Vera Barinova on possible sectoral priorities for Russia's development

Vera Barinova on possible sectoral priorities for Russia's development
Vera Barinova

In the wake of the recent anti-Russian sanctions and restrictions on the import of new technologies, the problem of achieving technological sovereignty and creating domestic import-substituting industries has come to the forefront for Russia. The need to achieve technological sovereignty is currently urgent for many countries due to the current geopolitical situation. At the same time, budget constraints force the governments of many countries to prioritize the development of certain industries. They are selected by countries according to various criteria.

Gaidar Institute experts have studied approaches to identifying key sectors for the development of Russian economy. Vera Barinova, Senior Researcher at the Center for Real Sector, identified three most common criteria.

Firstly, the criteria for selecting key industries to support technological development may be traditional for the country’s economy: they are characterized by a high share in the structure of gross value added (GVA), a high number of employees, a high GVA multiplier or employment multiplier. In the context of growth potential or, on the contrary, risks for development, support for these industries pays off quickly, promotes the development of related industries and production, and has a comprehensive positive effect on the economy as a whole.

Secondly, based on existing trends in foreign trade and patenting, as well as the scientific research findings — countries form their lists of strategically important industries that can ensure technological independence and, in the future, technological leadership in international markets. These are long-term investments, but they can lead to the creation of innovative products and even new markets.

Thirdly, these are industries that are not yet developed but are potentially attractive for development: with high GVA growth potential or a high index of identified comparative advantage, as well as a high share in total exports or a high export growth rate. These are the sectors in which the country already has a certain small reserve in terms of technologies, markets, trade relations, and which can be referred to high-tech industries or potentially related to them.

Gaidar Institute experts have conducted an analysis and calculations to identify possible sectoral priorities for Russia’s development. Agriculture, metallurgy, machine building, chemistry and mining were identified as industries with high value added. Production growth in these industries is associated with increased utilization of resources and raw materials.

On the other hand, the experts selected industries with already existing high competitive export advantage of Russia in the world market, with a high rate of benefit in the future, as well as industries that can have the most significant effect on economic growth. From this point of view, the most favorable for Russia’s development at this stage are investments in such industries as organic chemistry, pharmaceuticals, ferrous metallurgy, machine building, including optical, medical or surgical instruments and apparatus, as well as electrical machinery and equipment.

Friday, 06.06.2025