1. www.tukkk.fi/pei/e Russia - On the way to an information society? Prof. Kari Liuhto Director Pan-European Institute (PEI) Turku School of Economics and B. A. www.tukkk.fi/pei/e The Annual Conference of the Club of Rome Teliasonera / Futurium Helsinki11.10.2004

2. www.tukkk.fi/pei/e Russia – geographically giant but economically medium-sized Some 17 mn square km – some 4 times of the EU25 and twice the US territory Some 17 mn square km – some 4 times of the EU25 and twice the US territory The Russian GDP (measured at PPP) less than 15% of the EU or the USA – comparable to the Italian economy The Russian GDP (measured at PPP) less than 15% of the EU or the USA – comparable to the Italian economy

3. www.tukkk.fi/pei/e Russia’s 7 federal districts Source: Goskomstat North West Territory10% Population10% GDP10% Ind. prod.12% Oil prod. 4% Exports 9% Imports20% FDI 8% Southern Territory 3% Population15% GDP 8% Ind. prod. 6% Oil prod. 3% Exports 4% Imports 6% FDI 5% Volga Territory 6% Population22% GDP18% Ind. prod.23% Oil prod.22% Exports17% Imports 7% FDI 5% Ural Territory11% Population 9% GDP15% Ind. prod.19% Oil prod.67% Exports24% Imports 5% FDI 7% Far Eastern Territory36% Population 5% GDP 5% Ind. prod. 5% Oil prod. 1% Exports 4% Imports 3% FDI18% Central Territory 4% Population 25% GDP 33% Ind. prod. 23% Oil prod. 0% Exports32% Imports53% FDI56% Siberian Territory30% Population14% GDP11% Ind. prod.12% Oil prod. 3% Exports11% Imports 6% FDI 1%

4. www.tukkk.fi/pei/e Economic living standard (2003 at PPP) Source: CIA World Factbook

5. www.tukkk.fi/pei/e 7 bad years and 7 good years - how fast the economy grows in the future? (annual real GDP change - %) Sources: EBRD, EIU

6. www.tukkk.fi/pei/e Glorious past of tele-activity in Russia 1850construction of first telegraph 1850construction of first telegraph 1879first telephone call 1879first telephone call 1895invention of radio by A. Popov 1895invention of radio by A. Popov 1911first demonstration of a TV picture in the world 1911first demonstration of a TV picture in the world

7. www.tukkk.fi/pei/e ICT development after the Czar period Absolute decline: Russia has lost her forerunner position in the ICT sector (due to the stagnant Soviet era and less speedy transformation after 1991) Absolute decline: Russia has lost her forerunner position in the ICT sector (due to the stagnant Soviet era and less speedy transformation after 1991) Relative decline: Other economies have developed faster than Russia Relative decline: Other economies have developed faster than Russia

8. www.tukkk.fi/pei/e Russia’s telecommunication sector today (2002) Sources: Goskomstat, Solid Invest, ETLA Share of telecomm. in ICT sector Telecommunication share of GDP ~ 70% 1.8% 1.8% Employees 1.7% 1.7% Fixed capital stock 1.4% 1.4% Investments in fixed capital 4.0% 4.0% Share of total services provided for inhabitants in Russia 14.8%

9. www.tukkk.fi/pei/e Russia’s telecommunication market ($ bn) Sources: Goskomstat, Solid Invest, ETLA

10. www.tukkk.fi/pei/e Distribution of sales in telecommunication (2003) Sources: Goskomstat, Solid Invest, ETLA

11. www.tukkk.fi/pei/e Usage of cellular phones Sources: CNews, Solid Invest, ETLA

12. www.tukkk.fi/pei/e Russia’s main data transmission lines Sources: Solid Invest, ETLA

13. www.tukkk.fi/pei/e Internet access Sources: CNews, Solid Invest, ETLA

14. www.tukkk.fi/pei/e Digital access index (2002) Source: International Telecommunication Union This index measures the overall ability of individuals in a country to access and use new ICTs. It is built around four factors that impact a country’s ability to access ICTs: 1) infrastructure, 2) affordability, 3) knowledge, and 4) quality.

