Diplomacy and Innovation: The Idea Comes First

7 october 2012

Foreign Policy May Facilitate or Slowdown Technological Progress

Ivan Danilin is head of the Innovative Policy sector at the Institute of World Economy and International Relations (IMEMO). He holds a Doctorate in Political Science.

Resume: The innovative process, especially one so weak and fragile as in Russia, is very sensitive to external factors; it requires that politicians work in calm and silence. So the first simple and inexpensive step would be to revise the diplomatic lexicon and style.

The article was written with financial support from the Russian Humanitarian Scientific Foundation (RGNF), project No. 11-03-00164 “Foreign Policy Resources of Russia’s Modernization.” The author would like to thank Eduard Solovyov, director of the IMEMO Political Theory sector, and Irina Dezhina, director of the IMEMO Economy of Innovations sector, for their valuable comments and ideas voiced during the discussion.

A central idea in recent debates in Russia is that innovation is a sign of economic revival and that innovation will help the country achieve a respectful place in the world economy and politics. Indeed, without innovation, Russia would remain a hybrid, a country with tremendous ambitions and questionable opportunities. Economic scenarios for an innovative Russia abound, but no one has come up with any substantial proposals about what kind of foreign policy Russia needs in this context. Foreign policy has been outside the framework of innovation policy and vice versa, except for a mention of the non-proliferation regime and arms control. Yet these merely imply putting a cap on “bad” technologies rather than supporting “good” ones. At times it has been suggested that Russian science be used as “soft power” (Irina Dezhina addresses this issue), but this is still a matter of debate rather than diplomatic practice. Is this division correct? What role can Russia’s foreign policy play in the country’s innovative development? What should be done to realize the innovative potential of foreign policy?

GEOPOLITICAL INNOVATION

Formally, foreign policy has never been too far away from innovation, although the mésalliance has been specific. The simplest and obvious point of contact is the marketing of national innovation by opening and expanding markets. Even in countries with powerful innovative economies, policymakers and diplomats act as sales managers for national hi-tech sectors, mostly for capital-intensive, dual-purpose or military projects, such as “big energy” or aircraft manufacturing. It is enough to recall the nice spontaneity with which Condoleezza Rice and Hillary Clinton sold new Boeings during their visits to Asia-Pacific countries and Russia. Understandably, the solicitous hand of the “big partner” is always close to large innovative business and is always ready to support national technologies.

There are many reasons behind this symbiotic relationship and they are not limited to the vested interest of hi-tech companies to influence national policies. It is also desirable to increase the employment rate and maintain leadership in hi-tech production. For developing countries, a well-oriented foreign policy provides access to the world markets of ideas, capital, technologies, and human resources.

However, high technologies are also an independent instrument of foreign policy. The sale of key technologies promotes strategic dialogue and alliances, forges loyalty (“we only offer you the best…”), and is part of “soft power.” There is also the important factor of linking importer countries to the supplier country through product maintenance and updating, personnel training, etc. There are many examples: the U.S. strategy to sell modern armaments and equipment, including its military and technological policy (for example, recent contracts with Taiwan and India); the Soviet and Russian policies of cooperation with China, India, and, to a lesser extent, Venezuela; the French policy course towards North Africa and a contract to sell Mistral helicopter ships to the Russian Navy.

This logic increasingly applies to both civilian and commercial technology, as shown by the 2005 U.S.-India attempt to conclude a transaction based on agreements to develop nuclear energy technology. A similar situation has taken shape in the segment of science-intensive services, above all in training technologies and outsourcing, where visa regulations are manipulated, control over access to programs and functions is a common practice, and other similar tools are widely used. Lastly, the use of foreign policy tools in the sphere of innovation is also a way to encourage the “correct” behavior of the contractor. Modernization and development imply abiding by the political rules of the game and keeping “good manners” in the international arena.

