Interview with Dr. Alexander Sokolov, Higher School of Economics, Moscow

«The limits of the oil and gas based growth can already be clearly seen»
 Alexander Sokolov, Director of the HSE Foresight Centre, Moscow, about the challenges and opportunities Russia will be facing in the coming decade.  

Mister Sokolov, you are the Deputy Director of the Institute for Statistical Studies and Economics of Knowledge as well as the Director of the HSE Foresight Centre? What can you tell us about your current projects?
Our Institute and the Foresight Centre are research units within the Higher School of Economics – one of the most advanced research university in Russia in the field of social sciences. Foresight is one of the most rapidly developing fields of HSE research. Among our recent projects I can mention the list of National Critical Technologies (developed for the Ministry of Education and Science and approved by President Putin in 2006), «Education» Foresight (identification of key skills to be required in the future by Russian companies), and Innovation Foresight for the Republic of Bashkortostan. Now we are finalizing National S&T Delphi survey. There are also big ongoing projects on identification of strategic priorities for the Ministry of Natural Resources; Foresight and a system of roadmaps for nanotechnology applications in several industrial sectors (for the Russian Corporation of Nanotechnologies).  
The economical and industrial change of Russia in the last 20 years has been rather impressive. Where will Russia be in 10 years from now?
Russia deserves a better future, especially taking into account the decades the Russian people were subject to terrible experiments of Communism. We have everything – huge territory, rich natural resources, and – the most important – well educated and talented people. The key point is to transform these capacities into an efficient, modern and competitive economy and society. The latest macroeconomic forecasts by the government are very optimistic although there is hard work to be done. There is a strong need in profound institutional reforms in many fields (public dministration, pension system, education et al). The most important challenge is building a modern and efficient national innovation system. Where Russia will be by 2018 depends on its ability to change, to be integrated in the global economy and to use the best world practices within the country.  
What are the greatest misconceptions (prejudice) Russia faces today?
Last events related to Georgia’s aggression in South Ossetia and the reaction of Western mass- media (I witnessed it personally being abroad this August) have shown that there is a significant misunderstanding of Russia’s role in the outer world. To change the situation we need to make steps towards each other. Russia has drastically changed in the last 15 years and it has to further change to resolve such problems as low living standards, the gap between poor and rich, inflation, low innovation activity, etc. It probably cannot be clearly seen from the outside, but the Western states should be more open to dialogue; it will help to frankly discuss the most urgent issues and find mutually acceptable solutions. Nobody needs a new cold war.  
Currently Russia is playing a confident role in lobal politics and does not even fear to get politically isolated. Will Russia seek a role as counterweight to the USA (and China)?
This is not a problem of becoming a counterweight to the USA or China. The most important issue is to become a strong, internationally competitive economy and a good place to live. At the same time Russia, as any other big country, has to defend its national interests. There is always a trade off between the money invested in the economy and the defence sector. A right choice of an optimal balance in this respect will be a real challenge for Russia in the forthcoming years.  
On a more general scale, where do you think the big advantages and opportunities of Russia lie in the future?
The biggest advantages of Russia are its natural resources and human capital. Oil and gas revenues create a financial background for economic and social growth. People that are able to adapt themselves to the rapidly changing world and to learn throughout their entire lives can build a better organised and more efficient knowledge-based economy and civil society.
What are the risks involved with taking this path?
The major risks are related to the old-style institutions. We need to change many things, but transformations at such a scale never run smoothly. Of course Russia can be criticised for lack of democracy and transparency, corruption at all levels and many other things. Mikhail Bulgakov, a famous Russian writer, said about the after revolution time that the collapse is in the heads. A significant share of older people never worked in the market environment but the new generation – our children – is different. One of the risks is to miss the chance to give them access to better education and better working opportunities in the country.
With growth comes a higher energy demand. Russia has gas and other resources. How important are these resources in the construction of a «renewed» world power?
Fuel and mineral resource are and will be (at least in the near future) the main source of Russia’s prosperity, but the limits of the oil and gas based growth can already be clearly seen. Russia will either become an innovation driven economy or a second range state with huge territory and poor population. Efficient use of the oil and gas money and building of an environment that stimulates innovation in every region and every enterprise is the only way to construct a «renewed world power», but this world power will never be the same as it was 20-30 years ago.  
And: Can Europe count on Russia as a partner in trade and a supplier of energy i.e. gas?
In most interviews given by Russian top officials they are asked this question. The answer is always the same – Russia is and will always be a reliable partner for Europe in the field of energy supply and will not use it as an instrument for any political pressure. I am inclined to trust those messages but, to be sure, both Russia and Europe must build a system of mutual trust where such a pressure will not be beneficial for any country.
According to latest theories not so much the increased use of energy will be the problem in the future, but the emissions. What steps has Russia taken to keep the CO2-emissions at bay?
The Russian economy is still much less energy-efficient compared to developed countries, which is one of the major concerns of the government. The extensive way of industrial development and the overheated economy, when companies are most interested in producing more products for growing markets and still less care about the quality and efficiency, do not stimulate introduction of new technologies. The use of renewable sources of energy in Russia is still very low – just 3% of the total sources of energy (whereas the world average share is around 13%). Although in the «Energy Strategy: 2020» adopted five years ago the minimising environmental hazard is declared as one of the key goals, the process of technological modernisation is still very slow. Recently adopted radical changes of economic mechanisms in the energy sector are expected to give a momentum to increasing the share of renewable sources of energy, and – which is more important – growing efficiency of energy consumption. Russia joined the Kyoto protocol in 2004 and it seems to become one of the instruments to limit the CO2 emissions, but there is still a long way to go to the environment friendly energy sector in Russia.  
What can we look forward to hearing from you at the European Futurists Conference Lucerne?
My talk will be devoted to the key challenges Russia will be facing during the forthcoming decade, with a particular accent on building an efficient national innovation system.

Dr. Alexander Sokolov is Deputy Director at the Institute for Statistical Studies and Economics of Knowledge, Higher School of Economics (HSE), Moscow and Director of the HSE Foresight Centre.

Dr. Alexander Sokolov
Keynote «Russia 2018»,
Culture and Convention Centre KKL, Lucerne, Switzerland
October 27, 2008; 9.45 h



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