Medvedev modernisation programme

Background

After the near total collapse in 1998, the Russian economy recovered as a result of high oil prices during the presidency of Vladimir Putin, but remained heavily dependent on energy and raw material exports. In the first decade of the 2000s, global oil prices kept rising, fuelling economic growth. Medvedev later stated his belief that this was not only a boom, but also damaging to the Russian economy, saying that if the oil price is too high, "we’d never change the structure of our economy... We haven’t done anything in the last 10 years because oil kept rushing higher and higher."

There had been repeated calls for a more diversified economy under Putin; already in 2005, Putin's Prime Minister Mikhail Fradkov warned about the dependency of the economy on raw material exports, and in 2007 Deputy Prime Minister Sergey Ivanov said that without diversification, the Russian economy will sooner or later face a collapse. Dmitry Medvedev, elected as President in 2008, made economic modernisation his prime presidential agenda. Medvedev's statements regarding this issue went much further than other statements by the Russian leadership. In 2009, Medvedev founded the Presidential Commission on Innovation. The commission comprises almost the entire Russian government and some of the best minds from academia and business.

"Go Russia!"

Medvedev outlined his programme in an article called "Go Russia!" that was published online in September 2009. In the article, he formulated his strategic objective of modernising Russia. He criticised Russia's economic "backwardness" and what he called Russia's "humiliating" dependency on oil and raw materials. He described the Russian society as "archaic" and "paternalistic" and said that the country can no longer rely on the achievements of the past to secure a prosperous future. In Medvedev's view, Russia should aim for a modern, diversified economy based on high technology and innovation. Medvedev criticised the previous attempts to modernise Russia—those initiated by Peter I the Great and the Soviet Union—saying that the results they brought came at too high a cost, and this time modernisation must come not through coercion but via the development of the creative potential of every individual, through private entrepreneurship and initiative.

Medvedev identified five key areas for economic modernisation, in which breakthroughs must be achieved:

Medvedev further discussed and publicised his programme in his second state of the nation address in November 2009, as well as in a televised speech in December 2009.

Efficient use of energy and resources

Currently the energy intensity of the Russian economy is estimated to be about 2.5 times more than the world average. The government set an aim of 40% decrease of the energy intensity by 2020. It is estimated that the main potential of achieving this aim lies within the housing sector and the budget organisations. The following state projects are initiated to increase the energy efficiency:

Nuclear technology

Russia was the first country to develop civilian nuclear power and to construct the world's first nuclear power plant. Currently the country is the 4th largest nuclear energy producer. Russia has a strong industrial and scientific base in the area of nuclear technology, but much needs to be done for the full use of the technological potential that had been amassed in the Soviet era. Nuclear power in Russia is managed by Rosatom State Corporation. The sector is rapidly developing, with an aim of increasing the total share of nuclear energy from current 16.9% to 23% by 2020. The Russian government plans to allocate 127 billion rubles ($5.42 billion) to a federal program dedicated to the next generation of nuclear energy technology. About 1 trillion rubles ($42.7 billion) is to be allocated from the federal budget to nuclear power and industry development before 2015. The programme aims to establish secure, cheap, and long-term nuclear energy supply in Russia as well as increase Russian exports of nuclear energy and technology abroad. Besides construction of the new nuclear power plants in Russia and elsewhere, the following major state projects have been initiated in the area of nuclear technology:

Information technology

The recent decade saw a rapid spread of information technology in Russia. Over 42% of population in Russia have personal access to the Internet, and all schools and universities were provided Internet connection by 2007 as a part of the National Priority Project in Education supervised personally by Dmitry Medvedev, then vice-Prime Minister. Russia is a leading developer of software and the country enjoys a large amount of IT talent. Russian youth dominate international technology competitions like the ACM International Collegiate Programming Contest, where Russian universities have won five of the last ten contests. Despite this, Russia faces a shortage of IT specialists due to high demand. In 2009 Russian companies employed more than 1 million IT specialists, making up 1.34% of the country's workforce. However, the figure is lower than in some other major economies, such as the United States (3.74%), United Kingdom (3.16%), and Germany (3.14%).

The government puts much effort into development of the information society in Russia. The following major state projects are currently realized or planned in the area of information technology:

Space technology and telecommunications

Currently the country is the largest satellite launcher and the only provider of transport for space tourism services. However, much of the potential achieved in this area still awaits large-scale commercialisation. This can be achieved by the combination of space technology and telecommunications. The following state projects have been initiated in this area:

The funding of Russian Federal Space Agency Roscosmos has almost tripled from 2007, standing at $3.1 billion in 2011. President Medvedev and the modernisation programme is credited with the increase.

Medical technology and pharmaceuticals

Despite a number of achievements, Russia is significantly behind the world leaders in medical technology and pharmaceutical production. The country produces only 20% of the drugs used domestically, while 80% is imported. President Medvedev has said he is confident that Russia can overcome the problem, and has called for a restoration of Russia's pharmaceutical industry, through the principles of mixed financing, both government and private. He has stressed the need for serious investment, saying that hundreds millions of dollars are needed, as well as investment into personnel.

Currently, the specific major state projects in the area of medical technology and pharmaceuticals are not yet defined or announced. The government aims to achieve the primarily domestical production of the most needed types of medical equipment and pharmaceuticals, as well as support the development and commercialization of new innovative products, especially those related to biotechnology, cell and nuclear medicine, and nanotechnology.