Smart Technologies for Society, State and Economy [1st ed.] 9783030591250, 9783030591267

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Lecture Notes in Networks and Systems 155

Elena G. Popkova Bruno S. Sergi   Editors

“Smart Technologies” for Society, State and Economy

Lecture Notes in Networks and Systems Volume 155

Series Editor Janusz Kacprzyk, Systems Research Institute, Polish Academy of Sciences, Warsaw, Poland Advisory Editors Fernando Gomide, Department of Computer Engineering and Automation—DCA, School of Electrical and Computer Engineering—FEEC, University of Campinas— UNICAMP, São Paulo, Brazil Okyay Kaynak, Department of Electrical and Electronic Engineering, Bogazici University, Istanbul, Turkey Derong Liu, Department of Electrical and Computer Engineering, University of Illinois at Chicago, Chicago, USA; Institute of Automation, Chinese Academy of Sciences, Beijing, China Witold Pedrycz, Department of Electrical and Computer Engineering, University of Alberta, Alberta, Canada; Systems Research Institute, Polish Academy of Sciences, Warsaw, Poland Marios M. Polycarpou, Department of Electrical and Computer Engineering, KIOS Research Center for Intelligent Systems and Networks, University of Cyprus, Nicosia, Cyprus Imre J. Rudas, Óbuda University, Budapest, Hungary Jun Wang, Department of Computer Science, City University of Hong Kong, Kowloon, Hong Kong

The series “Lecture Notes in Networks and Systems” publishes the latest developments in Networks and Systems—quickly, informally and with high quality. Original research reported in proceedings and post-proceedings represents the core of LNNS. Volumes published in LNNS embrace all aspects and subfields of, as well as new challenges in, Networks and Systems. The series contains proceedings and edited volumes in systems and networks, spanning the areas of Cyber-Physical Systems, Autonomous Systems, Sensor Networks, Control Systems, Energy Systems, Automotive Systems, Biological Systems, Vehicular Networking and Connected Vehicles, Aerospace Systems, Automation, Manufacturing, Smart Grids, Nonlinear Systems, Power Systems, Robotics, Social Systems, Economic Systems and other. Of particular value to both the contributors and the readership are the short publication timeframe and the world-wide distribution and exposure which enable both a wide and rapid dissemination of research output. The series covers the theory, applications, and perspectives on the state of the art and future developments relevant to systems and networks, decision making, control, complex processes and related areas, as embedded in the fields of interdisciplinary and applied sciences, engineering, computer science, physics, economics, social, and life sciences, as well as the paradigms and methodologies behind them. ** Indexing: The books of this series are submitted to ISI Proceedings, SCOPUS, Google Scholar and Springerlink **

More information about this series at http://www.springer.com/series/15179

Elena G. Popkova Bruno S. Sergi •

Editors

“Smart Technologies” for Society, State and Economy

123

Editors Elena G. Popkova Moscow State Institute of International Relations (MGIMO) Moscow, Russia

Bruno S. Sergi University of Messina Messina, Messina, Italy Harvard University Cambridge, USA

ISSN 2367-3370 ISSN 2367-3389 (electronic) Lecture Notes in Networks and Systems ISBN 978-3-030-59125-0 ISBN 978-3-030-59126-7 (eBook) https://doi.org/10.1007/978-3-030-59126-7 © Springer Nature Switzerland AG 2021 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Contents

“Smart” Technologies in the Digital Economy and Industry 4.0 Scenarios of Smart Cities Creation as a Trend of Sustainable Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tatiana Yu. Shemyakina, Olga E. Astafieva, and Olga A. Gorelova

3

The Concept of Digital Supervision of Compliance with Labor Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pavel V. Tereliansky, Svetlana E. Titor, and Sergey P. Kosarin

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Prospects for the Development of Seaports of the Arctic Regions of Russia in the Infrastructure of the Arctic Basin . . . . . . . . . . . . . . . . . Alexei A. Stepanov, Alexander S. Aleshko, and Artem O. Merenkov

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Crypto Currencies: Current Realities, Philosophical Principles and Legal Mechanisms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Anatoly Yu. Olimpiev, N. Rouiller, and Irina A. Strelnikov

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Natural Resource Rent as a Basis for Valuation of Natural Capital in the Context of the Transition to the Sixth Technological Mode . . . . . Olga E. Medvedeva and Artem S. Savostitsky

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Sustainable Development and Principles of the Green Economy as a Concept for Development of “Smart Technologies” . . . . . . . . . . . . Irina D. Anikina, Ekaterina P. Kucherova, and Yuriy A. Bukhantsev

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Analysis of Innovative Projects of Early Development Stages Using Neural Networks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pavel V. Tereliansky and Ekaterina I. Konchenkova

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Efficiency and Perspectives of Import Substitution Development in the Sphere of Leading Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . Alla V. Litvinova, Natalya S. Talalaeva, and Mariya V. Parfenova

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“Smart Technologies” in Project Management: Rationalization of Decision Making or a Source of New Risks for Information Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Elena V. Patsyuk, Aleksandr A. Krutilin, Marina N. Kiseleva, Lyudmila M. Lisina, and Anna N. Liberovskaya

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Preconditions of Development and Perspectives of Use of Smart City Technologies for Regional Market of Tourism . . . . . . . . . . . . . . . . Valentina Y. Moiseeva and Vladimir A. Zolotovskiy

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The Role of Smart Technologies in Formation of Urban Identity . . . . . Anna A. Ozerina, Tatyana S. Timofeeva, Oksana V. Golub, and Irina V. Vlasuk

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Evaluation of Poverty and Measures to Reduce It . . . . . . . . . . . . . . . . . Rysty Berstembayeva, Shakizada U. Niyazbekova, and Gulzhanat S. Kaldenova

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Household Food Security in Kazakhstan . . . . . . . . . . . . . . . . . . . . . . . . 107 Ainur S. Baidalinova, Shakizada U. Niyazbekova, Zhanar Baigireyeva, and Assem Myrkanova Impact of Demographic and Gender Factors on Types of Communication Promotion in Social Networks . . . . . . . . . . . . . . . . . 115 Lyudmila G. Akhmaeva, Dmitry V. Dolgopolov, and Anastasia I. Eremeeva Analysis and Development of Algorithms for Blind Estimation of Channels with Memory in OFDMA Systems . . . . . . . . . . . . . . . . . . . 124 Evgeny S. Semenov, Lyudmila K. Rozhkova, and D. G. Osama Al-Qadi Linguopragmatics of Advertising Texts in the Era of “Smart Technologies” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132 Elena A. Kurchenkova, Irina V. Palashevskaya, and Viktor V. Leontiev Smart Technologies in Protest Communication: Current Practices and Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141 Larisa N. Rebrina, Nikolay L. Shamne, Marina V. Milovanova, and Elena Yu. Malushko Conditions and Trends of Green Energy Development in the Largest Economies of the Post-soviet Space . . . . . . . . . . . . . . . . . 152 Lyudmila Yu. Bogachkova, Lidiya S. Guryanova, Nadezhda Yu. Usacheva, and Irina V. Usacheva Protective Coating Based on Carbon Nanotubes to Ensure Information Security of Particularly Important Objects and Confidential Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164 Ilya S. Dvuzhilov, Yulia V. Dvuzhilova, and Mikhail M. Belonenko

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Determination of the Spatial Position of Cars on the Road Using Data from a Camera or DVR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172 Alexey Y. Gordeev and Vladimir A. Klyachin Analogical Reasoning and Metaphor in Uncovering the Essence of Smart Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181 Inna V. Skrynnikova Investigation of the Impact of Vulnerability of x86 CPUs on the Performance of Software-Defined Networking Controllers . . . . . 190 Sergey V. Galich, Alexey O. Pasyuk, and Evgeny S. Semenov Promising Aspects of the Analysis of Photoplethysmograms . . . . . . . . . 202 Igor B. Isupov, Vladislav Yu. Gribkov, and Rimma Sh. Zatrudina Intelligent System for Diagnostics of Venous Diseases Based on the Microwave Radiothermometry Data . . . . . . . . . . . . . . . . . . . . . . 212 V. V. Levshinskii Neural Networks in Diagnosis of Breast Cancer . . . . . . . . . . . . . . . . . . . 220 Alexander G. Losev, Denis A. Medevedev, and Andrey V. Svetlov SMART Technologies in Translation: Globalization as a Factor of Progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228 Anna A. Novozhilova, Svetlana A. Korolkova, Vera A. Mityagina, and Anna P. Naumova Educational Robotics in Practice of Modern School . . . . . . . . . . . . . . . . 238 Elena A. Chelnokova, Lyubov Y. Shobonova, Sergey N. Yashin, Elena V. Romanovskaya, and Nataliya S. Andryashina Laser Diagnostics of Biological Objects by Plasmon Resonance Spectroscopy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247 Valeriy V. Yatsyshen Ellipsometry of Nanocomposite Layered Materials . . . . . . . . . . . . . . . . 258 Valeriy V. Yatsyshen, Irina I. Potapova, and Kseniya Yu. Verevkina Analysis of Calculation Models of kPrice Coefficient in Electricity and Capacity Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 269 Valentin Y. Afanasiev, Sergey V. Mischeryakov, and Maxim S. Nasurdinov About the Creation of Sensor of New Firefighting, Devices Based on Nanostructures for Determination of Carbon Monoxide and Carbon Dioxide Components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 277 Sergei V. Boroznin, Olesya A. Kakorina, Igor A. Kakorin, and Evgeny S. Dryuchkov

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Comparative Analysis of the Effectiveness of the Sensory Properties of Carbon Nanotubes When Modifying Their Surface with Boron Atoms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 288 Natalia P. Boroznina, Sergei V. Boroznin, Irina V. Zaporotskova, and Pavel A. Zaporotskov Nanofilters Based on Carbon Nanomaterials for Cleaning Liquids . . . . 297 Natalia P. Boroznina, Irina V. Zaporotskova, and Pavel A. Zaporotskov System of Ornithological Protection of Airfields . . . . . . . . . . . . . . . . . . . 307 Alexander F. Vasilyev, Igor V. Neginsky, Alexander G. Protopopov, and Andrey L. Yakimets Modeling Weighted Graphs with Given Parameters of the Minimum Route Between the Vertices . . . . . . . . . . . . . . . . . . . . . 315 Nikolay Gdanskiy and Maria Belousova Overview of Foreign and Domestic Experience in the Formation and Development of the Waste Management Industry . . . . . . . . . . . . . . 327 Yana S. Ignatova, Viktor S. Gorin, and Galina V. Mohova Smart Technologies in Foreign Language Training . . . . . . . . . . . . . . . . 336 Tatiana N. Astafurova, Olga P. Kozlova, Natalia A. Vishnevezkaya, and Olga N. Romanova Digital Technologies in Russia: Trends, Place and Role in Economy . . . 344 Elena V. Romanovskaya, Natalia S. Andryashina, Svetlana N. Kuznetsova, Zhanna V. Smirnova, and Oksana G. Ivonina Innovative Technologies in the Training of University Specialists . . . . . 352 Zhanna V. Smirnova, Olga V. Katkova, Olga V. Golubeva, Elena V. Romanovskaya, and Natalia S. Andryashina Software Suite for the Analysis of Financial Instruments with the Use of Neural Networks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 360 Bakhtiiar T. Allakhverdiev and Alexander A. Polkovnikov The Impact of Smart Technologies on the Foreign Exchange Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370 Inna V. Kudryashova Smart Technologies: Trends, Problems and Prospects . . . . . . . . . . . . . . 379 Nikolay S. Yashin, Marina N. Yashina, Olga N. Grimashevich, and Sergey A. Saninsky Gold in Innovative Technologies: Demand and Price . . . . . . . . . . . . . . . 388 Boris M. Manakhov Smart Technologies in Scientific Literature on Natural Sciences . . . . . . 395 Lyubov M. Koroleva and Elena V. Koltunova

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To the Issue of Identifying Highly Automated Vehicles (HAV) in ITS Infrastructure (Intelligent Transport Systems) to Ensure Compliance with Transport Security Requirements . . . . . . . . 404 Anatoliy V. Zubach, Mikhail V. Kostennikov, and Ekaterina V. Kashkina Peculiarities of Standard Cost-Based Accounting . . . . . . . . . . . . . . . . . . 410 Igor’ Somkin, Dar’ya Rozhkova, and Evgeniy Orlov The Value of Corporations in the Investment Process of the Smart Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 418 Marina Trachenko, Anastasiya Volodina, and Vladimir Dzhioev A New Quality of Economic Growth in “Smart” Economy: Advantages for Developing Countries . . . . . . . . . . . . . . . . . . . . . . . . . . 426 Elena G. Popkova, Nadezhda K. Saveleva, and Anastasiya A. Sozinova Smart Technologies in the Modern Economy . . . . . . . . . . . . . . . . . . . . . 434 Ekaterina P. Bondarovich, Oleg N. Zhilkin, and Anna N. Zhilkina Smart Technology Advancement in the Transition to the Digital Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 445 Irina A. Kovaleva and Alla A. Kanke Systematization of Natural Resource Conflicts: Theoretical Aspects . . . . 454 Nazgul K. Matikeeva Current Experience and Perspectives of Application of “Smart” Technologies in Society Local and Global Analysis of Fertility Rate in Italy . . . . . . . . . . . . . . . . 465 Massimo Mucciardi Tendencies of the Labor Market and Prospects of Future Professions in Russia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 475 Tatiana V. Suvalova, Galina V. Mokhova, and Vadim A. Zhukov The Role of Smart Technologies in the Process of the Labor Market Transformation: Tendencies and Problems . . . . . . . . . . . . . . . . 483 Maria F. Mizintseva, Tatyana V. Gerbina, Anna R. Sardaryan, and Maria A. Chugrina Social Aspects of Eco-Systems’ Development in the Digital Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 490 Galina V. Serebryakova, Ivan V. Nezamaykin, and Tamara B. Shramchenko “Digital Assistants” in the Consumer Society: Global Trends and Vectors of Russia’s Development . . . . . . . . . . . . . . . . . . . . . . . . . . . 499 Sergey A. Pankratov, Liliia S. Pankratova, Sergey I. Morozov, and Sergey D. Gavrilov

