The Russian Academy of Sciences, known for its conservative tradition, is nonetheless trying to catch up with the time – learning how to sell what it invents and consolidating its many departments.

But this does not mean the nearly 300-year-old Academy intends to sever its attachment to the state. It will never be able to live off its own revenues alone, Academy officials say.

Still, after a decade of tugging at the state’s empty purse strings, the Academy is trying to become more self-reliant. Its president, Yury Osipov, says the Academy wants to increase nongovernment financing, which already makes up 29 percent of its budget.

Officials say that developing "commercial innovation centers" to market and sell the inventions that Academy scientists create will bring in extra money. At the same time, Osipov’s deputy, Vice President Gennady Mesyats, has decided to halve the number of Academy departments in European Russia, the Ural Mountains and the Far East in an attempt to cut costs.

Since its founding in 1724 as the Petersburg Academy of Science under Tsar Peter the Great, the pride of Russian science has been well looked after by the state. The tsar gave the Academy 25,000 rubles a year – a sum that in those days provided its denizens a comfortable existence.

Russia’s first academics were foreigners, including mathematicians Leonard Eiler and Nicholas and Daniel Bernoulli and astronomer Joseph Delille. When the Academy opened its doors in the early 18th century, Russia had yet to realize its own scientific potential.

Over the next 300 years, Russian science would rise to worldwide prominence. Today, however, Russian scholars are taking their knowledge elsewhere – 60,000 specialists were granted permanent residence abroad during the first five years following the collapse of the Soviet Union, according to the Moscow Science Research and Statistics Center. Many still leave in search of better financial opportunities.

According to the Academy itself, employee salaries are 3,400 rubles (about $130) a month on average; a research institute manager makes 3,000 rubles ($100) and an academic earns 7,400 rubles ($240). Many of those who stayed in Russia have turned to other fields.

"Active young people have left for commerce," said academic Leopold Leontyev, director of the Urals Institute of Metallurgy and also the head of the Academy’s property department.

The number of scientists working for the Academy is now half of what it was in 1991 when the Soviet Union was dissolved, Leontyev said. He added that when he was a young doctoral graduate and deputy director of a research institute in the Urals city of Yekaterinburg (then known as Sverdlovsk), he earned 700 rubles a month. At that time, a ticket to Moscow cost him 32 rubles. If he had the same job today, he said, his salary would not even cover his travel to the capital.

Leontyev’s office is in a shabby building that he said once housed the horse stables of the Yekaterininsky Palace. A worn red carpet that runs the length of the corridor is the only vestige of the mighty Academy of the Soviet era. According to the Academy’s finance department head, Alexander Konoshenko, the Academy now gets only 18 percent of its Soviet-era budget. Last year, the Academy was allocated just over 12.4 million rubles (about $400,000) from the federal budget, which represents 52.2 percent of its total annual funding. Commercial contracts provide 29 percent of funding (36.9 percent in Siberia), while another 6.7 percent comes from leasing Academy premises. The rest comes from the Ministry of Industry, Science and Technology and other parts of the government.

According to a 1996 federal law on science, state subsidies to science must not be less than 4 percent of total budget expenditure, yet even this is below Soviet-level funding. In 2002, state subsidies to science accounted for only 1.67 percent of budget expenditure: The Academy got only one-third of what it was entitled. Since 1992, the amount of money earmarked for Russian science has decreased from 2.4 to 0.29 percent of GDP, which itself has been reduced by half. The state says it plans to increase subsidies to the Academy to only 0.37 percent of GDP by 2010.

Despite the tight finances, the Academy’s institutes are managing to survive in the market economy. Some, like the Urals Institute of Electrophysics, the Nuclear Physics Institute and the Institute of Catalysis in Novosibirsk, are even thriving, thanks to strong construction and technological bases that enable them to raise more than 80 percent of the amount promised in budget subsidies by inventing, then producing and selling, technical equipment and machinery. But Leontyev said there are few institutes like these exceptions in the Academy.

Another problem, Leontyev said, is that 20 percent of state factories using the Academy’s inventions fail to pay for them. He admitted that the Academy has not yet learned to squeeze money from its debtors.

"We don’t yet live in a society where relationships with companies can be built on a purely commercial basis," he said. "They promise to pay when they have money. And that’s what we hope for. If we lay down the law too hard, we will not be able to work with them in the future," he added.

Fiscal concerns have pushed the Academy into the real estate business. As the owner of large amounts of property, it has plenty of assets to work with. The Academy owns 14.5 million sq. meters of indoor space, 378 institutes, a fleet of 26 oceangoing research vessels, construction bureaus, a field service, a publishing network that puts out 300 magazines and a book-selling network. The academy also owns renovation and construction enterprises, hospitals, clinics, kindergartens, hotels and land that the state gave it free of charge.

In 2001, Academy leased out some 400,000 sq. meters of premises, which brought it an income of 580 million rubles (about $18 million) – 6.7 percent of the Academy’s funding. The Academy rents out its premises for an average of $70 per sq. meter, Leontyev said, noting that the average rental price in Moscow for commercial use is $40 per sq. meter. But Academy finance department head Konoshenko dismissed rumors that the Academy has made big profits from renting as "great fairy tales." He said the Academy leases out only 7 percent of its property.

The Academy’s property has given rise to disputes over the last several years, sometimes bloody ones. Leontyev said that, in the last four years, they have won 13 cases in court returning property to the Academy that was illegally seized during the economic chaos that began in 1992.

Kommersant reported that, in 1997, the Academy’s then-vice president, Anatoly Tarasishin, who was in charge of capital construction, was shot to death. He was killed allegedly because criminal groups were trying to get control of some Academy property, Kommersant reported. A year and a half earlier, another Academy official, in charge of construction and leasing, was found dead. According to official reports, the official, Sergei Ilyashenko took his own life, but his colleagues said they thought the suicide was faked and suspected foul play, Kommersant reported.

Despite its commercial activity, the Academy does not plan to wean itself from state subsidies, entirely, Konoshenko said, adding that the decision to create more innovation centers should not be seen merely as a step toward self-support.

He said the Academy, despite its poor condition today, can survive "for as long as it wishes."

"The question is what volume of research it will be able to conduct and what scientific potential the country will have."