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Development of Russia’s industry: Some regularities and prospects

Author

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  • Oleg S. Sukharev

    (Institute of Economics of RAS, Moscow, Russia)

Abstract

Industry is the substratum of material production and the economy as a whole. Numerous discussions about the need for new industrialisation make us turn again to the analysis of the state of industrial potential and results of industrial development in Russia. The study aims to explain the performance of the Russian industry in terms of the most relevant and aggregated indicators characterising its functioning, and to formulate its long-term development tasks. The methodological basis of the study is the theory of industrial development. Methods of planning and industrial analysis are used. The evidence is the data for 2012–2022 retrieved from the Federal State Statistics Service of the Russian Federation and the Unified Interdepartmental Statistical Information System. The research concludes about the ‘contracted’ development of the Russian industry. The growth rate of the gross value added is more significantly impacted by the dynamics of fixed capital rather than that of labour. Yet the labour contributed greatly to the creation of the new value, which indicates the predominance of labour-intensive technologies, or obsolete capital-intensive technologies. The study empirically confirms that some periods saw a ‘paradox of rapid industrialisation’, that is, a substantially lower rate of economic growth against a higher growth of industry and modernisation of its fixed assets. The general conclusion is that when conducting industrial policy, it is necessary to influence the state of the labour and capital factors in the manufacturing sectors. The industrialisation of the Russian economy needs to be oriented towards the technological substitution through the creation of new fixed assets; in addition, the losses of greatly reduced labour potential should be compensated. A promising avenue is the organisation of analytical planning for the state-owned industry and indicative planning for private industries along with the adoption of a law on the state sector.

Suggested Citation

  • Oleg S. Sukharev, 2024. "Development of Russia’s industry: Some regularities and prospects," Journal of New Economy, Ural State University of Economics, vol. 25(1), pages 6-25, April.
    • Handle: RePEc:url:izvest:v:25:y:2024:i:1:p:6-25
    DOI: 10.29141/2658-5081-2024-25-1-1
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    References listed on IDEAS

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    1. Viktoria V. Akberdina, 2020. "Multifunctional role of industrially developed regions in the Russian economy," Journal of New Economy, Ural State University of Economics, vol. 21(3), pages 48-72, October.
    2. Jungsuk Kim & Mengxi Wang & Donghyun Park & Cynthia Castillejos Petalcorin, 2021. "Fiscal policy and economic growth: some evidence from China," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 157(3), pages 555-582, August.
    3. Cheng, Wan-Jung, 2023. "A political economy approach to endogenous industrial policies," Journal of Macroeconomics, Elsevier, vol. 75(C).
    4. Nicholas Crafts, 2005. "The First Industrial Revolution: Resolving the Slow Growth/Rapid Industrialization Paradox," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 525-534, 04/05.
    5. Zeira, Joseph & Zoabi, Hosny, 2015. "Economic growth and sector dynamics," European Economic Review, Elsevier, vol. 79(C), pages 1-15.
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    Keywords

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    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O21 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Planning Models; Planning Policy
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy

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