Competing in the Digital Age: Policy Implications for the Russian Federation

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This report examines the role of emerging technologies in digital transformation and the policy responses to the disruptions they cause across a broad spectrum of economic activity. The report analyzes the successes and challenges of digital transformation in Russia and develops recommendations to help policy makers accelerate the pace of digital transformation across the main sectors of the Russian economy.


"We live in an era of digital transformation. Digital technologies, the data they generate and the connections they enable are changing the way we live, learn, work and play, plan, think and make decisions. The accelerating pace of technological change is not only increasing risks and threatening established business models, but also creating new opportunities at all levels of government, business and social development."
Jane Treadwell
Jane Treadwell
Practice Manager, Digital Development

The opportunity to gain dividends from today’s digital transformation is ten times that of the Internet era. Russia's technical breakthrough will be centered on digital disruption that enables exponential growth. But in order for this breakthrough to occur, change needs to quickly take place in the following areas:

  • While the Russian government has succeeded in digitally transforming its client-facing, front end services, it now needs to focus on back-end transformation based on applying digital technologies to government operations. Data analytics, artificial intelligence, and other emerging technologies will transform the business of government and enable a greater focus on citizen participation, education and healthcare.
  • Russian businesses are moving too slowly, especially in traditional sectors. As such, digital transformation must be enforced in large traditional enterprises and SOEs, which would create demand for innovation in their respective ecosystems. Sectoral and cross-sectoral digital platforms, which grow into seamless horizontal digital ecosystems, enable the emergence of new business models, innovation and private sector competitiveness.
  • Digital innovation and entrepreneurship are key to sustained technological leadership. Close horizontal ties between government, business and academia in the innovation ecosystem are critical. Equally important is access to capital, local demand for innovation, new (technical and non-technical) skills for the digital age, and a cultural shift toward collaborative, open communication.

All of these factors combined will determine Russia’s competitiveness benchmarked against the speed of digital transformation.

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Testimonials

Bruno Lanvin
Executive Director for Global Indices
INSEAD

The World Bank’s Russia Digital Economy Report "Competing in the Digital Age: Policy Implications for the Russian Federation” makes a timely contribution to the discussion of strategies and decisions that are most urgently required to shape Russia’s digital future. By exploring a broad range of international best practice, this action-oriented report provides an array of recommendations that enable the Russian government, business and citizens to take practical steps to steer their country towards digital excellence. By highlighting both the changes needed at the non-digital level of the Russian economy, as well as those required to accelerate transformation on the digital front, the Report points to urgent challenges and exciting opportunities. By emphasizing the successes already achieved in Russia in several key areas, it conveys a clear message that building on success can be a safe and exciting course to follow. As a founder of the Network Readiness Index (NRI/GITR), Global Innovation Index (GII) and Global Talent Competitiveness Index (GTCI), I am naturally excited to see the prominent role that the report attributes to open innovation and talent development as key pillars of digital transformation. The authors of this seminal report deserve to be congratulated for the facts-based, future-oriented approach they have successfully applied and for the truly broad vision that they have developed. I have no doubt that the recommendations provided in this report will enhance Russia’s ability to turn its tremendous digital potential into spectacular digital success.

Pekka Sivonen
Executive Director, Digital Transformation of Finnish Industries
Finnish Innovation Agency Business Finland

Congratulations to everyone who contributed to the creation of World Bank Russia Digital Economy Report "Competing in the Digital Age: Policy Implications for the Russian Federation. The report is an absolute must-read to anybody interested in digital transformation of society, government or private business. We live in an age of the rapid emergence of new digital data-driven business-models that transform our everyday lives and blur borders between societies and businesses alike, connecting everything to everyone, and digital infrastructure becomes critical to social development. Russia is well-positioned to address the challenges of the digital age.

Dinand Tinholt,
Vice President, Global EU lead and Head of AI Strategy and Operations,
Capgemini Invent

This Report provides a thorough and valuable analysis of the state of play of Digital Transformation in the Russian Federation. It clearly highlights that much progress has already been made yet a great amount of potential remains to be unleashed. The Report emphasizes the importance of not only technological infrastructure but also other key aspects such as skills, leadership and organizational change.

Elias G. Carayannis,
Ph.D. Professor of science, technology, innovation and entrepreneurship
School of business, George Washingtion University, Washington, DC

The World Bank Russia Digital Economy Report, "Competing in the Digital Age: Policy Implications for the Russian Federation” is a well-written analysis of the challenges and opportunities Russia is facing at the nexus of the real economy and the Internet-of-Things universe. It follows the 20-year- long transformation Russia has gone through from a post-Soviet economy to a truly advanced emerging knowledge society prepared to address the challenges of the 21st century. Global best practices and challenges at the national level are well-outlined and proper recommendations are made.

Gwanhoo Lee,
Ph.D., Professor of Information Technology and Analytics,
Kogod School of Business, American University, Washington, D.C.

The World Bank’s Russia Digital Economy Report, “Competing in the Digital Age: Policy Implications for the Russian Federation”, is an impressive publication that provides important analysis, fresh insights and specific policy advice for building a strong digital economy in Russia. Using the World Bank’s emerging Digital Economy Country Assessment (DECA) methodology, the report offers an in-depth analysis of the strengths and weaknesses of the Russian digital economy. Importantly, the report applies global best practices to local challenges and presents well-thought-out policy recommendations.
I am confident that the report will benefit not only policy makers but also business leaders, consumers, and citizens alike as it touches on a broad range of issues including digital platforms, digital transformation, innovation, entrepreneurship, and digital skills. The report is a remarkable accomplishment resulting from a global collaboration between the World Bank, the Russian government, and global and local experts.