=Paper=
{{Paper
|id=Vol-2413/paper11
|storemode=property
|title=
Digital Economy or Manic Digitalization: the Choice of Russia
|pdfUrl=https://ceur-ws.org/Vol-2413/paper11.pdf
|volume=Vol-2413
|authors=Natalia Mamedova,Arkadiy Urintsov,Olga Staroverova,Mikhail Afanasev
}}
==
Digital Economy or Manic Digitalization: the Choice of Russia
==
https://ceur-ws.org/Vol-2413/paper11.pdf
Digital Economy or Manic Digitalization: the Choice of
Russia1
Natalia Mamedova1[0000-0002-8934-7363], Arkadiy Urintsov 1[0000-0003-0273-5134], Olga
Staroverova 1[0000-0003-2605-9417] and Mikhail Afanasev 1[0000-0002-4869-1977]
1
Plekhanov Russian University of Economics, Stremyanny lane, 36, M oscow, 117997, Russia
rector@rea.ru
Abstract. What is the digital economy? The answer can be presented as a result
of the development of the traditional economy, combining the realization of
three directions. The first direction – all data are digitized, the second – ensur-
ing transparency and transparency of data, the third – ensuring inclusiveness of
the economy. In 2017, the Government of the Russian Federation developed
and approved a Program to create conditions for the country's transition to a
digital economy. The ecosystem of the digital economy is based on a number of
areas of a cluster nature, expressed in the aggregate of the planned characteris-
tics of the digital economy. In this paper, the data of analysis and compliance of
the objectives and indicators of the Program to the three basic fairways of the
digital economy are presented. The results of analyzing the proportions of clus-
ters and the dynamics of the implemented activities form an idea of the actual
priorities of the Strategy. This study provides an answer to the question of
whether Russia is moving towards the creation and development of the digital
economy or replacing this activity with maniacal and little-promising digitaliza-
tion. A reference has been searched for verification of the digital economy pro-
jects specified in the Program for the conditions for the transformation of the
economy into a digital one. For this purpose, data of official statistics, ICT De-
velopment Index, Digital Economy and Society Index, Networked Readiness
Index were used. The results of the study do not confirm the trend towards man-
ic digitization of data, but did not reveal significant changes that ensure the in-
clusiveness of the economy.
Keywords: Digital Economy, Digitalization, Government Program, Networked
Readiness Index, ICT Development Index, Graph M ethod.
1 Introduction
What is a digital economy? This can be done as a result of the transformation of the
traditional economy. The first condition is that all data is digitized (accumulation and
processing of data according to the principle of man-machine interaction in the “C2C”
1
The research was supported by grant of President of Russian Federation according to state
support of leading scientific schools (grant № NSh-5449.2018.6).
Proceedings of the XXII International Conference “Enterprise Engineering and Knowledge
M anagement” April 25-26, 2019, M oscow, Russia
2
format), the second is to ensure the transparency and security of data, the third is to
ensure inclusiveness (accessibility) of the economy.
In 2017, the government of the Russian Federation developed a program for the tran-
sition to a digital economy - the Digital Economy Program. In 2019, it became invalid
due to the continuity of the National Program “Digital Economy of the Russian Fed-
eration” (Order of February 12, 2019 No. 195-p). The National Program (hereinafter
referred to as the Program) was adopted with the aim of avoiding duplication of pro-
gram documents in the field of the development of the digital economy.
The program is designed to form a digital economy and includes a number of federal
projects. Characteristics are not an abstractive expression, they are qualitative and
quantitative indicators as of 2024.
Among the most common ambitious indicators, it should be noted that at leas t 10
successfully competing world leaders, as well as at least 500 successfully operating
digital platforms and at least 500 successfully operating small and medium enterprises
in the field of creating digital technologies and platforms and providing digit al ser-
vices .
The study presents data, goals and indicators that allow you to find out whether the
selected trends can lead to results that transform the traditional economy into a digital
one. The hypothesis is the statement that the results of the analys is of the proport io n s
of clusters and total costs form an idea of real priority programs. This study answers
the question of whether it is a question of the existence of economic and economic
activity.
2 Materials and Methods
In Russia, until 2012, the IT industry developed under the usual market laws under
the conditions of the compensatory mechanism of state regulation and control. Since
2012, the situation has changed dramatically, as experts note - the era of unprecedent-
ed attention to the IT industry from the state began [1, 2]. With the adoption of the
Program, Russia became one of the countries that focused their policies on creating
the conditions for the transition to a digital economy.
