Modernization of the Russian Economy: Analysis and Modeling of Strategic Potential

Abstract

Askar Akaev — Leading Researcher, Institute for Mathematical Research of Complex Systems, Moscow State University. Address: 1, Leninskiye Gory, Moscow, 119991, Russian Federation. E-mail: askarakaev@mail.ru

The following components are used for the analysis and modeling of strategic potentials of a developing economy: essential elements of Schumpeter-Kondratieff innovation cyclical theory of economic development; mathematical models and methods of the calculation of various scenarios of demographic dynamics; long-term economic growth and dynamics of technical progress; as well as well as a structural analysis of economy and governmental policies.

It is demonstrated that any country that relies exclusively on its own technological basis cannot secure annual economic growth rates exceeding 2-3 percent. In the meantime, effective borrowing of advanced technologies from outside (in the presence of highly qualified engineering staff) may secure an additional 6-7 per cent of annual growth for two, or even three, decades. This can only be realized in the case of advancing investments in human capital (and, first of all, in the training of highly qualified engineering staff on the basis of the latest achievements of science and technology). Estimates suggest that by 2030 Russia will need to increase the numbers of scientists and engineers in R&D almost two-fold.

It is shown that the innovative development and technological modernization of industry organically reinforce each other; it is only their joint realization that can help achieve a successful modernization of the economy as a whole. Given Russia’s demographic problem the accelerated development of human capital turns out to be an especially urgent and pressing task for this country. Thus, to succeed in its innovation-modernization breakthrough, Russia needs to solve simultaneously three key tasks: innovative development; technological modernization of its industries; and accelerated development of its human capital. Within quite a short period of time (roughly 5-7 years) this could lead to a synergetic effect of the multiplication of positive shifts in each of the abovementioned directions; and, in general, to the achieving stable high rates of economic growth (about 8-10 per cent a year) necessary for Russia to become one of the more advanced and socially responsible countries of the world.