ICT Competences as a Factor in the Socio-Economic Development of Russia
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- Shavonne Louisa Armstrong
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1 ICT Competences as a Factor in the Socio-Economic Development of Russia Executive Summary Introduction Today Information and Communication Technologies (ICT) play a leading role in the innovative development of key areas of society such as public administration, business, education, healthcare, culture, security, and social life. Currently Russia faces the challenges of becoming an active participant in the global process of the information society development, and of securing maximum benefits from investment in ICT. To realize the full potential of ICT, the Strategy for Information Society Development in the Russian Federation, and the Information Society ( ) state program, have been adopted. Steps undertaken have already resulted in a substantial rise in Russia s ranking in two prestigious ratings, for the first time since they were established. The 2012 United Nations E-Government Readiness Survey ranks Russia as 27th (compared to 59th in 2010), which is partially due to the active conversion of public services into electronic forms and the creation of Web portals for their handling 1. Meanwhile, in the 2012 WEF Network Readiness Index Russia is rated 56th, up from 77th in More and more Russian citizens are benefiting from the Information Revolution. A study by the Institute of the Information Society (IIS), supported by Microsoft, analyses the impact of ICT competences in the innovative development of the economic and social spheres, with a special focus on the importance of ICT competences development programs for the enhancement of Russia s human capital. This study is based on a representative national survey and empirical statistical research of factors in information society development, including analysis of ICT usage in the regions of Russia. On top of that, results of the latest analyses of the role of ICT in economic development were used. ICT competences as a component of Russia s human capital Our findings demonstrated that ICT knowledge and skills are becoming an essential need, and prerequisite for personal success, for a growing number of people in Russia. They are required for better work productivity, communication, and access to information and services. While studying ICT competences as a component of human capital, we noted: 1. The importance of ICT skills as a component of human capital in Russia is growing. This is demonstrated by the steadily increasing proportion of jobs with mandatory PC and / or Internet skills: 10 years ago only 7% of jobs had ICT skills as a mandatory requirement, by 3 years ago, this had risen to 23%, and at present it is 30%, while another 14% actively use ICT skills in their work.
2 2. The average level of PC and Internet usage in Russia is lower than in Europe in general, however this difference is decreasing. The Internet in Russia progresses best: the gap between Russia and the EU in terms of Internet usage levels has shrunk more than twice over since Today 58% of individuals in Russia aged 16 to 74 use a PC at least once a week as compared with 69% in Europe, and the percentage of Internet users in Russia is 56% vs. 68% in the EU. Today Russia s results correspond to the average EU level as of 2008 and exceed those of a number of Eastern and Central European EU members. Young people lead the way in using information technologies the level of computer and Internet usage by Russian youth is close to average European rates. And for certain web services, Russian young people even outpace their EU counterparts: 79% use social networks (vs. 75% in the EU), they also use online training courses and some other services more often than youth in the EU. At the same time the older cohort falls significantly behind: the share of young people aged 16 to 24 using a PC weekly is 87% in Russia (92% in the EU), whereas this rate is only 18% for the age group (but 42% in the EU). These data show that the digital divide between different age groups in Russia remains unacceptably high. 3. One of the key priorities of information society development in Russia is e-government, one of the most important recent innovations in public administration. Moving public services to electronic forms also sharply underlines the issue of ICT literacy. Recent surveys show that lack of, or insufficient, skills in PC and Internet usage are major barriers to the use of e-government services. Currently e-government services in Russia are used by few: just 10% received information about services from official sites, 8% downloaded forms (vs. 25% in the EU), and only 5% submitted completed electronic forms (21% in the EU). However, there is high demand for these services in Russia, and 42% of the adult population considers the Internet one of the most convenient ways to apply to the authorities. More than half of young people say that if they need to apply to the authorities they would prefer to do it online. Lack of ICT skills, inhibiting the use of e-government and social e-services, has greatest impact among the elderly this group requires interaction with the authorities and social services more often, and yet their ICT skill level is significantly lower than that of young people. For elderly people not only is the percentage of PC and Internet usage lower, but also the level of skills is much lower: in the age group from 55 to 74 years, 60% of PC users can do only one or two of 10 basic operations, whereas in the younger generation only 20% show such results, the rest being more capable and confident. 