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The Role of Human Capital in Building a Digital Economy

May 29, 2017, 18:01 UTC+3

Jointly with the Internet Initiatives Development Fund (IIDF)

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The increase in data transfer speeds, the wide use of programmable devices, 3D printing, Big Data and new materials have all combined to change the way we live and do business in the next decade or two. This will prompt the labour market to cut iterative operations and extend the scope of application for intellectual and digital skills. The quick pace of change in information and communication technologies poses serious challenges for the Russian educational system, as in order to be part of the global digital economy Russia will not only need IT specialists, but also a plethora of engineers and dozens of fundamentally new professions.

The new technologies will substantially reduce the headcount in many professions before forcing them out of the market for good. Instead, they will require new talent to support digital economy processes.

  • The greatest demand is for IT developers and engineers, along with a wide range of accomplished professionals with developed digital skills.
  • The Western nations are starting to assess the HR inputs required to digitalise a variety of sectors. For example, the UK government estimates that by 2020 it will need to double the number of graduates with engineering and digital skills to 1.86 million people and invest GBP 2.5 billion to meet the demand for scientists, designers and engineers with new qualifications. A similar plan for Russia would require training some 4–6 million new professionals.
  • The standards of digital skills that people have to harness at work or in everyday life are rising by the minute: dealing with e-mails, search engines and online applications will no longer be enough. The developed countries are running nationwide projects to empower people with special IT skills (for example, Computer Science for All in the USA) that embrace general computer literacy and advanced digital competencies. Computer programming is becoming a regular feature on the curriculum for blue collar workers, as most of them will have to deal with numerical control machines. Self-employment is another rapidly spreading social phenomenon predicating the need to incentivise entrepreneurial skills.
  • In many innovation-driven industries the underlying technologies change faster than the state educational system can complete the managerial cycle going from competency planning to graduation. In that context, it is not only the more precise forecasts that are taking the centre stage, but also the implementation of new technologies, including distance learning, a wider use of internships, short-term training modules, etc.

The key performance indicator of the Russian educational system is its ability to meet future demand.

  • Despite the efforts to align the allocation of state-funded education opportunities with the list of in-demand professions and close inefficient universities, there is still an all too obvious shortage of engineering professionals in the market brimming with lawyers and economists. Last year, Dmitry Voloshin, Head of Research and Education at Mail.Ru Group, said "the most popular profession in Russia today is the civil servant, while IT specialists only rank 7th. Given the demographic crisis, the labour shortage will only get worse".
  • The current educational system is inadequate to the market needs, with just 55.3% of the employees doing the jobs they were trained for. This percentage is much higher in the IT sector, though, as it stands at 81.9% (Rosstat).

The Government is working to put in place new benchmarks for its human capital policies.

  • In May, the Russian Ministry of Telecom and Mass Communications submitted a new state programme Digital Economy in Russia for approval by the relevant Government agencies. Under this programme, Russian universities are expected to train some 60,000 IT professionals by 2020, bringing that number to 100,000 by 2025.
  • On top of that, the Government is planning to develop a regulatory framework governing distance learning in Russia.
  • Since 2015, the following professions have been on the Government's list of specialists playing the key part in the country's upgrade: IT, nanotechnologies, energy, transport and space systems, and information security.
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