The power of the state and market. Advancements in Russian software development discussed at the CIPR

The power of the state and market. Advancements in Russian software development discussed at the CIPR

The Russian Federation is capable of achieving technological self-reliance after the withdrawal of foreign software vendors from the market; this will require the state and business to combine efforts. That said, the government is ready to support both developers and those who need such software. Under current circumstances, the domestic industry has been presented with empty niches to fill, participants of the CIPR 2022, a conference that has just taken place in Nizhny Novgorod, say.

“So far, Russian manufacturing companies and enterprises do not have output that is comparable to the major world players, which makes competing with price difficult. However, I think the West’s restrictions have opened new niches for us that we can and should take advantage of. This is our goal in terms of developing our industry. The end-to-end assessment of digital maturity and the automation of our companies is an important criterion during the first phase of this work,” Prime Minister of the Russian Federation Mikhail Mishustin said at the main plenary session.

Domestic developers are given every opportunity to fill the gap in the software market, the Prime Minister added. “We saw examples of their software today at their stands. Digitalization of the entire product life cycle, from concept to disposal, must become the foundation for further transforming Russia’s industrial sector,” Mishustin said.

According to the Deputy Prime Minister of Russia Dmitry Chernyshenko, the most appropriate support measures are already being selected. “Today, we’re selecting the most appropriate measures. The selection mechanism has been presented; we unite consumers and developers. Later, we will be scaling them up in a certain manner, depending on the specific industrial sector,” Chernyshenko said.

Combining efforts

According to Mikhail Mishustin, under current circumstances, the rapid restructuring of basic and high-tech industries is only possible through the combined efforts of customers and developers. “We need to develop innovative tools to increase productivity and efficiency, which all industrialists are well aware of,” the Prime Minister noted.

Alexey Mordashov, Chairman of the Board of Directors at Severstal PJSC and Power Machines PJSC, agreed that, in order to develop software solutions under current circumstances, the government and market should combine efforts. “I’d like to once again point out that using the power of the state and the power of the market, using private initiative is crucial to developing software solutions,” Mordashov said.

According to the General Director of Kamaz PJSC Sergey Kogogin, working on the replacement of foreign products used in the manufacturing process is a “team race.” “We must reach this goal in five to seven years; otherwise, we have simply no future. Yes, developing such complex systems is a team race, and there’s no other way,” Kogogin said.

That said, to work more efficiently, it is necessary to carry out an inventory of market opportunities and needs. “There is an enormous number of needs, an enormous amount of groundwork has been done. It would probably be better to inventory them as well and figure out what we’ve got and what’s available,” the Chairman of the Board of Directors at Severstal PJSC added.

Konstantin Babkin, President of Novoe Sodruzhestvo, outlined the problem of withdrawal of foreign programs; however, in his opinion, the country will be able to achieve self-reliance in terms of software given the right support. “We would like to replace these products with Russian ones, but first, there’s no viable substitute yet, and second, that requires capital investments. If there are benefits and software developers are financially supported … then, of course, we will support these activities in every way we can and try to help our country achieve total software self-sufficiency,” Babkin said.

Critical infrastructure

The goals and objectives of the sector haven’t changed under new circumstances, but achieving them has been given significantly higher priority, Deputy Minister of Industry and Trade of Russia Vasily Shpak said at one of the sessions. According to the deputy minister, digital transformation is occurring at an extremely rapid pace, and Russia should keep up with it.

“Most importantly, our industry should be able to meet the challenges by drastically increasing its effectiveness and improving its global competitiveness in terms of products and services. Productivity growth is achievable precisely through the implementation of new business models and digital tools,” Vasily Shpak said.

In conversation with journalists, Dmitry Chernyshenko reminded that, starting from January 1, 2025, critical infrastructure would be banned from using all foreign solutions. The corresponding decree was signed by the President of Russia Vladimir Putin on March 30, 2022. According to Chernyshenko, there is not much time left to switch to domestic software, but the good news is that there are Russian companies that have already completed the import substitution process. “However, there are also sectors in which we should now speed up to achieve this very technological self-reliance, technological sovereignty,” Dmitry Chernyshenko said.

Under current circumstances, we need new approaches to developing Russian solutions that could ensure the industry’s advancement and competitiveness. “We consider the modular multi-service industrial platform’s project that was launched this year to be the main instrument for implementing our objectives and achieving stated goals,” Deputy Minister of Industry and Trade of Russia Vasily Shpak said.

Speaking to a TASS representative, Vasily Shpak stated that Russian software vendors would manage to carry out import substitution for critical infrastructure.

How can industries benefit from digitalization?

In conversation with journalists, Nizhny Novgorod Governor Gleb Nikitin highlighted that “industry” is a rather broad term that can take in energy and other economic sectors. “Digital is, in fact, everywhere. Transport, ecology, all of it involves digital,” the governor said.

According to experts, as for the construction industry, digital transformation reduces the cost of managing and maintaining different kinds of real estate, and as for the waste management, it makes the processes cheaper and, at the same time, more efficient.

“It is necessary, among other things, to set standards for the implementation of digital systems in apartment buildings, so that the costs of managing and maintaining different kinds of real estate are reduced,” the conference’s press office quoted the Director of DOM.RF’s Unified Information System for Housing Construction Alexander Lukyanov.

Digital transformation is essential to waste management as well since it can make waste disposal processes cheaper, easier, and more transparent, Denis Butsayev, General Director of Russian Environmental Operator, stated. “The implementation of digital services and organized information systems allows the industry to make many processes more transparent, get free from unscrupulous contractors and bureaucratic red tape and, in some cases, even purges it of crime,” the conference’s press office quoted Denis Butsayev.

The unprecedented scale

The 7th annual conference CIPR 2022 was the largest yet held in terms of the number of delegates and stands, the governor Gleb Nikitin told TASS. Over 1500 companies sent their representatives to the conference; the exhibition venues hosted 143 stands presenting breakthrough Russian digital technology solutions. For example, the prototype of the first Russian educational metaverse was presented at the event.

Deputy Prime Minister of Russia Dmitry Chernyshenko noted that over 6,000 people had decided to participate in the conference. “We’ve got a tremendous number of panels and meetings hosted and contracts signed. This is what such large-scale events are held for,” Dmitry Chernyshenko said. The conference’s press office told TASS that nearly 50 agreements had been signed during the event, which meant, inter alia, that over 700 schools in Astrakhan Oblast and Tula Oblast would switch to Russian office software.

The conference

The 7th annual conference “Digital Industry of Industrial Russia” (CIPR) took place on June 1–3 at the Nizhny Novgorod Fair. The CIPR is the first Russian conference that aims to ensure global dialogue and enable cooperation between government and business in digital economy development, industrial transformation, implementation of the “Digital Economy” national program, development of domestic high technology export, and cybersecurity. OMG Agency is the organizer of the conference. Rostec and Rosatom state corporations are the CIPR’s strategic partners.