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25 Dec, 2009 15:28

Medvedev calls for R&D boost

Russian President Dmitry Medvedev chaired his final 2009 meeting on the modernization of Russia's economy, calling for companies to boost their investment in research and attract foreign expertise.

Only two per cent of total investment by state corporations goes into research and development. That’s much less than in other market economies according to Russian President, Dmitry Medvedev, who says Russia would never be modernized without more spending on R&D.

“We welcome the creation of joint ventures with foreign partners to make innovative products. Moreover we need to attract foreign specialists – that’s crucial. We are smart people but shouldn’t be shy when attracting specialists from abroad.”

Both state and private companies are guilty of neglecting research. As proof, the president said global players in oil and gas invest more than $5 from each tonne of oil  – while in Russia it's less than 40 cents.
That includes the country's biggest fuel producer Gazprom – although it claims to do more than other Russian energy companies.

“In 2008 Gazprom and its direct subsidiaries invested about 390 million dollars in research and development. In the first nine months of this year we've already invested over 406 million and it may grow further. We are in fifth place in the world in terms of the research to revenue ratio.”

Dmitry Medvedev promised tax incentives for those who boost R&D investment. But Gazprom’s CEO says there are limits to the need for R&D in oil and gas – and taxation would make little difference.

Gas provides 52 per cent of the country’s energy. Investment could help develop new energy products – but that would require the government to shift the energy balance.