14 Modernisation 2.0 How relevant is the theme of modernisation in Russian industry? IronMagazine №1 (15) 2017 24 From Lomonosov to Toyota Occupational health and safety goes online in historical and modern Russia www.metalloinvest.com 38 Born in the USSR Digital technologies invented by Soviet scientists

THE DIGITAL IM SPEAKS AND MOVES ON 2 You can comment on On the Verge Iron Magazine articles online at of Transformation What plan should Russia adopt to help its economy to grow faster than the global average? www.metalloinvest.com IRON MAGAZINE №1 (15) 2017 1

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Founder: Management Company METALLOINVEST LLC Editorial office: 28, Rublevskoye Shosse, Moscow, 121609, Russia MANAGEMENT Tel.: + 7 (495) 981-5555, ext. 7574 24 | From Lomonosov to Toyota Fax: + 7 (495) 981-9992 After overcoming the failures of the 1990s, [email protected] the Russian system of occupational health and safety is undergoing a new phase of Project Manager development Dmitry Kravchenko [email protected] A VIEW INTO THE FUTURE Editor-in-Chief 28 | A Door into the Digital World Olga Kulalaeva What will be the consequences of the fourth [email protected] industrial revolution? The issue was approved for printing SOCIETY on April 24, 2017 32 | Interesting Young People in Circulation: 999 copies FEATURE Science Printed by Union Print LLC, 2, ul. Okskiy Syezd, 2 | On the Verge of Transformation Being a scientist could become fashionable Nizhny Novgorod, 603022 What should be Russia’s strategy to lift the again in Russia The content of the issue may country’s rate of economic growth above not be used without the consent the global average? SPORT of the Editorial office. 36 | Final Preparations Audience: 16+ FOCUS GROUP Stadium construction for the 2018 World 10 | What to Choose? Cup has entered its final stage IM asked experts which economic develop plans Russia should consider summary 38 | Born in the USSR BUSINESS PLAN Digital technologies invented by Soviet Publisher: LyudiPeople, Group of Companies 14 | Modernisation 2.0 engineers Office 18, Stroenie 1, 21, Zvyozdny Bulvar, Industrial modernisation was a popular Moscow, 129085 theme in the 2000s. What has this resulted GALLERY Tel.: +7 (495) 988-18-06 in and is modernisation still a relevant topic 40 | Countdown vashagazeta.com today? Host stadiums at the 2017 Confederations E-mail: [email protected] Cup and the 2018 World Cup FOREIGN EXPERIENCE Director General: Vladimir Zmeyushchenko 18 | Adapt or Fail Chief Editor: Evgeniy Peresipkin A business’ ability to adapt to the times is Executive Editor: Vilorika Ivanova key to success Designer: Natalia Tikhonkova Photo Editor: Svetlana Timonina INDUSTRY Available Colour Corrector: Aleksandr Kiselev 20 | From Outsiders to Leaders Production Director: Oleg Merochkin on the Russian pipe producers have conquered the Photo: East News, Alamy, Gettyimages, domestic market. What comes next? App Store Shutterstock, Lori, TASS, RIA News 2 Feature IRON MAGAZINE №1 (15) 2017 3 On the Verge of Transformation

In May, President Putin will receive strategic projects on the socio- economic development of Russia created by various groups of Olga experts; from liberals to ‘market realists’, as they call themselves. Mikhailova, The most likely outcome is that the final strategy will be based on Alexander Bulanov a compromise.

n the Soviet Union, children loved Russian economy growth rate above changed its focus from international a popular film called “Three Nuts the global average. This was the goal to Russia and opened with Georgy for Cinderella”, shot in what was he set in his December address to Sviridov’s Soviet musical legacy then Czechoslovakia. It differs the Russian Federal Assembly, and «Time, Forward!» from the original fairy tale by he spoke with a sense of urgency: “If According to the Prime Minister, Charles Perrault in that there is we do not address the basic issues of the plan would focus on the following no fairy godmother. Instead, in the Russian economy and launch new issues: ensuring stability, specifically, this film, Cinderella transforms using growth stimuli, our economy might sustainable regulation, while I end up stagnating at around zero magical hazelnuts and makes all of providing the necessary support for her decisions for herself. growth for years.” the «smart economy», that is, digital The Russian economy in some way technologies, human capital and resembles this version of Cinderella. From the bottom up reducing the «brain drain». He also It cannot rely on any external help, The government is working on announced his intention to launch but actually has everything it needs to the key «magic nut» for the economy. a «project finance factory» as part of hand; the trick is to use all available The International Monetary Fund development institutions. Economy resources properly. By the end of valued last year’s results for Minister Maxim Oreshkin explains: May, President Vladimir Putin should the global economy at 3.1% and “On the one hand, our banks say that have received three draft strategies this year it is expected to be 3.6%. there are no projects to finance, to stimulate the growth of the However, according to the Russian while on the other, businesses Statistics Service (Rosstat) Russia’s argue against planning any projects GDP decreased by 0.2% in 2016. because there is no funding. This According to some optimistic is a vicious circle that needs to be views, national economic growth broken.” He expressed the hope that is expected to be at 2% in 2017. VneshEconomBank (VEB) would take First Deputy Prime Minister Igor the lead in restarting this mechanism. Shuvalov announced this figure in his “The result should be simple: a new statement at the Davos Conference. economic paradigm”, Dmitry The official forecast is 0.6% from Medvedev commented. The document a low base. In short, there is room for must be submitted to the President improvement. by 30 May this year. At the end of February at So this means that the Sochi Investment Summit, Prime the government has learned from Minister Dmitry Medvedev revealed its past mistakes, but it would also the plan of action developed by be beneficial to learn from others’ the Cabinet of Ministers for the 2025 developmental missteps. Yaroslav Policy. The choice of the site was Lissovolik, chief economist at symbolic: this year, the Sochi Summit the Eurasian Development Bank, 4 Feature IRON MAGAZINE №1 (15) 2017 5

Of all countries, only Russia raised its interest rates during the crisis, according to to the support of export industries. said that a similar system is facilitated by a moderately low rouble competition. The government should Dmitry Medvedev raised the same necessary for investment projects: rate. At the second stage (after 2019), offer as much support as it can to the authors of Growth Strategy issue at the Sochi Summit. He “These projects are usually long-term, it will be necessary to think about these initiatives, including building as proposed simplifying the hedging of and with a large currency component; expanding the country’s non-primary healthy an environment (this goes not currency risks. The key is in creating this makes them an important barrier exports and increasing the economy’s only for regulations, but also for solid says that in principle, developing Their Growth Strategy, on the other a one-stop shop where exporters can and an area of risk.” productivity and competitiveness. infrastructure). economies are in a better situation hand, sets a goal to reach 5% fix the future cash flow in roubles. In order to succeed, we need Thereafter (following 2025), the time The question of how to finance than developed countries, as they economic growth per year. Commenting on this idea, VEB to take the first steps today. In the will come for domestic producers all of this naturally arises as a result. can learn from others’ experiences. However, they mainly criticise deputy head Andrey Klepach (also first instance, the «market realists» to turn to innovation. The main The P.A. Stolypin Institute is sure that Mr. Lissovolik adds: “The desire to the monetary policy aiming to stifle a member of the Research Council of propose continuing the policy of tools for this kind of breakthrough the country has enough resources, catch up with developed economies inflation. To suppress price increases, the Institute for Growth Economics) import substitution, which can be are entrepreneurial initiatives and which experts estimate at 5.5 trillion often leads to internal breakdowns, the government has established high as was the case with China, which interest rates, but this has resulted was recording steady growth at in limited economic spending. Growth a record pace for 20 years, and has Strategy claims: “Of all countries, now reached its peak, complicated only Russia raised its interest rates by economic inequality.” We need to during the crisis,» citing World understand how to avoid falling into Bank data for Italy, the UK, India, the same trap. the USA, China and Japan. But To view the situation from the P.A. Stolypin Institute believes different angles, two groups of taming inflation should not be the end experts joined forces. This means goal; inflation is only one of several that Cinderella from the fairy tale important indicators. Analysing other mentioned above gets two more countries’ experiences, the experts «magic nuts» in the shape of conclude that countries that strategies under development by stimulate economic growth could the Centre for Strategic Research also solve inflationary problems. (CSR), led by former Finance Minister The Growth Strategy recommends Alexey Kudrin; and the P.A. Stolypin relaxing monetary policy and Institute of Economic Growth, whose reducing interest rates to «inflation supervisory board is headed by plus 2%». At the same time, a budget the business regulator Boris Titov. deficit of 3% of GDP is considered acceptable (for comparison, this Don’t spare the money year it is expected to be 2%) and The P.A. Stolypin Institute was public debt of 30-35% of GDP (by the first to complete its work. At the end of the year, according to the end of February of this year, the Ministry of Finance, it will be at Boris Titov sent a document to 14.7%). The authors of the strategy the president entitled Growth consider investments the main Strategy, drafted by so-called source of growth; they believe market realists. The goals outlined in investment should help develop the document are ambitious: creating small and medium-sized business 35 million high-performance jobs sectors (SMEs), modernise industry, by 2035 (currently the country has strengthen infrastructure and much 15.3 million) and doubling GDP even more. In addition, they also propose under very moderate conditions, the intensive recapitalisation of according to Titov. The experts development institutions (1.5 trillion believe that if we do nothing, roubles over the next five years). By Russia will forever lag behind in 2018, the government should have the developing world. According launched mechanisms for financing to the P.A. Stolypin Institute, economic development amounting to the existing three-year governmental 2.2 trillion roubles annually. budget could well lead to this The support toolkit could be varied outcome, hence why they refer to this and allow space for manoeuvre; plan as ‘the budget of stagnation’. thus, the Growth Strategy refers This year, the Sochi Summit changed its focus from international to Russian: the internal agenda has now gained priority status 6 Feature IRON MAGAZINE №1 (15) 2017 7

