Russia — On the way to an information

Russia - On the way to an information society? Prof. Kari Liuhto Director Pan-European Institute (PEI) Turku School of Economics and B. A. www. tukkk. fi/pei/e The Annual Conference of the Club of Rome Teliasonera / Futurium Helsinki 11. 10. 2004 www. tukkk. fi/pei/e

Russia – geographically giant but economically medium-sized n Some 17 mn square km – some 4 times of the EU 25 and twice the US territory n The Russian GDP (measured at PPP) less than 15% of the EU or the USA – comparable to the Italian economy www. tukkk. fi/pei/e

Central Territory Population GDP Ind. prod. Oil prod. Exports Imports FDI 4% 25% 33% 23% 0% 32% 53% 56% Southern Territory Population GDP Ind. prod. Oil prod. Exports Imports FDI 3% 15% 8% 6% 3% 4% 6% 5% Source: Goskomstat Russia’s 7 federal districts North West Territory Population GDP Ind. prod. Oil prod. Exports Imports FDI Siberian 10% 10% 12% 4% 9% 20% 8% Territory Population GDP Ind. prod. Oil prod. Exports Imports FDI 30% 14% 11% 12% 3% 11% 6% 1% Volga Territory Population GDP Ind. prod. Oil prod. Exports Imports FDI 6% 22% 18% 23% 22% 17% 7% 5% Ural Territory Population GDP Ind. prod. Oil prod. Exports Imports www. tukkk. fi/pei/e FDI 11% 9% 15% 19% 67% 24% 5% 7% Far Eastern Territory Population GDP Ind. prod. Oil prod. Exports Imports FDI 36% 5% 5% 5% 1% 4% 3% 18%

Economic living standard (2003 at PPP) Source: CIA World Factbook www. tukkk. fi/pei/e

7 bad years and 7 good years - how fast the economy grows in the future? (annual real GDP change - %) Sources: EBRD, EIU www. tukkk. fi/pei/e

Glorious past of tele-activity in Russia n 1850 n 1879 n 1895 n 1911 construction of first telegraph first telephone call invention of radio by A. Popov first demonstration of a TV picture in the world www. tukkk. fi/pei/e

ICT development after the Czar period n Absolute decline: Russia has lost her forerunner position in the ICT sector (due to the stagnant Soviet era and less speedy transformation after 1991) n Relative decline: Other economies have developed faster than Russia www. tukkk. fi/pei/e

Russia’s telecommunication sector today (2002) Share of telecomm. in ICT sector Telecommunication share of GDP Employees ~ 70% 1. 8% 1. 7% Fixed capital stock 1. 4% Investments in fixed capital 4. 0% Share of total services provided for inhabitants in Russia Sources: Goskomstat, Solid Invest, ETLA www. tukkk. fi/pei/e 14. 8%

Russia’s telecommunication market ($ bn) Sources: Goskomstat, Solid Invest, ETLA www. tukkk. fi/pei/e

Distribution of sales in telecommunication (2003) Sources: Goskomstat, Solid Invest, ETLA www. tukkk. fi/pei/e

Usage of cellular phones Sources: CNews, Solid Invest, ETLA www. tukkk. fi/pei/e

Russia’s main data transmission lines Sources: Solid Invest, ETLA www. tukkk. fi/pei/e

Internet access Sources: CNews, Solid Invest, ETLA www. tukkk. fi/pei/e

Digital access index (2002) This index measures the overall ability of individuals in a country to access and use new ICTs. It is built around four factors that impact a country’s ability to access ICTs: 1) infrastructure, 2) affordability, 3) knowledge, and 4) quality. Source: International Telecommunication Union www. tukkk. fi/pei/e

Number of ICT-related graduates in Russia (2002) Universities 3554 Of this: Networks 1451 Multi-channel systems 1132 Radio, broadcasting and television 686 Other 285 Technical schools 5851 Of this: Networks 2363 Multi-channel systems Radio, broadcasting and television Other Sources: Goskomstat, Solid Invest, ETLA 1190 512 1786 www. tukkk. fi/pei/e

Production of ICT equipment Equipment PC (1000 units) 1998 1999 2000 2001 2002 62 66 71 136 186 Phones (1000 units) Telephone cables (1000 km) 235 534 783 716 525 60 86 115 154 108 TV sets (1000 units) 329 Sources: Goskomstat, Solid Invest, ETLA www. tukkk. fi/pei/e 281 1116 1024 1980

Sales on ICT market ($ bn) Product 2002 PC Components Integrated systems General-purpose software Custom-made software Total Sources: CNews, Solid Invest, ETLA www. tukkk. fi/pei/e 2003 1. 7 1. 3 0. 8 0. 6 0. 2 4. 7 1. 8 1. 5 1. 1 1. 0 0. 3 5. 8

Main offshore programming centers Sources: Solid Invest, ETLA www. tukkk. fi/pei/e

Russia’s foreign trade of ICT products ($ mn) # HS 8517 Product Electric apparatus for line telephony and line telegraphy Transmission apparatus for 8525 radio-telephony, radiobroadcasting Reception apparatus for radio 8527 telephony, radio-telegraphy and radio-broadcasting 9001 Optical fibers and optical fiber bundles Sources: UN Commodity Trade Statistics, Solid Invest, ETLA 2002 Exports 2003 Imports Exports Imports 15 696 21 697 30 536 29 611 3 135 4 150 14 16 14 21 www. tukkk. fi/pei/e

Russia’s exports of software ($ mn) Sources: CNews, Solid Invest, ETLA www. tukkk. fi/pei/e

Future view n Giant need for information society in a territorially-giant country (e. g. news service, e-government, e-commerce, e-education & training, e-medical services, etc. ) n e. Russia 2002 -2010 –programme: a necessary but not a sufficient step forward (total budget $ 2. 6 bn) n Large investments required (e. g. educational system, R&D, innovation funds, etc. ) n Co-operation with leading foreign corporations, universities, and research institutes needed (e. g. EU-Russian common space of research and education) www. tukkk. fi/pei/e

Some advantages of information society n Improving competitiveness of the Russian economy (e. g. time savings, free information access, increasing quality of decision-making) n Efficient tool for administrative reform (e. g. efficient communication and control system, information transparency, distribution of best practices) n Increasing quality of life, particularly in peripheral regions n Increasing equality between regions and citizens n Increasing unity and stability of the country n Enhancing free information flows (i. e. good for democratic development of the country) www. tukkk. fi/pei/e

Conclusion: Russia – on the way to an information society? Hopefully, Russia is on her way to an information society … not on her way to a formation society with less emphasis on democratic development www. tukkk. fi/pei/e