Increasing Return and Russian Innovation System

For the development of the national innovation system, it is necessary to meet three fundamental conditions: economic and political stability, entrepreneurial initiative, and increasing returns. The article examines what problems in the Russian innovation system are associated with mechanisms of increasing returns. An increasing return in this paper is a class of social (economic) interactions with positive feedback that allow you to benefit from the expansion of the scale of activity. The modern world of increasing returns is connected not onlywith the development of technologies but also with institutions and regulatory mechanisms. The article develops the narrative economics’ approach to analysing the Russian innovationsystem and the mechanisms of increasing returns. Narratives contained in 27 in-depth interviewsof representatives of the academic sphere related to innovation activities are used as data sources. The research highlights the main problems of the Russian innovation system related to the mechanisms of increasing returns. Among such issues, the author identified: a violation of consistency in the interactions of various elements and actors of innovation, weak demand for innovation from business, underdevelopment of physical and institutional infrastructure for innovation, failures in the development and implementation of public policy in the field of innovation, problems with attracting financing for innovative development andtheir implementation, lack of qualified personnel and failures in the system of their reproduction.The use of qualitative methods makes it possible not only to identify relevant problems of the Russian innovation system for actors but also to take a step towards developing a more comprehensive understanding of the state of functions and dysfunctions of existing regulatory mechanisms and institutions.