Growth in productive capacity (2000 is 100%) 140 130 124 127 119 120 116 107 110 113 100 100 99 99 100 100 103 105 100

80

60

40

20

0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Russian Centre for Productive capacity introduced in the last 5 years Macroeconomic Analysis Productive capacity introduced since 2000, but older than 5 years and Short-Term Forecasting ‘Older’ productive capacity(introduced before 2000 (CMACP)

As a result, we will need to invest finance minister. It is necessary to in the development of human capital speed up the decision-making process and the renewal of the production and to try out new tools, for example, sector, including in breakthrough the Government Project Office. “I technology. would also add judicial reform into the Alexey Kudrin wrote in his mix. Businesses should be reassured Sochi Summit article: “Innovation, that their legitimate rights, first of all the implementation of new property rights, are unconditionally Two multifunctional robots are installed annually per 10,000 workers technologies, and robotics are and impartially protected,” Kudrin becoming the key sources of growth pointed out. Finally, we also need in developed countries. The number to change public opinion. Russian roubles. In addition to the development as well as an increase in the budget Changing approaches to continue reforming, fighting of multifunctional robots per people need to learn to plan their institutes, this includes state deficit and the national debt ceiling. To The Centre for Strategic Research for macroeconomic stability and 10,000 workers installed annually lives, set achievable goals and allocate banks, state guarantees for public- avoid the jump to inflation, inevitable (CSR) has not finished work on its establishing simple and stable «rules in South Korea is 478; in China appropriate resources to match their private partnerships, income from with any large-scale infusions, the P.A. strategy yet; the plan is to publish of the game». this figure is 36; and in Russia, it ambitions.» privatisation, loans from the population Stolypin Institute recommends, among the document by 1 May. However, One of the main tasks in dire is two. Are we aware of this issue And where do they see funding and financial investors “through other suggestions, freezing the tariffs we can speculate with a degree of need of tackling is increasing in Russia? Of course. But we are coming from? Oil and gas revenues attractive tools such as index bonds”, on infrastructure monopolies. certainty on what the document will the productivity of the economy. moving in the right direction too are expected to decline relative to discuss by looking at Alexei Kudrin’s Kudrin believes that achieving slowly, because, in my opinion, GDP. “If we do not raise taxes, then own statements. Its main idea economic growth in Russia of 3-4%, the management system, the by 2025 we will have to live with Innovation, the implementation will be based on issues connected the global average, is possible with system of making and implementing outgoings at 32-33% of GDP. So we with incomplete institutional and a 30% increase in labour productivity decisions is slowing the process need to focus on efficiency. To prevent of new technologies, and structural reforms. These issues had by 2024. Such a leap is primarily down.” our economy contracting alongside been mounting for a long time and required because of various Therefore, this group of experts oil and gas prices, we need to robotics are becoming the key now they have been complicated by demographic factors: by 2030, there suggests starting with administrative export more non-primary goods and Western sanctions and the falling will be 10 million fewer able-bodied reform. There were initial attempts services,” said Kudrin. sources of growth in developed prices on key exported raw materials, young people (20-39 years old) while in the 2000s, but the reforms simply But is Russian industry ready which have led to painful results. the older population (40-59 years) will drowned in the growing flow of for this option? To investigate this, countries This means that it is necessary grow by only 3 million. petrodollars, according to the former the Centre for Macroeconomic 8 Feature IRON MAGAZINE №1 (15) 2017 9

The existing support system is designed mainly to work with established markets where we can calculate future demand with a high degree of probability. High-risk projects, do not Output increase, development so that promising trillions of roubles, 2012 segments grow, while eliminating fall into this category 50 the risk of a surplus of low-value products? 45 The situation in Russian industry 40 is rather heterogeneous, both between different sectors and within 35 each of them. “First of all, one must 30 understand that many of the factories 19 are still left over from Soviet times 25 25 6 and require very substantial funds 20 8 6 22 for refurbishment. These are 8 usually difficult to find from single 15 6 18 17 15 6 companies. For example, for the loan 7 9 9 13 4 10 6 2 3 11 itself, the bank will need to see 10 9 10 9 9 10 some collateral that the company 5 7 may not have. Illiquid equipment and 0 production facilities cannot serve as guarantees. This happens frequently,

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 for instance, in light industry,” Due to increase in productive capacity Source: Russian Centre for Macroeconomic Analysis commented Andrey Kaukin, head of Due to commissioning of new capacity and Short-Term Forecasting (CMACP) the laboratory of industrial markets and infrastructure at the Gaidar Institute for Economic Policy. Analysis and Short-Term be totally exhausted. This is an To create good conditions Forecasting (CMACP) carried out interesting conclusion and both for development, we need a few a large-scale study for the CSR, the Strategic Research Centre and systematic changes, from creating analysing the impact of industrial the P.A. Stolypin Institute (in their subsidies for the purchase of modernisation and production growth, Growth Strategy) included it in their modern equipment to stimulating the very essence of the 2000s. research. exports. When the industry turns It turns out that over the past In terms of industry sub-sectors, into a service model (that is, it sells 15 years, production capacity has it is evident that the more high- not only an end product, but also grown by one third, which means tech the product (high value-added accompanying products throughout The more high-tech the product, the lower the utilisation of productive capacity, according to the CMACP that some modernisation has product), the lower the utilisation their life cycle, which has become taken place. The proportion of old of productive capacity. Machine a popular model in recent years), industrial facilities introduced engineering and complex non- it faces extra costs on expensive But it is important for the Russian For example, the existing support so-called requirement for ‘generational before 2000 (many of which date food production find themselves in competencies, which our companies economy that these solutions are system is designed mainly to work with growth’, under which a certain standard back to the Soviet times, since in the most difficult situation. However, do not always have. They can either developed, sold and bought inside the established markets where we can is introduced, and companies have to the 1990s there simply was not much their existing productive capacities purchase products abroad (an country. calculate future demand with a high purchase equipment that complies with development) accounts for about do not always satisfy demand. expensive option) or try and develop For Russian companies, degree of probability. Ambitious high- this standard. In practice, this can work a quarter of all facilities. The average The expansion of assembly plants them themselves. In fact, a steel the opportunities for modernisation risk projects, of course, do not fall into through environmental requirements, age of the facilities is 12 years. is linked with the modernisation production specialist does not have a are largely related to the markets this category. Rather, only very few depreciation rates of fixed assets At the same time, the experts at of a number of machine-building preference for buying rolling mills in they work in, according to Daniyal manage to secure the necessary support. and taxation. But truly revolutionary the Centre found out that since sub-sectors (especially in electrical Germany or in Russia: what matters Sultanov, head of the project This mainly applies to small companies changes can arise in industry only when 2000 the capacity utilisation rate engineering). The question is: how, in most is that they meet quality direction of the CSR. One of the or start-ups involved in projects that do governments and businesses invest of Russian enterprises has been these conditions, should we stimulate requirements and are affordable. main issues today is a restricted not implement truly complex ideas. “In jointly in new complex technological increasing at a steady pace. But inflow of investments. This problem other words, modern tools take away facilities. “This requires the entire when in 2007 it reached its maximum, was also acute in the pre-crisis financing from the risky ventures, but possible range of support measures, it was only 72%, and now the figure When an industry turns period, but today it can only be this is precisely where the lion’s share including granting subsidies, building has decreased to 66%. It turns out resolved by large corporations with of profits is. This is backed up by the development institutions, integrated that our economy has, and had even into a service model, it faces an impeccable reputation and a solid policies of the world’s largest industrial investment contacts and creating in the 2000s, many opportunities financial track record, or whose companies,” said Sultanov. special zones for industrial development” for increasing the productive extra costs on expensive portfolio has projects of strategic According to him, one of the most commented Sultanov. And this is capacity of our industrial facilities, interest to the government. Others effective non-financial methods of arguably one of the most important which some experts believed to competencies face problems. incentivising modernisation, is the issues to be resolved. 10 FOCUS GROUP IRON MAGAZINE №1 (15) 2017 11