It is a well-known fact that the geopolitical potential of a state is determined today by innovation and civilian hi-tech to a no-lesser extent than military might. For example, the tremendous concentration of hi-tech production by U.S. companies in China gives Beijing additional opportunities to influence Washington’s policy, while the investment, technological, trade, and economic power of China enables it to influence developing nations and form its image as a leader state. Importantly, innovation in civilian industries directly influences defense opportunities. In the past several decades, the transfer of technology between the civilian and military sectors has gone in both directions; so civil innovation across the board (in materials, electronic, and aerospace technologies, etc.) already strengthens the military potential of countries.

The abovesaid proves the significance of foreign policy for promoting innovation, and, conversely, the importance of a country’s innovative potential for its diplomacy. In reality, the interconnection is closer still, and all points of intersection have to be considered. The diagram below illustrates the existing relationship.

MOVING TOWARDS AN IDEAL

What is the situation in Russia? Regrettably, the country is neither consistent nor efficient in using its foreign policy potential to solve innovative tasks, or to support foreign policy initiatives with innovation.

The only significant example of a more or less successful alliance between the two areas is the marketing of domestic innovative technologies in developing countries, especially former friends of the Soviet Union.

Russia is promoting its GLONASS global satellite navigation system, nuclear technologies, military hardware, new products in aircraft manufacturing (the marketing of SSJ mid-range passenger jets), and research and innovative cooperation in a limited number of projects. Foreign policy and general political resources are used to develop the national innovative and technological potential. “Skolkovo” (meaning both the foundation and the university) has actually become a common word used to gently compel Western companies to participate in innovative businesses in Russia.

However, notwithstanding these projects, the development of innovation has not become a de-facto and de-jure objective and practice of Russia’s foreign policy. Furthermore, the authorities continue to view innovation and foreign policy as separate areas. Russian diplomacy is still busy with pure politics.

The situation is exacerbated by the weakness of Russia’s research and innovative potential. With the exception of a few sectors, such as nuclear power generation or achievements in information technologies, Russia does not have much of which to be proud. Russia has increasingly fallen behind the West in a number of fields, and its education and workforce potential is disappearing. No new or truly competitive technology or global innovative-technological companies have appeared in the country recently. Even the fundamental sciences, the traditional pride of Russia, are suffering. Although this sphere still ranks quite high in the world and remains one of Russia’s most attractive development assets, the country has been unable to capitalize on this potential in the economic, innovative, or political sense.

Many chances have been lost, yet the situation can still be changed and foreign policy can play an important role here. As a first step, Russian foreign policy has to support innovation. As innovation gains significance and naturally fits into Russian diplomacy, the process will become bi-directional, and innovation will become a powerful foreign policy resource.

The following are some measures that need to be considered in order to achieve that objective:

  •  ensuring a comfortable foreign policy climate for developing innovation;
  •  establishing a system and practice of international and political support of innovation;
  •  adding more value to Russian proposals.

Money Prefers Silence. In the past few years, Russian foreign policy has been noted for brash statements, big showy gestures, and “principled” positions. One the one hand, this stance underscores the independence of the foreign policy line and opinions, and shows that Russia, too, has claimed its share of global influence. On the other hand, the louder the statements, the easier it is to hide one’s weakness and lack of real capability to influence the situation in the world. Consequently, emotions often run high, nearly escalating to the point of a political lexical confrontation.

No matter what we think about foreign policy, such behavior harms innovative processes. The heat of arguments and demonstrative gestures scare away institutional investors, making foreign governments and transnational corporations think about the consequences of too much intensive cooperation with Russia, including the possible reaction of the U.S. and other NATO countries.

Referring to the Soviet era to vindicate a tough line makes no sense; on the contrary, such statements demonstrate the weakness of such a policy. Firstly, the Soviet Union never wanted to integrate into the capitalist economic system as a full-fledged player, to enter the new markets of commercial technologies, or to establish a comprehensive exchange of technologies with Western countries. Secondly, given the restrictions placed by the Coordinating Committee for Multilateral Export Control (CoCOM) and other measures taken by the West in the technological and economic areas, ideological principles cost much at that time.

