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Russian Prime Minister Calls for Collaboration for Digital Transformation of Economy

As Russia forges ahead with its ambitious digital transformation strategy, Russian Prime Minister Mishustin points to the integration of public and private efforts appears crucial.

Russia is forging ahead with a digital transformation of its economy.
Credit: Jorge Láscar/Flickr

MOSCOW, RU – In a significant push towards technological independence, Russian Prime Minister Mikhail Mishustin has called upon the nation's industrialists and software developers to join forces. This ambitious initiative aims at creating domestic systems to enhance the life-cycle of products made within Russia. The move, strategic and timely, seeks to foster a self-reliant manufacturing landscape and reshape supply chains towards more 'friendly' nations amidst escalating sanctions from Western countries.


Strategic Planning for Technological Independence


The groundwork for this ambitious endeavor began with strategic planning sessions two weeks ago, culminating in a comprehensive summary released on Tuesday, November 7th.


Prime Minister Mishustin highlighted the directive from the Russian President, focusing on decreasing Russia's dependency on foreign, particularly Western, software.


To achieve this, Russia is actively revising its strategic approach and adopting new pathways for the digital transformation of key sectors.


Public-Private Union: A Path to Innovation


A proposed union between the Russian government and its commercial sector is envisioned to yield highly localized and innovative products while fostering competitive market dynamics.


Mishustin's initial proposal involves collaboration on major projects, where several leading industrial players are already making significant progress in developing advanced industrial and engineering software.


Localization Initiatives in Russian Industries


In 2022, Russia established its industrial centers of competence aimed at developing completely localized software solutions. Currently, about forty projects are underway, supported by Russian government grants amounting to ₽40 billion (US$430 million), supplemented by substantial Russian private equity and other domestic investments.


These efforts target key sectors such as shipbuilding, aircraft manufacturing, the rocket and space industry, the automotive sector, mechanical engineering, motor manufacturing, and railway engineering.


Funding Future Digital Projects


Mishustin disclosed plans for around 200 major projects, requiring total funding of approximately ₽230 billion (US$2.5 billion), predominantly sourced from private investments. Additional government grants from the state budget are expected to exceed ₽25 billion (US$270 million).


Private Sector Financing and Government Support


The development of import-substituting software is slated to be primarily financed by the private sector, with the government contributing through supportive grants.


For the success of these projects, harmonization between the state and businesses on strategic aspects like data exchange format compatibility is crucial. Efforts are underway to establish a standardized concept attractive to business investment.


Challenges in Import Substitution and Data Exchange


Transitioning to a fully localized software solution ecosystem involves revising technological and business processes. Mishustin emphasized the necessity for national-level agreements on data exchange rules and standards, advocating for an integration matrix to streamline interactions across various digital platforms.


Addressing Data Regulation Challenges


Developing cutting-edge digital technologies requires a focused approach to data management. Experts suggest the formation of mechanisms for interaction between data producers and consumers, encompassing processes for data trading, exchange, and enhancement.


Towards a Unified Digital Environment


Despite the strategic discussions, a clear roadmap for a unified digital environment in Russia remains elusive. Maksut Shadaev, head of the Ministry of Digitization, mentioned similarities between Russia's data regulation approach and China's, where data is considered state property.


To avoid top-down imposition of data exchange standards, the business sector needs to proactively participate and influence the setting of unified parameters that align with their best interests.

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