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31 October 2016

Challenges of Time: Threats Stimulate Innovation


Victor Kompaniets

Head of investments at Digital Future

"In Israel, there is the so-called Office of the Chief Scientist. This is scientific and commercial public corporation, which is engaged in stimulating development in certain areas deemed strategic for the state of Israel. There is a Royal Strategic Committee in Sweden, it also develops and promotes research and development in some areas. Other European countries and the USA have something similar. But public-financed science almost does not exist anywhere! There is a system of public commercial orders. However, funding for the most part is made from grants, funds, charitable societies and so on. Most of the science exists due to donations of large businesses, corporations." 

Republished from the web-site Novoye Vremya: http://bit.ly/2pw9FUo

Most sober-minded people in Ukraine believe that the principle of “threats stimulate innovation” is the main tool for the development of the country as a whole.

Therefore, the development of innovation is number one priority of our country. If Ukraine fails to take appropriate steps within a few years, the country itself is likely not to exist.

When a threat comes to everybody

For many years, Ukraine has been a significant exporter of military technology. This applies to aeronautical and space engineering, to small arms to some extent. There is also a lot of developments of electronic and radar warfare means. This makes Ukraine a significant player in the world armament market. But today, in the wake of patriotism and forced actions of different people, the interest in technology of purely military or dual, civil and military, use, increased.

A circle of interested people who joined to solving painful problems in defence sector at the call of their heart has recently formed. It was the case in the early days of the Russian invasion, when specialists from dozens of commercial and public companies acquainted through social networks and immediate military problems were solved through donations and volunteers. The urgent need stimulated the creation of social ties. These contacts would have not be formed otherwise, people would have never met and have not started to cooperate.

A lot of issues have been resolved during a real combat. Therefore, the informal groups were formed that can make prompt decisions for reasons of urgent need. It promoted the use of innovation in civil solutions, in buying things that thousands (and sometimes millions) times cheaper than their cost at a military standard. One can argue, whether it is good or bad, but there are several similar examples in the world where people of different professions united on the platform of combating invaders. If we look at history, we can see that a similar situation took place in Israel, the Czech Republic, Serbia and even in Finland, after the aggression of the Soviet Union. As a result, a relatively small country under pressure from the great enemy produces many interesting military solutions. That is, we have a chance to use it to raise the general level of the country's development. Develop not only public but also commercial entities that are able to deal with this subject, that is military and dual purpose.

Get rid of brakes and encourage the development of science

Domestic science needs a radical rearrangement. First, one can give an example of the situation around the National Academy of Sciences of Ukraine in its current form. Since the National Academy of Sciences of Ukraine is a direct threat to the state. Reformation of the National Academy of Sciences of Ukraine will be of no use, because 99.9% of high scientific figures do not contribute in creating new products or theories. This can be seen by example of the mechanism of co-authorship when someone writes an article and the co-authors are Head of Sector, Head of Division, Deputy Director of the Institute and Academician.

As a result, the authorship is primarily attributed to academician, not a real author. The mechanism of injustice in post-Soviet science is terrible, we deal with a kind of bribery in science. As a result – higher pensions for academicians; businesses created by them that use assets of the Academy of Sciences or production capacity for a penny; absolute neglect of the state. However, there is a group of young scientists, including some twenty - thirty people - recognized experts in the field of science and technology. They have some merit in creation of missilery or radar technology. All other should undergo re-certification and go work elsewhere.

Secondly, there must be a mechanism, as the Englishmen say “challenge”, through which the state can moderate the challenges for the scientific community, provide the opportunity to obtain pre-financing for competing teams. This is essential because not one group should develop a challenge but several teams while receiving pre-financing at the same time. And only at the stage of product testing and comparison of their work results anonymous selection of the developer team should take place. That is, none has to know whose product it is. Only such an approach will have some sense.

Let's look at the models of science development that exist in other countries. In Israel, there is the so-called Office of the Chief Scientist. This is scientific and commercial public corporation, which is engaged in stimulating development in certain areas deemed strategic for the state of Israel. There is a Royal Strategic Committee in Sweden, it also develops and promotes research and development in some areas. Other European countries and the USA have something similar. But public-financed science almost does not exist anywhere! There is a system of public commercial orders. However, funding for the most part is made from grants, funds, charitable societies and so on. Most of the science exists due to donations of large businesses, corporations. The state rarely finances science directly. It can stimulate a separate area, which is strategic for the development of the country, to attract certain resources. While gigantomania, focus on the process, not the outcome is thriving in Ukraine. At the same time we have a very low level of qualification of the majority of Ukrainian scientists. There are some highly skilled professionals, but they just set off the level of the entire mass. Unfortunately, many young ambitious people set out to Canada, Israel, Great Britain and other countries in Europe, Asia and even China. A lot of people went to Iran, India and Pakistan. That is, if one identifies certain abilities, aims to do something in science, he goes abroad. What should we do? We should make young scientists interested by creating favourable conditions for the development and material rewards.

Where and how investment is directed

There are several international practices regarding funding sources for projects. First, large commercial companies, corporations that finance at least 30% of the developments in the field of innovation through funds, incubators and accelerators. The next 20-30% of investment is a certain government grant programs to promote education, aimed at encouraging universities or university programs, training of teachers and the like.

Most countries have their own incentive programs, that also influences the quality of innovation greatly . The less country is developed, the greater the share of state and private money is directed to support entrepreneurship, the so-called small and medium businesses.

Of course, most businesses that received investment go bankrupt, but in this way people who can take risks get prepared. They understand how to do it, they have developed a taste to obtaining the results. That is, a kind of a long chain. In some countries they start to encourage entrepreneurship from kindergarten, particularly in Sweden, the UK, France and the United States. Thus, they raise entrepreneurial spirit in people in a cultural way, either at the national level or through support commercial companies. After all, according to statistics, about 15% of people are genetically predisposed to entrepreneurship, willing to accept a challenge.