Russia faces a technological race with the West, but in very different conditions than Asian powers – Japan, then South Korea and late China.
It is so hard to foretell whether it will be able to usage the economical war with the West to modernise, exit the function of a supplier of natural materials and make another multipolar centre of the world. There's quite a few indications that this isn't gonna work. But let's take a look... Money (capital), human resources (innovation) and technological corporations are needed to make the economy. And of course – outlets. In the erstwhile issue (https://myślpolska.info/2023/04/22/czy-Russia-will fall-in-technology- backward/) I described what the Russian strategy is, today, about what is needed to implement it. Let's start with corporate.
Ros-Corporations
The collapse of the USSR and the crisis of the 1990s destroyed a completely old industrial structure. For its restoration, president Putin established after 2007 state technology corporations – RosAtom, RosTech (originally called RosTechnologia) and RosKosmos. This enabled effective management of the full technological and industrial cycle in 3 key industries. atomic weapons, military technology, presence in space. Of course, it is essential to have an armistice as Russia inactive feels besieged by a stronghold that the West is trying to conquer and subdue at times.
President Putin later insisted that the “guard” should start civilian production, utilizing its technological competence, confirmed Russia's position on the global arms market. Therefore, in addition to military aircraft, Rostech besides supplies civilian aviation with fresh constructions specified as Dry Superjet or MC-21 (read: “They are napping Russian aircraft, calmly – civil” (https://myslpolska.info/2021/05/21/upgrading-Russian-civil aircraft). Breaking Western dominance in the aviation manufacture has been going on for a fewer good years, and here you can see precisely how cutting technology by the West delays projects and hinders the improvement of fresh products. Despite this, the Russian aviation manufacture provides modern constructions and awesome products, specified as aircraft or rocket engines.
The combination of arms and civilian activities is besides excellent in Rosatom, which, in addition to the construction of fresh atomic weapons, is besides a global civilian energy leader and has mastered 80% of the planet atomic energy market. These large companies are already able to make competitive products, as well as analogies of devices, parts, and products of the West. They are frequently of poorer quality, lower performance, although sometimes they can be much better. And they're almost always cheaper.
Achilles' Fridays Industry
But the challenges facing technology are enormous. It is essential to cut Russia off from modern means of production.
Russia was and is inactive dramatically uncompetitive in the device industry. The imports of this manufacture have been respective times (5-6 times) above exports. In times of good relations with the West and advanced oil prices, this difference was paid from oil gross – in the highest years there was 1/3 of oil and gas export gross (153 billion USD in 2013). This has made Europe the primary supplier of machinery. Later there were more and more restrictions, and present this exchange was broken. A immense Russian device park was without spare parts, the anticipation of renewal and modernization.
The drama of specified situations shows, for example, the situation with device tools (towing machines, milling machines, grinding machines, etc.). The Russian manufacture is entirely based on import, its own production – virtually zero. And these devices are essential for the production of the full industry, besides 1 crucial for Russia – defence, due to the fact that the modernization of the Russian army is based on imported device tools.
Personnel decide
Russia has previously dominated the "development of innovation", characteristic of peripheral (colonial) economies. The resources for the improvement of technology came from outside, through funds, specialised in seeking solutions around the planet and utilizing local talent. Local state finances supporting discipline were added to these funds. The work on the challenges of fresh technologies sometimes yielded good results, but their further improvement – prototypes, commercialisation and large-scale industrial production – was already taking place in the West. In the full technological import package, the solutions developed in Russia have already returned to finished products. A very efficient mechanism, draining talents and ideas from around the world, and perpetuating industrial dominance of the West. To become technologically sovereign, it must be eradicated, the full technological cycle carried out at home. Technology corporations can handle this.
But "all things are decided by the staff," as comrade Stalin utilized to say. And here's mixed news. These scientists and engineers in Russia have a wealth of (406,000 – 6th place in the world, level of Germany, Korea, France), is worse with resources spent on investigation and improvement (only 10th place, 42 billion dollars (according to PPS – purchasing power, in real dimension is worse). And here at the level of Italy or tiny Taiwan (24 million people). Unfortunately, the sources of backing are not awesome either, 70% of the funds come from the state. And it should be the other (even in Belarus it is 50/50 percent).
But how to be a leader in discipline erstwhile the west cuts off access to labs, acquisition investigation instruments, prevents them from being repaired by refusing to supply spare parts. It besides cuts off global investigation bases. In the people of science, who are inclined to print in prestigious magazines and participate in conferences that have been taken from them, there is simply a increasing revolt against the treatment of pariahs, which is frequently expressed in emigration from Russia.
And this drain of human resources is the 5th Achilles of Russia. Here the losses are huge, talented, innovative workers who are looking for a cool life alternatively than sacrifices for their homeland, like to flee with their company from Russia alternatively than stay here. And that despite very advanced pay offers. rather vague statistic talk of hundreds of thousands of people who emigrated with the outbreak of the Ukrainian War. On the 1 hand, it is good news for the Russian elite of power (the 5th column deserted), but erstwhile you lose the best brains, the West draws to itself the top talents from all over the world. With specified a drain of the most precious resources, Russia can not coil much.
Capital
Russia faces an extraordinary challenge: how to replace western capital, which is the engine of economical development, but does not want (or is not allowed) to invest in a sanctioned economy. The capital is not good in Russia. This resource-rich country did not have a successful period of accumulation of resources, concentration of capital, its organization in effective forms of action. The Russian State is adequate for everything thanks to the export of resources, the country has a large group of tycoons (called oligarchs by competitors), but capital resources towards the West are microscopic. Comparing even the stock marketplace capitalization, Russian seems dramatically weak... True, it grows, it beats historical records in the time of sanctions, but it inactive lacks a 1000 light-years for the stock exchanges of the Western planet (or even American ones).
And money, the investment capital of global corporations, is present the primary origin of investment. Without it, the cost of strategical improvement will be incomparably higher. But the main intent of the sanctions is to increase the costs that Russia already has advanced due to its size (large distances), low population density, or eternal cold, covering 2/3 of the country's surface.
Markets
The key problem is the deficiency of outlets. Today's 140 million is besides small. Everything on it will be worse, more expensive, delayed. At least half a billion consumers are needed, and this would give adequate opportunities for development. fresh technologies must be used, profitable, developed to compete with others.
Expanding markets is now the precedence of Russian diplomacy. Access to Western markets is out, remains a rapidly developing, popular Asia – ASEAN is simply a billion fresh mediate class, fresh consumers by 2050. Good relations with Africa will not aid much by looking at the strength of its economies. Russia has turned towards developing countries, forming alliances specified as BRICS, or Euroasia (EAES, SZOS or ODB).
Any chance?
We don't know if it'll work. And for a very simple reason: all Asian economies catching up have been successful with open access to global capital and the American and European markets. That's where the investments, the technologies, you could find the outlets. And it was frequently a dump at the beginning (so-called "Japanese" in the 1960s or later "Chinese"). Under the conditions of an economy cut off from capital, blocking access to outlets – this operation cannot succeed.
Russia has a powerful ability to mobilise science. But even if an example of a vaccine against Covid shows that even though the Russians released it first, it was boycotted for a long time by “international society”, that is, the global organization of WHO. Although real-life studies were the best.
But the first signs of long-term growth are already – in 2022 investments in the economy increased by 4.6 pp. It is not bad, although it was mainly the state that invested. Today, private investment in improvement is encouraged, with the creation of fresh businesses and jobs – the scope of the relief is enormous.
The challenge of a powerful, highest-class player is worth watching.
Andrzej Szczęsniak
Think Poland, No. 19-20 (7-14.05.20123)
