Russia needs a revolution

Citation

(2009), "Russia needs a revolution", International Journal of Productivity and Performance Management, Vol. 58 No. 7. https://doi.org/10.1108/ijppm.2009.07958gab.005

Russia needs a revolution

Article Type: News From: International Journal of Productivity and Performance Management, Volume 58, Issue 7

Russian policymakers have increasingly raised the question of productivity, stressing that the country’s lag behind leading global economies has become an acute nationwide challenge. Earlier this year, President Dmitry Medvedev addressed the issue at a meeting on modernization and technological development and emphasized that “we must not forget one simple, unfortunate fact: Labour productivity in this country is currently equivalent to only one quarter of the labour productivity in the United States.”

According to the World Bank, every employed Russian contributes only $16,100 to the country’s gross domestic product, compared with $38,100 in South Africa, $48,600 in Greece, $59,400 in France and $74,600 in the USA.

But these numbers alone do not reflect the true scope of the problem. Russia’s low productivity is exacerbated by the fact that the country is dominated by natural resource extracting with relatively little industrial development in the real sector. Although the overall productivity in Thailand ($12,500 of GDP for an employed person), Brazil ($16,700) or Malaysia ($22,900) do not differ from Russia’s in a dramatic way, in these countries’ high-tech industrial exports account for 16.2 percent, 22.4 percent and 36.7 percent of all exports, while in Russia they constitute a meagre 2 percent. Russia seems to suffer not only from a low level of productivity but also from a counterproductive economic structure, slow technological progress and outdated labour relations.