Science and Innovation: A turning point in the negative trend?

Andrei Laurukhin

Summary

In 2018, Belarus showed modest, yet positive results in many significant areas of scientific and innovative development. Research and development expenditure increased 0.9% from 2016 to 0.59% of GDP, which changed the negative trend of the past few years. However, the problem of seriously inadequate funding of science, primarily from the state budget, remains.

The number of personnel engaged in research and development (per 10,000 economically active population) has slightly increased compared with 2014–2016, but it is still much lower than in developed economies and in-country indicators.

In 2018, Belarus went up a little in the Global Innovation Index of the World Intellectual Property Organization.

Trends:

Financing: anemic growth

In early 2018, spending on research and development increased 0.9% compared with 2016 to 0.59% of GDP. This changed the negative trend of recent years (2014–2016), but the funding is still far from the standards of developed economies (2.0% and over) and even the in-country indicators of previous years (1.0% in 2007 and 0.68% in 2011).1

Belarusian science is underfunded due to the small proportion of public sector spending (including higher education) on research and development. According to the European Innovation Scoreboard (EIS-2018), the proportion of public sector spending in Belarus made up 0.19% of GDP, whereas Bulgaria spends 0.21%, Ukraine 0.23%, Poland 0.32%, Latvia 0.33%, Lithuania 0.55%, Estonia 0.61% and Sweden 0.98%. Furthermore, the proportion of budget funds in domestic spending on R&D continues to decline: as of the beginning of 2018, it decreased 2.2% compared with 2016. The proportion of extra-budget funds was increasing much less and slower (by 0.4% from 2016 and 0.6% from 2011). The proportion of spending on R&D in the commercial sector also remains one of the lowest among the developed economies despite a slight increase from 0.31% in 2014 to 0.40% in 2017.

For many years, the Venture Investment box has been unchecked.2 Alternative sources cannot substitute the national budget in funding science. Domestic spending on research and development has changed towards an increase in spending on exploratory development (by 5.7% from 2016) through a decrease in funding of applied (4.4%) and basic (1.3%) research.3

Scientific brainpower: grounds for cautious optimism

As of the beginning of 2018, R&D personnel increased by 541 people. The year 2017 was a turning point in the trend towards a reduction in the number of scientific personnel throughout 2015 and 2016. The increase affected all sectors: state (+42 people), entrepreneurial (+347) and higher education (+154 people), as well as all categories: researchers (+210), technologists (+73) and support staff (+258).4

The increase in the number of researchers was mostly observed in socio-economic and social sciences (+117 people), followed by natural sciences (+72), humanities (+20), agricultural sciences (+19) and engineering sciences (+10). Only medical sciences showed a decrease of 28 people. The scientific brainpower increase is a positive development, but this growth still does not compensate for the long-term decline in personnel (–4,711 people compared with 2011) and researchers (–2,579).

Considering the scientific personnel increase rate as of the beginning of 2018 in comparison with the end of 2016, it will take years to reach the number of personnel registered in 2011: 198 years in engineering sciences, 9.4 years in agricultural sciences, 1.7 years in natural sciences, and 0.4 years in socio-economic and social sciences. The situation with medical sciences is alarming given the continuing decline.

The quantitative increase in the number of personnel was primarily achieved through an increase in the number of researchers aged 29 to 49 and 70 and over. The number of students in postgraduate schools increased by 59 people against 2016.

The positive growth trend is also observed in the number of postgraduate school graduates: by 14 people in comparison with 2016 and 22 in comparison with 2011. However, the number of those admitted to postgraduate schools decreased by 22 people compared with 2016, and the number of postgraduate school students is still far from the number registered in 2011 (-630 people). If the number of postgraduate school students will remain at the level of 2017 (against 2016), it will take at least 10.7 years to at least reach the level of 2011.

The number of R&D personnel (per 10,000 economically active population) slightly increased from 2014–2016 (by 1 person as of early 2018), but it is still significantly below the standards of developed economies and in-country indicators (-6 people against 2011). According to the European Innovation Scoreboard (EIS-2018), the number of postgraduate and postdoctoral school graduates (ISCED 8) per 1,000 population aged 25 to 34 ranged 0.6 to 0.7 in 2015–2017 and even decreased by 0.1 compared with 2014.

Nevertheless, the positive trend of growth in the number of scientific personnel inspires cautious optimism and gives hope for the preservation of the country’s scientific brainpower capacity.

Innovative development in the context of GII-2018 indicators

In the 2018 Global Innovation Index (GII) of the World Intellectual Property Organization (WIPO) Belarus moved up from the 88th to the 86th position. As before, Belarus demonstrated its strengths in the improved input indicators, such as “Institutions”, “Human capital and research”, “Infrastructure”, “Market sophistication” and “Business sophistication”. In this segment Belarus’ country rating went up three points from the 63rd to the 60th position,5 basically thanks to “Human capital & research” (up two points) and “Business sophistication” (up twelve points).

