A new Russian state initiative reveals Moscow’s perennial struggle to modernize its economy and come up with a strategy for how to boost its technology by 2035.  Will this plan succeed?

It remains to be seen if Russia will be able to innovate its economy by 2035. Photo: ASI

The current economic stagnation has puzzled the Russian authorities a great deal. The dilemma the Kremlin is currently facing indicates that it has to choose between Russia’s international sovereignty (that means the continuing geopolitical standoff with the West and sanctions) and economic growth, which is not possible without foreign investment.

As Russian President Vladimir Putin does not seem to be willing to sacrifice his geopolitical achievements and give in to Western pressure, the second option seems unlikely, at least for now.

On the other hand, the Russian authorities are making efforts to reconsider their policy in its innovation and technology sector. One of the recent ambitions is to strengthen Russia’s position on the global technology market by 2035.

This goal, set by Putin in 2014, is expected to be achieved through the National Technology Initiative (NTI), a mechanism that defines key technology markets where Russia might have a competitive advantage over other global IT exporters.

Steamship strategy

Whether such an initiative can be implemented is one of the questions examined in the new Russia Direct issue, titled “Imagining the Future: Russia's Plan to Boost Technology by 2035.”

Written by Russia Direct’s deputy editor-in-chief Pavel Koshkin, the issue is the result of his participation in the 2016 edition of Foresight Fleet, a four-day steamship cruise on the Volga River from Samara to Astrakhan, organized by the Agency for Strategic Initiatives (ASI) and the Russian Venture Company (RVC). It brought together business and thought leaders to come up with roadmaps and projects for the implementation of the NTI.

The report brings together a range of views from both Russian and foreign experts and business leaders as well and also features several interviews – including with Evgeny Kuznetsov, deputy director of the Russian Venture Company (RVC), Kendrick White, a U.S. entrepreneur with more than 20 years’ experience of doing business in Russia, Dmitry Peskov, the director of the Young Professional Program at Agency for Strategic Initiative (ASI) and James Ming Chen, professor of Law at Michigan State University.

In addition, it outlines the most urgent problems concerning not only the future of Russia’s technology sector, but also the future of the country as a whole, with its complex bureaucratic challenges and vertical political culture.

However, the National Technology Initiative is a good example of Russia’s attempt to bring together grassroots approaches with top-down ones, to quote the report. The very format of the Foresight Fleet encourages effective discussion and brainstorming in a group of thought and business leaders as well as officials.

Also read: "Russian technology startups brace for a challenging 2016"

“This could foster effective discussion and horizontal, informal ties with different stakeholders, according to the logic of the initiators of such format, who see the NTI community as a grassroots movement,” reads the report.      

Moving from discussion to action

Some of the participants of the Fleet supported the new state initiative and the format of discussion that gathered more than 700 experts, businessmen and academics and made it possible for them to exchange ideas and come up with bold projects and ideas.

According to Andrei Bezrukov, one of the participants of the trip and an associate professor at the Moscow State Institute of International Relations, the format of the event, with its rapid brainstorming, allowed common positions on proposals to be reached very quickly. “I don’t see other formats that could unite so many diverse people,” he told Russia Direct.

“To teach people thinking in terms of a 20-year horizon is possible through the format that Foresight Fleet offers,” said Boris Ryabov, one of the veteran participants of Foresight Fleet and the managing partner at Bright Capital, a company that deals with private equity investment, business and strategy development in Russia and abroad.

Such a format helps promote the NTI and create the necessary environment for anticipating new markets and opportunities, according to Dmitry Verkhovod, the director of Academpark, a science park in Novosibirsk. The NTI can help Russia understand what it really lacks and what it needs to do to be competitive, he said.

Read the Q&A with Alexander Auzan: "Why Russia won't be able to modernize economy in times of crisis"

On the other hand, there are concerns that the projects and ideas discussed will run into obstacles and never be implemented. James Ming Chen believes the success of the initiative can only be measured in terms of real results on the market.

Likewise, Kendrick White, who is also advisor to the rector of Lobachevsky University in Nizhny Novgorod, argues that it is “crucial to advance from this stage of discussion to real implementation, because Russia has a long history of being good at understanding future trends on technology development, but not necessarily implementing or taking advantage of these trends itself.”

“After all, everybody can talk about the importance of long-term thinking, but there have to be specific government policies that support these trends,” he told Russia Direct in an interview.

Foresight Fleet served as a key forum for the design and assembly of the NTI roadmaps in 2015. Photo: ASI

Meanwhile, others are not certain of whether predictions and forecasts made during the discussions will indeed come true, but Valentina Kaledina, a partner for Strikitsa Consulting, a company offering global search services for business growth, struck a more positive note about the NTI: “98 percent of what we were discussing may not happen, but 2 percent will. And that 2 percent might change the world,” she said.

How does Russian bring together two incompatible principles – top-down and bottom-up – in its attempt to innovate its economy? Will the Kremlin be able to shift from short-term to long-term? How does Russia plan to tackle technology challenges in a difficult political and economic environment?   To learn more about Russia’s attempts to modernize its economy within the National Technology Initiative, subscribe to Russia Direct and download our May report.