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The Role of Network Technologies in Preventing Youth Extremism in the Context of Integration of Government and Civil Society’s Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 507 Vladimir M. Shinkaruk, Pavel P. Fantrov, and Natalya A. Solovyova Analysis of the Existing Human Capital Development Monitoring System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 514 Zhanar Baigireyeva, Shakizada U. Niyazbekova, Aliya K. Butkenova, and Ainur S. Baidalinova Competitive Human Capital as a Factor and a Result of the Forming and Development of Smart Cities . . . . . . . . . . . . . . . . . 522 Veronika V. Antonenko Omnichannel as a Modern Concept of Interaction with the Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 530 Nadezhda I. Arkhipova, Gennadiy L. Azoev, and Madina T. Gurieva Forming Analyst’s Competencies of Specialists for Modern Transport Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 538 Viktoriya V. Degtyareva, Svetlana Y. Lyapina, and Valentina N. Tarasova Modified Informatization Index of Children’s Life . . . . . . . . . . . . . . . . . 548 Igor Krivolapchuk, Maria Chernova, Anastasia Gerasimova, Vadim Chicherin, and Vladimir Myshyakov Algorithms of Human Activity in the Digital Age: The Problem of Preserving Traditional Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 558 Oleg Ju. Rybakov, Julia A. Gavrilova, Nina A. Kalashnikova, and Irina N. Falaleeva The Legislative Process Facing the Challenges of the Information Society . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 567 Ivan A. Usenkov, Aleksandr M. Ponomarev, and Natalia Y. Filimonova Smart Technologies in Human Resources Management . . . . . . . . . . . . . 580 Ekaterina V. Kryukova and Elena A. Matsui Webinar as a Variation of Smart Technologies for Schoolteachers’ Advanced Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 589 Elena G. Grigorieva, Anna V. Schekoldina, and Oksana A. Maletina The Regional Differentiation in Housing Conditions Satisfaction Degree in Russia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 599 Tatiana A. Pershina, Leysan A. Davletshina, Olga A. Zolotareva, and Aleksandr V. Bezrukov Interaction of Human and Smart Technologies in Modern Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 609 Elena P. Kozlova, Galina A. Morozova, Victor P. Kuznetsov, Elena V. Romanovskaya, and Natalia S. Andryashina

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Convergence of Technologies in Education: New Determinant of the Society Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 619 Anastasia V. Arzhanovskaya, Elena A. Eltanskaya, and Larisa M. Generalova Smart Solutions as Investment in Social and Human Capital . . . . . . . . . 625 Svetlana B. Tokareva, Ilia S. Dikarev, and Inna V. Skrynnikova Personal Accounts as Elements of the University’s Smart Educational Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 633 Irina A. Elkhina, Vladislav E. Arevshatov, Valery V. Poluboyarov, and Natalia M. Poluboyarova Methodology of Intellectual Analysis of Candidates in the Personnel Selection Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 641 Natalia N. Skiter, Nataliya V. Ketko, Olga A. Donskova, Elena E. Smotrova, and Irina A. Peters Smart Technologies for Smart Life . . . . . . . . . . . . . . . . . . . . . . . . . . . . 653 Maria F. Mizintseva Smart Technologies and Prevention of Extremism Among Young People . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 665 Pavel P. Fantrov and Vladimir M. Shinkaruk Modernization of Criminal Procedural Evidence in the Information Society . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 674 Yuri V. Francifirov, Alexey P. Popov, Peter P. Muraev, and Yaroslava V. Komissarova The Protest Potential of Smart Technologies in the 21st Century . . . . . 683 Elena V. Efanova, Kirill M. Makarenko, Irina A. Savchenko, and Diana K. Azizova Transformation of Economic Activity in the Digital Era: Practices for Generating Income by Young People in Social Networks . . . . . . . . . 691 Ekaterina N. Vasilieva, Evgeniy S. Vasiliev, and Mariya B. Poltavskaya Smart Technologies, Human Security and Global Justice . . . . . . . . . . . 701 Qerim Qerimi “Smart Technologies” in Education: Development Opportunities and Threats . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 714 Liudmila V. Baeva, Sergey A. Khrapov, and Iskhandar M. Azhmukhamedov Statistical Characteristics of Intercountry Differences in the Education Level of the Population . . . . . . . . . . . . . . . . . . . . . . . . 724 Marina R. Efimova, Ekaterina A. Dolgikh, Tatyana A. Pershina, and Naimjon N. Kayumov

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Integration of Information Systems Through a Process-Based Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 733 Ivan A. Ermakov, Yuri Goltser, and Svetlana S. Kuzminykh Smart Tourism: International Expertise in Strategic Solutions . . . . . . . 744 Natalia A. Zamyatina, Oxana G. Solntseva, and Elvira S. Madiyarova Smart Technologies in Tourism: To Understanding of the Sphere and Actual Tasks of Effective Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 753 Vladimir A. Zolotovskiy and Valentina U. Moiseeva Producing Online-Courses for Higher Education: The Marketing Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 761 Vasiliy Starostin and Sima Musatova Smart Technologies in the Humanitarian Field: The Needs for Practice and the Possibilities of Implementation . . . . . . . . . . . . . . . . . . . 769 Svetlana V. Ionova, Irina A. Leshutina, and Roman E. Telpov “Smart Manufacturing” in the Context of Digitalization of Business and Society . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 777 Larisa V. Ponomareva, Irina V. Usacheva, and Anna V. Volkova Digitalization of Medical Information Processes in the Health Care System on the Principle of Personalization . . . . . . . . . . . . . . . . . . . . . . . 786 Liubov’ G. Anan’ina, Dmitrii L. Mushnikov, and Viktor M. Cherepov Anthropological, Sociocultural and Geopolitical Contexts of the Development of “Smart Technologies” . . . . . . . . . . . . . . . . . . . . . 795 Dmitry V. Garbuzov, Elena A. Gromova, Nikolay Yu. Nikolaev, and Sergei P. Ramazanov Descriptors of Sports and Technical Readiness of 1st Year Students of the Main Department of Educational Groups of the GPP-Basketball in Digital Technologies of the Discipline “Physical Education and Sport” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 804 Sergei A. Barantsev, Vadim P. Chicherin, and Seitkerei M. Mukhtarov “Smart Specialization” of Regional Economies as a Factor in the Dynamics of Living Standards and Income Inequality . . . . . . . . . 811 Vladislav A. Ostapenko Motivational Factors in Ensuring the Transition to Blended Learning of the Subject “Physical Education” . . . . . . . . . . . . . . . . . . . . 819 Irina A. Kabanova, Nina V. Terekhova, and Gozel D. Kurbanova Evaluation of the Socioeconomic Efficiency of the Film Project . . . . . . . 825 Marina I. Kosinova

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Organizational Transformation of Culture of the “Smart” Enterprise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 832 Irina A. Kovaleva, Tatyana N. Eremina, and Anna Brusina-de Roos Smart Nation: Scientific Production Associations (NPOs) as the Main Link in Creating an Innovative Product . . . . . . . . . . . . . . . 842 Elena V. Kuptsova, Viktor G. Antonov, and Elena S. Petrenko On Development of Smart Competences . . . . . . . . . . . . . . . . . . . . . . . . 855 Yana S. Matkovskaya, Elena S. Petrenko, and Anna L. Shevyakova The Human Needs of Smart Nations in the Era of Artificial Intelligence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 866 Irina E. Sokolovskaia and Ilia V. Volochkov The Application of Digital Marketing Technologies for Improvement of Customer Communications . . . . . . . . . . . . . . . . . . 873 Alan Abaev, Feliks Sharkov, and Vera Aleshnikova Digital Technologies in the Educational Process of Higher School . . . . . 881 Galina N. Ryazanova and Liudmila E. Surkova Smart Technologies in Foreign Language Teaching . . . . . . . . . . . . . . . . 893 Yulia Kulichenko, Lyudmila Medvedeva, and Yulia Dzyubenko “Smart” Technologies in Public Administration and Law, as Well as the Experience in Development of e-government The Information Aspect of State Management in the Context of Formation of the Global Innovation System . . . . . . . . . . . . . . . . . . . . 903 Nikolai A. Omelchenko, Elena P. Kazban, and Oleg N. Drobotenko Interactions of Import Substitution and Public Procurement Based on Industrial Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 910 Angelina E. Gukasova Comparative Analysis of Success Factors for the Implementation of Public Digital Procurement Platforms: Domestic and World Experience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 918 Olga M. Pisareva, Svetlana A. Suyazova, and Anna I. Denisova Peculiarities of Interaction Between Health Maintenance Organizations and Consumers of Medical Services in the Face of Healthcare Informatization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 930 Viktoriya I. Tinyakova, Tatyana N. Russkikh, and Tatyana V. Karyagina Virtualization of Educational Environment in a Modern Tertiary School . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 938 Anastasiya V. Shishkova, Larisa V. Kozhevnikova, and Irina E. Starovoytova

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Information and Communication Technologies as a Condition of Effective Political Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 947 Elena S. Karsanova, Oleg S. Volgin, and Alexey V. Kolpakov Public Policy of the Russian Federation in the Sphere of Smart Technologies Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 955 Elena G. Russkova, Larisa V. Ponomareva, and Vasily A. Yakhtin The Role of Information (Smart) Technologies in Improving the Efficiency of Public Administration . . . . . . . . . . . . . . . . . . . . . . . . . 965 Olga V. Fetisova, Vladimir V. Kurchenkov, Olga A. Golodova, and Julia M. Azmina The “Smart Cities” Concept in the European Union and the Russian Federation: From Project to Practical Implementation . . . . . . . 976 Elena F. Parubochaya, Nikita V. Piskunov, and Elena M. Drinova Digital Transformation of the EAEU Economies: The Impact on Trade Development and Integration Prospects . . . . . . . . . . . . . . . . . 987 Elena I. Inshakova, Agnessa O. Inshakova, and Larisa A. Kochetova Development of Rural Areas by Means of “Smart Village” Concept . . . 998 Tatiana V. Klenova, Alexey S. Ivanov, and Daria A. Koneva The Concept of “Smart Federalism” in Overcoming Spatial Asymmetries in Russia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1007 Natalya Yu. Korotina On the Concept of Regulatory Sandboxes . . . . . . . . . . . . . . . . . . . . . . . 1014 Vladislav O. Makarov and Marina L. Davydova Evolution of Money Systems or Cashless Economy? . . . . . . . . . . . . . . . 1021 Inna V. Mitrofanova, Olga I. Larina, Mayya V. Dubovik, and Natalia V. Moryzhenkova Information Technology Impact Analysis on the Structural Changes Dynamics in the Regional Economy . . . . . . . . . . . . . . . . . . . . . 1033 Elena A. Petrova, Agnessa O. Inshakova, and Vera V. Kalinina Financial Monitoring of Financial Stability and Digitalization in Federal Districts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1045 Nadezhda I. Yashina, Oksana I. Kashina, Nataliya N. Pronchatova-Rubtsova, Sergey N. Yashin, and Victor P. Kuznetsov Smart Technologies of the “Smart City” . . . . . . . . . . . . . . . . . . . . . . . . 1052 Pavel M. Gureev, Helena N. Dunenkova, and Svetlana I. Onishchenko Smart City Branding Massively Expands Smart Technologies . . . . . . . . 1063 Marina A. Buyanova, Alla A. Kalinina, and Maria S. Shiro

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Smart Technologies and Logistics as Drivers of Development of a Special Economic Zone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1070 Ekaterina V. Kryukova and Diana Sh. Smirnova Assessing the Resource Potential of the Territory During the Digital Development of Society . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1081 Anastasya A. Dzhikiya, Anna V. Shkalenko, and Mikhail D. Dzhikiya Concept “SMART” in the Modern Urban Discourse . . . . . . . . . . . . . . . 1092 Vera A. Mityagina, Marina Yu. Fadeeva, Elina Yu. Novikova, and Irina D. Volkova Improving the Electronic System of Public Procurement in the Provision of Housing and Communal Services . . . . . . . . . . . . . . . 1099 Alexander V. Demin, Irina V. Milkina, and Sergey P. Kosarin Modeling an Electronic Auction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1108 Timur M. Gataullin, Sergey T. Gataullin, and Ksenia V. Ivanova The Use of Modern Digital Technologies in the Implementation of the Rights and Legitimate Interests of Citizens . . . . . . . . . . . . . . . . . 1118 Tatyana K. Krasilnikova, Gennady G. Egorov, and Tatyana V. Derkacheva Managing a Structural Modernization of the Regional Industrial Complex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1126 Mikhail Shchepakin, Eva Khandamova, Viktor Gubin, and Tigran Oganesyan Analysis of the Impact of Robotic Legal Services on the Changing Institutional Environment of Economy and Law . . . . . . . . . . . . . . . . . . 1146 Yuliya A. Tymchuk and Anna V. Shkalenko Smart Solutions for Intellectual Capital Commercialized in Industry 4.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1159 Vyacheslav V. Burlakov, Olesya A. Dzyurdzya, Oksana Ev. Gudkova, Gilyan V. Fedotova, and Alexey A. Sokolov Smart Technologies in Electoral Fundraising . . . . . . . . . . . . . . . . . . . . . 1167 Yuriy A. Bokov Prospects for Reforming the Criminal Procedure Through the Introduction of Information Technologies as Well as Issues Associated with Their Compatibility with the Psychology of Criminal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1176 Valentina A. Lazareva and Natalya A. Solovyova “Smart Cities” as a Modern Model of Territories’ Sustainable Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1185 Natalya Yu. Sorokina, Liliya N. Chaynikova, and Irina V. Sharova