Despite a decline in some indicators against 2017, the experts point out Belarus’ strengths in terms of the “Education” sub-indicators (20th) and “Tertiary education” (13th). The “Pupil-teacher ratio in secondary education” (12th in comparison with 2017) and “Graduates in science & engineering” stand out as the most positive development (up 7 points to the 12th position).

Belarus is also quite strong in the “Knowledge workers” sub-indicator, in which three out of five indicators show very good results: “Knowledge-intensive employment” (up 7 points from 2017), ‘% of firms offering formal training’ (up 3 points), and world’s second highest rating in terms of the ‘% of females employed w/advanced degrees’ among all employed women aged 25 and over (down 1 point).

In the “Institutions” section, the “Ease of starting a business” brought one point compared to 2017, and in the “Infrastructure” section, Belarus gained a point in “ICT access”.

At the same time, with respect to the input indicators, a decline was reported in “ISO 14001 environmental certificates” (45 points), “Environmental performance” (5 points), “Gross capital formation” (12 points), “Microfinance gross loans” (30 points), and “Tertiary enrolment” (1 point).

According to GII-2018 experts, Belarus is traditionally weak in the realization of the innovation potential component (output indicators), particularly the “Knowledge creation” and “Creative outputs”. A negative trend persists in the country rating of innovative efficiency. Belarus was down from the 109th to 110th position. With the very poor performance in two out of three indicators of the “Creative outputs” indicators (122nd in the world, although the country moved up one position here compared with 2017): “Intangible assets” (122nd) and “Creative goods & services” (108th).

Belarus dropped four positions in the “Knowledge impact”. Poor performance is still reported in the “Government effectiveness” (down one point, 94th in the ranking) and the “Rule of law” (down two points, 109th).

In the final analysis, although the rank is not that bad because of the broad difference between the input indicators (60th) and output indicators (110th), Belarus is 119th out of the 126 countries in terms of the innovation performance.

Innovative development in the context of the 2016–2020 program targets

According to the State Committee on Science and Technology (SCST), the innovative development aggregates indicated in the 2016–2020 State Innovation Development Program (SIDP) were exceled in the proportion of shipped innovative products (18.6%, the target being 16%), proportion of high-tech and knowledge intensive exports (33.3% against 32.0%), creation of new high-performance jobs (2,908 against 2,883) and proportion of innovation-active organizations (23.2% against 23.0%).

In 2018, ninety-four innovative projects were implemented as part of the SIDP. As a result, 20 new productions were launched and 10 reached the estimated capacity. Innovative products output was over BYN 1.12 billion (doubled from 2017). In accordance with presidential decree No.236 and government decree No.623, in 2018, 40 new projects were included in the 2016–2020 SIDP and 19 were prepared for inclusion.

Currently, the network of innovation infrastructure entities covers all regional centers of the republic and includes 25 organizations, 15 technology parks (nine technology transfer centers and the Belarusian Innovation Fund among them). In 2018, technology parks and their residents created more than 600 jobs, and the total number of their employees was over 2,300. Eighty-five joint sci-tech projects are being carried out with China, Ukraine, India, Pakistan, Lithuania, Mongolia, Korea, Poland, Cuba, Serbia, Azerbaijan, Vietnam, Armenia and Kazakhstan, which is 50% more than in 2017.

Exports of high-tech and knowledge intensive products reached almost USD 14 billion (a 120% increase). As part of sci-tech programs, 614 research and development, design and experimental works were performed, and 1,116 innovations were offered (a 50% year-on-year increase), three new productions were set up, seven were upgraded, and 29 existing productions were made ready for operation. Innovative products output totaled over BYN 4.7 billion (a 5.8% year-on-year increase).

In cooperation with the European Union, Belarusian scientific organizations started five projects, their funding totaling EUR 800,000.6 In cooperation with the Russian Federation, Belarus is implementing seven defense, healthcare and space programs worth USD 3 billion (2.17 billion in 2017).7

Successes of the High-Tech Park (HTP) are quite impressive. In 2018, its exports increased 38% year-on-year to USD 1.414 billion, which, according to world auditors’ forecasts, was only expected in 2019. HTP’s total output grew by 47%. In the domestic market, HTP residents developed innovations worth BYN 297 million (a 59% y/y increase). Last year, the HTP registered 267 new resident companies, more than in the entire 12-year history of the Park.8

Conclusion

The positive trends in the field of science and innovation show that the expansion of economic freedoms, higher motivation and harmonized efforts can be very efficient in the near future. An eloquent testimony to this is the presidential decree on digital economy development issued in late December 2017, which enables the HTP to promptly prove its effectiveness and viability. Apparently, the situation with science and innovations in other sectors of the economy is more complicated. It requires much more effort, money and time to resolve current issues there. All things considered, this is the only sustainable alternative to the mobilization model of innovative development that has long run out of steam.