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Digital Economy Program Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized a RUSSIA DIGITAL ECONOMY REPORT RUSSIAN FEDERATION SEPTEMBER 2018 © 2018 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved. This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifi cally reerved. Rights and Permissions This work is available under Creative Commons Attribution 3.0 IGO licence (CC BY 3.0 IGO) http://creativecommons.org/licenses/by/3.0/igo. Under the Creative Commons Attribution licence, you are free to copy, distribute, transmit, and adapt this work, including for commercial purposes, under the following conditions: Attribution—Please cite the work as follows: World Bank. 2018. Russia Digital Economy Report, September 2018, Competing in the Digital Age: Policy Implications for the Russian Federation. Washington, D.C.: World Bank. License: Creative Commons Attribution CC BY 3.0 IGO Translations—If you create a translation of this work, please add the following disclaimer along with the attribution: This translation was not created by The World Bank and should not be considered an official World Bank translation. The World Bank shell not be liable for any content or error in this translation. Adaptations—If you create an adaptation of this work, please add the following disclaimer along with the attribution: This is an adaptation of an original work by The World Bank. Views and opinions expressed in the adaptation are the sole responsibility of the author or authors of the adaptation and are not endorsed by The World Bank. Third-party content—The World Bank does not necessarily own each component of the content contained within the work. The World Bank therefore does not warrant that the use of any third-party- owned individual component or part contained in the work will not infringe on the rights of those third parties. The risk of claims resulting from such infringement rests solely with you. If you wish to re-use a component of the work, it is your responsibility to determine whether permission is needed for that re-use and to obtain permission from the copyright owner. Examples of components can include, but are not limited to, tables, figures, or images. All queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: [email protected]. TABLES OF CONTENTS Foreword . ix Acknowledgments . xi Abbreviations . xv Introduction . xix The Russia Digital Economy Report Structure. xx Executive Summary . xxiii Reference ....................................................................xxvii Digital Economy in Russia: Key Results of the Digital Economy Country Assessment . 2 1.1 Non-Digital Foundations ......................................................5 1.2 Digital Foundations ...........................................................6 1.3 Digital Transformation of the Different Sectors of the Economy ....................7 1.4 The Social and Economic Impact of Digital Transformation ....................... 11 References .....................................................................15 Digital Economy Today: Global Trends, Technologies, and Policy Implications . 18 2.1 The Rise of the Digital Economy ..............................................18 2.2 Disruptive Technologies as Drivers of the Digital Economy ...................... 20 2.3 The Data Revolution ........................................................ 24 2.4 The Transformative Power of New Business Models ............................ 25 2.5 Implications for Policy Makers and Recommendations .......................... 30 References .....................................................................31 Global Best Practice for Catalyzing Digital Platforms in Russia . 36 3.1 Global Trends in Digital Platforms ............................................ 36 3.2 Digital Platforms in Russia ................................................... 40 3.3 Policy Recommendations ................................................... 42 References .................................................................... 42 Global Best Practice for Driving Digital Transformation in Russia’s Public Sector. .. 46 4.1 Digital Government – Global Best Practice .................................... 46 4.2 Digital Government Transformation in Russia .................................. 53 TABLES OF CONTENTS iii 4.3 Policy Recommendations ....................................................57 References .................................................................... 58 Global Best Practice for Accelerating Business Transformation in Russia . 60 5.1 Global Best Practice for Driving Russian Industry Transformation ................. 60 5.2 Global Best Practice for Enabling the Digital Transformation of Russian Agriculture ..73 5.3 Global Best Practice for Advancing Services Transformation: The Case of Digital Finance in Russia .......................................................... 85 References .................................................................... 96 Global Best Practice for Boosting Digital Innovation and Entrepreneurship in Russia . 100 6.1 Global Trends in Digital Entrepreneurship .....................................100 6.2 Digital Entrepreneurship and Innovation in Russia ..............................110 6.3 Policy Recommendations ...................................................120 References ....................................................................122 Conclusion . .. 126 Boxes 1.1 Digital Economy Country Assessment Methodology ..............................3 1.2 Digital Education Platforms in Russia ...........................................9 1.3 The Ulyanovsk Oblast of the Russian Federation ................................13 1.4 Digital Transformation in the Kaluga Oblast .....................................14 2.1 Boosting the Digital Economy in China .........................................19 2.2 Dubai Roads and Transportation Authority. 21 2.3 Dubai Real Estate Blockchain ................................................ 22 2.4 Formulating a National Strategy in Artificial Intelligence in Finland ................ 23 2.5 Enabling Inclusive Growth through Digital Trade Platforms in China ................27 2.6 Ethics in the Digital Age ..................................................... 28 2.7 Measuring the Impact of the Digital Economy .................................. 29 2.8 Strategic Foresight Best Practices .............................................31 3.1 The Digital Ecosystem ...................................................... 38 3.2 B2B-Center ................................................................41 4.1 Applied Data Analytics in Action: A Case Study of Dutch VAT Refund Risk Model ... 49 4.2 Use of Blockchain in Sweden’s Land Registry .................................. 49 4.3 Basic Data Management in Denmark ......................................... 50 iv COMPETING IN THE DIGITAL AGE: RUSSIA DIGITAL ECONOMY REPORT 4.4 Devising a Strategy for Data-driven Government ................................51 4.5 Joinup: An EU Collaboration Platform for Digital Government Solutions ........... 52 4.6 Agile Approaches in Russia’s Largest Public Bank .............................. 56 5.1 Piloting a Digital Industry Platform at Gazprom ..................................67 5.2 4.0 RU and TechNet NTI .................................................... 69 5.3 Virtual Testing for Aurus .....................................................70 5.5 CompMechLab Group of Companies ..........................................70 5.4 Factories of Future ..........................................................70 5.6 Digital Shipyard to Be Built in St. Petersburg ....................................70 5.7 Artificial Intelligence in the Management of Energy Networks in the Kaliningrad Oblast ...................................71 5.8 Robotics at a ST. Petersburg Plant .............................................71 5.9 Enabling Precision Agriculture ................................................74 5.10 Globalization of Agriculture Know-How through Digital Technologies: Internet of Food & Farm 2020 ...................................75 5.11 Internet of Things in the Forest Industry ....................................... 82 5.12 Innovation in the Financial Sector ............................................ 86 5.13 MasterChain ................................................................91 5.14 Cashless Payments in Russia ................................................ 93 5.15 Attitudes Toward FinTech in Russia ..........................................
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