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The Institutional Basis for Implementing “Smart Technologies” in the Legal System of Fighting Crimes . . . . . . . . . . . . . . . . . . . . . . . . . 1195 Aleksandr S. Aleksandrov, Oleg A. Zaytsev, Petr P. Muraev, and Vitaly A. Ruchkin “Smart Contracts” vs Legal Technology in Contract Practice . . . . . . . . 1204 Marina Yu. Kozlova and Maria Aleksandrina “Smart Decisions” in Development of a Model for Protecting Information of a Subject of Critical Information Infrastructure . . . . . . 1213 Elena A. Maksimova “Smart” Innovations in the Public Sector . . . . . . . . . . . . . . . . . . . . . . . 1222 Kirill A. Belokrylov, Elena F. Gutzluk, and Evgeniy I. Firsov Development of the Smart City Concept in the System of Municipal Government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1232 Hans-Christian Brauweiler, Vladimir V. Kurchenkov, Olga V. Fetisova, and Elena A. Kurchenkova Development of Smart Technology in Tax Control . . . . . . . . . . . . . . . . 1240 Dmitriy M. Shor, Inna M. Shor, Dildarakhon A. Shelestova, and Elena S. Starostina Financial Systems Development in a Digital Economy . . . . . . . . . . . . . . 1248 Nikolay V. Kuznetsov, Ksenia V. Ekimova, Olga I. Larina, and Viktoria V. Lizyaeva Development of Accounting, Analytical and Control Support for Setting and Solving Management Tasks of Large Corporations . . . . 1256 Tatyana M. Rogulenko, Anna V. Bodyako, and Svetlana V. Ponomareva Artificial Intelligence as a New IT Means of Solving and Investigating Crimes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1266 Oleg A. Zaytsev, Pavel S. Pastukhov, Marina Yu. Fadeeva, and Vadim N. Perekrestov Innovations in Pawnshop Activity: Legal Considerations and Practical Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1274 Yu. V. Sokolov, S. I. Lenshin, and F. G. Myshko The Possibilities of the Blockchain Technology in the Provision of the Real Estate Rights’ Registration Services . . . . . . . . . . . . . . . . . . . 1280 Andrey N. Sadkov, Vitalii B. Vekhov, Nikolay V. Kotelnikov, and Vitalii A. Sadkov Financial Strategy of Creating “Smart” Regions in Russia’s Digital Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1288 Kseniya V. Ekimova

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Smart Technologies in Lawmaking: Towards the Concept of Smart Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1296 Marina L. Davydova and Vladislav O. Makarov Perspectives of Implementing “Smart” Digital Technologies in Criminal Justice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1306 Ilia S. Dikarev and Vitalii F. Vasyukov “Smart City” - A New Historical Stage of Housing Policy in Russia . . . 1313 Sergey A. Korostin “Smart Technologies” as a Mechanism for Regulating Bank Competition in Cross-Border Markets . . . . . . . . . . . . . . . . . . . . . . . . . . 1322 Nadezhda K. Savelyeva and Tatyana A. Timkina Establishment of a Public Administration Monitoring System Based on the Use of “Smart” Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1331 Elena V. Loginova, Natalia V. Loseva, and Aleksander A. Polkovnikov Smart Cities Today and Tomorrow – World Experience . . . . . . . . . . . . 1340 Ekaterina A. Khalimon, Elena A. Vikhodtseva, and Vladimir Obradović Optimal Control of Energy Pipeline Systems Based on Deep Reinforcement Learning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1348 Alexander Belinsky and Valentin Afanasev Architectonics of “Smart City” Management System . . . . . . . . . . . . . . . 1356 Elena E. Panfilova, Viktoria V. Borisova, and Hendra Raza “Smart” Technologies in Business Activity: from Digital Business to Business 4.0 Smart Contracts and New Technologies of Management in the Digital Environment of Organization . . . . . . . . . . . . . . . . . . . . . . 1369 Vladimir V. Godin and Anna E. Terekhova Innovative Technologies for Development, Justification and Adoption of Personnel Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . 1381 Viktoriya I. Tinyakova, Ekaterina A. Alpatova, and Inna A. Boldyreva Legal Basis for the Electronic Document Workflow in HR Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1389 Svetlana E. Titor, Anatoly Yu. Opimpiev, and Nodari D. Eriashvili Modern Principles of Design and Modernization of Enterprise Production Systems in High-Technology Industries . . . . . . . . . . . . . . . . 1397 Ekaterina Yu. Kamchatova, Artur D. Bobryshev, and Oksana E. Gudkova

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The Role of Technological Entrepreneurship in the System of Regional Economy: Problems and Perspectives of Development . . . . 1406 Elza I. Mantaeva, Viktoriya S. Goldenova, Inna V. Slobodchikova, and Inna V. Avadaeva Application of Fuzzy Inference Methodology in the Problem of Choosing an Effective Investment Project . . . . . . . . . . . . . . . . . . . . . 1413 Pavel V. Tereliansky, Sergey Yu. Kuznecov, and Anastasia V. Kostikova Clickbaiting: Special Features of Advertising Communication . . . . . . . . 1424 Natalya F. Krylova and Dybys S. Tashimkhanova Corporate Portal of a Technopark as a Unified Communication Platform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1432 Valentina G. Smirnova, Zhanna K. Baziyan, and Gabdelakhat R. Latfullin Information and Networking Technologies in the System of Promotion of Hotel Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1440 Mariya V. Maltseva, Yuliya O. Tsunaeva, Artur M. Arakelian, and Svetlana S. Galazova Protection of Information Resources in Industrial Enterprises . . . . . . . . 1451 Marina N. Oreshina, Anna V. Badina, and Andrey A. Dashkov The Prospects for Using Distributed Ledger Technology in the Russian Insurance Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1461 Olga I. Larina, Natalia V. Moryzhenkova, and Nadezda S. Kukanova Specifics of Company Management’s Digital System Creation . . . . . . . . 1471 Ilya V. Pshenichnikov, Veronica S. Epinina, Svetlana I. Korobova, and Anatoly D. Karabanov Organizational and Economic Aspects of Innovative Digital Project Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1481 Liudmila P. Goncharenko, Irina V. Sokolnikova, Anzor U. Soltakhanov, and Sergey A. Sybachin Site Appeal Model of a Commercial Organization . . . . . . . . . . . . . . . . . 1489 Ilya V. Germashev, Victoria Dubovskaya, Evgenia V. Derbisher, and Elena A. Markushevskaya Scenario for Production Planning in Industry . . . . . . . . . . . . . . . . . . . . 1498 Anatoliy T. Ershov and Elena A. Gubareva Case Analysis of USA Anti-dumping to China’s Color TV Sets . . . . . . . 1507 Larissa N. Talalova and Jiamin Tian Preconditions and Driving Forces for the Development of Electronic Commerce in the Context of Digitalization of the Economy . . . . . . . . . . 1516 Marina E. Buyanova, Alla E. Kalinina, and Irina S. Averina

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The Application of Digital Technologies in Financial Reporting and Auditing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1526 Olga Ageeva, Marina Karp, and Anton Sidorov Marketing Technology of Testing the Demand for a Mobile Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1535 Gennady Azoev, Kato Shizuko, and Ekaterina Sumarokova The Basic Factors Determining Communicative Efficiency of an Online Store . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1544 Irina Aleksandrova, Marina Orlova, and Svetlana Silina Virtual Teams in Russian Organizations . . . . . . . . . . . . . . . . . . . . . . . . 1553 Olga L. Belova and Alexander D. Mezhevov Stakeholder Engagement in the Management of Innovative Territorial Development: A Platform Approach . . . . . . . . . . . . . . . . . . . 1563 Viktoriya V. Degtyareva, Svetlana S. Bakhtina, and Galina I. Tatenko Smart Technologies in Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1573 Mikhail M. Guzev, Marina V. Ledeneva, Anna A. Trukhlyaeva, and Natalya A. Mishura Study of Machine Learning Techniques for Transport . . . . . . . . . . . . . 1585 Viktoriya V. Degtyareva, Mikhail G. Gorodnichev, and Marina S. Moseva Mathematical Methods for the Analysis and Optimization of the Geometry of Transport Networks Based on Generalized Delaunay Triangulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1596 Vladimir A. Klyachin and Ekaterina V. Yakovleva Transformation of Consumer Behavior on the Market of Educational Services Under the Influence of Smart Technologies . . . 1605 Tatiana I. Melnik, Nataliya S. Mushketova, and Oksana A. Maletina Smart Transformation of the Project Management System and Processes as a Factor in Increasing the Efficiency and Competitiveness of the Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1614 Irina S. Brikoshina, Alexandr P. Birukov, and Artem G. Geokchakyan Differentiation of Clients Based on Behavioral Data Using Domestic Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1623 Lyubov A. Konstantinova, Inna V. Kramarenko, Anna I. Denisova, and Gevorg I. Margarov Producer Competition and Cooperation Within the Infrastructure Sector of the Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1632 Mikhail I. Kuternin and Vladislav L. Suponitskiy

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Foreign Practice of Application of Smart Technologies to Support Technological Entrepreneurship: Prospects for Application in Russia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1642 Sergei A. Korobov, Viktor O. Moseyko, Elena Y. Marusinina, and Darya S. Devyatkina Smart Cyber Resilience Technologies of Credit Organizations . . . . . . . . 1649 Gilyan V. Fedotova, Yuri V. Kuznetsov, Larisa A. Kargina, Sophia L. Lebedeva, and Diana A. Kurazova Development of the Vocational Education Ecosystem of an Enterprise: The Role of Advanced Learning Technologies . . . . . . 1659 Mikhail B. Flek and Ekaterina A. Ugnich Infrastructure Maintenance of “Smart Technologies” for Entrepreneurship in the Agricultural Machinery Market: Needs vs. Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1670 Tatyana N. Litvinova Tasks of Preparing Smart Managers for Smart Business . . . . . . . . . . . . 1678 Marina B. Zhernakova, Tatiana Yu. Krotenko, and Irina A. Rumyantseva Concept of Marketing Models Combining at Stages of Innovative Startup Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1687 Boris Tokarev, Sergey Shkarovskiy, and Natalia Soldatova Financing of Public-Private Partnership Projects Based on “Smart Technologies” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1696 Svetlana S. Galazova Geoinformation Systems as a Means of Monitoring and Managing Floodplain Landscapes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1704 Denis A. Solodovnikov and Stanislav S. Shinkarenko Transnational Capital in Banking Market: Making Investment Decisions with the Help of AI in the Conditions of Competition . . . . . . 1714 Nadezhda K. Saveleva Smart Technologies in Entrepreneurship: Launching a New Business Cycle or a Countercyclical Instrument for Regulating the Economic Situation . . . . . . . . . . . . . . . . . . . . . . . . . . 1722 Elena G. Popkova, Nadezhda K. Savelyeva, and Anastasia A. Sozinova Culture Perception Matrices as an Identity Management Tool . . . . . . . 1731 Anna R. Akopyan, Artur M. Arakelyan, and Viktor V. Krysov Management in Higher Education Based on “Smart Technologies”: Digital Managerial Staff vs. Artificial Intelligence . . . . . . . . . . . . . . . . . 1738 Olga V. Konina, Sergey A. Tinkov, and Elena V. Tinkova

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A Smart Consumer Is a Challenge for Business . . . . . . . . . . . . . . . . . . . 1746 Vera Aleshnikova, Tatyana Beregovskaya, and Ekatetina van der Voort The Development of Smart Entrepreneurship as a Driver of the Smart Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1754 Victor Antonov, Elena Petrenko, and Ekaterina Kuptsova Author Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1761

“Smart” Technologies in the Digital Economy and Industry 4.0

Scenarios of Smart Cities Creation as a Trend of Sustainable Development Tatiana Yu. Shemyakina(&) , Olga E. Astafieva and Olga A. Gorelova

,

State University of Management, Moscow, Russian Federation {ty_shemyakina,oe_astafyeva,oa_gorelova}@guu.ru

Abstract. This paper is devoted to the issues of creation and development of smart cities. The purpose is to study the most effective conditions of transformation of urban environment as a system consisting of the physical, digital, and communication components. The research methodology is the approach on determining the characteristics of finding the level of a city’s development and its correspondence to the main requirements to a modern European city. The key characteristics of urban environment from the point of view of possible smartization are studied: economy, mobility, environment, population and way of life, and city administration. Evolution of the generations of smart cities is considered: from implementing certain digital solutions to improving the quality of city’s infrastructure and moving residents to a “smart” model of life in the city, which ensures long-term sustainable development. The spheres of application of innovative IT (systems of intellectualization of urban environment) are studied for increasing effectiveness and speed of management and reducing administrative costs. Based on the performed research, for the purpose of smartization of urban environment in Russia it is recommended to use automatization and creation of specific tools for “city crowdsourcing”, develop scenarios of smartization of cities in view of long-term forecasts, compile rankings of Russian cities which are based on the basic methodologies, and determine the key factors for evaluating the effectiveness of the evolutional transition of “Smart cities”, using the enlarged indicator of effectiveness. The mandatory direction of functioning of the “smart cities” concept in Russia should be application of the systems of intellectualization of urban environment for the purpose of reduction of administrative costs and increase of the population’s living standards. Keywords: Smart city
Intellectual systems development
Level of maturity JEL Code: O33


Long-term sustainable


R58

1 Introduction The global trend of growth of urban population influences city’s development and leads to a necessity for using the innovative and ecological technologies in the urban environment for creating favorable conditions of population’s growth. © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 3–10, 2021. https://doi.org/10.1007/978-3-030-59126-7_1

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T. Yu. Shemyakina et al.

