Сегодня впервые в жизни делал полуторачасовой выступление для студентов (частично российских, частично иностранных и нерусскоязычных) на английском языке. Что знаменательно, происходило это в Питере, ровно между Стрельной и Петергофом.
Can Russia compete? Loren R. Graham is a noted American historian of science, particularly science in Russia. In his “Lonely Ideas,” Loren Graham investigates Russia’s long history of technological invention followed by its failure to commercialise and implement it. For three centuries, as Graham shows, Russia has been adept at developing technical ideas but abysmal at benefiting from them. Loren Graham’s main thesis reads that Russians are great inventors, but bad innovators.
The concept of State as the main and the only innovator is rooted in Russian culture. The state then views its own mission as the main force of progress, the force which develops new approaches and technologies, which applies and inculcates them into everyday life, and through that enforces the society, which is obviously more conservative, to move forward and to catch up with the more developed countries.
So, when a Schumpeterian innovator pursues the goal to become rich, to extrude extra profits from new technologies, a Russian one is in most cases different — he tries to accomplish and perform the Government’s task, as its plenipotentiary and ambassador. And if he does not hold such a mandate at the time, his first aim is to receive the adequate status. That explains why such a typical tragic hero of Russian literature as Leskov’s Levsha, while spotting the cutting-edge British technology of old rifles keeping and maintenance, tries to deliver his message about it to the Tzar at the expense of his life.
Сontrary to Loran Graham, we, the Russians, are not bad innovators — we are different ones. And it’s mostly cultural difference. A typical Russian innovator is usually staking not on individual (mostly commercial) success in innovations, but on the State’s success — hoping that the State, in turn, will reward them with the what they deserve. This is not only about the literatry heroes like the mentioned Levsha, but also about the real Great Russian innovators in history — such as Sergei Korolev, the creator of our space industry, thanks to whom the humanity has become able to send the first man to space, or the Nobel prize winner physicist Jores Alferov, who invented the core semi-conductor technologies, exploited now in every cellular phone in the world. And for many of us, that is considered as the only way how, as is expressed in a popular catchphrase, “to make the world a better place”.
Let me further propose some theory about the process of commercialisation itself. When new technology emerges and it becomes obvious that it’s really working and useful, those who own and control it, receive some advantage in comparison with those who do not. Sometimes, especially when we speak about military or partly warfare related tech, it may be crucially important, maybe even the matter of survival. At that stage, you usually don’t sell it for money at all. You rather try to keep and develop it in secret until you prove that there’s no risk if anybody else could access it. Only then, but no sooner, you may think about bringing your product to market.
You can guess or imagine, that it works only with mostly military technologies, but even the progressive agricultural technology can be regarded as potentially dangerous from the national defence and security point of view. That’s why it’s also about the supply of the armies. And there you can remember, that the US have never maintained a big continental army in their history. Russia, on the contrary, not only had to have it, but during the all thousand years of its history struggled for survival and for tranquillity on its borders. And that’s why it’s also a question of the State. So, from that point of view, the question “how to make profit with this or that innovation”, is the second question, which becomes pressing/relevant only when you answer and remove the first one from your agenda: the question of survival. Any other sequence will be considered -on the cultural level — as something out-of-order.
Look at it from that point of view. We’re often complaining that we as a nation are relatively poor, in comparison with more developed and rich countries. But what if we were really wealthier than now? With our geography, our natural resources and our pack of neighbours, especially southern ones? Even the US is now building the wall at its southern border, but Russian southern border is the largest in the world, and it’s impossible and even unimaginable to build any wall there. When you become more wealthy, at the same time, you become more enviable and vulnerable.
I don’t mean that it’s some kind of official routine. It’s about perception at the deeper and more important level — the level of basic cultural patterns, the hierarchy of values. The value of survival — not as an individual, but as a whole — as a state, as a nation, as a civilisation — is considerably more important for us the Russians, than the value of enrichment and commercial success. That’s why there wasn’t any century in our history, when we did not experience such a vital threat of destruction
So, when it comes to the state-level struggle for survival, Russians become very smart innovators with huge managerial skills. And, if we use the classical definition of entrepreneurship given by an American researcher W.Gardner in 1987, which reads as follows — “entrepreneurship is the ability to build organizations” — in such cases, we are very good entrepreneurs. Who is able to build even whole new industries in a few years, as it once happened with mobile warfare industry, aviation, rocketry and nuclear industry, both military and civilian ones.
But that is true: we have relatively modest track record in converting new technologies into big businesses, in building profitable companies both on the international and even national level. And now let me introduce a more detailed view on this process.
What happens when a brand-new technology emerges on the market? If we are talking about a consumer market, you can use a relatively simple model. Imagine two curves. The first one indicates the cost price per unit, which inevitably goes down when the technology is improving, and the amount of copies is growing. The second one indicates the amount of people who are ready to buy it for adequate price (how the market decides which price is adequate – it’s a voluminous discussion of multiple pundits and we won’t go into these waters right now). It’s more complicated because not only price is important, but also the knowledge about it, the readiness to use it and the desire to purchase it right now.
And only when the two curves are crossing, and you become able to sell your product to these multitudes at a market price which is higher than the cost price, you are coming into the area of profits. And in this space, you build your company, constantly keeping an eye on the difference between the cost price and the market price, on the one hand, and on the amount of loyal customers, on the other. It’s your lifespace.
What is the main export resource of Russia in all times? It’s mainly raw materials, natural commodities — even in the forms of agricultural goods in ancient times. What is the main advantage of these commodities? They are reliable. The market price of oil and gas can go up and down, but peoples and countries need it nevertheless, and they will need it in a relatively long perspective. And when you live in such a state of mind when the basic value is survival, and at the same time, there are so many insecure things and factors and so few reliable ones — it’s simply dangerous to place a bet on such an uncertain factor as the consumer’s desire to possess any technological thingummy.
So, we continue to invent new technologies, as we have always been curious and resourceful. Now we are trying to implement the venture model, but I bet that the real progress in that sphere will be made when the VC no.1 will become our Ministry of Defence and the second — state security services. Not in the war and warfare related areas only — but in all areas, including digital, biotech, education, nanotechnology etc. etc. That’s not a matter of efficiency — it’s a matter of culture. A culture of permanent struggle for collective survival, with the unique function of state to guarantee it.