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M. Omarov
independent researcher, TSUE
ORGANIZATION OF FINANCING OF INNOVATION IN HEI
Мақолада ОТМларда инновацияларни молиялаштириш йўлларининг
хориж тажрибаси тахлил этилган, уларнинг салбий ва ижобий томонлари
кўрилган ва молиялаштириш тизимини мукаммаллаштириш бўйича таклифлар
берилган.
In the paper were analysed possible options for commercialization of HEI
innovations, highlighted their positive and negative sides, as well as the direction of
improving the system of funding of HEI innovations.
Keywords:
management, innovations, financing, HEI, commercialization of
innovations.
Involvement in economic turnover of intellectual activity results obtained by
HEI scientists is an important factor in strengthening competitive position of any
economy. These commercial aspects are part and essence of integration process of
science, education and production, along with the process of integration is
complicated with weakness of material and technical base of HEI science and lack of
financing sources of innovative activity in Uzbekistan, in connection with has been
tasked to study the experience of domestic and foreign HEIs in this field and to offer
improvement direction to the case.
In the base of partnership of HEI and real economy is intellectual property,
which is an intangible asset of higher education and is the result of research and
scientific and technical activity of scientific and pedagogical staff.
To continue own innovation activities, scientists of HEI need to finance their
activities, which will provide both material rewards of their creative job, and material
and technical conditions of its implementation. Currently, in Uzbekistan practice of
innovation management there are several sources of financing science and
innovation, depending on the type of scientific developments. If the research results
are applied in nature, you can use the following three options for the
commercialization of HEI research and technology: R&D on the order of enterprises
and companies of different industries, licensing and assignment of patent rights, as
well as the formation of small companies on the basis of HEI research results
implementation.
Well-established and well-known first way - conducting contractual applied
research works - is currently the main focus of financing of HEI scientific research. It
has consistently worked with the legislative point of view. Thus, according to the
Law on "On Copyright and Related Rights" and Civil Code of the Republic of
Uzbekistan, all rights to the results of scientific and technical activities belong to
employer (customer), unless otherwise agreed in the contract. At the same time
successful conduction of R&D ordered by companies of different sectors can
contribute to establishment of joint research laboratories, as well as development of
“Иқтисодиёт ва инновацион технологиялар” илмий электрон журнали. № 6, ноябрь-декабрь, 2016 йил
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specialized scientific-educational and scientific-technological canters in HEI.
Specific problems of HEI innovations commercialization on such direction in today's
economic environment defined by weak motivation of the real sector of the economy
on implementation of promising investments that provide returns in a long term
rather than immediately. Therefore this kind of innovation associated with
development and introduction of new technologies, is not always supported by
enterprises. Also, enterprises do not always have the relevant competence basis for
development of industrial designs, certification of new products, conduction of
market researches, introduction of new products to markets. All of these works,
related to innovations, in addition to significant financial investments require highly
skilled experts in the field of project management, marketing, patents, information
technology, and also have a high level of risk.
In modern conditions higher education in Uzbekistan, having not yet strong
enough human resources for innovation creation, does not have the necessary
material and financial resources for this purpose. The Government is not interested in
direct funding not directly related to results of research activities. The "grant" support
for research weak focused on innovation result as due to subjective reasons, and
because of objective difficulties in predicting scientific results.
Important in foreign HEI the second way - licensing and assignment of patent
rights is becaming in Uzbekistan a significant source of research funding. For
example, the Massachusetts Institute of Technology has in its patent portfolio more
than 3 thousand patents, which gives it more than $ 50 million a year annual revenue.
If we talk about the leading Uzbek universities, they are, at best, have demanded
several hundred patents. This delay is not due to ideological poverty of thought
Uzbek scientists, but the process is not developed because of imperfection of the
legislation.
And finally, the third way is formation of high-tech «startup» enterprises based
on HEI scientific research (new products, equipment and technologies). In this way,
there is a complex competence problem. Scientists, having knowledge of set up of
innovation, do not possess the skills to effectively commercializing their research
results, and managers with company management skills, poorly represent the essence
of innovation and not always interested in them as well as often do not know how to
implement innovative projects.
One of solutions of described problems is the creation and development of
technology transfer centres, where will be an integration of science and industry,
where experienced innovators can help scientists and entrepreneurs to join their
efforts for the implementation of promising investment projects [1].
This will help to overcome the "gap" between the scientific and technological
base and intellectual resources of Uzbek HEI, improve the efficiency of capital
invested in innovation, formation of needs to provide specialized consulting
economical and legislative, technical and technological, managerial services, which
may also become a unique resource for the development of HEI research. In addition,
it will help to objectively reduce commercial risks both investors and business
partners.
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To activate works of technology parks and transfer centers and be effective and
efficient, it is necessary to form their rational structure and optimize being
implemented business processes, having worked their model types, as well as work
through planning system, organization, motivation and control of its activities.