The increased pressure on cities as a result of growth of urban population, constant necessity for supporting economic growth, and new ecological risks predetermine the necessity for developing an ecological and energy-efficient method of organization of life in cities, ensuring comfortable life in these territories. Solution to this problem could be found in the “smart city” concept, which consists in increase of effectiveness of functioning of municipal services in the sphere of the digital infrastructure formation. Characterizing the “smart city” concept, it is possible to state that it is a system of municipal services, which works very effectively and ensures maximum security of city life in the conditions of the existing resources. “Smart city” is a city that uses its resources effectively, applying communication technologies and creating high living standards on its territory (Ovchinnikov and Naumov 2016). This emphasizes the necessity for increasing the level of mobility and connection with the help of unifying efforts and knowledge of all spheres of the society’s activities. The world energy consumption is three times higher than the long-term allowable norm. In order to cope with the unplanned growth of consumption, the future energy system has to be more intellectual and universal. The “smart city” concept started from creation of energy systems. The term “smart grid” characterizes the innovative approach to formation of energy systems, in which special software is used for monitoring and organization of distribution of electric energy that is received from all sources which are unified in a single network. This approach aims at flexible and effective distribution of energy in city infrastructure (Kafidov 2015). That’s why the “smart city” concept is considered primarily as a technological and energy-efficient project, which main task is creation of technologies that allow saving energy and obtaining energy from renewable sources, as well as reducing CO2 emissions. Besides, it is necessary to create a unified energy grid, in which – based on the applied technologies – large efficiency of energy consumption is achieved. Another direction of supporting city’s life is centralized heat supply – a system of distribution of heat for the purpose of companies and households, including heating of buildings and hot water. Centralized heat supply ensures higher effectiveness of distribution of heat and control over the ecological aspect of the process, as compared to individual boilers. Infrastructure – in the “smart city” concept – is a system consisting of the physical, digital, and communication components. The physical infrastructure is a first step to implementing the digital and communication infrastructure. In the “smart city” concept, the existing physical infrastructure is integrated into the digital one. Various intellectual devices, which are installed all around the city, provide digital information on road traffic, free parking space, energy consumption, traffic accidents, change of weather, etc. City residents receive this information with the help of smartphones or other devices. This allows making the physical infrastructure more flexible and individual (Smith 2016). For the “smart city” system to work, it is necessary to integrate the communication infrastructure (Albert 2019). This means that all city residents and all devices must communicate in the same language. This requires creation of a common

Scenarios of Smart Cities Creation

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communication platform, based on which city residents and city’s information devices can exchange information.

2 Methodology Despite the fact that it is rather difficult to clearly define “smart city”, this does not mean that “smart cities” should not be studied. Thus, a laboratory that has been working at Vienna University of Technology since 2007, evaluates small and medium European cities according to their correspondence to the “smart city” concept. Until 2014, only medium cities – 100,000–500,000 people – had been analyzed; in 2015, a new methodology was used for studying large cities – 300,000–1,000,000 people. The methodology is based on determining the characteristics for finding the directions of the city’s development and their correspondence to the requirements to a modern European city. The characteristics could be divided into two groups – level of culture, education, and social activity of city residents, as well as the desire and ability of the social institutions and city administration for quick changes and modernization. The laboratory distinguished 6 main characteristics of smart city, 31 forming factors, and 74 indicators that allow determining these factors (Long and Antonov 2014). Very often, they are used for determining smart cities, being the key characteristic of the urban environment – smart economy, smart mobility, smart approach to environment, smart population, smart way of life, and smart government (Ovchinnikov and Naumov 2016). The key characteristic is determined by the existing factors. Indicators are used for determining the presence of a factor in the city. As the indicators are only working units and do now allow for direct understanding of smart economy (as an example), here we shall dwell on characteristics and factors that could be used in the “smart city” concept in Russia. Smart economy is characterized by six main factors: 1) tendency towards innovations; 2) level of development of entrepreneurship; 3) economic environment; 4) economic effectiveness; 5) labor market’s ability to adapt to the changing conditions; 6) participation in international projects and economic processes. As this methodology is still in development, one of the characteristics is openness for transformations – however, indicators for this factor are not yet determined, so it is not taken into account during a city’s research. Each factor receives scores, which directly influence the level of development of smart economy and other characteristics in the city. The following factors are used for determining the level of smart mobility: 1) opportunity for free movement around the city; 2) city’s access and openness for domestic citizens and foreigners; 3) presence and accessibility of the infrastructure of information and communication technologies in the city; 4) modern, secure, innovative, and accessible transport system. Mobility is the key component of “smart city”. ICT infrastructure envisages a high level of the technological basis, and physical accessibility of a certain place is similar to the information access (Datta 2016).

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Smart approach to environment is characterizes by responsible attitude. The factors of this characteristic are as follows: 1) level of air pollution; 2) level of concern with the ecological environment; 3) level of development of resources’ sustainable management. This characteristic is the key one and the most problematic one. Technologies and eco-friendly sustainable development are the main drivers of “smart cities” (Panasenko 2015). The main component of a “smart city” is its residents, so the level of a city’s development directly depends on the level of education and qualification of the city residents. Another factor is the ability and desire for life-long learning. City residents must be able to use constantly changing technologies, which are the core of a “smart city”. Smart way of life is the conditions that form the residents of a smart city. According to the scholars from Vienna University of Technology, they are as follows: 1) developed infrastructure of cultural heritage and space, availability of cultural objects; 2) level of residents’ health; 3) presence and level of residents’ individual security; 4) territorial quality of life and level of housing and utilities services; 5) accessibility and level of quality of educational organizations’ services; 6) tourist attractiveness of the city; 7) social solidarity of residents. The last characteristic of “smart city” is smart management or smart government. Researchers from Vienna University of Technology distinguish three main factors that show that city management is smart management: – opportunity for city residents to participate in discussion of decisions regarding the city’s functioning and development; – quality of work of administrative and social services; – transparency and effectiveness of the work of city administration institutions.

3 Results The above method could be applied to all cities for which the data that are necessary for the analysis are available. However, it is necessary to take into account certain specific features during application of this method: – firstly, the method was developed for medium-sized cities – it is not known whether it could be used for cities with several million residents. It is difficult to obtain correct information and build a general idea of a metropolis. This method does not take suburbs into account – however, they play the key role in formation of the urban environment and turn a city into agglomeration; – secondly, the unified approach was during the analysis – i.e., statistical data were structured according to a certain model. This simplifies the work on determining the “smart” level of a city. In order to use this method, it is necessary to perform a range of additional sociological studies. This approach could be used for analysis of regional centers – as the tendency for modernization in regional centers is very vivid.

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Various countries have implemented projects on construction and reconstruction of the existing cities, and there are 143 projects of so called green cities with different level of using IT in North America and Western Europe (The Economist 2013). An example of “smart city” is South Korean Songdo International Business District; Barcelona, Copenhagen, and Vienna are the examples of smart cities that were built based on the existing cities (Golenkova et al. 2017). In Russia, the “smart city” concept is implemented only in several projects of new cities – which are currently at the stage of design of construction. We think that it has to be developed from the methodological point of view, for determining the level of cities’ maturity for the transition to the corresponding level of development. It is offered to use the matrix method for evaluating the level of maturity. Each level has the following parts: description of the status of urban locality, description of smart qualities in the city infrastructure, and results-effects. These parts are evaluated by indicators that are contained in the key elements of maturity – the strategy of development, information system, innovative technologies, management and services, residents’ communication. Expert scores are given in the matrix’s cells, and the final ranking is eventually compiled. This allows determining the current status and developing a road map for further “smartization” of a city. It is known that the “smart city” concept goes through evolutional development in the course of emergence and implementation of innovative technologies. Experts distinguish five generation of “smart cities”. The first generation envisages implementation of certain digital solutions for improving the quality of the city’s infrastructure and residents’ movement. A more progressive generation of cities are characterized by “smart” economy, management, and ecology, which ensure long-term sustainable development. The fifth generation is a “smart” model of life in a city (Kafidov 2015). We deem it necessary to develop a mechanism of effective evolutional transition of “smart cities” in the conditions of the plans of the town-planning development of territories. During evaluation of effectiveness, we recommend using enlarged indicator, which determines the ratio of the ranking’s value to excess of aggregate expenditures for achieving the level of maturity, as compared to the analog city’s expenditures in per cent. The main specific feature of “smart city” is its long-term sustainable development. This means that any decision on city management does not lead to aggravation of any element of the infrastructure, including living on this territory in the short-term and long-term. That’s why it seems that structures of a “smart city” should possess effective analytical tools and managerial methods for timely determination and evaluation of possible negative externalities (external influences on the city’s economy, when the market environment cannot automatically turn the external influences into costs and profits) for their minimization and management. This requires application of the methods of forecasting, analysis, and development of economic sustainability. “Smart” city systems could be organized and implemented effectively if the specific features of a city settlement are taken into account during its design and construction. In this aspect, new cities have an advantage, as compared to the existing metropolis, for the maximum connection of separate elements of the city infrastructure is achieved, which allows for a synergetic effect. That’s why the scenarios of creation of “smart cities” in Russia should be developed for new and existing cities.

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Following the global practice of stage-by-stage transformation of an existing city into a “smart” city, it is possible to offer Russian cities to start the process from implementing separate – not connected to each other – sub-systems of the city infrastructure – e.g., transport and social. As a result, city administration receives a large volume of information of making managerial decisions regarding various elements of the infrastructure, which raises the general efficiency of city management. The indicators that are necessary for operative management of a city should be analyzed in a unified analytical center of the city. As for separate sub-systems of the city infrastructure, it should be noted that the mandatory direction of functioning of the “smart city” concept in Russia should be application of the systems of intellectualization of urban environment for the purpose of increasing the speed of management, reducing administrative expenses, and improving the population’s living standards. Creation and development of intellectual transport systems in a city should be conducted within the systemic automatization of traffic management, public transport management, and control over special transport and cargo transportation. This increases the speed of work of traffic services and awareness of the work of transport systems, as well as traffic safety and ecological situation in the city. Application of innovative digital technologies allows increasing the quality and effectiveness of educational, medical, and other social services. Effectiveness of the work of a smart city’s systems during their creation and application could be achieved based on connection of the interests of city administration, residents, and representatives of business. We suggest developing the scenarios of “smart city” based on the long-term forecasts of development of the city territory with participation of the residents in the system of automatization and application of the modern tools of “city crowdsourcing”. When developing a scenario, it is necessary to evaluate the cities’ comfort for living. As the previous studies show, the evaluation should be performed in view of the objective characteristics of the infrastructure elements and results of sociological surveys of the population. It is possible to use the “happiness index”. The most popular “happiness index” is Happy Planet Index (The Federal Agency for Technical Regulation and Metrology 2016; Marks 2016), which is calculated by the international fund “New Economist Foundation”. Russia has adopted state standards GOST R ISO 37120-2015 and GOST R ISO 18091-2016, which offer a system of evaluation of four directions of city administration’s activities in the spheres of management, economy, and social development, as well as environment. The standard includes 39 indicators (The Federal Agency for Technical Regulation and Metrology 2015). The list of 59 indicators that determine a “smart city” was developed by the participants of the 75th session of the UN Committee on Housing and Land Management in 2014. It is one of the items of the Geneva Charter (Moroz 2012). Geneva UN Charter provisions are fully connected to the Russian programs of capital reconstruction of flimsy dwellings and relocation of people in other city districts. The topic of wear and tear of buildings is also very important for Europe. However, only Russia has achieved real results in implementation of these programs.

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The national program “Economic development and innovative economy” proclaims the happiness index as one of the main indicators for evaluating the execution of the project (Arzhanukhin 2014). One of the most important directions of transformation of “smart” city systems in Russia should be planned modernization of the energy infrastructure for the purpose of increasing its energy efficiency. Thus, implementation of the systems of automatic monitoring of electric energy consumption, improvement of the electric transport infrastructure, systems of distributed generation, co-generation (combination of the processes of simultaneous production of heat and electric energy within the device by en electric station), and renewable electric energy production stimulate the substantial increase of energy efficiency in cities. According to the surveys among head of administrations of the largest Russian cities, they are interested in innovative offers in the sphere of environment protection, improvement of ecological situation, etc. and think that the construction sphere – namely, design and construction of ecological and energy efficiency homes – is the most important step towards the “green” future in “smart cities”. Eco-friendly constructions are performed as a result of planning and interaction of the main participations of the construction processes. The modern concept of “smart city” in Russia has several levels – planning of development of the basic infrastructure, creation and development of intellectual infrastructure (e.g., with application of energy saving technologies), development social services (consumer services), and increase of the cultural level (style of life, art, and cultural objects). There are three well-developed concepts of “smart cities” in Russia – for Moscow, Kazan, and Skolkovo. The pilot project of a large scale is “Novy Bereg” (“New Shore”) near St. Petersburg, which is a new stage in creation of a modern environment of living in metropolis (Kotov 2014). Together with Russian companies, Japanese Nikken Sekkei, which their innovative technological and ecological approaches to creation and development of new territories, will be working on this project. This project envisages the approach to the basic principles and technologies of city building and use of the world achievements in the sphere of construction, energy saving, and communications. The projects of “smartization” of Russian cities should be financed from the federal and regional budgets, as well as with the help of public-private partnership.

