The economy of the country, even more than fifteen years after the “reverse transition”, does not seem to have been able to generate automatically the institutions needed for the correct operation of the system of markets and of private property. The main characteristics of the transition period (1990s) are as follows: rapid removal of central planning systems, dismantling of state-owned enterprises, elimination of all forms of control on trade and capital flows, promotion of individual initiatives. But in the industrialized world, to create an effective capitalistic system, public intervention is essential for a very long period and in several fields: modernization of industry and agriculture, orientation of production toward the satisfaction of domestic demand, constitution of a reserve of available and skilled workers, centralization of finance by the creation of a reliable capital market, definition and application of a long-term strategy of development.

2004 was the year of the launching of new reforms in Russia with the aim of controlling and organizing the markets. The State set up new instruments to play a more active role in the orientation of economic development: mobilization of abundant resources devoted to national industrial, technological and scientific projects; special economic zones for national and foreign investors; creation of a fund of investment fed by oil receipts, etc. The public property was extended and restructured: more than a thousand companies in the strategic sectors (defence, energy, means of transport, finance) are currently held by the State, while the programme of privatizations has become more selective. The new reforms that have been implemented since 2004 were justified by two great “reasons”: to give a direction to the economy by redefining its functions, and to provide reliable institutions to reinforce the economic and political power of the country in the global context.

This first issue of the Journal of Innovation Economics presents some selected aspects of the economic performances of Russia. The selected papers show different basic aspects of the Russian modernization.

The first paper, written by Irina Peaucelle, presents a global analysis of the determination of growth and development in Russia. She shows that recent years have seen important economic growth in Russia, and a number of adjustments among industrial sectors, technological priorities, and in health and education areas. However, international competitiveness has remained concentrated in natural resource-based sectors. The indicators of human development, health status and knowledge bases of production continue to stagnate.

Monetary policy is also a key in all macro-economic analysis. Victoria Dobrynskaya analyses in the second paper the optimal monetary policy under incomplete pass-through and asymmetrical price rigidity, then she evaluates the monetary policy of the Central Bank of Russia. In her view, monetary policy should adjust more in the case of depreciation of the domestic currency than in the case of its appreciation due to higher downward price rigidity and lower downward pass-through. V. Dobrynskaya uses this prediction to evaluate the monetary policy of the Central Bank of Russia and finds that the present policy is too inflationary and suggests that less effort should be made to prevent nominal appreciation of the rouble.

In the third paper, Ivan Samson and Patrick Ternaux focus their investigation on the labour market in Russia. They present a new approach regarding institutional change, particularly with regard to labour market adaptation among institutions of intermediate size. The study shows the difficulty of, and the need for building a new market salary relationship in Russia. The tool provided by institutional trajectories allows understanding of the debate between socially accepted norms coming from the past and the set of formal rules required for a prosperous future. The former norms protecting the workers are no longer relevant for economic restructuring and for the permanent flexibility required for a market economy, but they remain widespread in the society and tacitly valid.

The evolution of the labour market is linked with the transformation of management principles in Russian firms, as Liliane Bensahel and Tamara Chamsoutdinova-Stieven analyse in their two papers. Since the beginning of the 1990s, Russian enterprises have endeavoured to adopt the most modern management methods. This question cannot be summarized as a mere adaptation since these modern methods are themselves the result of a long evolution of Asian, American and European societies. Indeed, the history of Russian enterprises cannot be compared with others. Moreover, the authors state that changes in Russian enterprises are so far largely superficial. For example, the term “flexibility” is used but does not describe the same reality as in established capitalist societies, due to the survival of habits inherited from the past. Rigid programmes and methods of human resources management do not always correspond to the needs of enterprises competing in an insecure and changing market.

Sophie Boutillier focuses her attention on the development of entrepreneurship in Russia. It is a new phenomenon in the Russian context. To start a business in Russia is, as in other industrialized countries, can be a solution to having a job. Since the 1990s the Russian government has developed new regulations to promote entrepreneurship. The privatization process has transferred capital from the public to the private sector, thus the level of concentration of Russia industry remains broadly the same. On the other hand, it can be noted from results from several studies about entrepreneurship, that the entrepreneurial process is closely linked with a family grouping. A plethora of very small enterprises have been started in big urban concentrations (especially Moscow) in proximity services.

To promote entrepreneurship, Russian universities have developed cooperation with other universities in the European Union or United-States, explains Igor Kitaev. This evolution is marked by a deep transformation in the Russian university system which tries to adapt to the new market conditions. Russian universities have adopted new methods of management, but they have again a long way to go. For Igor Kitaev, the Russian university system has adapted to extraordinary social and economic turmoil with considerable vitality and offers new models and structures forged out of circumstances which have no parallel. What is remarkable is the survival routes that different universities have taken, the new organizational forms that have been created, and the new approaches to institutional development that have emerged as a consequence of diversification.