The discussion ‘Digitize or Die. Best Practices for Digitizing Major Businesses’, which was organized with the support of the Internet Initiatives Development Fund (IIDF), was held on 16 February.

Experts discussed the conceptual framework of digitization, the need for regulatory documents, and also projected an image of the future economy.

Alexey Bobrovsky, Head of the Economic Programme Service at Russia 24 TV Channel, moderated the discussion and noted that the understanding of the term ‘digital economy’ has been ambiguous.

Digital Economy Organization General Director Evgeniy Kovnir said the digital economy is an improved traditional economy that entails convenience for people, comfort, increased labour productivity, and improvements in daily activities. The Digital Economy state programme creates conditions for the development of these factors. The programme focuses on five areas: infrastructure, security, the formation of research competences and groundwork, personnel and education, and regulation. Russia currently has an autonomous non-profit organization for the digital economy, whose members include Rostelecom and Yandex. Its goal is to build a productive dialogue between the state and business as regards joint activities.

Chairman of the Bank for Development and Foreign Economic Affairs (Vnesheconombank) Sergey Gorkov suggested forecasting economic trends ten years in advance. Since potential GDP growth in Russia is 2–3%, the old industrial economy will be replaced by a new type of economy in the near future. “We must get a clear grasp of the trends that shape the image of the future global economy”, he stressed. While “it is important to engage in catch-up development”, Russia is unlikely to be able to compete with world leaders in the production of microchips, cars, and apparently space technologies, he said. That is why it is important to create regulatory conditions for the development of the digital economy. VEB supports the Digital Economy state programme, which was supplemented with sections on quantum technologies and blockchain at the bank’s initiative. Today, the time has come for pilot projects in specific regions, whether it be Kaliningrad or Russky Island, he said. “Without modelling in sandboxes, it will be impossible to create regulatory frameworks for the entire country. We will always be afraid to under-salt, over-salt, or ruin something. In addition, God forbid some grey money appears”, he said.

Keeping with the theme of regulatory frameworks, Russia EY Managing Partner Alexander Ivlev noted that their absence is hampering innovation. Today it is technologically feasible to use driverless taxis, but it has not been legally defined who will be responsible in the event of an accident. Automation has actively been incorporated into audits: people have been released from routine work. In the next ten years, tax counselling will also be using smart machines. Entrepreneurs are responding quickly to these changes. “Business is starting to look for opportunities to carve out new niches that would not be suitable for the original format”, he said. In particular, EY has initiated cooperation with major companies in related segments of work, for example in predictive analytics.

FinTech Association General Director Sergey Solonin stressed that the digitization of public services will improve the quality of management. However, the current environment in Russia, in particular as regards taxation, is not conducive to digitization, so many strong Russian teams prefer to do business abroad, he said.