Competitiveness and Leapfrogging Capabilities of Russian Business through Intangibles

The project is devoted to the fundamental research topic of competitiveness drivers. Mainly it is focused on companies’ strategic behavior with regard to intangible resources. According to the seminal papers of D.Teece, J.Barney and T.Stewart, intangibles are the crucial drivers of competitiveness in the knowledge economy. Taking into account the multidimensional nature of competitiveness, the main idea of the project is to provide a complex investigation of different aspects of intangible-based strategic behavior which allow companies to catch up to rivals or even to leapfrog them. Challenges faced by Russia such as the productivity gap, weakness of institutions and dependence on natural resources make Russian companies an excellent field for study: what particular strategies with regard to intangibles should be employed and whether or not leapfrogging factors exist.

This project follows the findings of the project “Competitiveness of Russian companies under import-substitution conditions: the Role of intangibles” supported by RSF in 2015. The core of the research carried out during the last three years was contextualized in the adverse macroeconomic and political conditions that Russian business faced 3-4 years ago. The import-substitution program was a response to the restrictions of the international trade, technological and financial overflows as well as significantly decreased purchasing power of Russian currency. During the previous project, these factors were taken as a set of conditions and the capstone of the import-substitution capacity was revealed in the low competitiveness of Russian companies due to the lack of endowment in intangible resources. The key paper that represents the significant results of the entire project was published in one of the leading international journals Measuring Business Excellence under the title “Bridging the Gap of Competitiveness of Russian Companies with Intangible Bricks”. This comparative study introduced on the basis of the previous relevant papers a set of factors such as innovative behavior, strategic orientation of companies, development of human capital, global orientation and networking capabilities, that appeared to be of particular importance for the capacity of Russian business to outperform their closest rivals. Public European firms were taken as a benchmark in this analysis.

The motivation behind the current project is for a deeper investigation of revealed factors searching for further opportunities for Russian companies to leapfrog and to outpace in the global competitiveness race. The aim of the project is to develop theory and to provide empirical evidence of different perspectives of companies’ strategic behavior with regard to intangibles. The key research topics are as follows:

•       Intangible-based company profiles.

•       Switching to an innovative strategy.

•       Voluntary and involuntary disclosure of intellectual resources.

•       Development and retention of human capital.

•       Global orientation and networking capabilities.

For each perspective a special research design and appropriate methodology will be elaborated. Such a research approach can provide a complex picture of intangible-based competitiveness. Moreover, in the framework of the project these five perspectives will be classified through the lens of leapfrogging capabilities. The aspects of governmental support of the employment of intangibles as a crucial factor for the successful implementation of intangible-based strategy will be addressed in the study as well.

The next important contribution of this project will be in the measuring of intangibles through open data presented in digital environment. The objective is to analyze existing digital channels for the formation and dissemination of the information of a company, to collect and organize the data from these channels, and, finally, to verify proxy indicators for intangible resources.

The key practical implication of the project is the further development of the analytical system “Monitor of Intangible Resources of a Company” (MIRC) which has been presented as the main result of the previous stage and according to received opinion from representatives of business and academia has substantial potential to become a reference and impact on the transparency of Russian business. The current version of MIRC contains interactive reports of endowment of intangible resources and its efficiency for more than 1000 public Russian companies. The objective of this project is to provide the opportunity for any Russian company to analyze its position with regard to intangible resources. Obviously, it demands uploading relevant information about human resources, organizational and relational resources of each new company in MIRC. The team of the project believes that with some support MIRC will push a self-sustainable process of information disclosure and encourage Russian companies for more transparency which in turn will increase their investment attractiveness.