Importance Due to the obvious need to modernize the Russian economy, the problem of reforming the institutional environment, where innovative products and technologies are created and consumed assumes particular urgency. Objectives As the goal of the study, I consider the determining of directions of modernization of institutional environment of the innovation sector of the national economy. Methods In this paper, using econometric techniques, I attempted to identify the relationship between the innovation activity of economic agents and the institutional environment corresponding to a certain time period. Results The analysis of international experience shows that the level of innovative development of the society does not depend on the form of the State government, level of democracy and corruption. The status of the institutional environment greatly impacts on innovation processes. Analyzing the historical experience of the development of national science and technology, I show that the maximum innovation activity of economy was observed in the period of centralized funding for science and education. The most important inventions and discoveries that were applied in the domestic economy have been made during the State control over the processes of development and introduction of new products and technologies. In the result of retrospective analysis, it was found that especially innovative processes are activated in the domestic economy in times of economic sanctions and restrictions. I demonstrate that market-based mechanisms that provide free movement of technology, knowledge, scientists and specialists have a negative impact on the national innovation system development Conclusions and Relevance I came to a conclusion about the need for strict control over an innovation process in large enterprises with State participation. I emphasize that for private enterprises and a company with foreign participation is meaningful to apply economic instruments and incentives that motivate them to develop innovative products and technology. In order to achieve that I consider, for example, the issues aimed at reducing taxes and interest rates.
Keywords: innovative development, institutional environment, scientific research
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