Once a barren land marked only by political tensions, the endless, sparsely populated frontier between China and Russia is now crossed by goods and trade. Today it’s not shocking to see that Siberia is becoming one of the leaders in Russia because the true innovation economy is a bottom-up driven economy. The regions that have allowed their young innovative entrepreneurs to thrive and to grow, and to develop themselves, are naturally going to become the leaders in any emerging innovation economy in Russia.
Over the past 18 months, Russia’s relations with Asia have begun to improve. Both Presidents Dmitri Medvedev and Vladimir Putin have repeatedly pointed to the need for an economic turn to Asia. Dozens of protocols and agreements on new projects have been signed with China. Some are already up and running.
Nevertheless, Russia has yet to devise a long-term and comprehensive Asian strategy. The main force holding Russia back is, to put it bluntly, ignorance. Indeed, for some Russians, any economic movement towards Asia is tantamount to a departure from a European path of development.
There is, of course, no Asian alternative to Russia’s cultural and political orientation towards Europe. But a partial economic reorientation towards Asia does not pose any real risk of disengagement from Europe; on the contrary, over the past two years, Russia has officially made a decisive turn in favor of closer integration with the European Union.
Europe currently accounts for more than 50% of Russia’s trade turnover. But the European market will not grow to any significant extent for the foreseeable future. Europe’s retained wealth and accrued cultural resources will allow the old continent to live in relative comfort in the decades ahead, even if it gradually cedes its position in the production of goods and services. Indeed, Europe is likely to become a tourist and leisure destination for hardworking Asians.
While Russia needs to integrate itself with Europe’s remaining islands of innovation (Germany, above all), it is the growth potential of the Asia-Pacific region that will determine the country’s future. Here, the main partner is China, which Russia now supplies with fertilizers, seafood, timber, nonferrous metals, and increasing volumes of crude oil. Unlike the West, Russia imports from China not so much consumer goods as engineering products. In most industries, head-to-head competition with Asia would be senseless, given Russia’s higher labor costs.
But, if current trends persist, Russia east of the Urals, and later the entire country, will become an appendage of China – a warehouse of resources, and then an economic and political vassal. No “aggressive” or unfriendly effort by China will be needed; Russia will be subdued by default.
There is no immediate geopolitical threat in this situation. Territorial expansion is not a Chinese historical trait, and the two countries have excellent political relations.
But the Chinese are already offering Russia projects that are similar to those that they promote in African states: the development of resources with Chinese money and Chinese labor. Russia must act now to secure a more dignified and beneficial place in a future world order.
That goal requires that Russia rely on its real competitive advantages. Consider basic foodstuffs. Rising food prices plague most of Asia, while Russia’s potential for expanding grain output is enormous. According to some estimates, Russia could increase its arable area by 10 million hectares, and its crop yields by 250%, thereby boosting grain exports dramatically.
But an even larger vision is needed. A modern Asian strategy for Russia – call it “Project Siberia” – should combine Russian political sovereignty with foreign capital and technologies. Investment should come not only from China, but also from the United States, Japan, South Korea, the ASEAN countries, and the EU, all of which are keen to prevent China’s exclusive dominance east of the Urals.
The workforce can be found to undertake the development projects in Russia’s east, including clusters of high-yielding agricultural production for grain, fodder, meat, poultry, pork, and possibly beer. There are still a few million surplus workers in Central Asia. Seasonal workers can be brought in from India and Bangladesh. And, yes, some will have to be brought in from China.
Of course, such a strategy will require highways, bridges, railways, and seaports. (There are practically no grain-export terminals in Russia’s eastern regions, for example.) Some Russians fear that if China is allowed to build these projects, crowds of Chinese will flock into the country. My answer is this: if we stay where we are, like the proverbial dog in the manger, the hay – Russia’s economy – will rot.
The strategy should be to transform Russia’s eastern regions into one of rising Asia’s resource and food bases. Russia’s east should become a provider of relatively high value-added goods, rather than just an exporter of timber, oil, ore, and seafood, as is the case now. Such a scenario would reverse the gloomy demographic and economic trends in Russia’s eastern territories, and would strengthen Russia’s geopolitical position in the process.
What makes Project Siberia so efficient is that it benefits everyone. Russia would maintain effective sovereignty over the eastern territories while creating a new platform for development. China, Asia, and the world would get a new resource and food-supply base, easing emerging shortages. And, last but not least, the vision of peaceful global integration would receive a powerful boost.
Therefore it seems to me absolutely non-surprising that three top regions in Russia, Krasnoyarsk, Tomsk and Novosibirsk, are all based in Siberia. And I believe they are going to create their own analog of Californian Silicon Valley, a very strong innovation clusters system. And perhaps what will emerge is a network of open collaboration between these different cities as exists in different parts of the United States, for example. Silicon Valley is a very long geographically spread out place with different base structures, which are interconnected by human capital and infrastructure and government programs and private programs. So I expect that to develop also in Siberia.