Today, when Russia aspires to neither exclusive ideology nor global dominance, this practice is irrational and unproductive. Business people say: “Money loves silence,” and this is doubly true for innovation. The innovative process, especially one so weak and fragile as in Russia, is very sensitive to external factors; it requires that politicians work in calm and silence. So the first simple and inexpensive step would be to revise the diplomatic lexicon and style. Threats and principled positions along the lines of “I can’t keep silent” should be replaced by the tedious, albeit effective, bureaucratic language of diplomats, who weigh each word for any possible impact on trade, economic, and innovative cooperation.

This tactic alone will enable Russia to improve its innovation climate. Investors will not be as nervous, while European countries will not have to wonder if Russia is trying to “seize” their strategic assets. Europe will not have to worry that Russia is trying to wring technologies from it in order to become more powerful and to dictate its will on Europe, to create new armaments to threaten NATO countries for their stance over missile defense, or to defend “tyrants.”

Supposedly, this will improve Russian policy in general, because loud words and sudden moves are never really effective. They do not add anything to independence or sovereignty, while they tarnish a country’s image and limit the diplomatic resources available. Beijing can hardly be reproached for relying on Washington’s policy, yet Chinese diplomacy remains reserved and laconic, in the Confucius style.

Economization of Policy. The next move would be to inject a heavy dose of economy into Russia’s foreign policy, or depoliticize it, no matter how odd that might sound.

“We aren’t diplomats, we’re traders,” Chinese foreign ministry officials would say, and that is a successful strategy for innovative development. Although China is nearing the status of a superpower, it has gained this status by “other ways.” While maintaining independence and strengthening the classic elements of geopolitical power, it has focused on developing its economy and national innovative system to secure access to assets abroad, new technologies, core investments, human resources, knowledge, and know-how. Chinese corporations buy companies and research centers in the U.S. and the European Union; hundreds of thousands of Chinese receive education and work at research institutions all over the world. Such a strategy creates obvious economic and strategic risks for Western countries, but does not encounter real resistance, at least right now.

An emphasis on integration into global innovative and economic processes does not pose a direct political challenge, but implies the status quo and keeping the rules of the game. Stronger economic independence and a sharply increased role in global innovative and technological processes enable Beijing to influence the position of developed countries and smooth out the most serious problems.

As for Russia, it turns out that Western countries are not one hundred percent sure of the motives behind Russia’s actions. Of course it is unlikely that there may be hotheads who sincerely believe that Moscow is seeking to take over the world or spread its ideology, simply because it does not have any. On the one hand, Russia resembles a revisionist with ambitions of re-building the groundwork of world politics by weakening the position of NATO states. On the other, it might look the Soviet Union’s successor is trying to reassert itself through the support of odious regimes, is taking a tough stance against NATO policy, or is engaging in other similar behavior. The fact that Russia’s policy is actually the opposite changes nothing, even though Moscow has accepted the rules of the game, as shown by its ascension to the World Trade Organization (WTO) and its protective position on reforming the UN.

Given Russia’s weak economy and other global power parameters it cannot meet, its large claims to global presence and influence are regarded as unjustified. Noteworthy in this context is how different the West’s reaction is to the military policy of Russia and China.

A Chinese project to build an ocean fleet, albeit under close scrutiny, is seen as a necessary step to protect service lines, supplies of raw materials, products, and economic interests in general. Conversely, Russian efforts to modernize its army and navy cause bewilderment and alarm: “Why does a supplier of raw materials need such power?”

Double standards are found even in raw materials policy. For example, in 2010, China, which accounts for 95 percent of the world market of rare earth metals, sharply reduced exports to localize production at home. Furthermore, Beijing punished Japan for territorial claims in 2010 by introducing an almost complete embargo on these supplies (Rare earth metals are a key resource for modern electronics, alternative power generation, and electrical engineering.) Yet no thunderous campaigns followed, denouncing China’s moves, nor were there any statements accusing Beijing of using raw materials as a political tool, even though many governments regarded this as an alarming move.

Now let us imagine Russian natural gas in place of Chinese rare earth metals. The difference in reaction will be fairly obvious. Russia and the West, given the specifics and very limited bilateral economic ties, are unable to resolve the existing problems of mistrust through increased inter-dependence. Dependence is viewed as a burden, not as a benefit.

