Intellectual Development Is a Top Priority

Innovation leads national program of Belarus’ economic development

The Minsk Times, November 5, 2006

Let’s momentarily imagine Belarus’ near future as an innovative economy. Houses are made from modern, comfortable, cheap materials in cities and rural areas. Modern construction technology makes housing more affordable. Meanwhile, new factories abound manufacturing the latest advanced hi-tech goods: microelectronics, lasers, optical and mechanical devices, medical equipment and genetic and original drugs. Companies involved in the production of energy-saving technology work in a competitive market and oil and gas take up a smaller share of product cost. Technical centers become more prominent (like the Finnish town of Espoo — where Nokia originated) and towns thrive, boosted by production and banking investment — aimed at exportoriented produce. Scientists are revered for their contribution to innovative development and, hence, exports. Internet and information systems develop and trade, banking and educational services occupy niches in the global market. Management improves, enabling each worker to demonstrate creativity and initiative; ongoing training and education is encouraged. Rather than being involved in bureaucracy, the workforce moves into production. Paperwork is digitized, making its processing much simpler.

Is it possible? Of course. The scientific community is already working with the government to achieve it. Innovation is more than just a fashionable trend; it’s a necessity. Deputy Economy Minister, Andrey Tur, explains that Belarus’ 2010_2015 social and economic development plan envisages raising GDP by 7-8 percent. “To survive competition from industrially developed countries, we need to concentrate on innovation. It isn’t enough to raise GDP by producing more raw materials, we must develop hi-tech goods.” Quantity and quality are important. The innovative component of Belarus’ GDP currently fluctuates around 1.2-1.4 percent but the target is 30 percent. It won’t be an easy task covering this gap: two obstacles are obvious.

Firstly, huge amounts of investment are needed. Deputy chairman of the State Committee for Science and Technology, Igor Voitov, recently presented a report at the Innovation Technologies and Systems international forum held in Minsk; he pointed out that funding needs to be allocated from the state budget alongside contributions from organizations and companies and innovative and agricultural funds. Banks and foreign investors also have a role to play. It seems straightforward but money needs to be gathered from a wide range of sources. Moreover, the state must provide the bulk of funding. How can this be done fairly? Will some companies be given preferential treatment? Who’ll control these funds — making sure they aren’t wasted? Many think it makes more sense to shift the burden of financing onto companies themselves since all would have equal starting points.

If profit tax was reduced this would enable each enterprise to allocate the money appropriately. It currently stands at 24 percent — the same as in Russia; however, the Russian Ministry of Finance may be about to cut this to 20 percent in order to fund innovative development. Reducing profit tax is now a global trend used to finance modernization of production.

Secondly, employees need to be encouraged to be innovative. What’s being done to achieve this? How long does it take to realize a new project? What stimulates innovation? What are the results and what do they depend on? Careful research is needed to discover which areas are currently expanding worldwide. Precise targets need to be set on the way to the goal. If we’re focused, Belarus may yet become home to innovative enterprises on a par with Nokia by 2015 — or maybe even 2010.

By Yuri Akulov