The starting point of the study is the position of the report o f the Organization for
Economic Cooperation and Development (hereinafter - the OECD), according to
which “Digital economy is an economy in which value added is created using digital
(information) technologies. It functions due to the connection and depende nce of
online economy and offline economy. At the same time, its development is deter-
mined by “smart data” [3]. Hence we formulate the thesis that the level and dynamics
of the process of digitalization of the economy is determined by the level and dynam-
ics of the value added indicator.
In the Program, digital economy is represented by 3 levels:
− markets and sectors of the economy (areas of activity) - in Russia the empha-
sis is on such areas as energy, transport, industry [4];
− platforms and technologies, where competencies are formed for the devel-
opment of markets and sectors of the economy (fields of activity) - special
3
attention is paid to so-called cross-cutting digital technologies (technologies
used in various fields of activity);
− an environment that creates the conditions for the development of platforms
and technologies (covers regulations, information infrastructure, personnel,
and information security).
The last two levels are recognized as the basis for the application of the regulatory
mechanism of public administration, the program is focused on them. Although here
lies a certain contradiction. After all, the most ambitious (equally -labor-intensive)
indicators of the Program include indicators that cannot be formed without entrepre-
neurial initiative and outside entrepreneurial activity, using mainly the regulatory
mechanism.
The key federal projects (hereinafter referred to as projects), within which the condi-
tions for the development of the digital economy are created, are designated:
1. Ecosystem of the digital economy (regulatory regulation of the digital envi-
ronment and digital public administration).
2. Personnel and education.
3. Digital technologies (formation of research competencies and technological
groundwork).
4. Information infrastructure.
5. Information security.
All five of these projects are needed to create an economy in which data in digital
form is a key factor in production. The program is calculated until 2024 and provides
for specific indicators specified in the Program’s passport.
It is required to solve the problem of verifying digital economy projects specified in
the Program to the conditions for transforming an economy into a digital one. To do
this, it is necessary to compare the planned indicators of the Program with a condi-
tional benchmark, objectively reflecting on a global scale the level and dynamics of
digitalization of the economy. To determine this benchmark, several statistical indica-
tors and indices were studied. The data on the development of information and com-
munication technologies (hereinafter referred to as ICT) were taken as the basis, since
it is with this sector of the economy that all the elements of the Program are connect-
ed.
3 Results Of the Study
In Russia, data on the development of the ICT sector can be obtain ed from a variety
of statistical indicators. The main sources of statistical data are the data of Rosstat [5]
and HSE [6]. Let us illustrate, for example, significant statistical indicators - indica-
tors of value added growth (Table 1), which is consistent with the previously ad-
vanced thesis that the level and dynamics of the digitalization process of the economy
is determined by the level and dynamics of the value added indicator.
Table 1. Indicators of value added.
Year
Data source Name of the indicator 201 201 201
5 6 7
4
Rosstat (Monitor- The share of high-tech and
ing the development knowledge-intensive indus-
of the information tries in GDP, in% 21,3 21,6 21,6
society in the Russian
Federation)
Rosstat (Infor- Share of domestic expendi-
mation Society) tures on research and devel- 1,39 1,36 1,36
opment in GDP, in%
Rosstat (Science Internal expenditures for
and Innovation) research and development 745 779 813
(information and telecommu- 55,8 32,0 90,7
nication systems), million
rubles
Statistical collec- The ratio of the growth rate
tions HSE (Science. of domestic spending on re-
-0,1 -0,2 2,6
Technology. Innova- search and development to the
tion) growth rate of GDP, in%
Statistical collec- Share of ICT sector in
tions of the HSE (Dig- GDP,% 2,7 2,6 2,7
ital Economy)
Using statistical data, it is necessary to take into account the difference in the calcula-
tion methodology - Rosstat data is based on the OKVED classifier, HSE data is based
on the OECD standard [7]. To form a complete picture, you need to be patient and
consistently look for indicators that are directly or indirectly related to the Program
among a multitude of indicators calculated for the Russian Federation and the subjects
of the Russian Federation; by types of economic activity; by industry; in priority are-
as; for socio-economic purposes and other classification criteria. Therefore, we con-
clude that it is inexpedient to use indicators of official statistics as a reference for
verifying the digital economy projects specified in the Program for the conditions for
transforming the economy into a digital one. The reasons for this conclusion are the
following: excessively labor intensive work; the lack of a unified method of calcula-
tion; difference in the scale of statistical sampling.
The next option in defining the benchmark was the ICT Development Index (IDI).
