Priorities of R&D Financing in Ukraine from Internal Sources of Science and Technology Organizations. Part I

Abstract

The issues addressed in the article are of great importance for Ukraine, as comprehensive studies of internal spending (or self-financing) by science & technology organizations at national level have not been performed due to the traditional focus of domestic researchers on other sources of funding (government or domestic and foreign business). The purpose of this study is to find out what science & technology fields are, in fact, profit making.

Statistical data on internal spending of science & technology works over the latest decade is used to identify the paradoxes associated with it, the concentration of internal funds in the science & technology system of Ukraine, and the distribution of these funds by institutional sector and group of sciences.

By institutional sector, the largest internal spending was in business enterprise sector, accounting for 76.8 % of the total internal spending, with the largest share of it (72.5 %) invested in development. This share is essentially lower than the analogous share of foreign funds (93.3 %). Also, organizations business enterprise sector invested internal funds in basic research. The internal spending of government sector, instead, was focused on basic research; the internal spending in government sector accounted for 15.15 % of the total internal spending on science & technology works in Ukraine. Internal spending is not a conventional source of R&D funding in higher education sector: its share, in spite of the possibilities for reallocating funds coming from education activities, was 1 % of the total R&D funding in this sector; nearly all the internal funds are invested in research. By organizational and legal form of management, the largest internal spending was at public and state-owned companies, which signals the existence of the so called “state-owned business enterprise sector” in Ukraine. The analysis of the concentration of internal funds in the Ukrainian science & technology system shows the ongoing decline in the number of organizations investing this category of funds in R&D, in parallel with the shrinking internal R&D resources of organizations that used to be on minor positions as investors of these funds. By group of sciences, the internal spending was large only in agricultural sciences and selected organizations in biological sciences. The group of technical sciences does have several leaders in internal R&D spending, whereas in the rest of organizations internal spending had minimal amounts, being either an instrument complementing other sources of funding or the last chance for survival. The objects with largest internal spending (the first echelon) in this group in 2015 were airspace engineering, power engineering, mechanical engineering and electrical engineering; the second echelon included processing of materials, radio and telecommunications and computing devices, and automation.