According to the existing experience of technology transfer, transfer of
innovations developed in HEIs on a commercial basis, may take the following forms
[2]:
- Patent agreement - a bargain when the patent owner transfers its right to use
the invention to the buyer of the patent;
- License agreements - a bargain in which the owner of intangible assets
provides the other party permission to use the intellectual property rights to a certain
extent;
- Know-how agreements - is the provision of technical expertise and
production secrets, including information on technology, economic, administrative
and financial nature, use of which provides certain advantages. The subject of such
sales are unpatented invention which has commercial value;
- Engineering agreements - provision of technological knowledge necessary for
acquisition, installation and use of purchased or leased machinery and equipment.
Еhis form of technology transfer activities include the development of a feasibility
study of projects, consultation, supervision, design, test, implement warranty and
service.
Created innovative small businesses can use the following forms of financing:
equity financing, credits, grants, and funding under the innovation programs of
government.
The most realistic:
1) Funding under the innovation programs. Since 2002, Uzbekistan introduced
order in which the budget allocations for financing scientific institutions are allocated
on the basis of the Grant Contract of research team, or with the appropriate budgetary
structure enclosed by the results of the competition for the execution of specific
research tasks;
2) Crediting. Investment credits are: - bank credits; - leasing; - investment
credits;
To attract venture funding seems unlikely at the present stage of development
of the Uzbek economy.
Among the forms of legal relationships can be called the conclusion of
partnership agreements and license agreements.
The aim of the partnership agreements is a direct joint research and production
activities of several industrial companies. As a result of the partnership agreement
appear strategic alliances between two or more firms. Through strategic alliances, the
company can:
- Gain greater economies;
- Avoid duplication of R&D expenditure;
- Access to new knowledge;
- Improve the efficiency of research activities;
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- Reduce risks, to change conditions of competition in the industry, to use the
knowledge of the partner.
Three types of new partnerships can be identified:
- Service unions (consortia);
- Associations created for the purpose of access to resources and benefits of
partner and lead to creation of joint ventures;
- Stakeholder unions (suppliers, customers).
Service associations are a group of companies (often the same industry), with
common needs and creating a new one, controlled (consortium), designed to meet
these needs (eg, R & D) by means of a partial uniting of resources.
Services provided by a union, as a rule, are too complex or expensive for each
individual member and cannot be purchased individually by each member of the
Union on the free market.
Creating a consortium requires minimal organizational changes within each
participating organization, since the degree of interdependence is minimal. At the
same time especially difficult are management problems, often loss of interest in joint
activities. Limited consortium tasks allow participation of potential competitors, as its
performance is equally available to all participants who stay at the same time
completely independent.
Joint ventures distinguishes desire to take advantage of the partner to achieve
their own goals. These advantages are in the possession of either resource or
technology or access to a new market. Such benefits are usually temporary, so using
them; the partners often lose interest in further cooperation. Joint ventures sometimes
grow from the previous relations between the partners and designed to solve
problems that arise in their business relationships.
Stakeholder unions arise from previous relationships between the participants
of economic activities, from which to a great extent depend on the results (supplier
groups, consumers or employees), and are "complementary coalition."
Successful technology transfer from HEI to industry and their implementation
in Uzbek enterprises is prevented firstly by imperfection of the legislation:
- absence of definition of "innovation activity", "innovative company",
"innovative product" in the legislation;
- absence of mechanism for establishment of «spin-off» HEI companies; HEIs
cannot act as founders of innovative companies based on HEI technology and
development, and, therefore, cannot receive dividends on their activities. Therefore,
in general, HEIs are not interested in creation and development of such companies;
- absence of mechanism and procedures for the transfer of technology from
HEIs and research organizations to industrial enterprises and companies, in
particular, HEIs have no right to license sale and assignment of patent rights.
In addition, problems of commercialization of HEI scientific researches must
be considered:
- lack of budget funding for the initial phase (3-5 years) of HEI innovation
infrastructure;
- lack of skilled personnel for innovation infrastructure of HEI;
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- lack of economic incentives of industrial enterprises for introduction of
innovative technologies.
Solving these problems will allow to fully implement the scientific results in
practice and, on the one hand, to provide our industry with new developments and
technologies, and on the other, to ensure inflow of material production in scientific
sphere.
E.I. Patrick notes that development of science and innovation in Germany takes
place with the active support of government, by using efficient market mechanisms.
Government innovation policy helps to create conditions for enhancing contribution
of HEI science and technology created by it in the country's economic development,
including promotion of economic entities to release of new competitive products,
those products that surpass world analogues and is based on introduction of new,
environmentally friendly, advanced technologies and equipment.
So If we look at the below diagram, we can see the Share of innovative
enterprises in German economy and without doubt it is mentionable that the
Government activities give a good result.