The foundation of success is growing productivity, which must ensure the increase of competitiveness

find opportunities to invest jointly to address this issue and secure jobs for people, for their own benefit. “The second option is to recycle waste, protect our environment, and make old dumps containing valuable chemical elements generate profits. This will be self-managing, provided the starting conditions are met. “The third option is to create Pavel Lubuzh, science parks using the existing, Partner at Strategy Partners Group and often excessive, infrastructure and Head of Operational Efficiency capacities of large production Practice facilities built as part of Soviet projects. Excessive open spaces, “Development programmes should workshops and warehouses, be comprehensive, while taking access railways, port terminals, into account the interests of the Combined Heat and Power (CHP) country, business and the regions. facilities, steam and compressed At the same time, the foundation air and maintenance staff services, of success is growing productivity, combined with large volumes of which must ensure the increase of raw materials produced at the competitiveness, the growth of value enterprise represent an excellent added production, tax revenues - opportunity for creating dozens of ultimately affecting the quality of life medium-sized enterprises around of the population - the ability to raise existing industrial giants. This will and educate children, treat an aging also create thousands of new jobs population, help those unable to for the population and new highly work, and support the development competitive value-added production and the future of the whole country. for the economy. “Currently, we lag far behind “The fourth option is a joint developed countries in terms of approach between business and labour productivity, and in many regional authorities to plan and industries, we are already behind implement particularly large China. We should address this issue, projects to be managed centrally, but at the same time, we should requiring products and services not allow a situation to develop from the regions. These could be where positive growth in terms of new large construction projects, individual productivity, both through such as import substitution, investment measures and through building new clusters and so on. What to choose? work optimisation, leads to societal Additionally, this could also include deterioration. a joint systematic progression Iron Magazine asked some experts about “How could we resolve this? I towards the global markets, with Varvara which seemingly unrealistic projects could see several possibilities for public- initiatives to include: working with Fufayeva, benefit current Russian strategies for private sector partnerships in this trade missions abroad, organising Alexander economic development. area. The first option is to increase delegation visits at central and Bulanov investment of available resources in regional levels, participating in the restoration of transport, energy fairs and exhibitions, and joining and housing infrastructure. Roads, specialised business communities, houses, electricity and heating as well as the competent networks in many Russian regions development of our regional are in dire straits. Big business and trade brands and their effective the government can and should promotion.” 12 FOCUS GROUP IRON MAGAZINE №1 (15) 2017 13

was 6.3%, compared to 5.3% the year before. “Large-scale projects in industrial agriculture, despite the food embargo, could example, how the economy of sectors in which scientific developments retain positive momentum, will be influenced by the Russia can succeed, with greater potential, and might even grow, albeit development of robotics without worrying about like new pharmaceuticals. not as fast as one would and how businesses international competition. “We ought also to hope. Our departmental should support this For instance, this could think about what will experts estimate the growth process, because, among be the manufacturing happen not only in 15, but Alexey Vyalkin, of non-commodity exports in other reasons it will be of eco-products. This also in 30 and 50 years, Director of the Investment this sector at about 11% until more profitable to use is not a step back, but in various economic and Innovation Department 2020. This not only applies to robots than to fulfill their rather constitutes our sectors, such as of the Russian Chamber of grains but also to fertilisers, Anton Belyakov, societal obligations to their unique advantage over transport infrastructure, Commerce fat and oil products, oilseed member of the Committee employees. While we have the rest of the world. energy production, and realistic plans. My ideas and animal feeds. on Economic Policy of not yet reached that stage Russian fields are not yet nuclear industry. And, are aligned with his, “When listing the key “For example, the the Russian Federation yet, Google has already spoiled by transgenes slightly controversially, but I think the situation economic projects in various physical volumes of fertiliser Council introduced driverless cars. and agrochemicals, I would reconsider is somewhat more sectors, we should pay special trade in the world have A similar situation will be unlike other countries. investing everything in complicated. I believe that attention to our exports. The increased by 25% over the “The current economic seen in other sectors in Given the potential food the future, and allocate we must press on with top performers have been past seven years, due to the reality may differ greatly all countries, including in deficit in the next 10 to some funds towards the implementation of the same for the past three agriculture demands in many from the future we will Russia. 15 years, predicted by present developments, reforms that we did not years. The trend towards a developing countries. Russia be facing in 15 years. “I believe that scientists, eco-production like social projects, complete on time, such decrease in the energy sector has secured this niche in the There are some global while putting together a is set to become even including education as the reform of local is evident from the drop in world market. Our companies processes that experts strategy, it is better to more widespread. It is and health care, as it is governments and pension export to 62.5% in January- account for about 14% of are already discussing; for favour the development also worth considering impossible to live in the Yevgeny Yasin, reforms. Now they are October in 2016 from 67.7% world exports and their output future forever. Thinking Scientific Director at the not developing as they in the previous year. At the is very competitive, since about the future, while Moscow Higher School of should, yet they can really same time, the energy sector we also produce all kinds of running away from the Economics benefit the country. accounts for approximately primary products required in Thinking about the future, while running away from present, could be a costly “Relations with 35% of exports outside of the sector. the present, could be a costly mistake mistake.” “The task at hand is business should develop raw materials, mainly due “The military-industrial rather complex. I believe freely, for example, to petroleum products and sector is comparable with that certain aspects as Boris Titov of the electricity. agriculture in terms of of the current policy P.A. Stolypin Institute “In the second instance supplies: today, Russia Today, the main economic (the rouble) and targeted of inflation and the stable were formulated at the described: the authorities we have mining and still provides 20% of the world’s strategy should be to help investment accounts for integration of the «gold beginning of the 2000s should not only target production, which effectively arms exports. At the same implement a controlled enterprises are key. The rouble». and they are, to some inflation, but also accounts for about 12% time, by 2020 this could gradual transition to a system is designed to “Based on an extent, aimed at curtailing control the growth of of non-commodity goods increase by 3.5%. new economic model provide targeted credit for integrated currency, past reforms. The old high-productivity jobs. exports. First of all, these “Finally, I see transport for the development of the real economy and the the new system would policy, and therefore the According to Titov, this are steel, aluminium (and engineering, including the Eurasian Economic high-tech sector. ensure compliance economy, succeeded is key to a successful products made from them), manufacturing of cars, railway Union. This would in turn “At the same time, with the underlying while oil prices were high. strategy. And I agree. nickel, and products from cars, civil aircraft, ships help overcome financial this helps to implement macroeconomic Now it is clear that it is The most difficult ferrous metals. and boats, among the most and economic crises, the strategic goal of relationship, i.e. time for revision, if we issues that we will have “Finally, the share of promising export-oriented deepen integration and increasing the credit consistency between wish to put the Russian to solve in the future exports of machinery and industries. The government Sergey Dyatlov, achieve sustainable supply at a minimal the amount of goods economy on the trajectory are to create a truly equipment has also grown – in should really try to support Professor and Chair innovation and investment interest rate of 2-3%. and money in circulation, of recovery. legitimate system and January-October in 2016 it this kind of development.” of General Economic growth in its members’ Through targeted business which is the basis for “In my opinion, favourable conditions for Theory and History economies. investment accounts, this keeping balance with other the former Finance competition, both in an of Economic Thought “The new ‘innovation finances the real economy major macroeconomic Minister, Alexey Kudrin, economic and political at St. Petersburg and investment’ system and innovation. This indicators both in the proposed the most sense.” We should pay special attention to State Economic has received a new toolkit: should lead to GDP and integrated economy as a University a system of indicators, employment growth at whole, and in some of its the export-oriented sectors of our where a unified currency low and controlled rates national sub-sectors.” industries “Modern conditions We must press on with the exacerbate hypercompetition not Modern conditions exacerbate hypercompetition not implementation of reforms only between individual that we did not complete countries, but also only between individual countries, but also between between interregional and on time interstate economic blocs. interregional and interstate economic blocs 14 business plan IRON MAGAZINE №1 (15) 2017 15

we export slabs and billets and create Bridgestone factory in Ulyanovsk begun about 50% of their capacity, focusing more valuable products from them at production of radial tyres. In Tatarstan, primarily on improving their mass Modernisation 2.0 foreign plants belonging to Russian NizhnekamskNefteKhim (TAIF) also production (ingots, billets). They also companies. However, this is natural, began to focus on a new direction, developed their medium-tech production, Russian industrial renewal, proclaimed in the 2000s, has not gone unnoticed, given the current circumstances. We producing materials for the exterior of updating lines of cold-rolled products, despite scepticism. And, although not all economic sectors succeeded, for those need to change these conditions; this is power cables. The SIBUR Tolyatti plant coated sheets, pipes and some types of who managed to stay on track, it has become easier to adapt to new economic something our industrial policy should launched a new brand of copolymer building structures. In these 15 years, Alexander challenges. These players are now moving to the next stage of modernisation: consider very carefully.” rubber, helping to increase the wear total production volume and capacity Bulanov creating fundamentally new products. resistance and strength of tyres and increased by about a third. The chemistry of growth other rubber products. Some of the new projects will bring Chemistry and the petrochemical Tamara Khazova, Director of major change: they will affect not only The study concluded that in the past industry serve as illustrative examples. Analytics at Alliance-Analytics, the volume of production, but also 15 years, industrial capacity (excluding Traditionally, the model worked commented: “2019 will see the next the transition to fundamentally new the oil refining industry) has increased as follows: we exported basic raw major wave of commissioning of new work standards. In 2015, Metalloinvest by about a third. At the same time, old materials and imported high-value and modernised factories, the first launched Pellet Plant #3, the largest equipment (i.e. equipment introduced products. In other words, there was of which will be ZapSibNeftekhim facility of its kind in Russia at the time. It before 2000, left over from the Soviet a gap in the production chain, which (SIBUR), SayanskKhimPlast was built using technologies developed in era, because in the 1990s there was was partly filled by other countries. Thus, and NizhnekamskNefteKhim.” cooperation with domestic engineering minimal introduction of new equipment) restructuring was a logical step. The ZapSibNeftekhim is the largest venture manufacturers. The new plant reduces amounted for only a quarter of all process began in the 2000s and to date of its kind. Even on a global scale it could the cost of raw materials for blast- equipment. Salnikov adds: “At the same has resulted in the upgrading of more be considered a giant. It will produce furnace production and, ultimately, time, our industry is more inclined to than 50% of industrial capacities. This is enough to make more than 2.2 million the cost of steel. The use of new produce low-value added products, as the main reason why Russian chemical km of water pipes, 600 billion medical technical solutions allowed the company the majority of enterprises in the country production is performing so well even in tubes, 71 million car parts and 151m2 of to significantly minimise its technogenic are designed for minimal processing of the current economic climate. carpet. According to Khazanova, “in 2017, environmental impact. The concept uses raw materials and exporting the resultant More specifically, rubber and growth will be generated mainly by newly waste-free, environmentally friendly products.” This needs to be addressed plastic production continue to produce built facilities moving up to full capacities. production: all of the base ingredients as soon as possible, as we do not have exceptional results. In the 2000s, these A strengthened rouble might also make and dust from the production are reused the luxury of the 2000s, when oil prices industries upgraded their equipment, domestic production preferable to oil and in the technological process. skyrocketed, giving the industry false while removing obsolete facilities gas exports.” Metalloinvest has also developed its hope that this model could prevail. altogether. This was followed by a period production of hot briquetted iron (HBI). To resolve the current issues, of reduced disposals of old production Deep processing HBI is characterised by low impurity we need to try to analyse current units, while a relatively high number According to the CMACP, in 2000-2015 content and chemical composition opportunities objectively. Not all of new facilities were introduced, mining and steel companies upgraded homogeneity, and therefore is an ideal markets are of interest here. Salnikov which created more opportunities for noted: “There are obvious priorities increasing output. that stem from existing competencies, The Ministry of Economic available markets and world standards.” Development of the Russian Federation The current belief that Russia needs analysed production performance ower prices for raw which systematically analysed various to develop its light industry is based last year. Their analysis showed an materials and other industries, may offer some insight. The on the fact that this industry was quite increase in industrial productivity of external factors have study was completed for the Centre for prominent in the Soviet Union. Salnikov 1.1%, which is not bad, given the negative increased the relevance Strategic Research, which will be used remarked: “I believe that this approach figures the year before. Rubber and of import substitution and in the preparation of a socio-economic is incorrect, since fabrics and clothing plastic production alone grew by 5.4%. brought slogans about development strategy for Russia. production are now dominated by The Ministry attributed this growth to modernisation back onto Vladimir Salnikov, Lead Researcher developing economies. Even China is the new and modernised production the agenda in Russia. The main objective at CMACP, commented: “Our team has looking to move away from this sector. facilities in Russia. Last year alone, L We could focus on high-tech sub- Nizhny Novgorod’s RusVinyl (owned by has been for Russian companies to learn encountered mixed results. On the one how create highly-processed products, hand, we have seen the consequences sectors within light industry, such as the the Belgian company Solvay and SIBUR) which previously were imported. But of previous modernisation efforts, which, production of protective clothing. We expanded its range of emulsion PVC before launching the Modernisation 2.0 of course, took place in processing need to develop the areas which could (used in vinyl wallpaper and artificial strategy, we should study the currently industries. On the other, when we become engines of growth within the leather). TomskNefteKhim (SIBUR) also ambiguous results and processes looked closer at the issues at hand, sectors themselves, by gradually creating completed its modernisation work, thus of its first stage. A recent study by it was impossible not to find that high-value added production facilities. increasing its capacity for polyethylene the Centre for Macroeconomic Analysis modernisation had exacerbated existing Ideally, this production would take place and polypropylene production. Cordiant- and Short-Term Forecasting (CMACP), issues.” domestically, unlike our current strategy: Vostok in Omsk launched its production of particularly strong tyres for cars and light trucks, while the Japanese Construction of the ZapSibNeftehim complex 16 business plan IRON MAGAZINE №1 (15) 2017 17