4 Conclusions It is possible to conclude that the experience of large cities shows the necessity for consistent observation of a scenario during construction of a “smart city” and constant monitoring of the current situation of its development. An important condition of a “smart city” is investments in the existing city infrastructure for provision of sustainable economic development. We suggest determining the level of city’s maturity based on a ranking with the use of the matrix method. During evaluation of effectiveness of the evolutional transition of “smart cities” we suggest using the enlarged indicator of effectiveness. “Smart city” structures should possess effective analytical tools and managerial methods for timely determination and evaluation of possible negative externalities.

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A mandatory direction of functioning of the “smart city” concept in Russia should be application of the systems of intellectualization of urban environment for the purpose of reducing the administrative expenses and improving the population’s living standards. The modern tools of “city crowdsourcing” should be used for connecting the interests of city administrations, residents, and representatives of business during development of the “smart city” scenarios based on long-term forecasts of development of city territory.

References Albert, S.: Intelligent - rather than smart - cities can address the roots of urban challenges (2019). https://theconversation.com/intelligent-rather-than-smart-cities-can-address-the-roots-ofurban-challenges-118022/. Accessed 25 Jan 2020 Arzhanukhin, S.V.: Happiness index in municipal administration. J. Manage. Issue. 4, 37–45 (2014). http://vestnik.uapa.ru/ru/issue/2014/04/. Accessed 25 Jan 2020 Golenkova, A.A., Shagbazyan, S.I., Stepanova, N.R.: Future behind smart cities. J. Constr. Archit. Mod. Trends Develop. Sci. Technol. 1, 6–8 (2017). http://issledo.ru/wp-content/ uploads/2017/02/Sb_k-1-8.pdf/. Accessed 25 Jan 2020 Datta, A.: Three big challenges for smart cities and how to solve them (2016). https:// theconversation.com/three-big-challenges-for-smart-cities-and-how-to-solve-them-59191/. Accessed 25 Jan 2020 Kafidov, V.V.: Modern Methodological Approaches to Strategic Management and Development of Cities of Various Types, p. 246. Delo by Academy of National Economy, Moscow (2015) Kotov, A.I.: The implementation of Smart City system in St. Petersburg uses the experience of New York. Neva Today, 14 August 2014. http://neva.today/news/92210/. Accessed 25 Jan 2020 Long, E.I., Antonov, E.V.: Rating of sustainable development of cities 2014. J. Energy Econ. Technol. Ecol. 8, 53–59 (2014) Marks, N.: Happy Planet Index (2016). http://www.happyplanetindex.org/. Accessed 25 Jan 2020 Moroz, S.: Russian Cities Happiness Index (2012). http://www.gosrf.ru/news/5927/. Accessed 25 Jan 2020 Ovchinnikov, A., Naumov, V.: Introduction to Smart City. Almanac of Urban tactics. City Theor. 7, 3–7 (2016). http://journalby.com/files/gt7.pdf/. Accessed 25 Jan 2020 Panasenko, S.: The new utopia or the grief of the mind? J. Green City 1(12) (2015). http://greencity.su/novaya-utopiya-ili-gore-ot-uma/. Accessed 25 Jan 2020 Smith, K.L.: How to ensure smart cities benefit everyone (2016). https://theconversation.com/ how-to-ensure-smart-cities-benefit-everyone-65447/. Accessed 25 Jan 2020 The Federal Agency for Technical Regulation and Metrology: GOST R ISO 37120-2015 Sustainable development of the community. Indicators of city services and quality of life (2015). http://docs.cntd.ru/document/1200123370/. Accessed 25 Jan 2020 The Federal Agency for Technical Regulation and Metrology: GOST R ISO 18091-2016 Quality management systems. Guidelines on application of ISO 9001:2008 in local authorities (2016). http://docs.cntd.ru/document/1200136910/. Accessed 25 Jan 2020 The Economist: A summary of the liveability ranking and overview (2013). http://www.tfsa.ca/ storage/reports/Liveability_rankings_Promotional_August_2013.pdf/. Accessed 25 Jan 2020

The Concept of Digital Supervision of Compliance with Labor Legislation Pavel V. Tereliansky(&), Svetlana E. Titor, and Sergey P. Kosarin State University of Management, Moscow, Russia [email protected], [email protected], [email protected]

Abstract. Ensuring constitutional human rights and freedoms in the field of labor is a priority for the development of the Russian Federation. The General doctrine of the digital economy cannot but affect the Supervisory functions in the field of labor. Modern technologies allow organizing control and supervision in the labor sphere in a completely different perspective: constant electronic monitoring of the employer’s actions. This approach will significantly increase the scope of control and supervision activities in the field of labor without increasing the staff. Accordingly, this will increase the level of ensuring compliance with the employee’s labor rights. But most importantly, whatever technological changes in employment and labor have not occurred, we should not forget that the focus should be on the person. The proposed technological and legal changes are primarily based on the creation of a “personal account” of the employee (job applicant), where he/she will be able to control all personnel processes. Such self-control by the employee will significantly reduce the conflict in the field of labor, and prompt settlement of all disputed issues. This will also reduce the burden on the Federal labor Inspectorate. To implement these tasks, it is necessary to create a concept of “electronic supervision” in the field of labor, which will define the goals and objectives, areas of application, principles of digital transformation of Supervisory functions, and the expected results of new implementations. Keywords: Labor supervision
Labor relations Public administration
Digital economy JEL: K31


Labor rights protection



M15

1 Introduction The main advantage of digital technologies is low expenditures. As economist expect, all participants of the digital market will receive large advantages: reduction of unemployment, possibility to enter closed markets, and reduction of costs and expenses. Also, using the digital economy’s tools leads to increase of labor efficiency and high-quality satisfaction of customers’ demands (Dunenkova et al. 2019; Milkina and Kosarin 2019). The doctrine of digital transformation of state management is defined in the legal acts of the Russian Federation (Decree 2016, 2017; Passport 2018). © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 11–19, 2021. https://doi.org/10.1007/978-3-030-59126-7_2

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Digital technologies could have large influence on protection of citizens’ labor rights through digital supervision of compliance with labor law. This will be stimulated by organization of automatic remote interaction between information systems, used by employers for personnel accounting, with a specialized software complex of monitoring and prevention of offences and the tools of remote collection and analytical processing of data on employers’ activities. Application of these tools will allow for more precise determination of risks of damage in the sphere of labor activities and for quicker reaction to the growing risks of supervision bodies. Importance of the tasks of digital transformation of supervision in the labor sphere (Myshko et al. 2019) is predetermined by the following reasons: – general doctrine of development of the Russian digital economy (analysis of the processes of transformation of the digital economy is given in (Tereliansky 2018, 2019); – necessity for increasing the requirements to protection of government information resources. Also, the necessity for transformations is predetermined by a range of problems in the sphere of provision of labor rights: 1) no measures on improvement of the legal regulation in the studied sphere; 2) no mechanisms of automatized interaction between the information systems of the federal labor inspectorate with the information systems of public authorities and employers in the given spheres of activities; 3) underdevelopment of the state labor inspectors’ measures of preventing character; 4) low coverage with inspection measures of the controlled subjects, which does not conform to the world examples that are defined by the International Labor Organization (1.6% of all controlled subjects as compared to 15–20% according to the ILO data); 5) existing number and qualification of employees (Tereliansky et al. 2018) do not ensure the proper and comprehensive implementation of the measures on digital transformation of supervision in the labor sphere. The main goals of transition to the system of digital supervision in the labor sphere are as follows: – increase of effectiveness of control and supervision in the studied spheres by means of implementing the modern digital technologies (Olimpiev et al. 2018); – increase of justification of decisions within supervision in the labor sphere based on automatized determination and accounting of the corresponding violations; – determining the generalized regularities of the corresponding violations, formation of preventive measures of influence (Vasiliev 2018); – provision of cooperation between employees, employers or their representatives, and the federal labor inspectorate for compliance with the established norms and rules in the sphere of regulation of labor relations; – increasing the effectiveness of federal government oversight in the labor sphere by implementing the innovative principles and methods of oversight; – provision of transparent and stable interaction between the federal labor inspectorate and population/employers.

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The process of development and implementation of the measures of the concept in the part of provision of information security (Titor and Svirin 2019) should be based on the following approaches: 1) during transfer of information and in the process of its processing – application of the Russian technologies for provision of accessibility, confidentiality, integrity, and verification of information; 2) predominant use of domestic software and hardware; 3) use of the Russian cryptographic standards during information protection.

2 Background and Methodology The research is based on the studies on the existing regulatory basis and the works of Russian and foreign specialists in the sphere of state management and supervision. The following methods are used: analysis and synthesis, comparative legal method, generalization and modeling, study of experience of the federal labor inspectorate, systematization, and structural & functional modeling. Implementation of the Concept of digital supervision and constant digital monitoring requires the corresponding scientific & methodological and normative & legal provision and technological infrastructure, including: – development and adoption of the Concept of digital supervision; – system of monitoring of goals, tasks, and indicators of efficiency of implementation of the Concept; – development of the monitoring tools, including new modernized methods of departmental statistical control over implementation of the supervisory function of the federal labor inspectorate; – methodological recommendations on the order of application of new tools of monitoring; – preparation of the projects of regulatory documents on the experiment of “personal profile of employee” and “personal profile of employer”; – preparation of changes of the regulatory basis of the functioning of the existing information and analytical systems of the federal labor inspectorate: “Rabota v Rossii”, “ASU KND”, “Oнлaйнинcпeкция.pф” (Onlineinspection.rf); – preparation of the projects of regulatory acts on changing the law on digitization of other processes that are necessary for transition to digital personnel document turnover and digital supervision in the sphere of labor protection (implementing biometric data for employee identification, bar codes for the applied certified means of individual protection, etc.); – preparation of offers on changes of the regulatory basis of functioning of the information system “Onlineinspection.rf” for turning it into a training and information portal; – preparation of offers for changing the regulatory basis on the simplified system of personnel document turnover and document turnover in the sphere of labor protection for small business.

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The following analytical and expert & research preparation has to be conducted: – analysis of efficiency of the experimental project of transition to digital personnel document turnover; – analysis of efficiency of the experimental project of improvement of applying the digital signature technology (with emphasis on HR accounting and document turnover in the sphere of labor protection); – analysis of efficiency of the experimental project on formation of “personal profile of employee” and “personal profile of employer”.

3 Discussion and Results The offered concept of digital supervision in the labor sphere envisages the following. 1. Constant Digital Monitoring Constant digital monitoring is relations that emerge in the process of conducting electronic HR document turnover by using the electronic service of the information & analytical system “Rabota v Rossii”, which include: monitoring of HR document turnover; monitoring of document turnover in the sphere of labor protection. For creating a secure digital platform for provision of digital monitoring in the labor sphere, it is necessary to do the following: 1) develop and implement technologies and mechanisms for implementing digital monitoring by receiving information from information systems of the employer on HR document turnover and document turnover in the sphere of labor protection, which exclude the possibility of its repeat; 2) implement the modern perspective technologies and tools for working with documents of primary accounting (such as a certified domestic hardware and software complex of processing of large arrays of data). The main tasks of the federal government oversight in the labor sphere in the form of labor relations monitoring are as follows: – determining the current state of compliance with labor law of a specific employer; – comparing the requirements of labor law and the current data; – evaluating the determined deviations and the level of their influence on the results of the organization’s functioning; – evaluating the consequences of the determined deviations. The methodology of federal government oversight in the labor sphere in the form of monitoring of labor relations is determined by the following: – preventive method: observing the terms and requirements of the regulatory acts of the Russian Federation during execution of digital documents (exception – mistakes at the stage of preparation of documents and their revision). The method consists in formation and use of digital documents at the web-site “Rabota v Rossii” (personal profile during formation of digital HR document turnover) before their signing by

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the party (parties). The result is excluding errors in execution of documents when using the web-site “Rabota v Rossii” and avoiding the necessity for further check of these documents. Monitoring with the help of analysis of self-control of employers: – observing the terms and requirements of the regulatory acts of the Russian Federation during execution of digital documents (exception – mistakes at the stage of preparation of documents and their revision). The method consists in checking the documents prepared by employers in their own information systems in the structured form; the documents are checked at the web-site “Rabota v Rossii”. Result: excluding the errors in execution of documents and the avoiding the necessity for further check of these documents; – meeting the requirements of the Russian regulatory acts in the executed “paper” documents (opportunity for independent correction of mistakes). The method consists in check at the web-site “Rabota v Rossii” based on semantic analysis of documents prepared by employers in their own information systems. Result: avoiding mistakes in execution of documents and avoiding the necessity for further check of these documents.

