Advancements in IT and digitisation lead to higher standards of living, services, etc., with key focus areas including the mobile economy, the Internet of Things, the information economy and the intelligent ecosystems (smart cities, healthcare, transportation and education). To unlock the potential in each of these areas, the Government needs to put in place effective regulatory and legal frameworks, ensure security and engage an increasing number of citizens.
Following his address to the Federal Assembly at the end of 2016, Russian President Vladimir Putin instructed the Government and the Presidential Executive Office to develop a Digital Economy programme and have it approved by June 2017.
- A total of eight focus areas are to be developed through 2025, including government regulation, information infrastructure, R&D, HR and education, information security, public administration, smart cities, and digital healthcare.
The Government Expert Council has also endorsed the programme roll-out to other areas such as manufacturing industry, energy, e-commerce, and SME.
- The share of households with broadband access is expected to reach 50% by 2020 and 97% by 2025.
- The number of technology-related patent applications is set to rise by 25% by 2020 and 50% by 2025.
- The share of electronic government services is to reach 50% by 2020 and 80% by 2025.
- The population of cities partaking in the 50 Smart Russian Cities programme is set to increase to 25 million by 2020 and 50 million by 2025.
According to the BCG, Russia now ranks 39th in terms of economy digitisation (based on the data about infrastructure development, online expenditures and activity of online users).
- The Russian Association of Electronic Communications estimates the share of digital economy in the Russian GDP at 2.8% as of 2016.
- 40% of population use online channels to communicate with public agencies, which is roughly in line with the EU figures (46.3%).
Communication services in Russia are becoming increasingly accessible.
- In 2016, Russia was ranked 41st in the Network Society Readiness Index.
- In some of the areas, Russia is leading the way: it ranks 2nd in terms of mobile penetration and 10th in broadband.
- In general, broadband, LTE and 3G penetration in Russia stands at 70% (Federal State Statistics Service), 70% (AC&M) and 95% (Cisco), respectively.
- According to the Ministry of Telecom and Mass Communications, Russia currently has only four urban areas with a population of over 10,000 people that do not have access to fibre optic communication lines.
- GfK estimates that the share of Russia's online community stayed flat last year at 70.4% (84 million people), with the number of online mobile users growing at a breakneck pace (by 6 million people, or 46% of all online users).
- The penetration of fibre optic communications in sparsely populated, remote and hard-to-access localities is still an issue. A special federal project was set up jointly with Rostelecom to address this challenge and combat digital inequality.
In the near term, the following technologies will be the key drivers defining the scope and volume of new markets:
- 5G networks with a speed of up to 10 Gb per second. Major equipment manufacturers are already announcing 5G devices, while mobile operators have disclosed their plans to start preparations and run pilots in 2018.
- The Internet of Things. According to IDC estimates, the IoT market in Russia totals USD 3.5 billion.
- E-commerce. In 1H 2016, the electronic commerce turnover in Russia increased by 23% year-on-year.
- Capitalising on Big Data. Forecast models based on big data to be accumulated in the course of digital transformation will serve to unlock a considerable economic potential.
For example, the Russian Post has aggregated and actively uses 3.5 PB of customer data.
Since 2017, most experts have insisted on viewing the mobile economy as a distinct industry. To that end, the Russian Association of Electronic Communications has undertaken a comprehensive study covering the production and retail sales of equipment and its components, operating systems, mobile and broadband communications, and content development, sales and marketing.
- The study shows that Russia's online mobile economy contributes to 3.7% of its GDP (USD 48.2 billion), while in the next five years it will be growing at an average annual rate of 10.7% creating some 430,000 new jobs.