Team Finland Future Watch: Russia mega trends

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  • 1.Russia Mega Trends: Macro to Micro Implications for 2020May 2012 1

2. Introduction to Mega Trends2 3. Definition of a Mega Trend What is a Mega Trend?Impact of Mega Trends on Key Organizational FunctionsMega Trends are global, sustained and macro economic forces of development that impact business, economy, society, cultures and personal lives thereby defining our future world and its increasing pace of change3 4. Mega Trends in Russia4 5. Economy: Russia Beyond Moscow The Next Game Changers5 6. Moscow Emerging Mega CityFast Forward Moscow City Facts: Did You Know?.. 25-30% of Russias GDP will be produced in Moscow (2025) 20% of Russian population will live in Moscow agglomeration The city will grow 2.5 times (Big Moscow) 150km of new tracks and 70 stations will be opened in Moscow MetroWhat Are The Implications? Global economic force on its own Hub and spoke business model Diverse and dynamic socio-economic mix Tech-savvy citizens connected 24/7 Mega-corridors: Moscow St. Petersburg, Moscow Nizhniy Novgorod6 7. Russia Beyond Moscow The Next Game Changers 5 to 7 cities will emerge as alternative growth centres by 2020, bridging the welfare gap between Moscow and the regionsSaint Petersburg1/3 of the population will live in the Eastern part of Russia in 2025MoscowKrasnodarYekaterinburg NovosibirskSouth: Sochi, Krasnodar, RostovKrasnoyarskKhabarovskDevelopment of tourism and agricultural business VladivostokUral: Yekaterinburg, PermSiberia: Krasnoyarsk, Novosibirsk, TomskFar East: Vladivostok, Nakhodka, KhabarovskLogistics, finance, machine buildingOil and gas, healthcare, energy, innovationModern infrastructure and logistics facilities7 8. The New Locomotives of Growth Vladivostok San-Francisco in the Far East Open sky status transit between China and US Modernization of Vladivostok Marine Trade Port Educational, scientific, travel and business centre linking Europe, Asia and America Tomsk 3.0 Cognitive City of the Future Post-industrial, innovative economic development Strong scientific and educational complex Comfortable living environment and social infrastructureYekaterinburg The City of Ural Economic and financial centre Important transportation hub multi-modal logistics, the fastest growing airport Solid industrial base attracting investments 8 9. Social Trends: Prosperity, Education and Social Mobility9 10. The Middle Bulge Middle Class Boom in consumer expenditure, stimulating the overall economy growthAnnual Disposable Income* (Russia), USD per capitaThe largest consumer markets in Europe Higher demand for intangible products services, leisure and entertainment, etc. Wellness and wellbeing Healthy nutrition Healthier lifestyle sport and fitness Social mobility She-economy Small and medium businesses Reverse brain-drain Education RUB 140.5 billion investment2005201020152020* Current prices, year-on-year exchange ratesFrom quantity to quality Corporate and federal universities, national research centresSource: Frost and Sullivan, Euromonitor International, Rosstat10 11. Small and Medium Business Engine for Innovative Growth Positive trendsRestraints1.7 m SMEs, 4 m individual entrepreneursOnly 5% have international contacts17 m employed, 22% of working-age populationOnly 2% - innovative SME21% of GDP 2000-2005 growth 7%, 2005-2009 40%US 40% of GDP, Europe 60% of GDP Barriers tax system, lack of available financing, corruption, red tapeWhat kind of support measures for SMES would be most effective? % of responsesSource: Chamber of Commerce of Russia and the Ministry of Economy Monitoring of SME sector(June 2011), Opora.11 12. Healthcare as a National Security Doctrine12 13. Facing Demographic CrisisLife expectancy among the lowest in the developed world Fast Forward Facts: DemographicsUnhealthy lifestyle and inefficient healthcare system Number of population decreased by 7 million in 1991-2009.Source: WHO, UN, Rosstat, Frost and Sullivan2025 forecast: optimistic/pessimistic scenarios ~139/131 millionNations healthcare becomes THE most urgent problem in Russia 13 14. Pharmerging EconomyPharmaToday Low per capita consumption of drugs High dependency on imports Tomorrow One of the fastest and most attractive pharmaceutical markets Locally-produced drugs, including innovative and biopharmaceuticalsManufacturing of pharmaceuticals in Russia2020Pharma 2020CAGR 20112016: 11-14% ForeignRussianSource: IMS Health, Frost and Sullivan201014 15. Equipping the Healthcare SystemMedical EquipmentToday Installed base 4 MRI and 9 CT scanners per 1 million population Estimate in order to meet the diagnostic needs 14 and 25 Lack of qualified personnel (e.g. radiologists) Dependency on imports Tomorrow Steady market growth Localization of production and technology transferCAGR: 7-8% MRI magnetic resonance imagingCT computer tomographySource: Frost and Sullivan 15 16. Infrastructure Development16 17. The most ambitious infrastructure development programme in the worldNew and improved business opportunities Population mobility Economic development of the Eastern part of Russia17 18. Up in the AirInvestment 2012-2019: RUB 107 ($ 3.55) billionToday: 63% of the Russias territory has no alternative to air transport. 