raw material for steel production in both vegetables). In other sectors, the there are a large number of production new approaches to designing and electric arc furnaces and converters. In domestic market is already saturated, facilities, which, when used more managing supply chains, and re-adapt addition to its high steel quality, HBI is and so we can turn to exports.” The in a time of weakening monetary industrial equipment for fundamentally very energy efficient. Its greenhouse main priority at the moment is to policy, could provide two or three different needs. gas emissions are significantly lower improve product quality. Unfortunately, years of industrial growth, without For example, according to analysts, compared to traditional blast-furnace according to Salnikov, for the time being, much additional investment.” Simply in order to reach the standards of production. The final advantage of HBI is companies are most often inclined to put, businesses do not need a big Industry 4.0, we would need to update in logistics, since its high density ensures adopt a price-hiking strategy, rather incentive. The second vital point is that, almost 50% of all of our production that it is convenient to transport, ship than a significant sales increase. But in although a higher level of capacity lines, since this necessitates the use and store. Warehouse for finished products at Lebedinsky GOK general, it could be argued that import use can slightly reduce inflation, it of new machinery and production Currently, construction of HBI-3 substitution has been successful in this can also stimulate the next wave of systems interacting with each Plant is under way at Lebedinsky GOK sector. development. Salnikov added: “Are other digitally. Daniyal Sultanov, (part of Metalloinvest). With a production of the world’s key exporters of grain crushers, refrigeration counters and This did not only take place due to we ready to endure higher inflation Project Manager at the Centre for capacity of 1.8 million tonnes per year and is trying to increase the export of display cases increased production as a external factors, but also thanks to the for higher investment growth rates? Strategic Research, noted: “with the (currently Lebedinsky GOK’s full HBI meat and poultry. Salnikov adds: “Such result of agricultural development. fact that in previous years, the industry’s Of course, everything should be within development of the real economy, capacity is around 2.4 million tonnes objectives require a steady production of Shipbuilding is another sector with production capacities have undergone reasonable limits, for example, a 20% we need to re-focus on the most per year), it will be one of the largest agricultural machinery and equipment, potential for growth. One of the largest active renewal. Since 2000, companies increase in prices per year would relevant areas, including robotics, big such facilities in the world. Primetals which is unlikely to be achieved without ventures in this area is now taking place have been able to modernise more mean we go bust. But if we are talking data, new materials, automation and Technologies and Midrex Technologies governmental support.” in the Far East. In 2016, the first stage of than 85% of their equipment, ensuring about the choice between 4% and 6% computer engineering.” At the same developed, produced and supplied Finally, transport engineering could the Zvezda shipyard was launched in the stable output growth by an average of inflation, which will mean 3% and 6% time, instead of focusing on creating all the equipment for the plant. The also grow in scope. Salnikov points Primorsky region. It will build ships for 4% per year. Meat products, vegetable growth in investment, the issue about our own machinery, it would be technology of direct reduction of iron out: “We are the largest country in the development of offshore fields and oils, canned fruit and vegetables and what is best for the country becomes more useful to find ways to combine (MIDREX) was chosen in 2005 as part the world but are still purchasing trains for work on the Northern Sea Route. The soft drinks showed the best results. At less obvious.” It should be noted that different approaches and technologies of the construction of the second HBI from Siemens and Alstom. At the same venture has three stages. According to the same time, a number of segments even without a significant equipment efficiently, in order to perform specific facility, meaning that its economic time, China has managed to connect the the plan, the factory will process 90,000 lag behind the industry curve. Almost upgrade, the Russian real economy tasks better. Almost every industry has and environmental efficiency was entire country with high-speed railway tonnes of metal per year at the first stage half of condensed milk, flour products could grow by using its under-utilised opportunities for this. Sultanov adds: also successfully tested. It is also lines and become an industry leader in (about 21% of the total consumption of and butter are produced with equipment capacities. This is possible because of “I think that today our most ambitious important that with the commissioning of one decade. It established its transport Russian shipbuilding), and by the end of installed more than 10 years ago. The so-called demand inertia. For example, objective is stable annual economic HBI-3, Lebedinsky GOK’s environmental system from scratch. I believe that the third stage this figure should grow to high share of non-competitive capacities military vehicles developed in the growth of 4%. To achieve this aim, impact will remain the same. the Chinese experience should serve as 380,000 tonnes. (about a third) in the production of basic 1970s are still being produced, as they we need to grow our production by Аccording to some experts, a good example for us.” food staples, such as flour, bread, and run on tried and tested technologies, 7-8%. This is possible with the proper the development of the mining and steel In recent years, not all Feed the country cereals, also concerns the experts. trusted by clients. But as for export support for entrepreneurial initiatives industry could be facilitated by the steady manufacturers of machinery and With the imposition of sanctions and These items should be development expansion and deep processing and a predetermined system of growth of consumer industries. Machine equipment intended to serve as an restrictions on Western imports, Russia priorities. That being said, the industry complexity, then we need to introduce economic indicators and metrics.” engineering, whose segments, according engine for the country’s industrial started to develop its agricultural and as a whole has more opportunities for to Salnikov, “are clearly defined”, is a development have had the opportunity food industries. These two sectors output growth. Its capacity utilisation over good example. Salnikov continues: “This to invest in modernisation. The industry seem to be benefiting from the current the past year reached 59%, which was is what we should focus our expertise suffered a significant reduction in situation because of sanctions, and also a record. This figure could be higher if it on, as these segments are incredibly the fleet of equipment from 2000-2015 of the devaluation of the rouble. A clear were not for the significant seasonality of important to our economy. This includes 45%, with machine tool construction and indicator of the industry’s success is that demand for many products and the need oil and gas production equipment, as bearing production taking the biggest now almost all of the pork and poultry to keep a significant stock of equipment well as everything that was formerly hit. In this case, according to the CMACP, products in Russian shops are produced on strategic commodity lines. In other known as petrochemical engineering. 30% of equipment made in the twentieth locally. Beef production, however, is words, in addition to technological As a leader in oil production, it is simply century remains in production facilities; still problematic as Russian companies modernisations, managerial decisions not right to import technologies and the equipment withdrawal process is still struggle to compete with their South can also be of use. equipment in this area. Although we do ongoing. On the other hand, on average, American counterparts, which benefit not yet have the necessary technologies only 35% of capacity is in use, meaning from good natural conditions for Inflation vs investment to implement high-tech solutions, that there is still scope for making livestock: excellent meadows, cheap Salnikov observed: “One of the main necessary, for example, to develop greater use of existing capacities. labour, and warm climate. reasons the Central Bank introduced the Arctic shelf, we are still capable of Significantly, almost all successful Salnikov commented: “So far, these a tight monetary policy was a lack of some simpler developments.” ventures in the industry took place in advantages remain so significant that available industrial capacity, which The second sector worthy of special sectors relating to domestic consumers. they outweigh delivery costs, which have resulted in a lack of opportunities for attention is agricultural machine Thus, production of household appliances become more affordable recently. In the real economy. The CMACP’s research building. Russia is currently growing developed, due to the increasing income addition to beef, we have a lot to develop showed that in most industries this Equipment installation at new facilities at the Zvezda Shipbuilding Complex in the its agro-industrial presence. It is one of the Russian population, while feed in our greenhouse agriculture (growing assumption is exaggerated and that Primorsky region 18 Foreign IRON MAGAZINE №1 (15) 2017 19 Experience