2. Digital Remote Supervision Digital remote supervision is relations that emerge in the process of inspection of HR documents based on the system of fully digital remote supervision, at which the inspection is performed without personal participation of the representatives of the federal labor inspectorate and employers, by interaction between the information systems of the Federal Labor and Employment Service (Rostrud) and the inspected subject with the use of the format and logical control. For creation of a secure digital platform for provision of digital remote supervision it is necessary to implement the following measures: – preparing the scientific & methodological provision, normative provision, and software and hardware infrastructure for remote inspections; – developing and implementing the technologies and mechanisms for remote receipt of the information as per query, which excludes its repeat, using the electronic digital signature; – integration of departmental systems, also with external information systems, which contain the data on the issues of the labor sphere, etc. The methodology of federal government oversight in the form of digital remote supervision is defined by the following: – conducting control measures based on the information interaction between employers, with the inspector’s participation. The method envisages employer’s transferring documents in the digital form via the web-site “Rabota v Rossii” with automatized and manual control and reflection of results in the information system. Result – inspections based on remote interaction between Rostrud and the employer;

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– control measures based on information interaction between the employers, with inspector’s participation. The method envisages transfer of data in the digital form (at the web-site “Rabota v Rossii”) from the government information systems. Result - automatized and full control over observation of the terms of labor contracts and requirements of the Russian law.

3. Digital Self-control Digital self-control is relations that emerge during use of the interactive service “Onlineinspection.rf” by employers for preliminary inspection (self-control) of compliance with the labor law, which leads to provision of preferences to employers (reduction of category of risk, cancelling planned inspections) which passes digital inspection (self-control) and use of the interactive service of document templates for HR accounting and labor protection records. The existing system of self-control “Onlineinspection.rf” fully conforms to the tasks and goals set before this system in prevention of violations of the labor law and other regulatory acts that contain the norms of the labor law. In the course of supervision in the labor sphere in the form of constant digital monitoring, where the main basis of document turnover (HR and labor protection) will be used by employers from the information systems of Rostrud via a personal profile, the necessity for “self-control” of employers will disappear. The used system “Onlineinspection.rf” transforms in favor of an educational and information portal. Its functions will be supplemented by “online lectures” and “online explanations” for various directions of document turnover (HR and labor protection). The portal will acquire the character of “Trust environment” of employee and employer. For this purpose, technical, organizational, and legal protection of the interests of employees (their representatives) and employers and government interests during the interaction of participants of a new system of the federal labor inspectorate is created, and the following measures are performed: – creation (actualization) of automatized information system of processing of queries of employees and employers (through personal profiles; – provision of citizens’ and organizations’ access to open information on the activities of the federal labor inspectorate, as well as information that directly relates to their rights and liberties, based on development of the functional capabilities of information systems of Rostrud and provision of digital services at the unified portal of state services in the “unified window” regime; – participation in provision of employees and employers’ access to the created system of increase of population’s literacy in the sphere of labor law. The main tasks of federal government oversight in the labor sphere in the form of digital self-control are as follows: – informing and consulting population, employees, and managers of organizations on the order of execution of certain provisions of labor law;

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– organization and development of preventive work against violations in the sphere of labor law; – studying and implementing the positive experience of prevention of violations of labor law.

4 Conclusions By 2025, implementation of the offered Concept of digital supervision should achieve the following results: 1) for employees: – increase (by 80%) of the share of requests to the federal labor inspectorate with the help of the system of digital services; – increase of effectiveness of providing the observation of the established norms and rules in the sphere of regulation of labor relations, based on mutual cooperation between employees, employers (their organizations), and federal labor inspectorate; – increase of effectiveness of federal oversight in the labor sphere by means of implementing innovative principles, forms, and methods of supervision; – increase of expansion of certainty, transparency, and openness of supervision in the labor sphere for employees; – increase of effectiveness of protection of employees’ labor rights through formation of digital document turnover; – reduction of the number of labor disputes by achieving transparency and openness of HR procedures for employees in their personal profiles; – increase of quality of employee’s awareness on the labor conditions; – improvement of image and increase of trust to the activities of the federal labor inspectorate.

2) for employers: – formation of systemic digital monitoring of compliance with labor law; – optimization and actualization, increase of effectiveness of information and information & analytical systems of Rostrud; – increase of the share of organizations that use the tools of internal control of compliance with labor law; – increase and expansion of certainty, transparency, and openness of supervision for employers; – reduction of employer’s work effort for HR accounting and document turnover in the sphere of labor protection, as well for interaction with the federal labor inspectorate; – reduction of corruption risks in the activities of the federal labor inspectorate.

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3) for government: – increase of effectiveness of providing the observation of the established norms and rules in the sphere of regulation of labor relations, based on mutual cooperation between employees, employers (their organizations), and the federal labor inspectorate; – reduction of inspectors’ work effort due to transition to the form of remote inspections; – increase of the number of supervision objects in the labor sphere with which the control and supervision measures were performed, in the total number of supervision objects; – increase of effectiveness of federal oversight in the labor sphere by means of implementing the innovative principles, forms, and methods of supervision.

References Decree of the President of the Russian Federation of 05.12.2016 N 646: On approval of the information security Doctrine of the Russian Federation (2016). http://www.consultant.ru/ document/cons_doc_LAW_208191/. Accessed 27 Dec 2019 Decree of the President of the Russian Federation of 09.05.2017 N 203: On the Strategy for the development of the information society in the Russian Federation for 2017–2030 (2017). http://www.consultant.ru/document/cons_doc_LAW_216363/. Accessed 27 Dec 2019 Dunenkova, E.N., et al.: Development of Innovative Activity in the Digital Economy. State University of Management, Moscow (2019) Milkina, I.V., Kosarin, S.P.: Formation of political and legal conditions for the implementation of the National program “Digital Economy of the Russian Federation”. Munic. Acad. 4. 19–29 (2019) Myshko, F.G., Vasilyeva, K.V., Popov, V.V., Strelnikova, I.A.: Trends in legal regulation of civil and competitive relations in the digital economy. Vestnik ekonomicheskoy bezopasnosti 1, 155–159 (2019) Olimpiev, A.Y., Myshko, F.G., Strelnikova, I.A.: Digitalization of the economy in the Russian Federation: state and prospects of development. In: Tereliansky, P.V. (ed.) Collected Volume: Step into the Future: Artificial Intelligence and the Digital Economy. Revolution in Management: a New Digital Economy or a New World of Machines. Proceedings of the II International Scientific Forum, Moscow, pp. 287–293 (2018) Passport of the National program “Digital economy of the Russian Federation” (app. by the Presidium of the Council under the President of the Russian Federation for strategic development and national projects on December 24, 2018 (N 16) (2018). https://base.garant. ru/72190282/. Accessed 27 Dec 2019 Tereliansky, P.V., Kuznetsov, N.V., Ekimova, K.V., Lukyanov, S.A.: The transformation of education in the digital age. Univ. Manage. Pract. Anal. 22(6), 36–43 (2018) Titor, S.E., Svirin, Y.A.: Digitalization in labor law. Black Holes Russ. Legis. 2, 61–67 (2019) Vasiliev, F.P.: Prevention of offenses in the digital economy. Econ. Law. Soc. 2(14), 17–23 (2018)

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Tereliansky, P.V.: Process cifrovoj transformacii ekonomiki Rossii [The process of digital transformation of the Russian economy] In: Tereliansky, P.V. (Ed.) Tendencii razvitiya Internet i cifrovoj ekonomiki: tr. II vseros. s mezhdunar. uchastiem nauch.-prakt. konf. (g. Simferopol’ – g. Alushta, 30 maya – 1 iyunya 2019 g.)/FGAOU VO «Krymskij feder. un-t im. V. I. Vernadskogo», In-t ekonomiki i upravleniya, Kaf. biznes-informatiki i matem. modelirovaniya, FGBUN Central’nyj ekonomiko-matematicheskij in-t RAN, FGBOU VO «Gos. un-t upravleniya», vol. 2, pp. 56–59. Science, Simferopol (2019) Tereliansky, P.V.: Cifrovaya transformaciya eksportno-orientirovannoj ekonomiki Rossii [Digital transformation of the export-oriented economy of Russia]. Vestnik universiteta 6, 124–133 (2018) Tereliansky, P.V.: Protsess transformatsii veshchnoy eksportno-oriyentirovannoy ekonomiki Rossii v tsifrovuyu [The process of transformation of the real export-oriented economy of Russia into data-economy]. Upravleniye 4(22), 67–73 (2018) Tereliansky, P.V.: Tsifrovaya ekonomika, iskusstvennyy intellekt, Industriya 4.0 [Data-economy, artificial intelligence, Industry 4.0]/P.V. Tereliansky // Tendentsii razvitiya Internet i tsifrovoy ekonomiki: materialy I-y vseros. s mezhdunar. uchastiyem nauch.-prakt. konf. (g. Simferopol’ – g. Alushta, Respublika Krym, 29–31 maya 2018 g.). FGAOU VO «KFU im. V.I. Vernadskogo», In-t ekonomiki i upravleniya, Kaf. biznes-informatiki i matem. modelirovaniya, FGBUN TSEMI RAN, FGBOU VO GUU, FGBOU VO «OGU im. I.S. Turgeneva», pp. 91–96. Simferopol; Alushta (2018) Tereliansky, P.V.: Humanitarian differences between Industry 4.0 and digital economy of the Russian Federation programs. In: Materials of the XV International Scientific and Practical Conference “Science Without Borders – 2019” (30 March–7 April 2019), vol. 1, pp. 7–10. Economic Science and education Ltd., Sheffield (UK) (2019)

Prospects for the Development of Seaports of the Arctic Regions of Russia in the Infrastructure of the Arctic Basin Alexei A. Stepanov(&) , Alexander S. Aleshko and Artem O. Merenkov

,

State University of Management, Moscow, Russian Federation {astepanov,ao_merenkov}@guu.ru, [email protected]

Abstract. The article deals with the prospects of development of transport infrastructure in the Arctic Basin and its subjects, in particular – seaports. The article also provides a classification of existing options for developing seaport infrastructure, taking into account their specification and the degree of completion of ongoing projects. The main strategies for organizing a smooth process of upgrading the transport infrastructure of seaports are highlighted. An insight of the operation of seaports in terms of their specialization in the current and projected period has been gained. An assessment of the possible consequences of incorrect implementation of programs for the development of transport infrastructure of seaports was carried out and possible measures to reduce the risks of inconsistencies were disclosed. Keywords: Arctic Basin
Regional transport infrastructure
Seaports
Arctic regions
Transport system of the Russian Federation JEL Code: R40


R41
R48

1 Introduction The main objective of increasing the economic growth of the Russian Federation (RF) is the development of the country’s regions. In this regard, an important tool to increase the investment attractiveness is the development of transport infrastructure of the Russian Federation. Such a task was set in March 2018 by the Russian President V. V. Putin at the Congress of Transport Workers. The goals and tasks of the transport complex development of the Russian Federation were specified at the meeting. At the same time, the state leader considers the creation of new highways as the path to the development of the system: expansion of the Baikal-Amur Mainline, construction of a new Taurida highway, development of port infrastructure (seaport “Vostochny”), development of the northern sea route (Resolution “On the new edition of the state program “Socio-economic development of the Arctic zone of the Russian Federation” 2019). The transition to digital technologies based on domestic software is to become an important aspect. Digitalization will expand the multimodal transportation sector, © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 20–27, 2021. https://doi.org/10.1007/978-3-030-59126-7_3

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increase the industry efficiency, reduce the cost to carriers and cargo owners, and increase passenger convenience level (The development strategy of the seaport infrastructure of Russia until 2030 2019). Programmatic development of the transport system of the Russian Federation, in addition to the infrastructure base, should be premised on systemic work predicated on applied scientific research, taking into account the best foreign experience and the best domestic developments, including in the field of management (Krasilnikova O.A. 2014). Thus, the further development of regional transport systems in the long term will require the study of freight flows, the capacity of infrastructure facilities, factors of requirement alteration and port facilities for the development of foreign trade and the use of transit potential of the country.

2 Methods and Materials The purpose of this study is to research and develop scientific and methodological approaches to assessing the role of the Northern Sea Route B in the socio-economic strengthening of the Russian Far North regions. To achieve the purpose, the authors have solved the following main tasks: 1) the analysis of the socio-economic development of the Far North regions and their contribution to the Russian economy was carried out; 2) The features of transport services in the Far North regions were examined; 3) the main features of the Northern Sea Route, which characterize it as the basis of transport services for the regions of the Far North were identified; 4) the existing scientific and methodical approaches to estimation of the options of delivery of cargoes in the Far North regions were analyzed; the research subject is the Northern Sea Route in the system of transport communications of Russia. The study focuses on the scientific and methodological approaches and the assessment of efficiency of transport service processes in the Far North regions. Theoretical and methodological basis of the study includes scientific works by domestic and foreign scientists in the field of transport service of the Far East regions, legislative and regulatory acts of the Russian Federation in the area of normative regulation of economic and transport activity of regions of the Far North of Russia. The study is based on the application of common methods of scientific research – observation, comparison, analysis, logical and comparative expert evaluation. The information base of the study are materials of the Ministry of Transport of the Russian Federation, specialized scientific publications of the Federal State Statistics Service, researches of domestic and foreign scientists, periodical press, data from the Internet, researches made by the authors. The scientific novelty of the study consists in the development of scientificmethodical approaches to the selection of rational options of transport service of regions of the Far North. The following scientific results are new: 1) the choice of a specific approach to the transport service of the Far North regions, taking into account characteristics of this sector of national economy was justified; 2) scientific and methodological approaches to assessing options for the delivery of goods to the regions of the Far North, taking into account industry specifics, were developed; 3) practical

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recommendations on the development of transport and forwarding services in the Far North of Russia were given. Theoretical relevance of the study consists is to deepen scientific and methodological approaches to the assessment of the choice of transport service options for the Far North regions. The results of the research will improve the efficiency of functioning of the infrastructure of the Far North regions through rationalization of transport flows. The practical relevance of the study lies in the possibility of using the results of the work in improving the transport and logistics flows in the regions of the Russian Far North, as well as in the development and preparation of teaching materials for universities in the field of assessment and analysis of the value of Russia’s High North.

