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Can Russia Compete?

Enhancing Productivity and Innovation in a Globalizing World

edited by Raj M. Desai and Itzhak Goldberg

Publication Year: 2008

In recent years the Russian government, concerned about sustaining its economic performance, has sought to promote more diversified and broader economic growth beyond the profitable natural-resource sector. Economic officials would like to see something closer to a "knowledge-based economy." One of the areas in clear need of upgrading is the manufacturing sector. This book quantifies and benchmarks the relative strengths of that sector, identifying opportunities to increase Russian productivity and competitiveness. Drawing on original survey data from Russian firms of all sizes, the authors formulate proposals that aim to • enhance the innovative potential of Russian firms, • upgrade the skills of their workforce, and • develop a business-friendly climate of lower administrative costs and greater policy certainty. This book examines the underlying firm-level determinants of knowledge absorption, competitiveness, and productivity, with an eye to improving workers' skill levels and improving the investment climate, which should in turn enhance the innovation needed to keep up in a globalized economy. The original research and analysis of Desai, Goldberg, and their colleagues will be of use to anyone interested in the problems of building manufacturing competitiveness, especially in Russia and the post-Soviet transition economies. It will also be of interest to organizations planning to do business with Russia or to invest in it.

Published by: Brookings Institution Press

Table of Contents

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pp. v-vi

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pp. vii-xi

Consider Russia’s economic transformation in the past ten years. In 1999,Russia’s economy was essentially bankrupt; it was leaking foreign exchange reserves; it was heavily indebted to the International Monetary Fund and highly dependent on financial assistance from the West; and it had been shrinking at about 6 percent a year since the breakup of the USSR. Today, Russia’s stock of...

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pp. xiii-xiv

This volume is based on work that began at the World Bank more than three years ago to produce a report on the Russian investment climate that would assess the constraints and opportunities facing the Russian Federation in its efforts to create a more diverse and innovative economy. We are, therefore, heavily indebted to those individuals at the World Bank who were initially...

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1. Introduction

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pp. 1-11

The Russian economy has been growing at an average nominal rate of 6 percent annually for the past decade. Among the most important factors contributing to its expansion has been the skyrocketing cost of oil and gas. In 2000, when Vladimir Putin took office, the cost of oil was approximately $20 a barrel; at the end of his term, it was five times higher. During Putin’s pres-...

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2. Productivity

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pp. 12-34

In the fifteen years since the collapse of the Soviet Union, the institutions and structure of the Russian economy have changed greatly. Although much can be said about the inconsistency of the transition and the incompleteness of many structural reforms, there is little doubt that Russia has moved from a centrally planned economy to a genuine market economy. All three main...

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3. Fostering Knowledge Absorption

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pp. 35-68

The Russian Federation devotes considerable resources and manpower to research and development (R&D), yet the Russian economy lags behind other large OECD and middle-income economies in R&D-based outputs. Microeconomic evidence shows that firms facing stiffer competitive pressures also innovate more—and that firm-level R&D has a strong, positive, and signif-...

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4. Upgrading Skills

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pp. 69-90

Russia, even with its highly educated workforce, faces a growing shortage of skilled workers in industry. In the transition to a market economy, Russia’s workforce underwent a wrenching reallocation of labor across industries and occupations, and many specialized and technical skills that workers acquired under central planning were no longer in demand.1 Mismatches in the labor...

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5. Improving the Investment Climate

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pp. 91-112

In addition to the skill base of the workforce and the capacity of firms to absorb technology, the investment climate—government policies and actions that shape the opportunities and incentives for firms to invest productively, create jobs, and expand—also affects the productivity and growth of Russia’s economy. Following the financial crisis of 1998–99, a...

Appendix 1

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pp. 113-116

Appendix 2

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pp. 117-124

Appendix 3

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pp. 125-141

Appendix 4

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pp. 142-162

Appendix 5

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pp. 163-167


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pp. 168-174


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pp. 175-176


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pp. 177-183

E-ISBN-13: 9780815701613
E-ISBN-10: 0815701616

Page Count: 183
Publication Year: 2008