07.09.2022

Metamorphoses of Russia’s technological sovereignty

Metamorphoses of Russia’s technological sovereignty

Access to international licenses, technologies and equipment cut off, the country is now facing the challenge of creating in-house high-tech solutions. HSE’s estimates show that so far, almost 30 % of the advanced technologies used in Russia have been acquired from abroad. The question of development and implementation of the solutions required to meet the demand under new economic circumstances is high on the agenda. However, will the pivot to Asia really be a push for technological development, or does it pose a risk to the domestic IT market?

General Director of SUEK JSC Maxim Basov presented an interesting view on the problem, stating that it looks like Russia has everything it needs to become a technological leader but in reality there is too much missing. According to him, there are things that hinder the acquisition of leadership, such as the market size (Russia accounts for only 2 % of global output), negative attitude wealthy Western countries now have toward Russia, small population, which results in a small number of actors and entrepreneurs, and, of course, limited capital, since there is little interest in venture capital financing and no access to emission centers. That said, the government is providing a great deal of support for the IT industry indeed. Russia’s got tools and favorable conditions; however, the main problem is how small the number of private companies willing to participate in the leadership race is.

“Technological breakthroughs will be made only by companies, mostly the private ones, in cooperation with the state. The challenge now facing venture capital financing is that founders will obviously look for other jurisdictions. Such jurisdictions may be close to Russia, but they will still be jurisdictions of Kazakhstan, the United Arab Emirates, Armenia—places where companies will get access to the global market and global finance,” Mr. Basov elaborated. He does not share the overly optimistic idea that Russia can break into the tech market ranking second, third or fifth in such a short period of time. It seems more realistic to assume that Russia will first rank in the top 20, closer to the top 10, and gradually move upwards.

Executive director of The First Ore Mining Company JSC Igor Semenov believes that, in order to achieve technological leadership, all industries should “own the product” (i.e., final assembly should be done in-house) and, of course, design and build it. The strategy is quite simple: minimal imports and total self-reliance. Mr. Semenov concluded his speech on conquering new markets and localization of Russia’s production by saying, “Today you’re either fast or dead. What matters is understanding the technology and knowing how to make things happen.”

According to Acting Rector of Bauman Moscow State Technical University Mikhail Gordin, the idea that major businesses could support the education of specialists by allocating funds is overlooked. Investing in talent is investing in the future. However, that can be not at all obvious to those who focus on short-term business performance indicators.

Education provides people with knowledge that eventually becomes a basis for the startups venture capital funds and different investors are chasing. It is the first-hand access to modern high technology granted by inventors and developers, as opposed to the access to technologies that are purchased in the market and have already been used by others.

The Eastern Economic Forum 2022 takes place on 5–8 September 2022 on Russky Island (Vladivostok). It is a key international platform for establishing and strengthening economic ties, primarily in the Asia-Pacific region. This year’s forum will bring together delegates from over 60 countries. “On the Path to a Multipolar World” is the main theme of the EEF 2022. The program offers over 70 business events, such as panel sessions, roundtables, televised debates, and business dialogues.