 CurrentStatusofInnovationintheRussianEconomy. . . . . . . . . 10 1.4.1 InsufficientInnovationPerformance. . . . . . . . . . . . . . . 10 1.4.2 InsufficientInternationalization. . . . . . . . . . . . . . . . . . 15 1.4.3 InsufficientEntrepreneurialActivity. . . . . . . . . . . . . . . 16 1.4.4 InsufficientContributionofSMEs. . . . . . . . . . . . . . . . 20 1.5 NationalInnovationSystem. . . . . . . . . . . . . . . . . . . . . . . . . . . 21 1.6 MilestonesofInnovation. . . . .. . . . . .. . . . . .. . . . . .. . . . . .. 22 1.7 TheStrategy. . . . .. . . . .. . . . . .. . . . .. . . . . .. . . . .. . . . .. . 24 1.8 Bottlenecks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 1.9 Megatrends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 1.10 RussiaAimsattheTechnologyFrontier. . . . . . . . . . . . . . . . . . 36 1.11 OverviewofThisBook. . . . . .. . . . . . . . . . . .. . . . . . . . . . . .. 39 Literature. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 2 TheSolution:StrategicInnovationMoneyMakerModelVersus TechnologyFrontierMoneyTakerModel. . . . . . . . . . . . . . . . . . . . 45 2.1 TheNeedforaNewBigPicture. . . . . . . . . . . . . . . . . . . . . . . . 45 2.1.1 MacrolevelandMassiveOutlook. . . . . . . . . . . . . . . . . 46 2.1.2 MesolevelandMajorRenewal. . . . . . . . . . . . . . . . . . 48 2.1.3 MicrolevelandMegaImpact. . . . . . . . . . . . . . . . . . . . 51 v vi Contents 2.2 MajorDevelopmentsRequiringStrategicInnovation. . . . . . . . . 52 2.2.1 SustainableEconomy. . . . . . . . . . . . . . . . . . . . . . . . . . 53 2.2.2 InternetofThingsandIndustry5.0. . . . . . . . . . . . . . . . 55 2.2.3 NewDominantRegions. . . . . . . . . . . . . . . . . . . . . . . . 59 2.2.4 WorldEconomyReplacesGlobalization. . . . . . . . . . . . 64 2.2.5 BigUnknown. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 2.2.6 CommonDenominatorofSustainability,Internet ofThings,NewDominantRegions,WorldEconomy andBigUnknown. . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 2.3 ConsequencesforRussia. . . . . . . . .. . . . . . . . . .. . . . . . . . . .. 67 2.4 GrowthCycleVersusTechnologyFrontier:MoneyMakerVersus MoneyTaker. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 2.5 Russia’sPositionontheGrowthCycle. . . . . . . . . . . . . . . . . . . 75 Literature. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 3 TheInstrument:StrategicInnovationasaNewFoundationfor RussianInnovationSystem. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 3.1 TheMindShiftfromTechnologytoFutureEarningPowerNeeds NewTheory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 3.1.1 StrategyConceptsCannotExplain“WhatHappens Here?”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 3.1.2 InnovationTheoriesCannotExplain“WhatHappens Here?”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 3.1.3 StrategyandInnovationConceptsCompared. . . . . . . . . 86 3.2 FromParrot-Economyto24-Karat:FromTechnologyFrontier TowardsStrategicInnovation. . . . . . . . . . . . . . . . . . . . . . . . . . 90 3.3 TheInnovationMatryoshka. . . .. . . .. . . .. . . .. . .. . . .. . . .. 93 3.4 TheSixPillarsofStrategicInnovationTheory. . . . . . . . . . . . . . 95 3.5 EntrepreneurialFunction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 3.6 GrowthCycleIsMoreThanDisruption. . . . . . . . . . . . . . . . . . . 98 3.7 Non-technicalInnovations.. . . .. . . .. . .. . . .. . . .. . . .. . . .. 100 3.7.1 ScopeofNon-technicalInnovation. . . . . . . . . . . . . . . . 100 3.7.2 ImpactofNon-technologicalInnovation. . . . . . . . . . . . 104 3.7.3 Non-technologicalInnovationsAreHardtoImitate. . . . 105 3.7.4 ImplicitandTacitInnovation. . . . . . . . . . . . . . . . . . . . 