Creating a smarter Russia

Some measures have been protective, such as supporting the ruble and bailing out struggling businesses and institutions. There is no doubt a need for sound economic policy to avoid repeating the collapse of 1998. But if we include more proactive investments, there is a unique opportunity right now to help make Russia a better place to live and do business in the long term.

We know from previous economic downturns around the world that investing in national infrastructure can help deliver injections of capital and create jobs in key areas of business, industry and society. But old ways like putting people to work on huge national projects to build roads, dams and railways are clearly not the solution to a very 21st-century problem. It is essential that the actions we take now help secure Russia's long-term competitive advantage in the globalized world that is currently taking shape.

In the first decade of the 21st century, we have experienced a series of wake-up calls. From global warming to global security, we are reminded that nations are more connected than ever before — economically, technically and socially. But we are also learning that being connected is not sufficient. We need to do a better job of leveraging modern technologies to ensure that global integration works to our advantage.

Intelligence is being infused into the way the world works — into the systems, processes and infrastructures that enable goods to be developed, manufactured, bought and sold. These systems allow services to be delivered and help move money, oil, information, water, electrons and thousands of other things. They also help billions of people work and live. Designed and integrated correctly, modern technologies and networks help cut costs, create efficiencies and make better decisions — in short, do things smarter.

There is huge potential return to be gained from investments in smarter technologies and infrastructures in Russia. Take the energy sector, for example. According to the World Bank, by undertaking achievable measures, Russia could save 45 percent of its total yearly energy consumption —an amount equal to the annual energy consumption of France. The Center for Macroeconomic Analysis estimates that from 2007 to 2010, growth in energy costs alone will translate into a 15 percent reduction in profits for Russian companies. Russia is not alone in this regard.

Many industrialized countries have out-of-date and inefficient utility infrastructures with little or no built-in intelligence. But it doesn't have to be this way. Around the world, utility providers are implementing smart technologies to better manage energy production, distribution and consumption, saving money, reducing wastage and avoiding outages.

There are also clear opportunities for transformation in our health care sector. Today, literally hundreds of different information systems traverse the country, making it impossible to effectively share important clinical data among doctors, hospitals and medical research organizations. There are few unified standards for recording, coding and sharing valuable medical data. By creating a unified information system based on electronic medical records, Russia could significantly improve health care while lowering costs and ultimately improving personal productivity, quality of life and life expectancy. Technology can also help better administer prescriptions and control the distribution of medicines.

Another consequence of the globally integrated economy is that jobs and investment flow not only to the places in the world that offer cost advantages, skills and expertise. It is flowing to regions and cities that offer the smartest infrastructures including efficient transport systems, secure and reliable distribution systems and utilities. It is also flowing to those places with an enhanced quality of life.

For leaders with the courage and vision, this is a period of great opportunity. Since the country's macroeconomic situation remains strong, this puts it in a great position to lead — not only by pulling its businesses out of recession, but by investing wisely to make the country more efficient and attractive for investment and by improving the quality of life in the long term.

Kirill Korniliev is general manager for IBM Russia & CIS

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