INSOR Russia: Institute of Contemporary Development
Updated April 1, 2020

Sergey Kulik. Russia: The President’s thirst for technologies

December 20, 2019

(First published: Baltic Rim Economies 5/2019)

What is the most damaging impact of the Western sanctions on Russia? Moscow official statements or dominating experts’ comments prefer rather calming reactions or a list, as short as possible, of their victims – from some foods with higher prices to shortages for some manufacturing needs. Without any specifics about the most suffered.
On October 12, 2016 publicly, at a business conference the Russian President V. Putin for the first time provided such specifics by pointing to technological imports. [1] A reader would not find this acknowledgement on the official Kremlin.ru website, but without any replies from the President’s team it appeared thanks to AFP and then repeated by the Russian official RT TV channel. It seems that afterwards V. Putin has preferred not to recur to such a sensitive subject.
This statement reflected a very high dependence from Western technologies in a wide spectrum – from hardware to know how. Moreover, from the highest level it gave hard evidence that such a traditional dependence on a number of important (if not vital) technologies did play a trick on Russia. It did not stimuli Russian bureaucracy for strengthening scientific and technological base and for reforms much needed for not being on the sideway of the global technological competitiveness. It’s much easier to buy something for money from oil and gas exports than to invent something sophisticated of your own.
The death of the Partnership for Modernization with the European Union during the Presidency of D. Medvedev and before the Ukrainian crisis is one of the key indicators of fantastic inertia in Moscow even on the eve of the new high technological wave. If the EU is mentioned, it should be added that unprecedented positive and deep connections with the EU before 2014 in a number of areas, including important role in technological assistance, provide some arguments about “invisible presence” of the Union with its sanctions in the above statement of the Russian President.
In November 2019 V. Putin joined a discussion about artificial intelligence at the AI Journey conference – the seemingly low-profile event for his presence. But this is just a fresh example: before he showed a frequent involvement in public debates and meetings with his subordinates devoted to technological initiatives. His interest has emerged unprecedented after the first wave of Western sanctions. Along with evident emphasis on growing concerns about Russia’s positioning in the rising global competition for rapidly shifting markets. And with seemingly tardy acceptance of new realities: markets’ transformations promise drastic changes in energy demand what is fraught with shaking the Russian economy in the near future with its reliance mainly on energy exports. These realities, in turn, dictate emergency for adequate responses.
So far the responses are mainly limited with following a line of “turning to the East”, i.e. turn to China (without earlier high expectations of other leaders in East Asia). But this line proves more to be rather “turning from the West”.
Another path has been chosen for accelerated national innovation endeavors supported by substantial financial resources. Setting aside previous rather declaratory “strategies” for innovations and technological priorities the first detailed road map – National Technology Initiative (NTI) – was adopted in 2015 after a one-year energetic preparations. Later it has been supported by several other robust documents.
Under the pressuring demands from the Kremlin to urgently find remedies authors of these responses deliberately or not have ignored at least three things. The first is the degree and scale of Russian dependence on Western technologies, best practices and know-how. So far the so-called import-substitution policy to replace Western high-tech products from Russian sources has widely accepted as failed.
The second concerns limits, both current and foreseeable, of the Chinese potential for the Russian needs. After the first energetic hopes of the “turn to the East” in 2014 there is an obvious emergence of sober assessments of Chinese contributions to demands for technologies.
The third addresses rapid changes in the global distribution of labor, emergence of GVCs along with other global transformations due to the new technological high wave. In simpler terms this means that if you “open the door” to the East sooner or later you’ll have to “open the door” to the West.  Analysis of many projects and tasks in the NTI as well as in some other programs adopted later indicates that without close regional and global cooperation they are hardly feasible.
Russia has to follow more flexible and diversified engagement in international technology and production chains, rather than to stubbornly advertising import-substitution and autocratic approach. This engagement dictates restoration where possible connections with the EU and the Union’s leading members in innovations, Nordic countries in particular.  But this would demand a number of mutual compromises beyond the technologies’ domain.
[1] https:inosmi.ru/economic/20161012/238014635.html

From: https://sites.utu.fi/bre/russia-the-presidents-thirst-for-technologies/