1

Top Mega Trends in Russia

2

Contents

1. Economy: Russia Beyond Moscow - The Next Game Changers, Economic Engines for Growth

Russia’s economic hotspots – cities, regions

Sources of economic growth – industries, products, services

Diversification away from oil and gas towards innovative economy

2. Social Trends: Prosperity, Education and Social Mobility

Growing purchasing power of population and emergence of middle class; Social mobility

Higher demand for intangible products – entertainment, services, investment

Education – Federal Universities, National research centres

Solid technical knowledge vs. lack of managerial skills in Russia

3. Healthcare as a National Security Doctrine: Health, Wellness and Wellbeing

From treatment to prevention

National drug manufacturing

Telemedicine and e-healthcare

Health insurance and private healthcare

3

Contents

4. Urbanisation : Mega Cities, Mega Regions and Mega Corridors

Moscow “Big City” project

Vladivostok – mega hub in the Far East

For discussion: Moscow - St. Petersburg Mega Corridor? (Mumbai-Delhi case-study)

5. Infrastructure Development: the Silk Road of Modern Age and Beyond

Europe-Western China Highway: Russia – Kazakhstan – China

Development of Trans-Siberian Railway and era of high-speed rail

Regional air traffic growth and new aviation hubs – drivers and restraints

6. Modern Russia

Modernization of obsolete infrastructure and manufacturing capacities

E-government / e-services as an alternative to paperwork of the Soviet era

7. Back to Russia

Localization of manufacturing in Russia – hi-tech alternative to mass production in Asia

Reverse brain drain

4

Contents

8. Key Technology Developments

Biotech (e.g. targeted drug delivery), nanotech, energy (e.g. floating nuclear station), LED lighting

Technology leapfrogging (e.g. from 2G to 4G/LTE)

Satellite technology for traffic management, weather control

Hybrid and electric vehicles

9. “Smart” is the New Green

Smart meters, smart buildings, smart grid and smart cities

Other applications - smart traffic-lights, smart bandages, etc.

10. Mega Events

Investments, infrastructure and technology, Russia brand promotion, mass sport industry:

APEC Summit (Vladivostok, 2012) Winter Olympics (Sochi, 2014) Formula 1 Grand Prix (Sochi, 2014) Soccer World Cup (2018)

5

Mega Trends for Skolkovo working groups

1. Social Trends: Prosperity, Education and Social Mobility Growing purchasing power of population and emergence of middle class; Social mobility

Higher demand for intangible products – entertainment, services, investment

Education – Federal Universities, National research centres

Solid technical knowledge vs. lack of managerial skills in Russia

2. Urbanisation : Mega Cities, Mega Regions and Mega Corridors Moscow “Big City” project

Vladivostok – mega hub in the Far East

For discussion: Moscow - St. Petersburg Mega Corridor? (Mumbai-Delhi case-study)

3. Modern Russia Modernization of obsolete infrastructure and manufacturing capacities

E-government / e-services as an alternative to paperwork of the Soviet era

4. Back to Russia Localization of manufacturing in Russia – hi-tech alternative to mass production in Asia

Reverse brain drain

5. Mega Events Investments, infrastructure and technology, Russia brand promotion, mass sport industry:

APEC Summit (Vladivostok, 2012)

Winter Olympics (Sochi, 2014)

Formula 1 Grand Prix (Sochi, 2014)

Soccer World Cup (2018)

6

Guidelines and useful hints

7

Guidelines

Approach and methodology: create hypothesis based on economical, statistical data, press releases, companies web sites and annual reviews, blogs and other secondary sources on information. Some new trends and hypothesis besides mentioned in the short-list are always welcome but need to be discussed and proved. Macro to micro trends analysis.

Structure: hypothesis, some proving facts and data, analysis based on common sense, reliable scientific and economical articles and investigations expert opinions (may include the interviews made by the students themselves), visualization of ideas.