105 3.8 UltimatePowerofTime. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 3.8.1 TimeIstheMasteroftheUniverse. . . . . . . . . . . . . . . . 106 3.8.2 TheBasicbutUnnoticedRoleofTime. . . . . . . . . . . . . 108 3.8.3 TacitKnowledgeDoesnotExist,ItIstheTimeFactor... 110 3.8.4 TheSevenTimeDimensions. . . . . . . . . . . . . . . . . . . . 111 3.8.5 TimeCulture:AProfoundHiddenForceofSocietal DevelopmentandProgress. . . . . . . . . . . . . . . . . . . . . . 112 3.8.6 TimeArrow:FutureorBackwardsOrientedSociety. . . 114 3.8.7 TimeControl:WhoControlsTimeOwnsPower. . . . . . 119 3.8.8 Timing:MultiplierofProfitsandLosses. . . . . . . . . . . . 122 3.8.9 TimeDuration:CreatorandDestroyerofWealth. . . . . . 124 Contents vii 3.8.10 TimeConsumption:FromUbiquitytoScarcity. . . . . . . 129 3.8.11 TimeIntensity:Evolutionary,Revolutionary,Speedy andRiskyTimes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132 3.8.12 WrapUpSevenTimeDimensions. . . . . . . . . . . . . . . . 135 3.8.13 DynamicProductionFunction. . . . . . . . . . . . . . . . . . . 136 3.9 DynamicValue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139 3.9.1 FromProfittoDynamicValue. . . . . . . . . . . . . . . . . . . 139 3.9.2 MultiplierTimeEffectandExponentialGrowth. . . . . . 147 3.9.3 DynamicValueasModusOperandiofStrategic Innovation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149 3.9.4 RelevanceofDynamicValueforRussia. . . . . . . . . . . . 151 3.10 EmulationasEndlessRaceofOutperformingandnot ofDisruption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151 3.10.1 EmulationIsCoreofProgressandProsperity. . . . . . . . 151 3.10.2 The4IEmulationSchemeforRussianeedsTailorMade Approach. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155 3.11 StrategicInnovationTheoryElevatesRussiainWorldInnovation League. . . . . . . . . . . .. . . . . . . . . . . . . . .. . . . . . . . . . . . . .. . 157 Literature. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159 4 TheManagement:UnleashingtheStrategicInnovationPotential.... 163 4.1 GrowthCycleandStrategicInnovation. . . . . . . . . . . . . . . . . . . 163 4.2 GrowthCyclePhases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167 4.2.1 Pre-seedandSeed:LeadorBleed. . . . . . . . . . . . . . . . . 167 4.2.2 Start-upSmart. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169 4.2.3 ScaleorFail. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170 4.2.4 IncumbentsDefendorExpand. . . . . . . . . . . . . . . . . . . 171 4.2.5 FromRenewaltoFutureCrownJewel. . . . . . . . . . . . . 172 4.3 MythBustingtheNewEconomy. . . . . . . . . . . . . . . . . . . . . . . . 175 4.3.1 Myth1:Technology. . . . . . . . . . . . . . . . . . . . . . . . . . 175 4.3.2 Myth2:KnowledgeEconomy. . . . . . . . . . . . . . . . . . . 176 4.3.3 Myth3:Disruption. . . . . . . . . . . . . . . . . . . . . . . . . . . 177 4.3.4 Myth4:OpenInnovation. . . . . . . . . . . . . . . . . . . . . . . 178 4.3.5 Myth5:Cooperation. . . . . . . . . . . . . . . . . . . . . . . . . . 180 4.3.6 Myth6:NetworkFirms. . . . . . . . . . . . . . . . . . . . . . . . 180 4.3.7 Myth7:SharingEconomy. . . . . . . . . . . . . . . . . . . . . . 182 4.3.8 Myth8:TacitKnowledge. . . . . . . . . . .. . . . . . . . . .. . 183 4.3.9 Myth9:CostlessInformation. . . . . . . . . . . . . . . . . . . . 183 4.3.10 Myth10:ObsoleteProductionFunction. . . . . . . . . . . . 184 4.4 BacktoBasicsforRussianInnovationSystem. . . . . . . . . . . . . . 184 4.5 TheManagementBasicsofStrategicInnovation. . . . . . . . . . . . 185 4.6 FutureEarnings:CreatingCompanyoftheFuture. . . . . . . . . . . 185 4.7 GrowthPhaseManagement. . . . . . . . . . . . . . . . . . . . . . . . . . . . 