The Digital Economy, a Future That is Now

20 october 2017

The Digital Economy of Russia program that was approved this summer was a separate topic onto itself at the Open Innovations forum. On October 17, 5 sessions were held with participants discussing various issues related to the digital transformations of the Russian economy.

The digital economy is setting new ambitious goals for individuals, companies and states of the future. Key challenges for the economy, education and society as a whole include personnel training, requirements for competencies and general digital literacy. Those were the topics discussed at the Human Capital session. Dmitry Peskov, Head of Young Professionals at the Strategic Initiatives Agency, talked about the main goals, which include elimination of digital illiteracy, advanced training of personnel and replacing obsolete elements such as diplomas and work record book with individual personal profiles. "Seven million work hours gets wasted in Russia on maintaining work record books. This is an absolute atavism." Mr. Peskov is convinced.

"In Russia IT professionals make up some 1.5% of the total labor force, while in developed countries they make up between 3 and 5% of the total. We need more IT major graduates," said 1C CEO Boris Nuraliev. Andrey Svinarenko, the CEO of the Foundation for Infrastructure and Education Projects, added that the question was about interdisciplinary knowledge of IT skills, people of different specialist areas should have these skills. "No digital state is possible unless there is enough people with sufficient knowledge of the IT sphere for that IT skills are becoming an integral and fundamental element in every area of activity," summed up Oleg Fomichev, Deputy Minister for Economic Development.

"Cybercrime knows no borders," said Deputy Chair of the Management Board of Sberbank Stanislav Kuznetsov, opening the Information Security session. According to him, the main problems the banking sector is having to deal with have to do with cyber security, new technology competencies, Internet control and legal challenges. It's also important to develop domestic technologies at the level of foreign technology and create a single coordination center to combat cybercrimes, the expert believes. According to Mr. Kuznetsov, "The Digital Economy of Russia program, which is currently being developed in responsible competence centers, can help solve these problems."

"It's important to understand that digital revolutions completely reshape the world, which means that the challenges we were trying to protect ourselves against in the past are no longer relevant. All warfare is now an information warfare: we've got cyber attacks, cyber theft, cyber extortion, cyber piracy, cyber terrorism, everything is cyber now," believes Ilya Sachkov, founder of Group IB. Accordin to the expert, hackers are no longer a small but a big problem.

And in order to effectively combat cybercrimes, the global community needs cooperation, all the countries need to join forces, believes American cryptographer Martin Hellman. "The issues of cyber security are currently being discussed at the level of law enforcement and various companies, professionals are sharing information despite political disagreements," the expert noted. At the same time it's important to improve relations at the level of various professional associations.

International expert Kirill Tatarinov believes there is a general lack of cyber literacy in the world. "Modern operating systems and Internet were created without security issues being taken into account. In the near future they are all going to transform with emphasis being placed on protection against hackers," the specialist is convinced. Mr. Tatarinov also believes that crypto-currencies must be regulated and a single coordination center needs to be established on the basis of law enforcement agencies to combat cybercrimes.

"The IT industry cannot grow without a good infrastructure," said Boston Consulting Group Managing Director Alexander Zhorov at the Information Infrastructure session. In Russia the problem of the lack of infrastructure is exacerbated by a weak ruble and a low purchasing ability of the population, the expert noted.

Vladimir Kirienko, Senior Vice President for Development and Business Management at PAO Rostelecom, noted that the competencies center responsible for information infrastructure is looking for the ways to store big data arrays, develop technology platforms and create a number of pilot 5G zones in Innopolis and Skolkovo. According to the plan, by 2024 140 million people in Russia must have access to quality communication channels.

Aleksey Kozyrev, Deputy Minister for Communication and Mass Media, believes that communications are one of the most competitive industries in Russia and state support will be offered there through market mechanisms aimed at promoting demand for communication services.

The Digital Economy program contains both a vision for the future and development priorities for today. "It was business rather than the state that created the action plans that comprise the program. For that reason business must also implement those action plans while the state will provide necessary support," Mr. Kozyrev said. "Our measure of success will depend on how successful our companies are at the global markets. We expect that at least 10 Russian companies should be able to compete on the international markets."

Wide use of new technologies, regardless of whether it's big data, artificial intelligence, autonomous transport or block chain, inevitably brings changes in the legal environment. On the one hand, attempts could be made to regulate the introduction and adoption of new technologies, but on the other, their development could be promoted by creating regulatory sandboxes or other special legal and administrative conditions. That was the topic of the Regulatory Sandboxes and Preventive Legislation session.

Data are creating new markets and the role of the state is to ensure these new markets can function safely; the way that's done is first and foremost through regulatory policy. MTS Vice President for Corporate and Legal Issues Ruslan Ibragimov is convinced that the impact of artificial intelligence on society is an issue that everyone is concerned about and first of all legal experts. "Historically the law has always regulated interaction between people but in a digital economy we're seeing a new type of interaction emerging, interaction between humans and artificially intelligent machines as well as interactions between machines," Mr. Ibraginov explained. "So what should be the response of the legal system here? Can an artificially intelligent machine be regarded as equal to human beings in the legal sense? Does this make artificial intelligence a subject of law?"   The expert believes that these questions need to be answered as soon as possible so we could understand what lies ahead, whether it's going to be a legal reform or a legal revolution. "The constitution as the foundational document guarantees the rights and freedoms of individuals and everything that can potentially infringe it must be regulated, meaning legislation must precede economics and the state must get a move-on on this front," Mr. Ibraginov is convinced.

Participants of the Creating the Technology Foundations session were trying to figure out what people mean when they talk about technology foundations. Kirill Komarov, First Deputy CEO of Rosatom, believes that open platforms that everyone will be able to join and use would be one such technology foundation. "We are now creating institutional instruments, such as an exchange of ideas that could be replicated if successful," Mr. Komarov said.

FANO Head Mikhail Kotukova believes that the important technology foundation is an expansion of academic knowledge. "A good fundamental science sooner or later becomes an applied science," Mr. Kotukov added. During the session Rostech, Rostelecom and a number of other companies told each other about what they were working on in this area.

Photo: The website of the Open Innovation forum