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Busy Lines, Hectic Programming. A Competitive Analysis of the Northwest Russian ICT Cluster

Author

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  • Averin, Andrey
  • Dudarev, Grigory

Abstract

Northwest Russia and particularly St. Petersburg were a globally important development center for information and communication technologies (ICT) during 1850-1950. The regions position of strength deteriorated after this period as a consequence of the choices made about technology and Soviet secrecy. However, the region and its ICT industries still enjoy the benefits of education provision, the research-oriented tradition and inherited human and industrial capital. The transition to the market economy opened up many opportunities but also resulted in the evapora-tion of uncompetitive producers like giant electronics manufacturers. It also reduced financing and changed the priorities for R&D and education. At the same time, breakthroughs in telecom technologies and the overwhelming success of mobile communications greatly influenced the ICT industries in Russia. Understanding the major changes and trends is crucial for industrial policy and business strategy decision makers. In this study, we identify the Northwest Russian ICT cluster and the key matters related to its competitiveness and growth prospects in the new environment. The study demonstrates that inherited production factors, as well as growing domestic demand, form the background of the growth currently experienced. Russia already has a competitive edge in offshore programming. However, focused industrial policy is urgently needed in order to make the clusters growth sustainable and create long-term competitive advantages. Luoteis-Venäjä ja erityisesti Pietari olivat vuosina 1850 1950 yksi maailman tieto- ja viestintäteknologian (ICT) kehityskeskuksista. Tämä jälkeiset teknologiavalinnat (sotilas- ja avaruusteknologiapainotus) ja salailun aiheuttama eristäytyminen vaurioittivat alaa. Tästä huolimatta ICT-alat hyötyvät koulutuksesta, tutkimustraditiosta, sekä periytyneestä inhimillisestä ja teollisesta pääomasta. Siirtyminen markkinatalouteen avasi monia liiketoimintamahdollisuuksia mutta myös kuihdutti elektroniikan kilpailukyvyttömät jättiyritykset. Myös T&K:n ja koulutuksen rahoitus pieneni ja painotukset muuttuivat. Teletekniikan läpimurrot ja matkapuhelimen ylivoimainen menestys vaikuttivat voimakkaasti ICT-aloihin Venäjällä. On ensiarvoisen tärkeää, että elinkeinopolitiikan ja yritysten päättäjät ymmärtävät näiden muutosten vaikutukset. Tutkimuksessa analysoidaan Luoteis-Venäjän ICT-klusterin kilpailukykytekijät ja kasvumahdollisuudet. Tutkimus osoittaa, että kasvu perustuu perityille tuotannontekijöille ja kasvavalle kotimaan kysynnälle. Ohjelmointiliiketoiminnassa on jo saavutettu kansainvälistä menestystä. Kestävän kehityksen ja pitkän tähtäimen kilpailuetujen saavuttamiseksi tarvitaan tarkasti kohdistettua elinkeinopolitiikkaa.

Suggested Citation

  • Averin, Andrey & Dudarev, Grigory, . "Busy Lines, Hectic Programming. A Competitive Analysis of the Northwest Russian ICT Cluster," ETLA B, The Research Institute of the Finnish Economy, number 199.
  • Handle: RePEc:rif:bbooks:199
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    References listed on IDEAS

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    1. von Hippel, Eric, 1987. "Cooperation between rivals: Informal know-how trading," Research Policy, Elsevier, vol. 16(6), pages 291-302, December.
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