Diagram 1. Eurostat - Share of innovative enterprises, 2010–12
To enhance research and innovation activities in Germany used a very broad
composition of economic instruments, incentives and tools.
It is very common in Germany (substantially limited at the moment in our
country) direct government research funding. The main feature is the target directive
to activate innovation process, to obtain concrete results. Direct funding of research
in Germany is based on these basic principles: first, the researcher - recipient of
government subsidies - as much as possible should bring its work to innovative
results; secondly, he is obliged to develop an innovative project, including
implementation of a specific program of research results; thirdly, is to protect
obtained innovative results by intellectual property rights; fourthly, it is very
important from the point of view of revitalization of scientist, the researcher is
entitled to use results obtained by him while working on a project funded in their
research interests; fifth, is not prohibited introduction of scientific developments
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outside the EU, it is recommended to make appropriate clause, and receive
appropriate approval, and if it is not received, the grant must be returned to funders in
full; sixth, if the recipient of government subsidies within a clearly specified period
(two years) has not implemented the results of his scientific research, he loses the
right for their subsequent use.
There are enough branched indirect methods of stimulating innovation in
innovation policy in Germany. These measures include activation of innovative
processes, actions to create a favourable social and economic conditions and the
socio-political climate for a positive attitude to innovation and scientific and
technological development. Among them, it is advisable to allocate tax and
depreciation benefits, contributing to the growth of innovative activity. Also in
Germany is characterized by effective protection of intellectual property rights, as
well as supporting development of innovation-oriented small businesses.
The most important feature of the state innovation policy in Germany is to
promote not only development and production of innovative products, but also
investors and users of these products, thus ensuring attraction of investments in
innovative sectors.
One of striking example of this policy was the law in the field of renewable
energy. Obviously, at the beginning, almost all the production of innovative
alternative energy technologies (bio-energy, solar, wind, geothermal and other
renewable energy) proved more expensive than conventional energy. Companies and
firms engaged in development of technologies and equipment for renewable energy
production, at first, is carried out scientific and experimental research, developed
mainly through direct public funding. When there is equipment suitable for industrial
use, have enacted laws that encourage users of this equipment. For example, it was
with the equipment for manufacture of biofuel, when the state subsidize biofuel
producing companies (currently when the cost of conventional fuels is growing
steadily and biofuel production becomes cost-effective, state subsidies have stopped).
So far, subsidized energies are biogas, wind and solar power: in addition to
subsidies for purchase of equipment, the owners of "windmills", solar panels and
biogas plants are guaranteed by grid companies purchase of electricity produced by
them at a price that is almost twice the price at which they buy electricity themselves
from the network (costs of grid companies at the same time compensated by the
government). Thus, the initial cost for the purchase of innovative equipment for a
short time payback and installed equipment starts to bring a substantial profit. The
use of this mechanism creates incentives for a sharp increase in the number of such
units buyers, which ultimately leads to a significant inflow of funds into developing
the industry.
It should be noted serious protectionist policy of Germany in respect of
domestic developments. If Germany has its own development or equipment in any
area (eg, a software package for the solution of some problems), then during the
development, ongoing for public funds, developers, and designers usually have to use
German products.
Germany has a very aggressive policy in attraction of foreign investments and
innovations. Virtually in all lands, regional governments set up special agencies to
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attract investment and innovation that lead purposeful work on organizational, legal
and financial support for foreign companies and individuals, creating in Germany its
subsidiaries, joint ventures or new firms.
The above general and specific mechanisms and instruments for financing
innovation activities have made it possible for Germany for a long period of time to
be a leader in manufacture and export of new technologies and the newest equipment,
that ensures sustainable economic development, characterize innovation management
system as a successful and conceptually justified.
Translation of above analysed funding options of innovation in Germany has
practical significance for the HEI science of Uzbekistan.
Thus, we have identified the following areas of improvement of the system of
financing HEI innovation:
- Direct government funding for research with a clear target setting to obtain
concrete results;
- Indirect methods of stimulating innovations, including tax and depreciation
benefits, contributing to the growth of innovative activity;
- Stimulating not only the developers and manufacturers of innovative
products, but also, and most importantly, users of these products;
- Active protectionist policy of the state in respect of domestic developments;
- Organizational and legal support for foreign companies, creating branches,
joint ventures or new companies in the territory of Uzbekistan.
References
1.
R.C.Thames, D.W.Webster. Chasing Change: Building Organizational
Capacity in a Turbulent Evironment. USA: WILEY, 2009, 255p.
2.
E.I.Patrick Modern trends of management theory and practice
developments in Russia and abroad: collected reports and thesis’s of International
scientific and practical conference. Stavropol, 2012, part 1.
3.
O.A.Boris, V.N.Parakhiina Social economic phenomena and processes.
2012, no. 3.
4.
Eurostat - Share of innovative enterprises, 2010–12. www.eurostat.eu.
(reference date 18/05/2016)
