ABSTRACT
This chapter examines the direction and characteristics of innovation policy in Russia by tracing a series of policy changes. It focuses on market quality and state quality as factors constraining innovation. Understanding the need for privatization and market initiative after 1992, and in order to stop the 'brain drain', Russia immediately set forth building an institutional foundation that included laws on property rights. According to the survey by the Higher School of Economics in 2009–2012, which monitors the innovation activity of the Russian manufacturing and service sectors, few enterprises regard innovation products and new products as priorities and as offering a competitive advantage. The traditional Japanese business organizations and values changed into barriers to open innovation. The top Japanese multinationals in the automobile sector have occupied the leading position, and manufacturing sectors can be regarded as the main players of innovation.