The launch of Internet, one of the biggest revolutions of post war, if not the main, obviously also regarded Russia. According to statistics, the country would include about 46 million internauts in 2010, out of 143 million inhabitants. The rate of Internet penetration would therefore be 30 % and about 22 % Russians would be connected to Internet every day, 9 % at least one time a week. The Russian represent the globe 3 % surfers of today. Russia is besides the second European country after Germany when to the number of users, but would be possible before 2012 become the first.
From 2002 till 2010 the increase to access to the web was exponential, a growth well balanced spread in the country and that is found only in other high growing emerging countries as China (420 million users) India (239 million users) or Brazil (75 million users). These 4 countries, which are also known under the name of the countries of BRIC, should besides before 2015 see their number of users with Internet doubling, attaining 1,4 thousand million linking.
In a country which has been condemned to silence for a long time (under USSR) and of the absence of possibility to freely express opinions, the Russian Internet (or Runet) became in some years one of the main sources of information, but also of expression of the Russians. Runet is one of the main symbols of the opening of Russia and one single visit and the reading the contain of many blogs allows to understand that the Russian web is one of the most open on the planet. According to the information site Metrica.ru the daily audience of the Russian Internet attained 38 millions for example in November, 2010.
The Russian blogosphere is literally blowing up these last years. The Russian-speaking Internet today has about 30 million blogs, one, and their influence would not cease to grow in Russia, those beeing more and more referred by traditional media (6.000 times in 2010 against 30 times in 2005). For number of analysts, the Russian blogosphere could in the coming years overtake traditional media. Currently, the internauts share mainly between two main social networks, Vkontakte and Odnoklassniki.
It is necessary to underline a feature of Runet, that just to be very orientated to “Made in Russia“ The audience of these two sites is very strongly concentrated in the age bracket of 20 - 35 years what puts them at the moment far in front of the American Facebook in terms of subscribers. Besides the Russians are the world leaders of time passed on social networks, far in front of the Brazilians! Even the planetary leader of research engines, the American Google, does not break through in Russia since more than 60 % of online researches are done through Yandex search engine against 20 % for Google.
Last year many business created Buzz on Internet in Russia, which is thought of protests for the floods, with the Presidential elections and lately with the Pussy Riots trial or else during tragic fires of last summer. In each of cases, blogueurs investigated, commented, relieved, and indeed made live information, so that it is not forgotten and offer a way to act.
One of the strongest reaction was visible during the las presidential election which managed to mobilize hundreds of thousand people. A reaction completely surprising and interesting for a Russian society which many commentators think too passive facing the tide of history.
Internet, via Youtube is notably used by Russians, who want to communicate, or to get messages at the highest level of the state. The case of the policeman Dymovskiqui had made a video message to report corruption in the police. Lately a very strong Internet activity due to the Pussy Riots affair allowed the participants to demonstrate, to meet fast, to get organised, but also to get number of messages considered extremist.
The pulse towards this new media is not, as many people want to let it think, peculiar to Russia where media would be locked, but a generation and global movement. In Russia, the former president Medvedev was among the most famous of the bloggers, since this one opened his own blog on the platform Live Journal (the main platform of blogs in Russia) and this one counts from now on more than 200.000 subscribers.
Proof of the dynamism of the Internet front in Russia, the possibility of depositing domain names from now on in cyrillic so to spread more widely Internet and increase the penetration on the territory, through populations which do not manage Latin alphabet.
Finally, it seems difficult to speak about Internet without speaking about the increasing risk brought by viruses, this malevolent software which pollutes the computers which are not protected. To protect themselves, antiviruses exist, as that of Kaspersky-Lab, a Russian company headquarter of which is in Moscow and which equips more than 300 million computers in the world today. A success-story " Made in Russia " begun in 1997 and which registers perfectly in the themes of modernisation which encircle the development of today's Russia.
Russia Ranked 3rd for Online Sales Potential
27 June 2012
The Moscow Times
With its expanding base of Internet users, Russia ranks third among emerging markets with the highest potential for online sales growth, with more retailers placing bets on its $9 billion market for electronic commerce to develop business, a consulting company said in a survey.
Russia boasts 60 million Internet users – the largest online population in Europe – and 15 million online shoppers, making it the most attractive market for online retail sales after China and Brazil, according to the survey by A.T. Kearney released late last Monday.
The size of the country's market for online retail is expected to reach $16 billion by 2016, with domestic retailers like grocery chain X5 Retail Group launching websites for online purchases, and foreign companies like Spanish apparel maker Mango committed to developing online trade in the country, the survey said.
The ranking of 10 emerging markets also includes Chile, Mexico, United Arab Emirates, Malaysia, Uruguay, Turkey and Oman.
But the survey also said that unlike many of its peers on the list, Russia has yet to address a number of issues like poor financial infrastructure, regulation and logistics problems to ensure sustainable growth of online sales across the country, with 70 percent of the sales still concentrated in Moscow and St. Petersburg.
"Russia's e-commerce market is hampered by poor digital consumer protection laws and active, regular censorship of digital content, so the key to growth is building trust with Russian consumers," the survey said.