4. We may conclude from the results of the study that ICT competences are of substantive importance among the human capital components. Adding the indices characterizing the ICT competences of the population to the composite index of human capital development notably increases correlation with the level of ICT usage in a region. This means that ICT competences are today a necessary condition of social and economic development based on ICT usage. Impact of human capital on ICT-based social and economic development The crucial role of education, permanent knowledge and skills acquisition for securing the competitive advantage of a person, corporation or country in the modern economy is caused 2
3 by the fast-changing environment of technology, markets and information where business operates in the context of globalization and ever-increasing competition. Strong competition results in acceleration of innovation, that in turn requires more creativity from employees, fast adaptation to new conditions, and mastering of new equipment and working skills. Today human capital is becoming one of the more important factors of e-development in Russia. According to the statistical research conducted, where the level of the population s education, ICT skills, number of ICT specialists graduated, and population of scientists in a region are higher, the rates of ICT use in various spheres of activity tend also to be higher. As an example, the interrelation between the overall level of human capital development and development of e-business in a region is fairly high (Pearson Correlation is 0.63) and exceeds economic factors of ICT usage (Pearson Correlation is 0.25). In addition, the level of ICT skills among human capital components in the developing information society assumes ever greater importance.the study has shown that expert evaluation of the ICT skills of a region s working population is interrelated with the level of ICT usage the rarer managers highlight their employees' insufficient ICT skills as a key factor in restraining ICT usage, the higher is the overall rate of ICT usage in the region. On average in Russia, nearly one fourth of companies operating in various fields consider their employees low level of ICT skills to be an important factor hindering ICT usage. The findings demonstrate that the overall level of ICT use in a region is interrelated with the number of enterprises providing ICT skills trainings for their personnel (Pearson Correlation is 0.51) deep penetration of ICT in various fields of activities requires special training of personnel, and motivates managers to provide training for their employees. According to the study, ICT skills enhance realization of people s potential in various spheres of activities. People who have completed specific PC training courses highlighted the effectiveness of this training and believed that the courses helped them to get access to necessary information and services in the Internet (53% of trainees), communicate with their friends and relatives (44%), improve their productivity (30%), and find a new (20%) or keep their current (16%) job. ICT-based innovative development as a driver of economic growth As we have demonstrated, human capital and ICT competences are today important factors in ICT-based innovative development. In addition, the wide use of ICT leads to important social and economic effects that change the face of modern society and expand opportunities for people. Information and communication technologies are, in particular, are important drivers of economic growth. There are two main areas where ICT impacts on economic development. The first one is production of ICT goods and services (the ICT sector being one of the most innovative and dynamic economic sectors, contributing significantly to growth). The second area, which is not less important, is ICT usage, which enables innovative development, and leads to labor productivity growth, cost savings, the emergence of new economic activities, and improvement in quality of life. Today, the ICT industry, still one of the most dynamic in the world, has continued to grow in spite of the global financial crisis. Supported by a continuous flow of innovations, the ICT sector has actually become one of the largest sectors of the world economy. Between 2000 and 2008, the annual average growth rate of the Russian ICT sector was more than 20%. Its contribution 3