The ability to adapt is not only s a rule, a successful important from the point of business will aim to expand and view of improving financial diversify. However, Adapt or Fail new acquisitions performance and investments do not always bring A business’ ability to adapt to the times has always been key to success. History A positive results. At the end of the 1980s, Li Kun- to close 13 steel plants and sell shows that an inability to sense the need for change at the right moment, hee inherited the business empire. non-core assets in the cement, Yakov Utin as well as an incorrect strategy for change, can lead to adverse consequences. From light bulbs The third son of Samsung’s founder, timber and mining sectors. In 1982, to medicine he was a strong advocate of the company acquired Marathon The history of the company Royal investment in advanced technology. Oil for USD 6.2 billion to stabilise Philips began in 1891 with a small He proclaimed the business’ new revenues. Roderick was convinced electric light bulb factory, a far-sighted ideology: to become a producer that mining its own hydrocarbons business idea for the time. At the start of innovative goods that were would allow the company to reduce of the 20th century, Philips had grown competitive on the global market. the steel plants’ energy expenditures, into one of the largest companies The timeframe for this revolution was and selling oil to third parties in Europe. By 1980, this successful ten years. would reduce the impact of cyclical family business had become a vast Li Kun-hee financed various variation in the price of ferrous conglomerate with such an unwieldy research projects dedicated to metal products. In turn, it was organisational structure that senior identifying factors that enabled intended that Marathon Oil would management found it difficult to companies to compete successfully buy expendable items for boring run. Acquisitions often did not meet on the global market. Samsung began and production equipment. Later, expectations and Philips found it more a concerted effort to bring in younger the company significantly reduced and more difficult to cope with growing managers. The new expenditures excess production capacity (around competition and keep expenditures were financed through selling off 30%), made efforts to optimise staff down. In 1996, a decision was taken non-core assets. numbers and implemented a wide to restructure the company. Over In 2003, the Korean brand scale programme to acquire new three years, Philips sold off roughly 70 became one of the most valuable in equipment. subsidiary companies, returning to its the world and revenue was in excess Thanks to the reduction in original speciality. of USD 100 billion. expenditures, US Steel became one At the same time, Philips looked of the most cost-efficient American into development opportunities. In Self-improvement vertically-integrated companies. 2000, observing the ageing population In tough times, restructuring with Productivity rose significantly and increasing outlay on healthcare, the aim of reducing expenditure and as a result of the new equipment, the company took the decision to creating new competitive advantages and partnerships with Japanese increase investment in medical is a company’s only method of companies improved production technology production. As a result, survival. The American firm US quality. by 2008, medical technology sales Steel, which can trace its history The effective transformation of accounted for the highest share of the back to 1901 and which was the a business depends on many factors; company’s operational profit; in 2011, largest in the world until the Second of course, there is no general medical technology was the company’s World War, began to lose some of template for success. Nevertheless, largest segment by sales volume. its market share to German and many studies have shown that Japanese producers in the middle of companies who have updated their Cutting the excess the twentieth century. Its competitors business models at the right time The ability to adapt is not only actively used continuous casting have various common traits. They important from the point of view of machines, which allowed them to set themselves clear and ambitious improving financial performance, reduce energy use and increase goals, created an integrated but is also key to success when productivity. The necessity of wide business structure, invested in moving into a new market. The South scale investment was a serious modernisation and motivated Korean company Samsung was challenge for US Steel management. employees to participate actively developing as a classic large family In 1979, David Roderick, who in the business. And, perhaps business until the start of the 1990s, favoured decisive action, took most importantly, these successful bringing together enterprises in control of the company. His first companies were led by strong and various sectors. move was to take the decision effective managers. 20 Industry IRON MAGAZINE №1 (15) 2017 21

Traditionally, Russia used to import large-diameter pipes

arge-diameter steel with importing pipes. In the 1960s, pipes (LDPs), essential the Soviet Union signed a long-term for construction in the agreement with West Germany, oil and gas industry, which Chancellor Konrad Adenauer are to thank for this subsequently broke. It seems development. The large that the West was concerned that diameters start from 530 the Soviet Union would strengthen its Lmm, and each size has a unique use. ties with Eastern Europe using new Pipes with a diameter of up to 1,020 pipelines. mm are used for main oil pipelines, Adenauer’s decision coincided and those with diameters up to 1,420 with the construction of the Bukhara- mm are used in gas pipelines. The Ural gas pipeline, where imported 1,420 mm pipes are known around pipes were going to be used. This the world as ‘Russian-size pipes’ and meant that the Chelyabinsk Pipe- are used mainly by Gazprom, despite Rolling Plant (Chelpipe) had to develop the fact that Russia did not produce and produce their replacements. At them until very recently. the same time, the Soviet authorities realised the need to replace imported Gas for pipes materials. In 1965, the Volga Car Historically, LDPs were sold in Manufacturer built a whole new plant the Soviet Union, and then in Russia, for welded large-diameter pipes. It is by Germany, Austria, Italy and Japan. now called the Volga Pipe Plant and is However, there were many issues part of TMK.

From Outsiders to Leaders

Until recently, Russia depended heavily on imported goods for its pipeline projects, which form a significant part of its earnings. However, today, Russia’s domestic pipe industry has become a global leader. Elena Romanova

The Kozmino port is the end point of the Eastern Siberia-Pacific Ocean Pipeline 22 Industry IRON MAGAZINE №1 (15) 2017 23

From 2002-2016, Russian pipe manufacturers invested over 470 billion roubles into developing their production capacities

In detail

Modern industrial demands on metal rolling for pipe production are constantly becoming more exacting. In order to meet these demands, Metalloinvest is looking to, among other approaches, close collaboration with pipe producers. The Company regularly increases its collaborative efforts with strategic partners in the sector and organises coordination meetings to discuss issues related to metal quality or the development of new types of steel. These fruitful exchanges between Metalloinvest’s technical specialists and customer representatives move the implementation of complicated infrastructure projects to the next level. For example, production technology for cold-resistant K60 rolled products was developed and launched at Ural Steel for the ‘Eastern Siberia-Pacific Ocean’ oil pipeline project, which took place from 2009-2012. Between 2015 and 2016, integrated production technology for X70 rolled steel with increased durability at low temperatures and A rock garden in the Vysota 239 large- which exceeded the standards required of Class 0 steel by five times diameter pipe workshop at Chelyabinsk was developed and implemented for the installation of OJSC Yamal LNG Pipe-Rolling Plant In the 1970s, the only Soviet Plate previously purchased from Germany, However, the major companies are now gas gathering systems at Ural Steel. (Editor’s note: Class 0 steel has no Mill 3600 was built at the Azovstal Plant, would not be produced in the country expanding into international markets, internal defects; this is determined through ultra-sonic testing.) which improved rolling technology. Later, until the 2000s. Over time, United diversifying their production, and so In 2016, Metalloinvest supplied pipe billets for the manufacture of However, it quickly became in Khartsyzsk the only Soviet LDP factory Metallurgical Company (OMK), SeverStal, are still attracting the same rates of seamless pipes for high-pressure boilers at the Long Phu 1 thermoelectric apparent that the task at hand was far was built, equipped with imported goods. TMK and the ChelPipe have all grown investment. power station in Vietnam, which has a total capacity of 1,200 megawatts, from easy. In the 1970s, after the Social However, from the 1980s, oil and gas their production capacity. In total, from With regard to exports, however, from OEMK to production sites at Pervouralsk New Pipe Plant (part of Democratic Party came to power in companies began to move further east, 2002-2016 Russian pipe manufacturers there are still some problems, ChelPipe). West Germany, cooperation with the into Yamal and Eastern Siberia. They invested over 470 billion roubles into including the new EU antidumping From 2007-2012 and in 2016, steel produced by Ural Steel workers was Soviet Union resumed and kicked off needed pipes that could withstand developing their production capacities. regulations concerning domestic used by Gazprom to build the Bovanenkovo-Ukhta and Bovanenkovo-Ukhta with the so-called ‘Gas for Pipes’ project. a harsh climate and permafrost, which, One of the most important side effects seamless products made with cast 2 gas pipelines, designed to transport gas from the Yamal peninsula to the The agreement stipulated that the yet again, increased Russian imports. of this investment was the rise of steel cylinder billets. But since Russian Unified Gas Supply System. Soviet Union would supply 3 billion m3 With the collapse of the Soviet sustainable demand for ferrous metals. the quality and reliability of Russian This year, Chelyabinsk Pipe-Rolling Plant is producing finished of gas annually to West Germany, and Union, the period of intense construction pipes exceeds international standards, pipes from high-quality Ural Steel strips, and is supplying them to in return it would receive 1.2 million came to an end, bringing the need for Are we trying too hard? according to Igor Malyshev, Director of Transneft for the implementation of two major projects. The first was tonnes of LDPs. The project was more efficiency and reliability to the According to the Russian Statistics the Pipe Industry Development Fund, the Zapolyarye-Purpe-Samotlor pipeline system, which today is the beneficial primarily to West Germany, fore. The Russian pipe manufacturing Service, the total production of steel they are still in demand. northernmost major oil pipeline in Russia, passing through the Yamal- which was developing its steel industry industry, competing with the now pipes in Russia in 2016 amounted to Today, the pipe industry is one Nenets Autonomous Area. The second is the Kyumba Taishet pipeline by reselling cheap gas to its European Ukrainian Khartsyzsk Pipe Plant 10.1 million tonnes, which is 11.5% of the most innovative in Russia, linking the Krasnoyarsk and Irkutsk regions, the construction of which, consumers. By 1980, West Germany (Azovstal was now also part of Ukraine), less than in 2015. This is due to lower and developments are ongoing. along with the development of the Kuyumba and Yurubchena oil fields, had received about $11 billion for its had to learn to stand on its own. demand for LDPs for the construction TMK signed a futures contract will allow Russia to maintain its current rate of oil extraction. pipes. This money could have been However, longitudinally welded LDPs, of new main pipelines in Russia. with Gazprom, based on which the Metalloinvest products have also been used in various other large earned by Soviet steel manufacturers. company received an advance payment pipeline construction projects over recent years, such as Atasu- But despite this massive loss, the to develop a new premium product Alashankou (Kazakhstan-China Pipeline), Vankor (Rosneft), Eastern project helped to build important gas Today, the pipe industry line. In fact, Russia is the only country Siberia-Pacific Ocean (Transneft) and Sakhalin-Khabarovsk-Vladivostok pipelines such as: Orenburg - Western in the world that currently has all (Gazprom). Border pipeline; Urengoy - Pomary - is one of the most innovative the necessary technologies for the Uzhgorod pipeline; and Yamburg - production of underwater and overland Western Border pipeline. in Russia gas main pipelines. 24 Management IRON MAGAZINE №1 (15) 2017 25