The ICT Development Index (IDI) is an index published by the International Tele-
communication Union of the United Nations (ICT) based on combined ICT indicators
[8]. It is a standard tool for benchmarking the most important indicators of the devel-
opment of the information society and measuring the digital divide, comparing ICT
indicators within and between countries. The ICT Development Index is based on 11
ICT indicators grouped into three subindexes: Access to ICT (Access subindex), Use
of ICT (Use subindex), Practical skills to use ICT (Skills subindex). The rating data of
the Russian Federation on the ICT Development Index (IDI) are presented in Table 2.
Table 2. The place of the Russian Federation in the ranking (ICT Develop-
ment Index).
Year 2012 2013 2014 2015 2016 2017
Position in rating * 41 (166) 42 (166) – 45 (167) 43 (175) 45 (176)
5
* in parentheses are the number of countries participating in the ranking
The index is calculated according to a standardized method, which is reduced to a
single criterion, is global in nature, and can be used for comparative analysis at the
global, regional and national levels. These benefits are unconditional, however, the
meaningful coverage of subindexes is limited to indicators related to access to ICT,
the use of ICT, as well as practical knowledge of these technologies by the population
of countries covered by the study. In the Program under study, only a part of the indi-
cators can be correlated with the indices of the subindexes. This leads to the conclu-
sion that it is inappropriate to use the ICT Development Index as the required stand-
ard for verifying the digital economy projects specified in the Program for the condi-
tions for transforming the economy into a digital one.
Another index considered as a benchmark was the Digital Economy and Society In-
dex (DESI). This is a composite index that summarizes the relevant indicators on the
effectiveness of digital technologies in Europe and tracks the evolution of EU mem-
ber states in the field of digital competitiveness. The Digital Economy and Society
Index (DESI) is a composite index that summarizes about 30 relevant indicators of
digital efficiency in Europe and tracks the evolution of EU member states in five main
dimensions: communication, human capital, Internet use, digital integration, digital
public services. Based on the DESI Index, the International Digital Economy and
Society Index (I-DESI) is formed, which measures the performance of the digital
economy of the EU-28 member states and the EU as a whole compared to 17 non -EU
countries using a methodology similar to the DESI index The EU. In particular, the
value of the index for Russia for the period 2013-2016 was 45.7 points on a scale (in
the range from 39.7 to 75.2) [9].
Judging by the profile and components of the DESI Index, it is of interest for this
study. However, the idea of using it as a reference for verifying digital economy pro-
jects had to be abandoned. The reason was that the Index’s methodological tools are
limited to an evaluative component of socio-economic indicators, which can be used
to judge the rate of digitization of data and their use. It does not take into account
other basic conditions for the formation of a digital economy - the inclusiveness of the
economy and ensuring the transparency (security) of data. In addition, the DESI Index
is not focused on a comprehensive assessment of the contribution of ICT to the coun-
try's gross domestic product structure. And this, in turn, contradicts the thesis that t h e
level and dynamics of the digitalization process in the economy is determined by the
level and dynamics of the value added indicator.
The final option for determining the benchmark was the Networked Readiness Index
(NRI). The NRI is a comprehensive indicator reflecting the readiness of the world
economy to use ICT to accelerate development.
The index is published as part of the annual Global Information Technology Devel-
opment Report (Global Information Technology Report). The report for 2016, the
year before the adoption of the Program in Russia, says the following: “We are at the
dawn of the Fourth Industrial Revolution, which represents a transition to a new set of
systems combining digital, biological and physical technologies in new and powerful
combinations. These new systems are built on the infrastructure of the digital revolu-
6
tion.” To assess the willingness of countries to reap the benefits of emerging technol-
ogies and benefit from the opportunities provided by the digital revolution and be-
yond, the NRI Index is used. The rating data of the Russian Federation on the NRI
Index are presented in Table 3.
Table 3. The place of the Russian Federation in the rating (Index of Readiness
for the Network Society).
Year 2012 2013 2014 2015 2016 2017
Position in rating * 56(142) 54(144) 50(148) 41(143) 41(139) –
* in parentheses are the number of countries participating in the ranking
As a justification for the use of the methodology and data of the NRI Index as a refer-
ence for verifying digital economy projects specified in the Program, the conditions
for the transformation of the economy into a digital one will proceed from the follow-
ing provisions:
− indicators of subindexes take into account all the projects of the Program,
which ensures the relevance of correlation of indicators of the Program and
indicators of subindexes;
− the NRI index is formed and used to study the role of ICT in stimulating in-
novation;
− the NRI index measures the ability of countries to use ICT to increase com-
petitiveness and well-being;
− the results of the global rating using the NRI Index show a correlation with
the rating results on the Information and Communication Technology Devel-
opment Index (ICT Development Index) and correspond to the trends rec-
orded in the OECD report “Prospects for the Digital Economy” [7];
− the metadata that forms a number of indicators of subindexes are consistent
with the indicators of value added (in particular, ROIC, EVA, IRR [10]),
which makes it possible to use them to calculate and evaluate the dynamics
using the B. Stewart formula [11].
