Innovative Import Substitution in Russia and the World: A Comparative Analysis

Abstract

The purpose of the paper is to theoretically prove the role of innovations in import substitution, develop the performance benchmarks reflecting the impact of innovation on the import substitution as well as reveal the trends of innovative import substitution in different countries depending on the features of their external economic balance. The research methodology relies on the fact that the foreign trade turnover of each country where innovative import substitution occurs suffers structural changes, which are manifested in the growing proportion of innovative goods in exports and decreasing proportion of similar goods in imports. Therewith, the augmented export of innovative goods is proportional to the drop in the import thereof. An indicator of the positive impact of innovation on import substitution is simultaneous growth of costs associated with the innovation activity, and increasing export of innovative goods; moreover, the innovation component of exports should outstrip the innovation costs. The condition for innovative import substitution in countries with a very high or very low export-import coverage ratio of suitable values hereof (100–115%) against the background of the growing share of innovative goods’ exports. The authors investigated the dynamic changes of innovative import substitution in twelve countries of the world that representing various models of the establishment of foreign trade balance and applied the method of analytical equalization of the dynamic series. Analysis of target indicators of the positive impact of innovations on import substitution shows that all the countries under consideration to some extent perform innovative import substitution. We want particularly note Russia, the United States, Great Britain, Mexico, and South Africa. Regardless of the results achieved by the countries, the innovative import substitution should be developed towards the promotion of technological modernization of domestic production, enhancement of its efficiency and development of new competitive types of goods with high added value.