Raising the Efficiency of the Main Factors of Production Remains a Key Issue for Russia’s Economy

The core fundamentals required for the efficient development of an economy are macroeconomic stability; a favorable business climate; an adequate quality of labor resources; and a proper legal and legislative basis.

The main parameters of the Russian economy' development in the near future can be determined in the framework of a thorough analysis of its current state and its prospects for development, focused on the above-mentioned factors. In his annual Address to the Federal Assembly, the RF President set the goal of reaching growth rates above the world average within the next 3-4 years.

One of the keys to achieving this goal is raising the efficiency of the main factors of production. In actual practice, their efficiency should be increased through the synchronized use of the existing institutional, economic and social mechanisms, with a primary focus on the entire range of strictly defined priority areas in the field of goods and services production and infrastructure development.

Although the educational level of Russia's population is high and the quality of this country's workforce is sufficiently good, the national structure of professional education still does not match the requirements of the Russian economy. In order to achieve labor productivity growth of at least 5% per year, Russia will have to synchronize the future changes in her labor market and to harmonize them with the forthcoming acceleration in the structural shifts which is currently taking place in the economy. Also, the Russian authorities should stimulate the processes of creating new hi-tech/knowledge jobs and upgrade Russia's system of professional education, including training and retraining.

The other acknowledged keys to achieving the goals of raising labor efficiency and developing human capital are positive changes in the demographic situation of a country, a decrease in the rate of mortality of able-bodied persons, the promotion of a healthy way of life, and a structural modernization of the health-care and educational systems.

In order to accomplish these tasks, Russia should promote investment for development. It is planned that, by 2018, the share of fixed asset investment will rise to 25% of GDP, as compared to the past five years' average of 20% of GDP. The expected change in the behavior of investments should give an impetus to production of hi-tech goods and promote import substitution within the framework of modernization of the Russian economy, making these sectors the main areas of Russia's modernization efforts.

Olga Izryadnova – Head of the Structural Policy Department.