Frost & Sullivan role: short-list of Mega Trends preparation, assistance with some data and primary information. Moderation of discussions within working groups, assistance with data collection and analysis techniques. Assistance with data visualization.

Requirements to collection and formulation arguments for new/ existing Mega TrendEvery trend realization (in general) should be supported with:• Existing or planned project or technology R&D better with announced financial plans or intentions,

proving the whole trend (time of realization, approx. amount of investments)• Announced government support, special legislation framework, government programs and initiatives,

co-investment initiatives.• Some data (e.g. backward statistics or current and future situation analysis, experts point of view, etc)

proving social, economic, technology, whatever, local or global trends.• Good examples or success stories proving the hypothesis (in Russia or in other countries as well).And vice versa: if you think that of the trends for some reason won’t work for Russia you should be ready to prove it with some valuable facts.

8

Social Trends: Prosperity, Education and Social Mobility

To analyse:

Middle class size (now and in 2020), its main characteristics (incl. distribution per country),

related economic trends (demands, development, interdependency with economic processes,

etc.)

Social mobility trends: economic, geographic and infrastructure aspects (benefits, threats).

Why do we need it? How it could be intensified?

Higher demand for intangible products – entertainment, services, investment (new services,

new markets and market opportunities)

Current and Future Education systems for Generation Y (announced plans and reforms),

necessities, main trends – globalization, education in Russia and abroad (statistics,

predictions), social effects, opportunities, benefits.

To think about:

Social thinking: social networks (current statistics, trends), social innovations,

personalization(new trends and applications)

Solid technical knowledge vs. lack of managerial skills in Russia (traditional forms of

education). Complex approach and reformation, new shape of high education: Federal

Universities, National research centres.

9

Urbanisation : Mega Cities, Mega Regions and Mega Corridors

To analyse:

Moscow “Big City” project:

Announced plans and investments (opportunities, problems, concerns)

Development strategy (infrastructure, transport system, social aspects)

Investments and project realization period

Regional impact. Is it possible? Why do we need it?

Vladivostok – mega hub in the Far East:

Complex development of Vladivostok before and after APEC 2012 summit

Opportunities and problems for Vladivostok as a hub and connection point between Russia

and Asia. Possible locations-competitors.

Level of investments needed and announced (perspectives)

Regional impact. Why is it so important?

To think about:

Moscow - St. Petersburg Mega Corridor? (Mumbai-Delhi case-study)

Prerequisites for corridor creation (trends and examples), costs and future opportunities

Project execution (plans, timing, possibility and necessity)

Russian urbanization trends in general. Another examples of Mega Regions/ corridors in Russia.

10

Modern Russia

To analyse:

Current and announced modernization programmes and initiatives (plans, investment level,

goals, realization period) – state and private trends,

Some industry examples: oil and gas (oil refining), and/or utilities (water/gas/electricity supply,

wastewater),

Expectations and impact on various industries (some related statistics could be useful)

New technologies application in industry and economy (how they could influence on current

situation or shape new trends),

E-government implementation in Russia (current situation, statistics, perspectives, comparison

with another countries - United Nations “E-government reports”, situation in different countries:

leaders and best practices to understand main trends.

To think about:

“Strategy 2020” state programme,

Business initiatives and expectations,

Various sectors opportunities: space, energy, ITC, etc.,

Russia: current state vs future opportunities : cost of paper services and e-government

approach (plans, budget spending). What do we actually gain and what we lose?

11

Back to Russia

To analyze:

Localization of manufacturing in Russia – hi-tech alternative to mass production in Asia

region (trends, reasons, opportunities, threats),

Different practical aspects: manufacturing capabilities, human capital, geographic position,

infrastructure),

Leading international companies and their plans in Russia: manufacturing localization, R&D,

etc.

Reverse brain drain process:

Is it truly exist?

Do people return or it’s just “brain circulation” (reasons, statistics, positive and negative

sides)?

Current trends and government plans and expectations

To think about:

Current position and Russian perspectives in global economy. Is “Back to Russia” possible

and why? Global experience of the same processes.

