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Introductory Remarks at a Joint Meeting of the Security Council and the State Council Presidium February 24, 2004 The Kremlin, Moscow Вступительное слово на совместном заседании Совета Безопасности и президиума Государственного совета 24 февраля 2004 года Москва, Кремль VLADIMIR PUTIN: Good afternoon. Today we are to discuss the state of affairs in the innovation sphere. In other words, what we are talking about here is the strategy for ensuring quality growth in our economy, in industry and in science. Ultimately, what this comes down to is the formation of a genuine state innovation policy. This is the first time we are examining this issue in such a systematic way. It is true that we have taken a whole number of serious decisions over recent years, and there has been real progress made, but there is unfortunately still a long way to go in this area. The Security Council and other bodies have also looked at support for science and education on more than one occasion and have determined the main priorities for technological development. What I want to inform you about today is what was discussed recently at the Presidential Council for Science. At that meeting I promised that we would take the appropriate decisions significant decisions, even if still just small steps for now. I can tell you today that I have just signed a decree on material incentives for scientists and designers who have made big contributions to developing modern military arms and equipment. In accordance with this decree, specialists who have made particularly valuable contributions to the development of military arms and equipment will receive monetary grants of 20,000 roubles a month. But overall, despite successes in some sectors, the Russian economy remains primarily raw materials-based. Our country accounts for less than 1% of the global market for science-intensive production. We have built up a vast scientific potential, and we have qualified specialists and promising projects in practically every area of modern technology. But we have not yet learned to make effective use of this natural competitive advantage created through the efforts of several generations of scientists and designers. The key problem is that we have not learned to transform our scientific discoveries and inventions into working capital. Russian investors show little business interest in them and they do not generate any significant revenue for their creators. Meanwhile, a considerable share of the scientific work that gets financed by the state budget remains outside modern economic and legal relations. But putting money into science for which there is no demand is a waste of state funds and is a real threat to Russias national security, the threat of finding our country relegated to the sidelines of global technological development with the status of a donor of raw materials to the developed nations. You know that the world economys growth today is being fuelled by constant improvements to services and technology. New technologies account for more than half of GDP growth in countries such as the United States, Japan and Germany. Economies like these are more sustainable and have long-term competitive advantages. They are more diversified and therefore have better prospects and greater stability. Only this kind of economy will enable us to win ourselves a worthy place in the global market. For modern Russia, an innovative leap forward is a real key to rapidly modernising the country, and is a road that will take us towards a better quality of life for our people and a more competitive economy. Innovation policy should be one of our priority national projects, and like any project, it has to be carefully prepared before being launched.