o take up a trade is From the mid-1970s, to make an orphan of the land’. This the number of phrase, spoken in the time of Peter the injuries at work had Great, was used to describe Russian serfs been declining ‘Twho moved into industry. In Russia, Mikhail Lomonosov, the chief scientist and naturalist of the eighteenth and safety. The Council of People’s century, was the first person to begin Commissars established the Health discussing occupational safety. In and Safety Committee and created his book, The First Foundations of the Health and Safety Code. Later, From Metallurgy or Ore Mining (1742), he they developed a scientific approach outlined safety rules for the mining to health and safety, a solution that industry. was ahead of its time. The founder Control over workers’ safety of the Central Institute of Labour intensified in 1882 with the creation of (CIT), Alexei Gastev, was behind this Lomonosov a system of factory inspections. A little strategy. In short, its main idea was later, the duties of this supervisory to re-educate oneself and others authority expanded to include control in order to achieve accurate, fast over steam boilers and checks of and creative production. The CIT lifting devices. In 1886, The Rules for documents are written in a Soviet to Toyota the Supervision of Industrial Factory manner, but if we ignore that, it turns Institutions were adopted, requiring out that their message is still relevant enterprises to hire an employee with today and applies to ergonomics, responsibility for supervising the the organisation of working time and A safe working environment is one of implementation of the legislation. This space and establishing uniform work the keys to success for any organisation. was the prototype for the health and standards. In Russia, the system of occupational safety engineer. However, even the founding Olga One of the factory inspectors father of the Soviet school of scientific Lariohina health and safety dates back to the eighteenth century and today, after was Piotr Sinev. A prolific health management was not saved by his overcoming the failures of the 1990s, it is and safety advocate in Soviet Russia, success. Alexei Gastev was exiled undergoing a new phase of development. he later became the first head of in 1939, and his suggestion that the safety engineering department work should help people discover at the Moscow Higher Technical themselves started to fade away. School. Basing his argument on The times of romanticising work had statistical data, he wrote: “The task passed and, gradually, the Soviet of occupational health and safety is system of work management turned to create and maintain production into another bureaucratic machine. conditions with a minimal risk of However, the real problems arose accidents”. much later, in the 1990s, during The Soviet government slogan the economic crisis. ‘Occupational Health and Safety for This can be judged through Workers!’ began a new era for health the injury rate at work. Since 26 Management IRON MAGAZINE №1 (15) 2017 27

In detail

According to the European Agency for Health and Safety and Work, over 80 million work days are lost annually in the European Union due to accidents at production facilities. Three quarters of these incidents do not have serious consequences, but this figure is still notable. In Europe in 2014, a strategic occupational health and safety programme was launched in order to reduce the scale of this issue. In Russia, the Research Institute of Labour calculated that in 2016, losses of working time due to work-related injuries and resultant compensation to employees amounted to 103.5 days. The design of ventilation systems at industrial workshops by However, here differences in approach specialists at the All-Union Research Institute in the 1970s to statistical analysis can play a role. The Ministry of Labour of the Russian Federation uses a figure showing that the mid-1970s, the number of injuries fatal injuries had already begun to 2.4 deaths occur per 100,000 people in at work had been declining, both in increase at the height of perestroika, employment, which is similar to the levels absolute and in relative terms. Then, and continued to rise for more than in the EU, Japan and the USA. However, during de-industrialisation the picture 20 years. Only in the 2000s did the there is still room for improvement in changed. In the period of sharp trend reverse with the reinstatement the field of occupational health and production decline (almost halving of occupational health and safety safety. Traditionally, three quarters of all from 1990-1995), the specific number legislation, aiming to reduce industrial accidents are caused by organisational of injuries attributed to the volume of injuries in Russian companies. errors, which can therefore be output increased by 40%. The safety triangle became eradicated fairly easily. These errors For a detailed analysis, the impact the standard foundation of many include unsatisfactory organisation of health and safety measures can be Russian businesses’ health and of the production process, violation of assessed by the accident ratio, i.e. the safety systems. According to However, the organisation occupational health and safety standards, ratio between the frequency and the this theory, for every fatal work insufficient training and lack of workplace severity of work accidents. After all, the accident, there are 10-30 serious of the work process is not discipline. Solving these problems would total number of injured workers varies injuries, about 100-300 minor have tangible consequences. According according to the rate of occupational injuries, 1,000 – 3,000 micro-injuries the only component of safe to the Russian Labour Research Institute injury reporting, while the number of and 10,000 – 30,000 potentially of Labour, in general, economic losses deaths from fatal injuries is unaffected dangerous injuries. Vladimir production linked with Russian working conditions by the reporting issue. The rate of Pupkov, a consultant and instructor amounted to 1,36 trillion roubles, or 1.7% of GDP, and of this losses of work time alone, direct losses of employers, came to An employee in an OEMK workshop 406 billion roubles.

By its very nature, metalwork undergo successful OHSAS awards from the industrial is a dangerous industry, 18001:2007 certification. community. For example, in at Orgrpom group, commented: best practice and benchmarking based on the successful experience TWI training at work also has a role which is why occupational To ensure the safety summer 2016, Metalloinvest’s “Occupational health and safety play a major role in the proactive of Toyota (with health and safety as to play. Pupkov observed: “HR health and safety is one of of tens of thousands of Oskol Electrometallurgical services and line managers usually approach.” one of its key elements). In Russia, departments must roll up their the key tasks for enterprises employees in complex Plan (OEMK) won in get involved in two ways, reactively In this case, there is the most popular and widely used sleeves to achieve real results in in the sector. Metalloinvest metalworking conditions at the Health and Safety category (to eliminate the consequences of an opportunity to test Gastev’s theory. elements of lean production are: this area. Some organisations have works within the norms of Metalloinvest enterprises, of the 13th Mining and Steel accidents) and proactively (to monitor After all, today’s management is 5S technologies for optimisation of training in place as a box-ticking Russian legislation, its own the company operates Enterprise with High Social risks systematically and reduce trying to figure out why an average the workplace; horseshoe work area exercise, because it is required by corporate social responsibility a labour protection and Effectiveness, an industry the probability of accidents). While Joe, an experienced worker, would layouts; Total Production Systems for law. But modern trends show that the policy (CSR) and the OHSAS industrial safety system. competition. In total, the reactive approach is more directly ignore personal safety measures. In universal maintenance of equipment; safety costs, as well as continuous 18001:2007 regulations; The company’s high level 42 enterprises, employing regulated in the investigation of other words, they are attempting to Kaizen systems, meaning continuous work to reduce occupational risks, and all its enterprises are of responsibility in this field about 40% of all mining and accidents, and the Occupational Safety establish a culture of safety. It turns improvement; and more. could be treated as investments”; internationally certified. All has been recognised on steel workers in Russia, took Department takes a more active part out that these ideas are very similar Safety management is not the only In future these investments always company enterprises regularly more than one occasion with part in the competition. in such investigations these days, to the concept of lean production, component of safe manufacturing. pay off. 28 A View Into IRON MAGAZINE №1 (15) 2017 29 the Future

or the second year in New technologies can enable a row, digitalisation remains one of the main producers to gain real advantages A door topics on the agenda of the World Economic Forum (WEF) in Davos. technology, material sciences, Russian industry also has Artificial intelligence energy storage and quantum a few similar examples of F(AI) affects our lives in many ways: computing,” believes Klaus Schwab, the successful application of into the from cars that park themselves founder and executive chairman of the fruits of the Fourth Industrial to computers that handle large the WEF. Revolution. In 2013, Lebedinsky amounts of data. Traditionally, when it comes to GOK and Mikhailovsky GOK (part “The possibilities of billions of digital technology, Russia is believed of Metalloinvest) introduced people being connected via mobile to be lagging behind. But, according a unique management system for digital world devices with super-powerful mini- to Internet World Stats, the level mining transportation machinery processors and memory capacity, of Internet access in Russia is called MODULAR. The system The Fourth Industrial Revolution is inevitable: no one doubts that providing unlimited access to the highest in the CIS and BRICS. enables real-time monitoring of the digitalisation of all aspects of life will only increase. However, ques- knowledge, are endless. All of these Together with Hong Kong, Russia the extraction and transportation of tions remain about the consequences of this change. opportunities will be even greater is ranked first among countries iron ore. All information about the Olga with the help of technological with the most affordable mobile machinery, from tyre pressure to Mikhailova breakthroughs in AI, robotics, communications. This rating is fuel consumption and the location the ‘internet of things’, driverless part of the WEF’s own report on of heavy vehicles and excavators, is cars, 3D printing, nano- and bio- technological development. collected in the centralised control 30 A View Into IRON MAGAZINE №1 (15) 2017 31 the Future

