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Russian Authorities Promise Prosperity By 2020

According to the doctoral thesis of Yelena Lenchuk on the innovation processes in a transition economy, which cites numerous facts and figures, Russia and other former Soviet countries are lagging behind the rest of the world in the innovation process.
by Alexander Volkov
Moscow (RIA Novosti) Jun 27, 2007
The Russian Ministry of Economic Development and Trade spent nearly a year working on President Vladimir Putin's instructions to elaborate a socioeconomic development strategy for the period until 2020. According to the press, the strategy is ready and has been forwarded to the government. It includes three development scenarios: the inertial scenario (which is the least desirable, as it involves preserving the commodities-oriented economic model), a scenario based on commodities exports (accelerated oil and gas production), and the preferred, knowledge-based scenario.

Only by following the latter plan can the country achieve the ambitious goals outlined in the strategy in terms of per capita GDP, average wages and other figures determining Russia's place in the global economy, and all-round welfare.

The third scenario provides for turning Russia into an innovation-based country that produces safe nuclear power plants and nanotechnologies. The share of high-tech sectors in GDP should be double the oil and gas sector's contribution (17%-20% against 10.5% now), and the number of companies introducing innovations should grow fourfold, to 40%-50%. Exports of high-tech products should be increased to $60-$100 billion, or 1% of the global market, compared with 0.2% now.

Does this strategy reflect changes in the mentality of the Russian authorities and the end of an era when many promises were made, but few were implemented? Much has been said in the past about the need to abandon the obsolete development model, ease off oil dependence, and diversify the economy. But the continued brain drain has shown that there was little demand for knowledge and high technologies.

Will the situation change now? Academician Andrei Kokoshin has recently said that Russian big business is not in a hurry to invest in knowledge-based sectors. Russian billionaires invest almost entirely in the production of oil, aluminum and other commodities, which stands to reason, as the profitability of these sectors is incomparably higher.

The modern globalizing economy is giving rise to new demands. Industrial goods are increasingly becoming the embodiment of knowledge, and intangible resources (research and design, industrial skills and qualifications of workers, and enterprising and managerial skills) have long become the main source of prosperity in the rest of the world, constituting the bulk of value in products. Will Russians ever learn to value inventive minds and innovation enthusiasts?

According to the doctoral thesis of Yelena Lenchuk on the innovation processes in a transition economy, which cites numerous facts and figures, Russia and other former Soviet countries are lagging behind the rest of the world in the innovation process.

Lenchuk writes that industrialized countries have "occupied" the most rapidly growing, and therefore most profitable, sector of innovation technologies. Over the past 10-15 years, they have completed the fourth technological revolution, whose goal was to make production intellectual, and began creating an information society of a new type.

By investing huge funds in R and D, these countries have attained high standards of high-tech exports, which allow them to rapidly increase their GDP and dictate conditions on other markets, disregarding the opinions of newcomers.

Should Russia begin its quest for a better future by creating domestic demand for high-tech products?

Lenchuk writes that Russia is lagging behind industrialized countries not only in high-tech sectors. The depreciation of its fixed assets has risen above 50%, and industrial modernization has all but stopped. In other words, the level from which we must begin our revival is incredibly low. We must patch these gaping holes instead of talking at length about a "future-generations fund." As far as I know, that term was coined in Norway, where the current generations do not live poorly either.

Sergei Naryshkin, deputy prime minister of Russia, speaking at Hanover's CeBIT high-tech fair, the biggest ICT exhibition worldwide, said that a transition to an innovation-development scenario was not just a slogan for Russia, but a process that was already under way and yielding the first results.

Russia's Economic Development and Trade Minister German Gref, commenting on the establishment of the Federal Agency for the Export of High Technologies, said that Russia's share in the global high-tech output would grow by about 76 times in 10 years.

The mind reels to think how much must be done to bridge the gap between reality and fantasy, which entails advanced research, modern production facilities, and the training of personnel. Experts warn that the inevitable strengthening of the state in this situation may have an adverse effect on private enterprise.

In my opinion, though, it is equally important to gauge the psychological readiness of society to embrace innovation development. We must prepare to leave behind the gloomy world where almost nothing works, a world of moods ruled by fleeting desires and a striving to have as much as possible here and now, where few have learned to invest money for the long term, and where people drink too much and study too little.

Skeptics say rightly that we will not achieve anything with the current depressive belief that we will never catch up with industrialized countries.

We must leap into a new world, a world in which millions will systematically, persistently and stubbornly work to reach modern economic summits, a world of unceasing improvement of knowledge and creative abilities, and therefore everything around us. What can force Russians to change into such enviable human beings?

The goal of working towards an innovation economy has been set. Now we must find a way to encourage the people to believe in it, because they have learned not to trust long-term promises and goals. They no longer want to work hard for a brighter, but distant, future that may never come.

This time we have been promised that it will come rather soon, in 2020. But we want to see intermediary results sooner, in the next few years. This would be the best proof of the seriousness of our leaders' intentions.

The opinions expressed in this article are the author's and do not necessarily represent those of RIA Novosti.

Source: RIA Novosti

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