4 to the country's GDP increased significantly, from 3% up to nearly 5%. From 2009 to 2011, the sector s growth rate slowed but, according to expert estimates, its growth potential is still high. According to DigiWorld, the ICT share of global GDP was 6.1% in , and McKinsey forecasts that this may reach 9% by Based on the results of recent studies, ICT use contributes greatly to the economy, in particular to labor productivity and economic growth. According to European Commission estimates 4 (2010), during the period from 1995 to % of the increase in labour productivity was due to ICT. According to the latest data from the OECD, the contribution of investments in ICT to the USA s economic growth was about 30% between 2000 and 2009, and about 32% 5 for Denmark, Belgium and Germany. Speaking about the impact of ICT on economic growth and labour productivity, we should keep in mind the ICT threshold effect. A study conducted by the Economist Intelligence Unit (EIU) 6 showed that ICT integration must accumulate a certain critical mass before it starts to influence positively on economic development; moreover, there is a time gap between ICT implementation and its visible economic impact. The effectiveness of ICT investments also depends on favorable conditions for doing business, and on human capital. As of the date of the EIU study (2003), the level of ICT development in Russia was below the limit where economic growth effects appear. Now, the ICT usage rate of Russia has considerably increased, and latest studies show the positive influence of ICT, and in particular of the Internet, on the economy. To increase the impact from ICT use in a country, it is necessary to improve the business climate (Russia is currently at 120th place on the ease of doing business index of the World Bank 7 ), and invest in human capital development and in ICT skills development in particular. The value of ICT competences programs, and assessment of the activities of Microsoft and its partners for the ICT skills development of Russian citizens As demonstrated above, the enhancement of ICT competences as a component of human capital is a necessary and important condition of innovative social and economic development based on ICT use. The study had a special focus on the level of PC and Internet skills of the Russian population, the ways of developing ICT skills, and demand for ICT skills improvement, including demand for special training courses. The adult population in Russia mainly explores PC and Internet via self-education, reading books, and consulting with friends, relatives and colleagues. Only 18% of population have ever undergone training on specific ICT skills courses, whereas this figure amounts to 39% in the EU. As our study has shown, specific courses are the most efficient and relevant way of developing ICT skills for adults: of those who have undergone specific computer training the level of ICT skills is significantly higher 48% are able to perform most basic operations, whereas only 17% that have not taken any specific courses show such results. The survey showed high demand for development of ICT skills in Russia. One third of adults believe that they need to obtain or improve PC or Internet usage skills, and around 11% plan to take ICT skills courses. The main incentives for such education are job-related (career development, to change job / seek a new job) and refer to enhancement in other fields (communication, obtaining of information and services). The demand for ICT skills development is even higher for youth: 43% 4
5 believe improvement to be necessary, and 17% plan to do this with the help of specific courses. With this in mind, the project Tvoy kurs: increasing digital literacy is operating in Russia as part of the joint All-Russia initiative of Microsoft and its partner organizations for ICT competences development for Russian citizens. The main goals of the project are to expand access of the population to ICT, provide training in modern information technologies, and develop technical skills and knowledge to enable employment and to improve quality of life in general. In total around 700,000 Russian citizens received consultancy and training as part of this project in the period ; this includes more than 200,000 that completed computer literacy training courses. Training workshops and courses were conducted in 100 cities across Russia by 120 partner organizations that took part in the project. The survey allows to estimate the contribution of the Tvoy kurs project to the development of Russians ICT skills: 2.6% of all those having taken ICT skills courses during the past 3 years did so within the Microsoft initiative. The high visibility of this project is also notable 16% of Russians aged 16 to 74 are aware of the Tvoy kurs program. 1 United Nations E-Government Survey 2012: E-Government for the People. New York: UN, p. 2 The Global Information Technology Report 2012: Living in a Hyperconnected World / Ed. by S. Dutta and B. Bilbao-Osorio. Geneva: World Economic Forum and INSEAD, p. 3 DigiWorld Yearbook 2012: The Challenges of the Digital World / Ed. by H. Ollivier and D. Pouillot. Montpellier: IDATE, p. 4 Europe s Digital Competitiveness Report / European Commission. Luxemburg: Publications Office of the European Union, p. 5 OECD Key ICT Indicators. / sti / ICTindicators 6 Reaping the Benefits of ICT: Europe s Productivity Challenge. The Economist Intelligence Unit, p. 7 Doing Business 2012: Doing Business in a More Transparent World / The World Bank and the International Finance Corporation. Washington: The World Bank, p. 5
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