Neurotechnologies Innovations such as smart drugs, neuroimaging, New computing and bioelectronic technologies Space technologies Virtual and augmented Artificial interfaces that New architectures for Developments allowing realities intelligence3 6Blockchain and Geoengineering allow for reading, 10computing hardware, for greater access Next-step interfaces Advanced and robotics distributed Technological communicating and such as quantum to and exploration between humans and materials and Development of ledger 7intervention in influencing human computing, biological of space, including computers, involving nanom2aterials machines that can Biotechnologies Energy5 capture, Distributed ledger planetary Ub8iquitous brain activity computing or neural microsatellites, immersive environments, 3D printing Creation of new materials substitute for humans, Innovations in storage and technology based systems, linked sensors network processing, advanced telescopes, holographic readouts and Advances in additive and nanostructures increasingly in tasks genetic engineering,4 transmission on cryptographic typically Also known as as well as innovative reusable rockets and digitally produced overlays manufacturing, for the development associated with sequencing Breakthroughs in battery and systems that to mitigate the “Internet of expansion of current integrated rocket-jet for mixed-reality experience 12 key technologies,using a widening of beneficial material thinking, multitasking, and therapeutics, fuel cell efficiency; renewable manage, verify effects of climate Things”. The use of computing technologies engines according rangeto the of materials WEF properties, such and fine motor skills as well as biological- energy through solar, wind, and publicly change by networked sensors and methods; as thermoelectric computational and tidal technologies; energy record transaction removing carbon to remotely connect, innovations include efficiency, shape interfaces distribution through smart data; the basis of dioxide or track and manage 9 3D bioprinting of retention and new and synthetic grid systems, wireless energy “cryptocurrencies” managing solar products, systems, 1organic tissues functionality biology transfer and more such as bitcoin radiation and grids 12 Sourсe: World Economic Forum11 Handbook on the Fourth Industrial Revolution, 2017 progress of work; for example, the software calculates the actual planned Cyber-attacks, software defects and Automation has already eradicated lead to economic shocks. “Humans embankment and excavation volumes other risks can lead to serious issues. a large number of industrial jobs or machines? This is not the right at the site. Therefore, when installing digital requiring simple repetitive actions. question: humans and machines But, of course, there is always systems, it is vital to develop solutions However, today, new opportunities are should have a symbiotic relationship. room for more projects of this nature. to protect against these threats. appearing for even skilled work to be Our goal is to develop technologies Last year, in his address to the Federal There is also a risk that the performed by machines. Therefore, that benefit people and improve what Assembly, President Vladimir Putin development of technology will it is necessary to find a balance they do”, commented IBM CEO Ginni proposed a programme for the lead to issues in the labour market. in which new technologies do not Rometty at Davos. digital economy: “We will rely on Russian companies and research and engineering centres to implement this.” As a business incentive, the president suggested extending tax breaks for IT companies to 2023. He called the industry one of the fastest growing sectors of the Russian economy: “Until very recently, IT exports were close to zero. Now, they have risen to $7 billion.” However, tax breaks are not sufficient to turn plans into reality; it is also important to create the right Participants of the World Economic Forum at Davos test virtual reality headsets conditions for development, such as a healthy venture capital ecosystem. But does this mean that all new technologies bring guaranteed panel. In turn, each quarry driver has model to predict the chemical benefits? Usually, the WEF experts access to all of the necessary data composition of steel, they used share their Global Risks Report at on the on-board 10% increase in the data from more than 200,000 Davos. This outlines the key threats the productivity of the quarry fleet. smelts compiled over seven to society, economy, politics, and, Last year, Yandex Data Factory years of operations at the oxygen basically, everything on the planet. introduced a service to optimise converter shop. Another example is This year, extreme weather events the consumption of ferroalloys and the construction of the Amur Gas were labelled the number one threat additional materials in the oxygen Processing Plant, implemented by to world stability. However, the converter shop at Magnitogorsk Gazprom and controlled remotely via technological boom also caught the Iron and Steel Works. As a result, unmanned aerial vehicles. TraceAir attention of the recorders of the array the enterprise now produces steel created the software used in the of risks. According to WEF experts, with specific parameters and project, which creates a terrain- inefficient management, accidents quality, while reducing raw material planning map with accurate links and other unforeseen circumstances consumption by 5%. To build a to the coordinates and controls the all carry threats to public safety. The MODULAR system at Metalloinvest enterprises helps to monitor the extraction and transportation of iron ore 32 Society IRON MAGAZINE №1 (15) 2017 33

There should be a high level of competition at educational institutes for highly in-demand specialists

knows about is poor funding. “We need system engineers Each year, Russia spends around with broad scientific knowledge to $40.5 billion on R&D in terms of be able to apply different research the purchasing power parity of methodologies, analyse complex data national currencies, according to and work under time pressure in data from the Moscow Higher School fields that may not be fundamentally of Economics Institute of Statistical new, but are still close to the cutting Studies and the Economics of edge», commented Dmitry Trubitsyn, Knowledge. In 2015, the country was Head of Tion Group, a company ranked ninth in the world by this that creates smart ventilation indicator. Over the past 20 years, systems. He believes that waiting Russia has only managed to move for the next generation of Russian up only one place in the rankings. scientists to emerge as a result of But competition is tough. And, governmental initiatives is simply perhaps more importantly, it is not inefficient. Companies should take the level of financing itself that poses the issue into their own hands by the problem, but what the funding is establishing various partnerships actually used for. Here everyone has with research institutes and their own goals. universities, among other possible At a February meeting with initiatives. President Putin, Olga Vasilieva, Russian Minister of Education Success story and Science, stated that the main production lines achievement of the last few years Zhelezno is an educational exhibition had been stemming the ‘brain centre in Stary Oskol. It is the result drain’ among young scientists. of a joint programme between Several support systems have Metalloinvest, the National University been established for this purpose, of Science and Technology MISiS and including the Russian Foundation for the Moscow Polytechnic Museum. Basic Research. The fundamental Alevtina Chernikova, Rector of NUST principle of its work is ensuring MISiS, explained: “We invite any who ost studies have targeted funding for science. In this is interested to come and learn more shown that globally, system, scientists decide how grants about the secrets of engineering.” young people carry should be used themselves, without This is not simply an exhibition out the majority of input from research institutions’ that displays the development of scientific research. administrations, which is good for the mining and steel industries, but Interesting Young However, this motivation. However, these kinds a multifunctional interactive space unwritten rule of solutions cannot be the only where visitors can watch videos, Mdid not apply in Russia for a long mechanisms supporting scientific look at photo slides and participate time. Science has been declining development. in quests. “We wanted to have in popularity for most of the post- Because scientific a place in Stary Oskol where young People in Science Soviet era. This trend has begun to research does not always have people could not only learn, but also reverse in recent years, although the a direct practical application, spend their time in an interesting In the USSR, it was considered prestigious to be a scientist. But then situation is still far from perfect: the the government provides the lion’s way,” Julia Mazanova, Director budding young scientists began to move abroad or switch to business. average age of Russian researchers share of its funding. However, for Social Policy and Corporate Yulia Will science ever be fashionable again in Russia? is now 46. this does not mean that business Communications at Metalloinvest, Solovieva should not be involved in supporting remarked. Was there science, although it is clear that The 2014 opening of a turning point? entrepreneurs have their own the Zhelezno centre coincided with One of the issues that everyone interests. the 35th anniversary of the Stary 34 Society IRON MAGAZINE №1 (15) 2017 35

840,000 people took part in the NAUKA 0+ festival, more Moscow. More than 100 lectures were given by world-famous scientists, than those who are involved in including the British economist James Mirrlees, a Nobel laureate in Economic scientific research Sciences; European Organisation for Nuclear Research (CERN) and Vostochny Cosmodrome events shares this opinion. According to forces and attain mutually beneficial were also broadcast as part of the him, after the age of twelve it is too results. NAUKA 0+, a science festival, festival. This was all organised with a late to instil a love of science in takes place annually in Russia. It is single aim: to make science popular children. “In Japan, little children organised by the Ministry of Education again. 840,000 people participated in are overwhelmed with lectures on and Science, the Moscow city the festival last year, which is more combinatorial mathematics, and administration and the Lomonosov than the total number of Russian then their reactions are observed. Moscow State University. researchers. This is a clear sign that The most important thing is that this Traditionally the festival is many people are quite interested in ‘knowledge inoculation’ is carried out supported by the Art, Science and science already. And it is possible by professionals who truly love their Sport Charity Foundation, which was that in the near future we will be able work”, he added. created by Alisher Usmanov, founder to discuss reversing the decline of The popularisation of science of USM Holdings. Last year, the festival interest in science not with caution, allows all stakeholders to join took place in almost 100 sites across but with confidence.

