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November 19, 2019

Technological revolution may leave 2.5 million Russians jobless until 2025

Technological revolutionThe technological revolution may leave 2.5 million Russians jobless until 2025. At the same time, modernization is one of the challenges, which the economy is facing, according to the report of the Russian Academy of Sciences.

One of the options for changing the labor market may be the rapid development of small and medium-sized businesses, according to economists. In this sense, the labor market will adapt due to changed conditions and one of the key moments will be the establishing of a bottom-up economy when people start creating unique products and services themselves. Such a change has long been mature in society.

The Russian Prime Minister Dmitry Medvedev noted the new challenges in September during the Moscow Financial Forum.

According to Medvedev, the technological revolution can not only blow up labor productivity based on the digital economy but also remove professions and increase the risks of income polarization.

“We are critical for our readiness to meet new challenges in key sectors such as health, education, social welfare”, said the Russian Prime Minister.

The fourth technological revolution faced by the world will increase robotization and automatization. One of the examples of change is the new blockchain technology, and its deployment can significantly reduce the number of civil servants. The blockchain based pilot projects are already implementing the Federal Office of Registration, Cadastre and Cartography, the Health Ministry and the Novgorod District. The technology is actively explored by the Central Bank, Sberbank and Vnesheconombank.

The authors of the study have estimated that 3.9 million jobs could be released by 2025 due to the technological modernization of production and reforms in the budget sector. Due to the demographic collapse in the 1990s, the workforce will decline by 1.4 million people. This means that at least 2.5 million Russians will leave jobless.

Increasingly popular will be creative startups, niche projects and other types of self-employed activities where people determine the future of the economy.

In order to eliminate a potential rise in social tension, it is necessary that the production volume of small enterprises to be accelerated from the current level at least 2 times by 2025, economists estimate. They recommend the government to take measures to increase workers’ skills, create new jobs and opportunities for effective relocation of workers between regions.

“In Russia there will be no technological revolution soon, so it is too early to fear it”, says Director of the Financial Research University at the Finance Ministry, Vladimir Nazarov. “I think we should not worry too much about the aging population. A jump in unemployment can happen if the price of oil falls to 15-20 USD per barrel and remains at that level two or three years. In another case, unemployment will only decrease”, added he.

According to the government, one of the engines of economic growth and a source of new jobs can be small and medium-sized businesses. Programs have been created for facilitated lending and a legislative quota for state-owned companies for purchases by small and medium-sized enterprises.

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