15. www.tukkk.fi/pei/e Number of ICT-related graduates in Russia (2002) Sources: Goskomstat, Solid Invest, ETLA Universities 3554 Of this: Networks 1451 Multi-channel systems Multi-channel systems 1132 Radio, broadcasting and television Radio, broadcasting and television 686 686 Other Other 285 285 Technical schools 5851 Of this: Networks 2363 Multi-channel systems Multi-channel systems 1190 Radio, broadcasting and television Radio, broadcasting and television 512 512 Other Other 1786

16. www.tukkk.fi/pei/e Production of ICT equipment Sources: Goskomstat, Solid Invest, ETLA Equipment19981999200020012002 PC (1000 units) 626671136186 Phones (1000 units) 235534783716525 Telephone cables 6086115154108 (1000 km) TV sets (1000 units) 329281111610241980

17. www.tukkk.fi/pei/e Sales on ICT market ($ bn) Product20022003 PC 1.71.71.71.7 1.81.81.81.8 Components 1.31.31.31.3 1.51.51.51.5 Integrated systems 0.80.80.80.8 1.11.11.11.1 General-purpose software 0.60.60.60.6 1.0 Custom-made software 0.20.20.20.2 0.30.30.30.3 Total 4.74.74.74.7 5.85.85.85.8 Sources: CNews, Solid Invest, ETLA

18. www.tukkk.fi/pei/e centers Main offshore programming centers Sources: Solid Invest, ETLA

19. www.tukkk.fi/pei/e Russia’s foreign trade of ICT products ($ mn) # HS Product 20022003 ExportsImportsExportsImports 8517 Electric apparatus for line telephony and line telegraphy 15 696 21697 8525 Transmission apparatus for radio-telephony, radio- broadcasting 30536 29292929 611 8527 Reception apparatus for radio- telephony, radio-telegraphy and radio-broadcasting 3135 4 150 9001 Optical fibers and optical fiber bundles 14 16 16 16 16 14141414 21 21 Sources: UN Commodity Trade Statistics, Solid Invest, ETLA

20. www.tukkk.fi/pei/e Russia’s exports of software ($ mn) Sources: CNews, Solid Invest, ETLA

21. www.tukkk.fi/pei/e Future view Giant need for information society in a territorially-giant country (e.g. news service, e-government, e-commerce, e-education & training, e-medical services, etc.) Giant need for information society in a territorially-giant country (e.g. news service, e-government, e-commerce, e-education & training, e-medical services, etc.) eRussia 2002-2010 –programme: a necessary but not a sufficient step forward (total budget $ 2.6 bn) eRussia 2002-2010 –programme: a necessary but not a sufficient step forward (total budget $ 2.6 bn) Large investments required Large investments required (e.g. educational system, R&D, innovation funds, etc.) Co-operation with leading foreign corporations, universities, and research institutes needed Co-operation with leading foreign corporations, universities, and research institutes needed (e.g. EU-Russian common space of research and education)

22. www.tukkk.fi/pei/e Some advantages of information society Improving competitiveness of the Russian economy Improving competitiveness of the Russian economy (e.g. time savings, free information access, increasing quality of decision-making) Efficient tool for administrative reform Efficient tool for administrative reform (e.g. efficient communication and control system, information transparency, distribution of best practices) Increasing quality of life, particularly in peripheral regions Increasing quality of life, particularly in peripheral regions Increasing equality between regions and citizens Increasing equality between regions and citizens Increasing unity and stability of the country Increasing unity and stability of the country Enhancing free information flows Enhancing free information flows (i.e. good for democratic development of the country)

23. www.tukkk.fi/pei/e Conclusion: Russia – on the way to an information society? Hopefully, Russia is on her way to an information society … not on her way to a formation society with less emphasis on democratic development