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Russia’s winning strategy in the Eastern and Western digital race

CHALLENGES:

  • Low share of digital economy in Russia’s GDP

“It is really sad, but Russia’s at 3%, its digital economy is at 3%, while in the UK, for instance, it is at 7%,” said Shlomo Weber, Rector, Academic Head, Center for the Study of Diversity and Social Interactions, New Economic School.

  • Underdeveloped entrepreneurship culture in Russia

“People must understand the economics, finance, management components, which, historically, have not seen sufficient development in Russia. And there is even a lack of understanding that no progress is actually possible without these capabilities and skills,” added Shlomo Weber.

“It’s a little bit shocking the way I say it, but Russian companies are afraid to fail. They are not risk-taking. That’s the issue, it’s a cultural difference,” said Stephen Brobst, Chief Technology Officer, Teradata.

  • Challenging logistics

“For example, we have ten time zones, which is a huge challenge in terms of logistics. Another challenge is a lack of adequate transportation infrastructure in some parts of the country,” said Pavel Eyges, General Director, Open Mobile Platform.

SOLUTIONS:

  • To support new businesses

“In our view, new infrastructure capabilities are needed, which, while being a product, could also attract new producers and new solutions, encouraging new businesses to emerge around it,” said Pavel Eyges.

“Even within large companies – you have got the resources, and failures should be part of the learning. If you look at, for example, Jack Welch from GE, he is very famous for saying that innovation is about fast and cheap failure and learning from each one of those failures. <…> It is an issue of risk-taking,” said Stephen Brobst.

“The final success metric is, do we grow great, brand-new, world-class companies? The goal is not that the Microsofts of the world, which will prosper under any of the scenarios, survive or grow, but it is that there are new companies that come online and solve new problems and build great companies. But I want to emphasise that it typically works <…> not by copying so much as building on your own strengths,” said R. Preston McAfee, Corporate Vice President, Microsoft.

  • To build digital economy hubs powered by universities

“We need to use universities, the great universities of our country, <…> not replicate the Silicon Valley. I would choose a path of creating centres of excellence  based on the following triangle: university/students, industry and municipal participation,” said Shlomo Weber.

  • To effectively use the available potential, first and foremost the talent pool

“It is about not having to invent everything yourself. I think that the open source software development is a good example of that. We do not have to create everything new,” said Stephen Brobst.

“In Russia, there are about 150,000 hard science people and engineers graduating every year. And there is a similar amount graduating in the more liberal arts and soft and human sciences. <…> Maybe that is a pool of talent that Russia can use to leapfrog into the digital age. <…> I believe that there is a fantastic opportunity there,” said Edwin Van der Ouderaa, Global FS Digital Lead, Accenture.

“The talent. <…> We see really outstanding talent in Russia in areas like mathematics, engineering, IT, science and technology. I think this is an asset that not many other markets have,” said Markus Borchert, Senior Vice President, Market Europe, Nokia.