3 Results According to the World Economic Forum (WEF), Hong Kong, Singapore and the Netherlands are the countries having best maritime transport infrastructure in the world. The Global Competitiveness Report, published by the WEF, ranks 137 countries on a scale where 7 is the highest score. Points are earned by the quality of different types of infrastructure such as railways, ports and airports. On this scale Hong Kong was rated 6.7, Singapore – 6.5 and the Netherlands – 6.4 (Grieger, M. and Ludwig, A. 2019). Hong Kong, China’s Special Administrative Region, has an infrastructure index of 6.7, the highest among all countries in the world. Hong Kong infrastructure is efficient and contributes to economic development in line with international standards, ensuring that businesses operate efficiently. Hong Kong has about 1,138 miles of roads. Hong Kong’s railway infrastructure is one of the most developed in the world, with a total of 21 miles of electrified railways and the Kowloon Peninsula is connected with Chinese railways (Rakhmangulov A.N. 2016). Thanks to its well-developed infrastructure, the government encourages the widespread use of public transport. Singapore inherited its well-developed infrastructure from the colonial government and worked to further develop that infrastructure. Singapore has 1,940 miles of road network, 99% of which are powerful highways. Between the 1970s and 1980s, Singapore saw a sharp increase in the number of private cars, resulting in higher levels of pollution. However, the Singapore government quickly addressed the issue of environmental pollution by investing large sums of money in the public transport sector, which encouraged people to use public transport on their way to work and when travelling on other matters. In order to further secure the city and reduce pollution, the government introduced 51 miles of transit road infrastructure (Lavrikova Y.G. 2019). The Netherlands is the main entry point of goods into the European continent, and it is essential that it have the best infrastructure to transport goods to the hinterland of Europe. The country is estimated to have 78,145 miles of road network and 70,229 miles are fully paved roads. The country has established high-speed service to facilitate transportation from the coast of the Netherlands throughout the country. Due to high urbanization, most urban roads were built to include bicycle lanes, which allows the country to avoid congestion on the roads. The widespread use of bicycles has helped reduce environmental pollution, although 79% of citizens still use their cars. The

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Netherlands has more than 1,702 miles of railways and a total of 3,135 miles of modern waterways (Lexin V.N. 2018, Stros et al. 2017). Infrastructure has a direct impact on the economy of any country, since it allows the movement of goods to ports and airports and, finally, to other countries. Without adequate infrastructure, goods will not reach their destination in time, which will result in economic losses. Highly developed infrastructure contributes to the economic development and growth of the country (H. Wang, J. Zhang et al. 2016). The determinants of port efficiency are: the quality of country and port transport system infrastructure and the services provided. The prospects for maritime transport today are determined by the degree of development of the port capacity (Michael E. 2018). There are 67 seaports in the Russian Federation. In recent years, the government’s overall investment in this type of transport has yielded some results. This has a positive impact on the overall development dynamics in terms of cargo transshipment volume – 721.9 million tons. Development in no small part ensured through the infrastructure. Thus, even in spite of unfavorable economic situation, slowdown in economic growth rates and instability of foreign trade operations, the cargo turnover of seaports is increasing, reaching the indicators planned within the framework of the state program “Development of transport system in the Russian Federation”. About 60% of Russian cargo imports and exports are handled at sea ports. Balanced development of port infrastructure will increase the competitiveness of Russian exports in the world market. Port infrastructure has been developing at a high rate over the past 16 years: between 2000 and 2016, the cargo turnover at Russian seaports almost quadrupled and is expected to increase more. Companies operating in the Russian market differ in scale, business structure and cargo specialization. Some are part of vertically integrated holdings with transshipment mainly of cargoes exported by the respective holding company. Others are not part of vertically integrated holdings, but consolidate the transshipment of one or two types of cargo for third-party companies. Companies of the third type perform transshipment of all types of cargo. Finally, the fourth type consists of small companies transporting a particular type of goods within one port. The study showed that nowadays the Russian Federation’s demand in terms of cargo transportation is hindered by both insufficient port capacity and lack of railroad approaches to them in the regions and republics of the Russian Federation. This naturally undermines the export and import potential and creates barriers to transit transport development. A number of regions lack developed transport infrastructure and which created artificial competition between transport modes. It is necessary to form a unified cargo flow control system. Intensive social and economic development of the Russian Federation, thanks to the expansion of economic ties with other countries, primarily with the BRICS countries (especially China), is a catalyst for the growth of needs in maritime transport in general, and the development of port infrastructure in particular. At the same time, infrastructural development requires the construction of new transshipment complexes and the purchase of modern vessels corresponding to the nature of transported cargo.

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The third major issue is the organization of interaction of modes of transport with the seaports, management of cargo flows between different modes of transport. This will facilitate the development of multimodal transportation. The information about the capacity of foreign ports, their current load is also necessary. Thus, a scenario approach in determining the directions of development of cargo flows of the country’s regions, which takes into account both the peculiarities of the Russian economy and transport system and trends in foreign trade towards building a harmonious system of transportation, harmoniously integrating all modes of transport, can become strategically important. Efficient implementation of the scenario approach requires preliminary preparation, namely, the research of cargo flow dynamics in the seaports of the Russian Federation constituent entities, analysis of the level of port infrastructure load in the Russian Federation and neighboring countries. Transit potential, export-import needs of industries of the Russian Federation, assessment of the condition and prospects of development of railway and automobile approaches to the port infrastructure of the Russian Federation, their potential and competitiveness in terms of cargo transshipment can be formed based on foresight method. In accordance with the Development Strategy for the Arctic Zone of Russia, as well as taking into account the expansion of oil and gas companies’ activities in the Arctic and Yamal regions, we can expect a steady growth of transportation along the Northern Sea Route in the future. The problem of finding optimal ways to develop the transport infrastructure in the Arctic Basin has been raised for quite a long time. It is primarily expressed in normative acts and documents that define the strategy for ensuring social and economic well-being both for the Russian Federation and for its constituent entities. With rapidly growing freight traffic, it is critical to have a competitive transport infrastructure, especially in those regions where this seems to be a particularly difficult task. This is the way to describe the regions of the Far North of Russia. Most of the constituent entities that have access to the Arctic Basin are concentrated there. That is why the problem of transport infrastructure development in Russia within the Arctic Basin transport communications system is of highest priority. The main specialization of the Arctic Basin ports is the transshipment of industrial raw materials. Murmansk, Arkhangelsk, Vitino and Kandalaksha, which account for more than half of all cargo in the Arctic Basin, can be highlighted from the whole list of Arctic Basin seaports. Other ports are somewhat problematic because of their location in the territories of the Russian Federation, where transport infrastructure is weak. These ports are typically used for the deliveries of goods to the Northern Territories of Russia (Hao Wang 2018, Jiangang Shi et al. 2019). Transportation of essential materials and food is performed within the Northern Supply Haul. The Northern Supply Haul provides a timely supply of raw materials and supplies to a number of important strategic locations (Majbah Uddin 2019). Murmansk is the only port capable of handling loads all year round. Murmansk climate is softened by the North Atlantic Current or the Gulf Stream, so there is no ice in the port water area. Harbor waters of other ports freeze in the winter (Cao J. 2017, Kompalla et al. 2017).

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It is necessary to improve methods and forms of seaports and transport infrastructure development management. At this stage, several possible development options should be highlighted: 1) Inertial 2) Basic 3) Expert option The above mentioned potions of transport infrastructure development in the Arctic Basin should be considered in combination with regulatory acts, among which the state program of the Russian Federation “Socio-economic development of the Arctic zone of the Russian Federation”, providing for the implementation of several programs: 1) creation of conditions for the development of the Arctic zone of Russia, formation of key development zones and ensuring their subsequent operation; 2) ensuring navigation using the Northern Sea Route; The implementation of each program ensures the fulfillment of the following tasks: development of the Northern Sea Route as the key transport highway of the Russian Federation in the Arctic, social and economic development of the Arctic zone of the Russian Federation. The above tasks, if successfully solved, will guarantee the increase of the investment attractiveness of the Northern Sea Route and the transport infrastructure of the Arctic zone of the Russian Federation in general. In order to assess the prospects for the development of seaports in the Arctic transport communications system, it is also necessary to refer to another document “Strategy on the Development of Russian Seaport Infrastructure Till 2030”. This document assesses the prospects for the development of seaports in the Arctic Basin, subject to the implementation of ongoing and planned projects, including the construction of new terminal and expansion of transport coverage. As an example, several ports in the Arctic Basin were identified, among them: Arkhangelsk, Varandey, Murmansk, Vitino, and Sabetta. The volume of cargo transshipment through the port of Arkhangelsk as part of the development strategy is estimated in this document as follows: by 2020 - 5.9 million tons per year; by 2030 - 6.6 million tons per year. There are a number of facts to be recorded in the case of Varandey Port. First of all, there is a fixed ice-resistant offshore export terminal. Further, the capacity of the terminal is up to 12 million tons per year. As a result, transshipment volume is estimated at 8.0 million tons per year in 2020 - 2030. For the Murmansk Sea port, the cargo transshipment volume is estimated at 52.0 million tons per year in 2020, and 75.0 million tons per year in 2030. Vitino terminal has the potential for shipping up to 6.0 million tons of oil products. Development of this port is unpromising due to the low capacity of railway infrastructure. Transshipment volume may reach 5.0 million tons per year in 2020 and 2030. The Yamal Peninsula is a key strategic feedstock region of Russia; it is also petroleum-bearing region. Liquefied gas is transported by sea from the Sabetta port, with an average volume of 17 million tons per year by 2020 and 20 million tons per year by 2030 (Michael E. 2018).

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The port of Kandalaksha is primarily focused on the transshipment of coal exported from the Kemerovo region by rail. Transshipment volume through Kandalaksha port is estimated at 2.0 million tons per year by 2020 and 4.0 million tons per year by 2030.

4 Conclusions Thus, the following conclusions can be drawn from the above: 1) Achieving the expected performance indicators for the Arctic Basin seaports is possible with strict adherence to one of the development options. 2) Continued evaluation and re-evaluation of ongoing Arctic Basin seaport development projects is needed to ensure alignment with the existing development strategies. 3) It is necessary to search for new scientific and methodological approaches to studying the development of transport infrastructure and seaports in Russia.

References Krasilnikova, O.A., Lomakina, N.S.: Features and prospects for the development of seaports of the Arctic basin. Young Sci. 2014, 136–139 (2014). (In Russian) Resolution “On the new edition of the state program” Socio-economic development of the Arctic zone of the Russian Federation, p. 1064, 31 August 2017. Collection of acts of the President and Government of the Russian Federation (2017). http://government.ru/docs/29164/. Accessed 26 Nov 2019 The development strategy of the sea port infrastructure of Russia until 2030. Federal State Unitary Enterprise Rosmorport. http://www.rosmorport.ru/media/File/State-Private_ Partnership/strategy_2030.pdf. Accessed 26 Nov 2019 Rakhmangulov A.N., Muravyov D.S.: The development of the sea port infrastructure of the region on the basis of the “Dry ports”. Reg. Econ. 2(3), 924–936 (2016). (In Russian) Lavrikova, Y.G., Akberdina, V.V., Suvorova, A.V.: Coordination of the priorities of scientific, technological and spatial development of industrial regions. Econ. Reg. 15(4), 1022–1035 (2019). (In Russian) Lexin, V.N., Porfiryev, B.N.: The Russian Arctic today: substantial innovations and legal conflicts. Econ Reg. 14(4), 1117–1130 (2018). (In Russian) Cao, J., Cao, X.: Comparing importance-performance analysis and three-factor theory in assessing rider satisfaction with transit. J. Transp. Land Use 10, 65–82 (2017) Wang, H., Nozick, L., Xu, N., Gearhart, J.: Modeling ocean, rail, and truck transportation flows to support policy analysis. Marit. Econ. Logist. 20(3), 327–357 (2018) Uddin, M., Huyn, N.: Reliable routing of road-rail intermodal freight under uncertainty. Netw. Spat. Econ. 19, 929–952 (2019) Webber, M.E.: A new age of rail. Mech. Eng. 1, 44–49 (2018) Stros, M., Heinze, T., Říha, D.: Relevance of personal interaction factors between customers and sales representatives in the automotive business. J. Appl. Market. Theor. 7(1), 33–55 (2017) Kompalla, A., Geldmacher, W., Just, V., Lange, S.: Tailored automotive business strategies in the context of digitalization and service-oriented models. Qual. Manage. 18(156), 77–84 (2017)

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Shi, J., Duan, K., Wen, S., Zhang, R.: Investment valuation model of public rental housing PPP project for private sector: a real option perspective. Sustainability 11(7), 1857 (2019). https:// doi.org/10.3390/su11071857 Wang, H., Zhang, J.: Research on the relationship between customer characteristics and categories in personal automotive business. In: 2016 Chinese Control and Decision Conference (CCDC), Yinchuan, pp. 1003–1008 (2016) Grieger, M., Ludwig, A.: On the move towards customer-centric business models in the automotive industry-a conceptual reference framework of shared automotive service systems. Electron. Markets. 29, 473–500 (2019)