Reverse brain drain: globalization of modern science (volume of brain drain, cost for

economy, conditions for return – to analyse if it’s possible or not). Global trends.

12

Mega Events

To analyse:

Mega Events in Russia

APEC Summit (Vladivostok, 2012)

Winter Olympics (Sochi, 2014)

Formula 1 Grand Prix (Sochi, 2014)

Soccer World Cup (2018)

Different aspects: investments, infrastructure and technology (threats and opportunities)

Impact to national economy (direct and indirect): tourism, production, investments

Private and state approach and contribution,

Global experience: success stories and bad examples (London, Beijing, Mexico-2010

celebration programmes)

To think about:

Mega events as a part of national promotion strategy: does it really work?

Russia brand promotion: current image and perception, trends and the ways to improve

13

Examples

14

Case Study: Delhi-Mumbai Industrial Corridor (DMIC) – One of the Biggest Manmade Corridors; Completed by 2020

Estimated cost of completion; funding from Japanese and Indian governments on a 50:50 basis

states

road and rail link length

each of 200 sq km size, projected tripling of exports in 5 years

$90 billion

7

97 emerging Mega Cities 3 ports, 6 airports and high speed freight lines

1,483 km

Industrial zones 6 investment

regions

3 million people

employment opportunities, 70% in manufacturing and processing

Investment Regions

Source and Photo Credits: DMIC

to be integrated along the corridor

15

Case Study: Jaypee Green Sports City—India's First $1B Urban Integrated City to be Completed by 2013

The 2,500-acre Jaypee Greens Sports Complex in Noida, New Delhi, is comprised of apartments and villas, lakes and canals. social clubs, a motor racing track, a cricket stadium, and other international sports centres.

Total Investment• Sports City Complex: $820 million• Additional Contract Fee (Formula One):

$175 million ($35 million p.a. for 5 years)

Important Dates• Tentative date of completion: 2013

Lake District

Cricket Stadium

Golf Course

and Green Park Motor

Racing Track

Country Homes

Residential Lake District includes villas, town homes, and mid- to high-rise apartment blocks.

18-hole golf course and 18 km of green boulevard across 215 acres of landscape, waterways, and recreational facilities.

25,000-seat hockey stadium, a go-karting facility, and a sports academy have been planned.

Buddh International Circuit, over 875 acres in length, has already hosted the very first F1 Motor Race in India in October 2011.

Upcoming in-built cricket stadium, which boasts a capacity of 10,000 people.

Country-style homes with a capacity to house a total of more than 1.5 lakh families.

Other Sports

facilities

RESIDENTIAL & COMMERCIAL

SPORTS FACILITIES

Source: Jaypee Group (Company Website)

16

E-Governance in India: Examples of Emerging G2G, G2C, and G2B Services in India

INTERACTIONS

G2G

SERVICES (Examples)

• E-Training, e-Payroll, Budget Control, e-Funds Transfer

• e Files, Decision Support System

• E-Delivery of Land Records, e-Payments for Utility Services, Electoral Services

• E-Registration• E-Licenses and e-

Permits• Vehicle Tracking System

• E-Licensing• E-Permits• E-Procurement (Pre- and

Post-Bid)• E-Revenue Collection• E-Business and e-Forms

G2C

G2B

IMPLICATIONS

• Increase efficiency between different functional areas of government

• Transparency for stakeholders in G2G transactions

• Efficient delivery of a long range of public services 24/7

• One Stop Shop for all G2C and B2C services

• Cut red tape and save time

• Reduce operational costs for businesses

• Increase buying power• Transparency in bidding

process

MEDIUM

Installation of

service centres, kiosks,

Internet, fax,phone, e-

mail, WAN, data

servers, application

servers

Source: 11th Report, Second Administrative Reforms Commission, “Promoting e-Governance”, Government of India, 2008

Government to Government

Government to Citizens

Government to Business