Trip to the Zhelezno! centre in Stary Oskol

Oskol Institute of Technology. Today, MISiS and the largest companies in future generations of scientists the Institute is part of the National the industry. should start even earlier, while University of Science and Technology Arthur Muradyan, Executive they are still children. Karfidov Lab MISiS, one of the best technological Director of Traft, a transport company, is a project developed by former universities both in Russia and the believes that properly interesting NUST MISiS students. The business world. Last year in the QS World young people in science can only started as an engineering club, University Rankings by subject be achieved in one way: by showing where its founders met and became area, it was rated among the best them the real impact of science on friends. Today, Karfidov Lab has universities specialising in the mining the modern world. This means that a considerable number of high- industry. According to Professor it is necessary to strengthen the ties tech projects of various levels of Leonid Vaisberg, a member of the between science and industry. He complexity under its belt. According NUST MISiS Expert Mining Council, in believes that “the government should to co-founder Dmitry Vasiliev, in order the past few years mining education help create ‘success story production for young people to be interested in Russia has been developing lines’ at intrauniversity Fab Labs» in pursuing science, there need to rapidly: “World-class laboratories (networks of open creative production be more interactive museums and undertaking advanced research are workshops for young people). exhibitions, opportunities to interact opening in Russia. I see increased with established scientists and interest in mining engineering among It’s never too early scientific cartoons and TV channels. young people.” This is a direct result However, young scientists Pavel Frolov, producer of of the collaboration between NUST themselves believe that work with the educational project Robbo, Russia spends $40.5 billion on research and development annually Science show by Dr. Hal at the NAUKA 0+ festival in Moscow 36 Sport IRON MAGAZINE №1 (15) 2017 37

According to a recent Nielsen survey, there is a difference between building Sochi. How this issue will be addressed 94% of Russian people are aware of the infrastructure and making the best use is not yet clear. Anton Alikhanov, Acting World Cup and 74% are excited by the of it. According to Ilya Solntsev, Director Governor of Kaliningrad, believes that Final Preparations prospect of hosting it in their country. of the Centre for Strategic Studies the stadiums are likely to become Success for Russia would not necessarily in Sport at the Plekhanov Russian additional cost centres for the regions in In January, a symbolic ceremony was held to unveil a new clock in entail a strong performance on the pitch, University of Economics, only one of the which they are located. Varvara Yekaterinburg, which is counting down to the start of the 2018 FIFA which is always a doubt, but rather the stadiums used in the World Cup, Spartak However, the regions are hoping for Fufayeva, World Cup, less than 500 days away. The tournament will be held in level of sports infrastructure put in place Stadium, has a chance of breaking even new sources of income from the World Alexander eleven Russian cities, where football stadiums are currently being for the tournament, which should lead in less than ten years. Cup, chief among them revenues from Bulanov completed. to a greater possibility of future football Stadium maintenance costs are domestic and international tourism. Last victories. Moscow will become the world estimated at two billion roubles per year, year, the Kaliningrad region attracted leader among global megacities in terms according to a speech by the Russian about 1.4 million visitors, a 30% increase of the number of football stadiums Sport Minister Pavel Kolobkov at from the previous year. “This is a record eciding on the list of Otkritie Arena in Moscow (during produced domestically, including steel meeting international standards. But the Russian Investment Summit in for us, but we will try to maintain this host cities took time. the World Cup it will be called Spartak and concrete structures, polycarbonate pace of growth and increase the number For example, in 2011 Stadium) and Kazan Arena (built for for glazing and more. Metalloinvest of visitors again in 2018,” commented the Moscow region the 2013 Universiade).Three more enterprises supplied products for Alikhanov. Kaliningrad Stadium was built withdrew its application. sites will be finished this spring. The the Fisht Olympic Stadium in Sochi and strategically to aid the development of Boris Gromov, Governor first will be the Fisht Olympic Stadium, the Otkritie Arena in Moscow, as well tourism: it is in the very centre of the of the region at the renovated following the 2014 Winter as facilities in St. Petersburg, Samara, city on Oktyabrsky Island, near Kant time, admitted that it would be too Olympics. The Krestovsky Stadium Rostov-on-Don, Saransk, Krasnodar, Island (Kneiphof). After the tournament, D in St. Petersburg will be the second. Volgograd and Nizhny Novgorod. the stadium could be transformed into expensive to build a new stadium that would meet FIFA’s standards. These The last to open will be the Luzhniki However, imported materials are largely a cultural and business centre with standards are very demanding. The Stadium in Moscow, Russia’s flagship being used for internal equipment, a hotel, fitness facilities and offices, as stadium for a group qualifier match stadium. In 1980, it was from there that including lighting, sound, broadcast and well as sports grounds. needs to have capacity for at least Mishka, Russia’s Olympic mascot, was security systems. Since FIFA approves Broadly speaking, it is clear that 35,000 people and the venue for the released into the sky. The stadium will its plans far in advance, there is no football alone cannot sustain these opening and final matches needs to be host the key events of the 2018 FIFA way to adjust them to allow for import stadiums in the future. “There are many large enough to seat 80,000. Compare World Cup, including the opening substitution. questions about the use of the stadium,” this to the opening ceremony at the ceremony and the final. A number of stadiums have been noted Valery Shantsev, Governor of Fisht Olympic Stadium in Sochi, which Record-breaking preparations assigned some rather complex projects. Nizhny Novgorod. The same concerns hosted 40,000 spectators. Then there are underway in Russia. The country Take Krestovsky Stadium with its have been voiced in other cities and no are the requirements for the stadiums’ has never built so many large sports sliding roof and retractable pitch, for final resolutions have been approved locations, equipment, lighting and facilities at once, and the total example. Or the Luzhniki Stadium in anywhere. Andrey Bocharov, Governor energy supply. The pitches can only be confirmed budget is 639 billion roubles. Moscow, where everything is being of the Volgograd region, commented: grass and the training facilities must One of the main issues associated upgraded, and all that remains from “There are many interesting ways in also comply with an additional set of with this is an increase in the cost the old building are the walls. Even the which we can repurpose the stadium requirements. The list goes on, with all of imported construction materials new Fisht Olympic Stadium has to be after the end of the tournament, and requirements listed in great detail. against the background of a weakening adapted to meet FIFA’s standards. Luzhniki Stadium in Moscow has always been Russia’s flagship arena. In 1980, we are discussing them. But our main There are two stadiums rouble. Thankfully, the main materials Regardless, work on all stadiums it was from there that Mishka, Russia’s Olympic mascot, was released into the priority is to develop children’s and public currently in full operation: the required for the stadiums are still should be completed by early 2018. sky, and now the stadium will host the World Cup final sports.” 38 Summary IRON MAGAZINE №1 (15) 2017 39

Alexander Prokhorov and Nikolai Basov, as well as by Charles Townes, their colleague from America. It was an incredible achievement, which few Born in the USSR believed was possible. Even the Soviet physicist and Nobel Prize laureate, Lev When thinking about the Soviet Union, one thinks of Landau, believed that there was no a specific political system, a social model, a powerful way to create conditions under which military and industrial sector, or even the best ballet in electrons could give out the same Julia the world, for example. But digital technologies are one amount of radiation simultaneously. Gromadskaya of the last things to come to mind. Then, there have been arguments for many years about when the era of personal computers began and who was responsible for it. Some consider 1971 the year of mass computer technology, when Intel released its first available microprocessor. Others believe that it started in 1976, with Apple’s first fully-fledged computer. A third group considers the date to be in the 1950s, when the pioneering IBM estern countries 610 was made. All these are important are seen to have milestones. But there was another been the main important step in the development of contributors to affordable personal computers, and Generator for a solid-state pumping laser, created by specialists at the General the development it was taken in 1973, in the USSR, Physics Institute at the Soviet Academy of Science in the 1980s of electronics when Arseny Gorokhov received and computer a Soviet patent describing in detail his technology. This is true; however, ‘programming device’, as he called it. For the sake of continuing W However, the digital revolution the USSR also made some fundamental discoveries in this area. The issue of covers not only complex computer work on the laser, one scientist precedence is not always clear cut, since equipment, but also new entertainment many identical breakthroughs in the technology. Computer games have long resorted to sabotage twentieth century happened in different places around the world. One example of this is been an integral part of modern life. the conversion of an analog signal And here as well, the Soviet Union into a digital one. Vladimir Kotelnikov, left its mark. One of the most famous a scientist at the Moscow Power computer games in the world was Engineering Institute, came upon invented in the USSR - Tetris. Alexey the idea in the USSR. In the early 1930s, Pajitnov, a scientist at the Computer he was trying to improve radio quality by Center of the USSR Academy of narrowing the band of radio frequencies. Sciences, developed it in 1984. How By experimenting, he found that it would Tetris became popular outside be impossible to achieve with analog the country remains unknown. data transmission, but could work with We only know that it caused a stir digital transmission. However, 15 years when it became a main feature of later an American scientist, Claude the Game Boy released by Japan’s Shannon, substantiated the same idea Nintendo. Office workers soon independently of Kotelnikov. started to play the game on their Another example of a discovery computers, almost abandoning their that scientists made simultaneously work. Then the rumours started that on opposite sides of the planet, is Tetris was invented by the Kremlin the invention of the laser. Although with help from the KGB as a new Albert Einstein formulated the laser weapon designed to undermine the principles as early as 1917, for a long economies of the West. Mind you, time the idea existed only in theory. what would an invention, even a The first real working laser was created digital one, be without a captivating in the 1950s by Soviet scientists, Alexei Pajitnov is a fan of puzzles and the inventor of Tetris legend?