The framework translates into various main categories (su bindexes), 10 subcategories
(pillars), and 53 individual indicators distributed across the different pillars.
To establish the correspondence between the NRI Index indicators and Program indi-
cators, we use the graph construction method. Having labeled each of the 53 indica-
tors with the vertices of the graph, we will connect them with the vertices correspond-
ing to each of the 12 indicators of the Program, distributed over 5 projects. Since the
number of vertices and edges of the graph is expressed by a finit e set, the decision on
the connection of the vertices was made on the basis of combinatorial estimation,
analysis, and enumeration of variants [12].
To indicate on the graph of program indicators, we use the classification presented in
the passport of the National Program “Digital Economy of the Russian Federation”.
To designate the NRI Index indicators, we use the classification of the original data
set methodology (The Networked Readiness Index Historical Dataset © 2012-2016
World Economic Forum).
The results are presented in Figures 1-5.
7
Fig. 1. Graph for the project of the Program “Ecosystem of the digital economy”
Fig. 2. Graph for the project of the Program “Personnel and Education”
8
Fig. 3. Graph for the project of the Program “Digital Technologies”
Fig. 4. Graph for the project of the Program “Information Infrastructure”
9
Fig. 5. Graph for the project of the Program “Information Security”
Construction of the graph performs the following tasks:
− reveals a qualitative relationship between the NRI Index indicators and the
Program indicators, verifying the contribution of each Program indicator to
the change in the values of the indicators and the final values of the NRI sub-
indexes;
− defines “growth points”, “gap” and “bottlenecks” in the implementation of
the Program to find the optimal solution for combining regulatory measures
affecting the decision making and execution process;
− makes it possible to organize the vertices of the graph by checking the op-
tions for decomposition or aggregation of the graph with the prospect of
clustering of Program indicators.
Conducting a correlation and regression analysis to confirm and determine the nature
of the relationship between the vertices of the graph is a natural continuation of the
course of the study, but is not presented in this paper.
4 Findings
The tree structure of the graph demonstrates the multiplicity of links for Program
indicators that ensure the growth of NRI Index indicators. The presence of a connec-
tion from one indicator to several indicators of the Program (which is one of the char-
acteristics of the constructed graph) indicates a possible synergistic effect achieved
through the implementation of the indicators of the Program. From the perspective of
long-term planning, this effect can be considered as a justification for the implementa-
10
tion schedule of the Program’s activities. The absence of null-graphs indicates that the
effect of the implementation of each indicator of the Program can be transposed into a
positive trend of the corresponding subindex.
All the presented conclusions lead to the conclusion that the projects of the Program
implemented as a whole can lead to results that transform the traditional economy into
a digital one. Thus, we can say that the content of the Program corresponds to its pur-
pose.
However, besides the content of the Program, there is also a context that, ultimately,
will determine which of the three conditions for the transformation of the economy
will become a driving force for Russia. The scale of the Program’s indicators suggests
that an inclusive economy has been chosen as the locomotive. At the same time, the
activities of the Program in the period 2017-2018 were mainly aimed at the formation
of a legal field and information infrastructure. This corresponds to another condition -
ensuring transparency and data security - reflected by the IDI and NRI indicators,
which to a large extent ensure Russia's place in the ratings even today. And since the
installation basis created in this way cannot lead to a noticeable increase in the posi-
tion of the state in the NRI rating, changes in the rating can be expected after 2019.
Then the structure of the formed graph can answer the question, at the expense of
which context of the Program the changes were made.
The trend to manic digitization of data does not confirm the results of the study, but
did not reveal any significant changes that ensure the inclusiveness of the economy.
World practice shows that the IT industry itself is self-sufficient and independent.
Therefore, it is important for the state to maintain the regulatory trend in the “support-
ing” and “stimulating” regimes. The change in the regulatory trend to “total control
over the national zone” in the context of the cross -border nature of the digital econo-
my will lead to the fact that such directions of development as import substitution and
support for IT exports cannot be implemented in principle. Government control over
the development of the digital economy should function within the framework of
ensuring national legislation and to ensure national security without violating the
principle of inclusiveness of the economy.
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