Determining the reasons that prevent Russia from becoming competitive in the knowledge economy by 2025

    27 October 2017

    Insufficient demand for intellectual resources, substitution of education with graduation, ensuring social employment instead of contribution to human capital and lack of conditions for self-realization are the main obstacles on the Russias way from the resource to knowledge economy. This is stated in the study Russia 2025: From Staff to Talents, prepared on the basis of interviews with the heads of the largest Russian employers companies from 22 industries.

    The study was conducted by theBoston Consulting Groupin collaboration withSberbank, Public Join-Stock Company, the Contribution to the Future charity foundation, Worldskills Russia, andGlobal Education Futures.

    The report mentions the United Kingdom, Singapore, Germany, and Japan among the countries that have already entered the knowledge economy. They share a similar structure of the labor market, where an important role is played by people who can work under uncertainty conditions and fulfill difficult analytical tasks that requires improvisation and creativity. The study organizers classify such jobs in the Knowledge category: in the employment structure of advanced countries, their share is not less than 25%; in Russia, only 17%.

    Today, there is no reason to believe that by 2025 our country will be able to catch up with the development level of the employment market in this (leading) group of states, and therefore become competitive in the knowledge economy, the authors of the documents stated, giving 3 reasons to support this thesis.

    Reason No. 1. There is no critical mass of demand for knowledge

    The Russian economy is focused on the use of resources, rather than intelligence. In terms of the attractiveness level of the labor market for talents, Russia lags behind not only developed countries, but also many developing ones. There is a priority of social stability over economic efficiency: the model of social employment is encouraged, where inefficient jobs are preserved even in the situation of GDP decline.

    At the same time, the pace of creating new jobs in Russia lags behind the needs of the catchup transition economy development, whereas a consistent reduction in their total number is evidence of the growing informal sector. As a rule, informal employment freezes the primitive nature of work, does not promote the development of employee competencies and the national human capital, as a whole.

    Reason No. 2. The education system does not train workers for the knowledge economy

    The general higher education has substituted the concept of education with that of graduation. The access to higher education has become a social standard, and the general military duty has become another source of artificial demand, which is unique for the Russian Federation. Against the background of the general higher education, the system of secondary vocational education (SVE) is underfunded and divorced from business needs.

    Employers expect that graduates will be prepared for life, work, and self-realization in the new environment. In the countries that have entered the knowledge economy, a question of agenda is the new content of the education, with a shift in emphasis from obtaining academic knowledge to developing universal skills of the 21st century, the set of which corresponds to the Target Competency Model 2025 (see picture). For now, Russia shows a different situation.

    Most people do not study after 25 years. To succeed in the knowledge economy, it is not enough to once gain knowledge or develop skills; you should regularly update your equipment.

    Reason No. 3. The Russian society prefers stability to growth

    In Russia, public employers are not only the most prevalent on the labor market (providing over 40% of employment); they are also the most attractive ones. The national consciousness has firmly associated the public sector with strong stability, lifelong employment, and minimum guaranteed income.

    The main features of the average Russian employees cultural profile are striving for stability and safety:

    • Lack of initiative, vitality, drive; the attitude nothing depends on me, initiative is punishable: learned helplessness and lack of desire to change anything;
    • Focus on the process rather than the result;
    • Excessive reliance upon established (and often obsolete) rules and procedures;
    • Lack of flexibility, readiness for change;
    • Lack of customer focus;
    • Lack of critical thinking; mechanical, executive attitude to job tasks.

    In efficient labor markets, the value of human capital is translated through the level of payment: with an increase in the professional level, the average income increases too. Examples of such countries are Germany and the United States, where the difference between the average incomes of, for instance, a doctor and a driver is 172% and 261%, respectively. This dependence sends a signal to the market about the demand for qualification in the Knowledge category and stimulates the choice of more complex professions and the development of competencies by professionals.

    The authors of the study proposed to transform the approach to building the human capital and to develop a concept that will include not only the issues of education and staff training, but also those of stimulating the demand for professionals in the Knowledge category, as well as creating a favorable environment for talent development.

    The document sets forth eight main development steps of the Russian human capital.

    Eight development steps of the Russian human capital

    1. Creating a competitive offer of working conditions for professionals in the Knowledge category by employers with State involvement;
    2. Reducing the ineffective social employment;
    3. Creating a system for retraining the redundant workers at the national level;
    4. Creating a favorable business environment in Russia, including stimulating the development of innovative small enterprises and setting goals for governors and regional heads;
    5. Creating an advanced supply of professionals, who have the target competencies, by the educational system;
    6. Shifting the focus of educational programs from the development of academic knowledge and memorization of information towards the development of personal and meta-disciplinary competencies;
    7. Encouraging the influx of talent into education;
    8. Promoting the values of growth and professional development at the national level, particularly, in companies.


    A unique feature of the study was conducting more than 90 interviews with the top managers of the largest Russian employers companies from 22 industries, together providing jobs for more than 3.5 million people: with representatives of boards of directors and shareholders, heads and their deputies for strategic and HR issues, HR directors, as well as with representatives of governmental bodies, the system of education, small and medium businesses, startups, business associations; with Russian and international experts in the field of human capital development.

    Source: Website Editorial