The situation a priori implies the establishment of informal international regimes to limit Russia’s access to technologies, know-how, markets, and key assets in a number of areas that are important for innovative development. Furthermore, major restrictions are placed on strategic innovative alliances with transnational corporations and foreign states. For example, close partnership is limited to a small group of developing countries. They are prepared to pay a certain price for Russian science and investments, but cannot provide for an increase in quality.

This is the same problem as Moscow’s thundering and emotional diplomacy. The tools for an ambitious foreign policy and geopolitical claims, which are largely attempts by a country to prove its greatness to everybody and to itself, weaken Russia’s real geopolitical potential based on the economy, innovation, and high technologies. This is also reflected in the federal research and development policy. World experience shows that current policy towards the militarization of state expenditure for science is misleading and has the reverse effect. In the long run, this one-sidedness will turn against the development of scientific and technological potential even in the defense sector, not to mention the economy as a whole.

A realistic answer to existing challenges is the economization of foreign policy, i.e. the establishment of “technological” diplomacy to fulfill the tasks of national economic and innovative development. Russia has to focus on marketing innovation and opening markets, strategic political and economic swaps along the lines of the Norwegian model (access to resources in exchange for technology), and establishing large innovative-economic alliances. Indeed, Russia should try and emulate the Chinese experience.

Russia will no likely be able to make its foreign policy as successful as China’s. There has been a persistent suspicious attitude towards Russia since the Cold War era and the traditional wish still exists among many Western ideologists to see a “stable, but not too powerful” Russia. But even despite this attitude, an economic-oriented and pragmatic foreign policy, and full-fledged integration in world innovative and technological processes – with national specifics, but without a new search for “one’s own way” – will help Russia attain a new quality. For example, it will enable Moscow to remove some of the obstacles to access to foreign markets, assets, and know-how. Despite their bias, Western economies are pragmatic when it comes to practical issues.

The record of foreign acquisitions by the Rosatom state-owned nuclear energy corporation is symbolic. In 2009-2011, the corporation’s affiliates purchased Germany’s Nukem Technologies (the holder of important civil nuclear technologies) and Canada’s Uranium One (uranium deposits in Canada, the U.S., and other countries). Although both assets are strategic, there were no problems with purchasing them. The regulators and politicians in Germany, the U.S., and Canada understood Rosatom’s motives; the transaction was advantageous, economically justified, and had no political charge – unlike the failed attempt by the Russia’s Sberbank and GAZ to purchase Opel.

The Power of Values. Although “turning down the volume” and economizing foreign policy are important development conditions, this foreign policy mix requires another ingredient. Russia’s weak innovative potential and economy in general forces it to search for arguments in order to prove the uniqueness of its proposal for its partners and contractors. Whereas resources and the market can look unique enough for Western countries and transnational corporations at the initial stage, Russia – in its policy towards developing countries and the long-term – cannot do without a Big Idea (as a source of values and reference) for an adjusted global innovative development.

On the one hand, the Idea should be based on liberal values of increased welfare benefits and the modernization of society. It also must offer a fair practice of global innovative development by leveling out emerging imbalances and non-discriminating access to a certain array of basic innovative services and opportunities. In other words, the slogan should proclaim the equality of all states and peoples to be part of the technological progress.

In addition, Russia will have to work out special financial and organizational instruments to support fair innovative development and the humanitarian transfer of technologies and know-how. Recent attempts by the U.S. and the EU to develop “new energy” as a set of revolutionary technologies show that there is an objective need for such new instruments. It goes without saying that any attempts, even at the conceptual level, to set the Russian version of “correct” global innovative development against the “incorrect” or “selfish” designs by the U.S. and other developed countries are harmful. The Big Idea must be absolutely positive, not confrontational. In general, Russia should try and work out a scientific innovative agenda of world development, comparable to the “sustainable development” concept. The new Russian concept can only be created and promoted with the active participation of diplomats. Current Russian foreign policy has half-finished instruments in stock, which are often contradictory, propagandistic, and difficult to comprehend.

