Staunton, November 26 – Vladimir Putin’s suggestion that Russia can progress most efficiently by waiting until the West develops something new and then buying or stealing it and applying it in Russia to promote economic growth will not threaten the West or save the Russian economy, Vladislav Inozemtsev says.
It will not threaten the West because those like Russia who buy or steal the most advanced Western technologies not only lack the industrial know how to apply them effectively but do not have the rapidly developing industrial base that could produce sustained economic growth, the economist continues (theins.ru/opinions/189596).
The Kremlin leader, he suggests, has in fact proposed “nothing new.” Many countries now and in the past, including Russia, have taken advantage of developments elsewhere in this way to help themselves. Indeed, today, the world is divided between “developed and successful countries” which innovate and “lagging and less well-off ones who steal technology.”
But there are several obvious reasons why Putin’s plan won’t achieve what he says it will. First of all, today the world is at a phase of development in which industrial espionage can provide fewer benefits than it did.” It is possible to copy things from the past as China does but it is not possible to introduce cutting edge technologies.
But there is another and “more important” reason Putin’s strategy will fall short. “When one speaks about the most serious kinds of production, it turns out that even copying requires enormous spending and a powerful industrial base.” China can and does provide that and therefore benefits, but Russia can’t and doesn’t and therefore won’t.
Russia for example acquired completely legally Western technologies for the SSJ-100 but couldn’t make it in a competitive way. It purchased and wanted to install Siemens turbines in Crimea “not because we did not know the technology of the production of turbines but because we have lost the competence of producing their main components.”
“Russia lags behind the West in productive potential 20 to 30 years,” Inozemtsev continues, “and therefore its industrial espionage to a large extent doesn’t represent a threat to the developed world. We probably are still able to steal something new … but we will not be able to produce it on our own in industrial scale.”
Economic success today is not about technology pure and simple but “in the creation of network structures” which can take those technologies and produce a final product at competitive prices. That requires a serious industrial base with major investments, neither of which Russia now has.
In this regard, Russia is not only not a competitive to the West but even is seeking to limit the development of the kind of networks the success of the West depends on. “If Russia were a rapidly developing industrial power,” Putin’s plans “would generate concern in the West.”
“But in the present situation, the production of final and quality product on the basis of stolen technologies simply elicits big doubts and therefore isn’t taken seriously” in the West, he says. Those who should be concerned are the Russians themselves because they are going to remain the big losers from Putin’s strategy.
What we are seeing in it, Inozemtsev says, is “the latest act of the struggle between ‘domestic producers’ and domestic consumers. It will be the latter who will get medicines that don’t cure, plans that don’t fly, and equipment which threatens the lives of miners rather than ensures more production.”
Putin’s ideas about “legalized theft” will likely “provoke the departure from Russia of the majority of companies which encounter it and a ban on the supply of their production even through intermediaries.” But both that and the other consequences of Putin’s plan are even more serious.
They show that the Kremlin “doesn’t understand the essence of contemporary know-how and the real state of Russian industry” and that its minions are “completely inadequate to take key decisions for the country,” Inozemtsev concludes.