80% of airport infrastructure is outdated and requires modernization 70% of runways were built over 20 years ago. Tomorrow: Tourism in the North Caucasus 4 new and modernization of 6 existing airports Vladivostok air hub in the Far EastSource: Rosstat, IATA, Frost and Sullivan 18 19. Fools and RoadsInvestment 2012-2019 RUB 1.71 trillion ($ 57 billion)Today: 29% of federal roads are overloaded, in Moscow 60% 46,000 settlements (2.7 m citizens) do not have access to hard-surfaced roads 23.5 deaths per 100,000 people caused by road accidents (Europe 9.5) Tomorrow: Construction/modernization of ~20,000 km of roads, including toll highways Trans-Siberian route development and emergence of multi-modal hubs The Silk Road of Modern Age: Europe to China highway via KazakhstanAutomotive Industry Over 4 mln new car sales in Russia by 2020Logistics Industry To reach over $100 bn by 2020Source: Ministry of Transportation, Frost and Sullivan 19 20. Back on Track Today: Low railway network density Low cargo delivery reliability 88-90% Investment 2012-2019 RUB 407 ($ 13.5) billionTomorrow: 20,000 km of new railway links by 2030, +24% in railway network density The dawn of high-speed railway era 1,500 km with speeds up to 350 km/h (St-Petersburg Moscow Yekaterinburg) Modernization of rolling-stock (passenger and cargo)Siemens Desiro trains to be manufactured in RussiaRailway modernization in Russia attracts foreign playersTalgo Spanish manufacturer to supply variable gauge trains for MoscowBerlin and Moscow-Kiev routes Alstom Supplier of Allegro train on St.Petersburg-Helsinki direction, is eyeing further expansion in Russia Source: Ministry of Transportation, Frost and Sullivan 20 21. e-Russia21 22. Modern RussiaImplications for Government, Business and Society: Accountable and transparent government Transparency for stakeholders in G2G and G2B transactions, bidding process Improved city planning process Cut red tape and save time: on-line G2C services (taxes, utility bills) Reduce operational costs for businesses Efficient delivery of a long range of public services 24/7 education and healthcare New business models22 23. E-GovernmentUN e-Government index 2012 www.government.ru solid and representative, rich technical features www.gosuslugi.ru portal One Stop Shop for e-services, ~500,000 monthly visitors 27th spot in the world The leader in Eastern Europe, only behind Japan and US among the largest populated countries+32 positions in global ranking in 2 years (!)RUR 80 ($2.7) billion investment for government informatization 60% of the population to use egovernment services in 2020, up from ~11% presentlyNote: * - with a population over 100 million people Source: United Nations 23 24. e-Societye-LearningLegal status of e-learning approved by the new Law on Education (2012) 20-25% growth of e-learning services in the coming yearse-HealthcareRUR 24 ($ 0.8) billion investment Electronic health records system roll-out in pilot regions Telemedicine and m-healthcare remote patient diagnosis, monitoring and treatmente-Commerce~ 40% annual growth Overcoming general distrust, expansion in the regions and all age-groups Solving logistics and payment issues New business models (private shopping clubs, group purchasing, penny auctions)24 25. Made in Russia25 26. Made in Russia 2.0 Innovative production in Russia, % of GDPBefore AfterREBRANDING Innovative products in Russian exports, %26 27. From Raw Materials Supplier to Innovative ExporterStrong dependence on hydrocarbon exportsBeforeLocalization of foreign manufacturersAfterExport of innovative goods and servicesR&D fundingTechnology transferLocalization of manufacturing in Russia will trigger its innovative growth 27 28. Back to RussiaEnergy Energy efficient power generation turbines General Electric and Rostekhnologii High performance gas turbines Siemens AG and Silovye MashinyHealthcare CT scanners Philips Healthcare and Elektron, GE Healthcare and Rostekhnologii Big PharmaICT Mobile base stations for LTE networks NSN, Rosnano and Mikran IPTV set-top boxes Cisco Systems (manufactured by Jabil)Automotive Localization of automotive plants Railway cars Alstom and Siemens AG Automotive components Valeo, Robert Bosch28 29. Technology Leapfrogging29 30. Space Jam Automotive & Logistics:Other:Navigation assistanceTracking (personnel, children, criminals)Traffic managementRemote patient monitoringUsage-based insuranceImprovement in weather predictionIn-vehicle infotainment Asset tracking Real-time stock managementMobile satellite services Increase in broadband speedAir-traffic control Automated guidance of machinesERA GLONASS is to become fully operational by 2014-2016 and create multiple innovative applications 30 31. Wireless