Igor Yurgens, RIO Centre chairman, said that Russian authorities had realized the importance of building knowledge-based economy. Gerhard Schroeder, formerly chancellor of the Federal Republic of Germany, now chairman of the North European Pipeline shareholder committee, opened the plenary session. He said that in the age of globalization, the competition was no longer between companies but between nations.

Schroeder suggested that in order to be competitive, Russia has to conduct 'fundamental and forward-looking reforms' consisting of two elements -- changes in social security system and subsidies reallocation from the past to the future, i.e. to education, research and development.

He said that three years ago when he was announcing the program for Germany modernization until 2010, it was aimed at solving these very tasks.

According to Schroeder Germany allocates about 2.5 percent of its GDP to research and development. These investments will increase up to 3 percent in 2010. However, Schroeder said this is was enough: China allocates over US$100 billion into R&D annually, whereas the figure for Germany is $60 billion. 'If we don't make substantial steps and efforts the gap will keep growing', Schroeder noted.

The Russian government at the conference was represented by three top officials: the minister for information technologies and communications Leonid Reiman, the minister for education and science Andrei Fursenko and the deputy minister for economic development and trade Andrei Sharonov.