187 4.7.1 Aspire. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187 4.7.2 Discover. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188 4.7.3 Create. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188 viii Contents 4.7.4 Select. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188 4.7.5 Institutionalize. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188 4.7.6 Expand. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189 4.7.7 Exploit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189 4.7.8 Dominate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189 4.7.9 Reset. . .. . . . . .. . . . . . .. . . . . . .. . . . . .. . . . . . .. . 189 4.7.10 Emerge. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189 4.8 LongitudinalManagement. . . . . . . . . . . . . . . . . . . . . . . . . . . . 190 4.8.1 StrategicInnovationLeadership. . . . . . . . . . . . . . . . . . 191 4.8.2 InstitutionalInnovation. . . . . . . . . . . . . . . . . . . . . . . . 198 4.8.3 CorporateGovernance. . . . . . . . . . . . . . . . . . . . . . . . . 204 4.8.4 BusinessDevelopment. . . . . . . . . . . . . . . . . . . . . . . . . 205 4.8.5 BusinessModelFormulationandExecution. . . . . . . . . 206 4.8.6 IndustrialGovernanceasPower. . . . . . . . . . . . . . . . . . 207 4.8.7 CrossCulturalManagement. . . . . . . . . . . . . . . . . . . . . 210 4.8.8 DynamicValue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213 4.9 RussianVolgaAmurModelforIndustrialLeadership. . . . . . . . 214 Literature. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217 5 TheInternationalization:RussianCross-culturalStrategic Innovations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221 5.1 WhyDoesRussiaHavetoIntegrateStrategicInnovationsAcross theBorder?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221 5.1.1 FromCreativitytoRussianStrategicInnovations.. . . .. 223 5.1.2 FromCultureDiversitytoRussianStrategicInnovation Context. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227 5.1.3 FromTradePartnerstoTripleEofRussianStrategic Innovations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 232 5.2 FromLose-LosetoWin-Win,HowCanRussiaandChina CooperateinInternationalStrategicInnovations?. . . . . . . . . . . . 234 5.2.1 TheLose-LoseHistoryofSino-RussiaRelationship. . . . 234 5.2.2 TheNewStrategicInnovationChancesforChinaand RussiaLookingforWin-Win. . . . . . . . . . . . . . . . . . . . 237 5.2.3 HuaweiasanExampleoftheChineseStrategic InnovationsinRussia. . . . . . . . . . . . . . . . . . . . . . . . . . 241 5.2.4 HowShouldRussiaWorkwithChina?. . . . . . . . . . . . . 244 Literature. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246 6 TheCases:PotentialsandOpportunitiesofRussianStrategic Innovations“Urbi,OrbietUniversum”. . . . . . . . . . . . . . . . . . . . . . 247 6.1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247 6.2 Agrofood:Grain,FoodChainandBrain. . . . . . . . . . . . . . . . . . 247 6.3 Aerospace:HeroicPastandHeroicFuture?. . . . . . . . . . . . . . . . 260 6.3.1 Go-Around. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 262 Contents ix 6.3.2 Takeoff:GrowingintotheSky. . . . . . . . . . . . . . . . . . . 269 6.3.3 BeyondtheCloud:SpaceRaceasMoneyMaker. . . . . . 276 6.4 FarEasternFederalUniversity(FEFU):Vladivostok Valorization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279 6.4.1 PastSuccesses,RankingsandNewOpportunities. . . . . 280 6.4.2 BuildingQuadrupleHelix. . . . . . . . . . . . . . . . . . . . . . 282 6.4.3 FEFUasStrategicInnovation. . . . . . . . . . . . . . . . . . . . 283 Literature. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 286

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