Examples of the successful realization of such ideas are on hand. Although Soviet civil technologies could not rival Western ones, the Soviet Union had a powerful trump card in its alternative ideology. This ideology suggested new opportunities for the economic growth of developing countries and a possibility (at least a tentative one) of becoming an economic leader in the future world order. The global situation today is favorable for forming such an idea. The era of world-dividing ideologies is gone, but various regions are experiencing an acute shortage of fresh ideas and have a high demand for development models. This demand is manifest in the growing Islamist sentiment and the revival of Socialist ideology in certain regions.

Regarding the substantive side of the Idea, Russia could provide assistance to a contractor in creating a fundamental and applied R&D sector as a prerequisite for its ability to independently obtain new technologies. It is this unique capability that should become the core of the new agenda, not ready-to-use technologies or purely fundamental science – where Russia cannot yet rival the U.S., Western Europe, or other developed nations.

This Idea can be realized by providing scientific-intensive services, focusing on R&D, international science, and technological projects, and developing the human resource potential of contractors. It should be underscored that this unique proposal should be neither pure charity nor money making. Education and science must be offered as a service for a fair price or as a bonus to larger and substantive cooperation in the innovative area.

The correct wording of such an Idea and its promotion is a task Russia can accomplish as it meets its interests. The advantages here are scientific and technological education, scientific potential, good knowledge of developing countries, and continuing contacts with representatives of the elites that received higher education in the Soviet Union or were its friends. A new meaning will be lent to ties, crucial for implementing projects, with the Western scientific and educational community and the Russian diaspora, which has begun to evolve recently.

The idea implies a broader and more rational support for reforming the science/innovative sphere and education. On the one hand, Russia needs a more powerful and globalized fundamental science and basic scientific and technological education; on the other, it has to support the sector of practice-oriented applied R&D, and engineering and technological know-how. The proposals should be worked out with the participation of foreign policy elites and Russian transnational corporations as customers and beneficiaries of the process.

Despite the large scope of necessary changes in science and education, they largely conform to the ideology of ongoing reforms that will facilitate their implementation. However, the efforts to be made must be adjusted and be well supported by resources. The expenditures involved should not look frightening: whereas at the initial stage the basic advantages of the new policy will be manifested as relations with developing countries, these ties may become a strategic resource in the long run. This will make Russia an attractive partner for Western countries and transnational corporations.

 

GETTING STARTED

The implementation of the above proposals is a huge and strategic task.

First, it requires adjusting an entire range of objectives, tasks, and instruments of foreign policy. In actual fact, Russia will have to go beyond the point of determining its place and role in the world, a very unpopular and painful process both for the elites and ordinary citizens. Nobody is urging Russia to give up its military and political potential, or the right to have its own opinion of world processes, help its allies, or ensure “the presence of the flag” and interests in different parts of the globe. Yet Russia must realize that its key task is the development of national scientific-innovative, production, and human resources. The solution of other tasks will only be possible if Russia is successful in this area.

Second, developing dedicated foreign policy lines to achieve the objective of innovative development without sacrificing national interests and sovereignty will be a challenge.

Third, it is necessary to formulate a ready-to-use global idea, comparable in scale to the leading ideologies and past and present ideas. It is no trivial thing; it is a powerful intellectual challenge.

Finally, Russia must complete ongoing reforms in science and education, which have lasted for more than two decades. Importantly, the process must be tied to foreign policy reform.

By and large, Russia needs a national project or even a genius in order to combine the accomplishments of: (1) Prince Alexander Gorchakov, Georgy Chicherin, and Tsar Alexander I; (2) Mikhail Lomonosov, Igor Kurchatov, and Dmitry Likhachyov; (3) Steve Jobs and Pavel Tretyakov. In this endeavor, a heavy reliance on the Foreign Ministry or presidential administration would not be welcome. What Russia needs least is a new bureaucratic procedure, a new political discussion, or piles of formal paper reports on consulting and R&D projects. Considering the complexity of the task, the expert community should take the initiative. This community includes international political scientists and natural scientists, along with that part of the corporate sector, government agencies, and non-government organizations that is capable of coming up with creative approaches and that is able to rethink standard practices.

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