What Capitalism Does Russia Need?: Methodological Guidelines of the “New Industrialization”

• Main Author: Romanov Evgenii V.
• Format: Article
• Language: English
• Published: Russian Academy of Sciences, Vologda Research Center 2017-05-01
• Series: Economic and Social Changes: Facts, Trends, Forecast
• Subjects: trends and contradictions; liberal concept of modernization; “new industrialization”
• Online Access: http://esc.vscc.ac.ru/article/2217/full?_lang=en

Modernization of the Russian economy should be carried out taking into consideration global trends and contradictions of the country’s socio-economic development. The first trend is predetermined by the transition to the sixth technological mode: the creation and development of bio-, genetic and nanotechnology, quantum computers and new composite materials. Countries that missed the stage of preparation for the beginning of a new Kondratieff wave (the growth potential is laid in the first 15–20 years of the beginning of the cycle), will at best enter the stage of catching-up development. The second trend is defined by global competition for human capital and consists in the outflow of talented Russian youth to the West. Russia should develop a concept for the preservation and enhancement of human capital, which will create natural barriers against the loss of intellectual capital. The undervalued “live labor” forms the basis of strategic contradictions of Russia’s socio-economic development between the declared policy of innovative development of the economy and a weak demand for innovation on the part of private enterprises. Cheap labor does not encourage the business to upgrade production technology, it increases the “gap” between the incomes of the “rich” and the “poor”. Increasing social inequality increases the level of corruption. The paper analyzes existing approaches to the modernization of the Russian economy. The author supports the thesis that in the long term certain conditions should be created for a “technological breakthrough” based on the innovation-driven recovery of the sectors of industrial economy, reaching leading positions in the global production of quantum computers and increasing the export of information technology, transfer of innovative developments of the military-industrial complex in civil industries and a more comprehensive use of competitive advantages, which Russia still retains from the viewpoint of innovation development – human capital (creation of natural barriers against the “brain drain”). It is necessary to increase the share of state ownership and increase its management efficiency in industries that are critical for overcoming the de-industrialization of the Russian economy and achieving a “breakthrough” in the sixth technological mode. The increase in the cost of “live labor” and, as a consequence, the creation of conditions for expanded reproduction of labor force should be the imperative of a “new industrialization”. Attracting investment (including foreign investment) and assessing its quality should be considered in the context of the created (or not created) opportunities aimed to increase the value of “live labor” and the number of domestic technologies of the sixth technological mode