Crypto Currencies: Current Realities, Philosophical Principles and Legal Mechanisms Anatoly Yu. Olimpiev1(&) , N. Rouiller2, and Irina A. Strelnikov1 1

State University of Management, Moscow, Russian Federation [email protected], [email protected] 2 School of Business, Lausanne, Switzerland [email protected]

Abstract. This article is based on several years of practical legal advice provided to entities issuing and administering cryptocurrencies, mostly domiciled in Switzerland but active worldwide. It observes that new legal instruments and concepts are not necessary to correctly and efficiently deal with cryptocurrencies and smart contracts as regards issues of private law (contractual aspects, corporate structures); in contrast, some questions of administrative law may require decisions or clarifications of the legislator. The article emphasizes that the provision of legal advise benefits from a good understanding of the technical realities as well as of the philosophical approaches that motivate promoters of cryptocurrencies, including those that are critical of monetary policies followed by central banks. The practical advantage of cryptocurrencies is their purpose as a tool for implementing so-called “smart contracts”. A smart contract is a consistent programming method that allows a transaction to be executed automatically. In legal systems, cryptocurrencies are not difficult to understand the handling of cryptocurrencies and «smart contracts». Payment in cryptocurrency is legally valid. The importance of digitalization for the modern economy cannot be overestimated. Most companies around the world are digitizing what they do. New digital assets are generated daily: innovative applications are being created and existing competencies are being improved. The totality of various measures for digitalization affects the evolutionary development of the world economy as a whole. Therefore, the most discussed topic in the field of digital technologies is the rapid spread of cryptocurrencies and blockchain technologies. Cryptocurrency is included in the system of everyday use at the user level as a means of ensuring payment transactions, a means of accumulation and financial speculation. Since the appearance of the cryptocurrency, the question is legitimate: whether it should be banned or not and what its nature is. However, due to the novelty of the cryptocurrency, the ambiguity of its legal and economic essence, various practices have developed to determine the legal status of the cryptocurrency, while in most subjects of international law, legislation has not regulated this phenomenon. The purpose of this study was to solve several problems: knowledge of the history of the development of cryptocurrencies; definition of the concept of «cryptocurrency»; determination of the legal status of cryptocurrencies in developed foreign countries; comparative legal analysis of the cryptocurrency market in a number of States; detection of features of © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 28–39, 2021. https://doi.org/10.1007/978-3-030-59126-7_4

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bitcoin distribution in developed countries; analysis of the practice of legalizing bitcoin in foreign countries. Keywords: Cryptocurrency
Bitcoin
Switzerland
Legislative reform
Payment token
Investment token
Token
Coin
Blockchain
Exchange platform
Smart contract
Escrow-agent
Eurosystem
Online trading JEL Code: O31


O32
O33
O38

1 Introduction This article is based on several years of legal advice provided to address a wide variety of issues related to cryptocurrencies and corporate entities issuing and administering (some aspects) cryptocurrencies. In addition to random headlines in the media caused by a jump or drop in market rates or other impressive events, the cryptocurrency phenomenon has become a significant and already long-standing social and economic reality. As of the beginning of 2020, market capitalization of 100 major cryptocurrencies (among more than 6,000 existing ones) is close to the equivalent of 300 billion US dollars (varying from 150 to 350 billion US dollars during 2019), and the number of registered exchange transactions per day is approximately 100 billion US dollars (while daily values in 2019 ranged from 10 to USD 250 billion, with a median daily value of about USD 60 billion). Lawyers practicing in Switzerland had particularly many opportunities to combat this phenomenon, as no legislative reform had been put in place for the time being. This state was chosen as the place of legal registration for organizations issuing some of the most important cryptocurrencies (such as Ethereum [ETH] in 2014, which has since remained the second only to Bitcoin, Cardano [ADA] token in 2017, currently in the 11th place, Tez [XTZ] in 2018, currently in the 10th place, and many others, such as Cosmos token [ATOM] in 2019, holding the 20th place and numerous important projects) (Favier/Huguet/Takkal-Bataille 2018). These first years of work confirm that some – in fact, the most important legal aspects are extremely simple and can be instantly understood and easily put into practice. New legal concepts are neither necessary nor useful: what is necessary and useful is the understanding of technical reality (and strict implementation of classic legal concepts). In addition, defining the fundamental goals that motivate or guide people who create cryptocurrencies is useful for the right approach to many practical issues, including sensitive ones, such as combating money laundering and choosing corporate legal structures. That is why in this brief article we will elaborate on these motivations, which can be called “philosophy” or “philosophies”, supporting the formation and use of cryptocurrencies. One of the real difficulties of a conceptual approach, which should not be underestimated, is the diversity of cryptocurrency. Each of them has its own peculiarities, and each new cryptocurrency promoter will naturally emphasize that it is innovative if not revolutionary compared with the existing ones. Classifications and differences

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between payment tokens, utility tokens and investment tokens are useful (and can have a practical legal function in accordance with the applicable regulations), but their usefulness is limited, in particular, due to the large number of hybrid tokens (combining characteristics, belonging to several of these categories).

2 Methodology The study of cryptocurrency functioning in the global financial market is a relatively new area of economic research. Scientific views on this phenomenon are still being formed Alizart (2019), Blanc (2018), Vailland G. (2016), Rouiller (2018), BIS Committee on Payment and Settlement Systems (2003), Goodman (2014), Hautcœur et al. (2010), The Swiss Federal Council (2018), Tirole (2017). Methods of study were: functional-structural, analytical, logical, graphical and statistical analysis method. Despite the diversity, we can identify some common characteristics that help outline the essence of cryptocurrencies. It seems appropriate to agree with the fact that in this context the term token or coin refers to a transferable cryptocurrency unit (regardless of its numerical value, i.e. also to an infinitely small fraction of nominal value of 1). Assuming probably the most common conventional concept, the real cryptocurrency is decentralized (at least to a large extent and in some respects, apart from the question of whether an absolute decentralization is possible). Decentralized nature, indicative of a “real” cryptocurrency ecosystem is based on a combination of a common code and operation, physically occurring through an abstracted large number of servers (at least several hundred) that are not owned or managed by a specific single entity; they are owned and operated by independent entities. There is an objective register (general ledger) of historical transactions (blockchain), identical on each of the servers in this ecosystem. Thus the blockchain is decentralized or distributed. This decentralized identity means that it is virtually impossible to change the historical register. Each historical phase is a node or “block” (hence the expression “blockchain”). Changes in the register, which are possible, consist of additions to the blockchain, that is, they are chronologically later; the way in which such a change to the blockchain is implemented and accepted (validated) varies from one cryptocurrency to another and is one of the differentiating elements. The oldest verification process (used in Bitcoin ecosystem) is carried out through Proof of Workbased verification performed by miners (receiving rewards for this activity); an alternative, more recent verification process (used, in particular, by the Tezos ecosystem) is the Proof of Stake (which consumes significantly less energy), performed by the socalled bakers. Another alternative verification process is the Proof of History (developed, in particular, in Solana project). The reliability and safety of processes of validation of adding new blocks to the blockchain is emphasized by the promoters of most new cryptocurrencies in order to justify the existence of their products. Another justification - and a feature often emphasized by new cryptocurrency promoters - is the quality of management and the possibility of adopting ecosystem improvements (that is, a public code) through organized democratic procedures (the successful Tezos project was notorious a few years before its launch for the White Paper called “self-amending

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crypto-ledger”. This aspect can also be considered as belonging to the broad concept of a decentralized ecosystem (or “distributed power”) (L. M. Goodman 2014). An important aspect of decentralization is the lack of mediation for the storage and transmission of a token or coin. A token can be defined as the actual ability to control a unit accepted in the blockchain (i.e. recognized by individuals participating in the ecosystem): control consists in either keeping this unit unchanged, or in transferring actual control over this unit to someone else (i.e. from one “address” to another “address”). This ability does not depend on the intermediary, but solely on the relationship between the participant and the blockchain. Therefore, the “retention” of tokens occurs without any other custodian, except for the blockchain as a system. At the same time, the token transfer is performed directly from one participant to another participant, without any mediation (peer to peer). If any third party offers an “interface” (usually an exchange platform), which shows the participant’s balance and facilitates the transfer of tokens, this does not change anything in the essential characteristic that retention and transfer are possible without intermediaries.

3 Results In addition to the direct transfer of tokens, the practical advantage of cryptocurrencies is that they are a tool for programming and implementing “smart contracts”. Smart contract is harmonized programming, according to which the transaction will be automatically executed when the events described in the programming, are recognized as occurred. In other words, it is a conditional contract, the execution of which occurs automatically: human intervention is in programming, and execution depends on obtaining the information provided in this programming. It can be very simple: for example, a certain amount of ETH will be transferred from one address (A) to another address (B) on the Ethereum blockchain if and when it is recognized that a certain amount of XTZ was transferred from address (X) to another address (Y) on the Tezos blockchain. Addresses A and Y are usually controlled by one contracting party, and addresses B and X are controlled by the second contracting party. This is a simple cryptocurrency exchange operation. The fact that the contract is programmed on the blockchain and is therefore unchangeable is a practical guarantee that allows the parties to complete this transaction safely without an intermediary, provided, of course, that the programming was done correctly. Smart contracts can be much more complicated: the cryptocurrency transfer provided for in the programmed operation is not initiated by a transfer to another blockchain, but by a more complex event or series of events, for example, several transfers on several blockchains, as well as, for example, an event in the physical world. Some events in the classical world can be easily recognized, for example, the appointment of a new director and the dismissal of the currently appointed director in the company in the Register of Companies, which is a public (on-line) register and can be “automatically read” if relevant programming was done in the smart contract. Thanks to such smart contract, parties to a transaction whereby the ownership and control of the company are transferred and realized through the change of a director (as director holds the register of shareholders) can do without any escrow agent. The

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obvious effect is that if the costs of programming are low, then the contract execution (payment itself) costs almost nothing, while a similar action performed by a reliable deposit agent is very expensive in most countries. At the same time, some events that the parties want to make a cryptocurrency transfer trigger cannot be automatically recognized. In this case, a notification that an event has occurred must be provided by an individual or legal entity, and it will be recognized by the program as the occurrence of a condition on which the automatic fulfillment of the contract (i.e. payment) depends (an individual or legal entity giving this notification, is often called “Oracle”). In these configurations, the contracting parties can do without a deposit agent, so that no custodian or depository of funds should be hired and rewarded, but the third party, confirming the occurrence of the event, must be a trustee – and in many situations, such third party must be rewarded. Smart contracts are not a cost-free solution for all transactions of a certain complexity. Some tokens are pure payment instruments. They do not create any rights for anyone. One can say that legal content is nothing more than controlling a position on the blockchain (that is, the ability to keep it unchanged or transfer it). Their value is determined by what participants consider worthwhile. This is the case for Bitcoin, Ethereum, Ripple (community), Tezos and most major cryptocurrencies. They are called “payment tokens” or sometimes “native tokens”. In contrast, some tokens give their holder the right to some performance provided by the issuer (or a third party). These tokens are called “security tokens”. Their transfer method - which is usually decentralized - and the possibility to use them in smart contracts justify the fact that they are called cryptocurrencies. In particular, they allow the issuer (supplier of goods or services) exchange its goods or services in a much more liquid market than otherwise. Some other tokens are called “investment tokens”. Their content may be the ownership of the issuer (for example, a share or the right to receive a share in the issuer) or a claim on the issuer (i.e. the issuer’s debt to the token holder; in this case, it is a bond equivalent). Their content can also be the right to an asset or to a part of an asset owned or controlled by the issuer, or to a group of assets owned or controlled by the issuer. In such situations, the token is the equivalent of participation in an investment fund. Investment tokens are sometimes referred to as “asset-backed tokens”, while (some) utility tokens, to the extent that they create a claim to the issuer for a future product or service, are also “asset-backed”, since the claim is also an “asset”. It is recognized that these categories are not impenetrable to each other and that tokens may have characteristics that belong to several of these categories (“hybrid tokens”). For clarity and to avoid confusion regarding the fact that the possession of a real cryptocurrency token does not entail any right in relation to a person, it is mentioned here that if someone (for example, a bank that decides to act as a cryptocurrency custodian) promises the creditor to hold and deliver payment tokens (e.g. the bank for its clients), in which case the creditor has the right against a certain entity (in the Example: the bank), which shall deliver these tokens (i.e. deliver them to the address on the blockchain specified by the client, the owner of the claim).

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Decentralization is a key aspect in relation to the diverse motivations of the creators and promoters of cryptocurrencies. For some of them, which together could be called “cryptanarchists” or “anarchocapitalists”, the key is the independence from the central authority, that is, the government and/or banks as central financial intermediaries (or “central counterparties”). Their power can be viewed from the perspective of the existence of control as such or from the angle of the natural aptitude of any subject possessing some power to expand and, finally, abuse it. These aspects may be related to their authority to issue money or to control transactions (whether it is awareness thereof or the ability to prevent transactions, for example, through any type of freezing). Creation of peer-to-peer financial transactions without any central institution, as real cryptocurrencies allow, makes it possible for people to live in a society with lower level of control (or, if this possibility is not limited: with no control) over personal decisions and actions. Appropriate motivation can be called anarchism, liberalism, or libertarianism – all these concepts are manifold, and their content is understood in many profound ways. Some “kryptanarhists” believe that transaction anonymity is of paramount importance, the others on the contrary contribute to their full transparency. Another group of motives is more likely to create opportunities for transactions, also complex - including those that entail an element of credit (i.e. provisional performance by one of the parties) - to be executed at a (very) low cost without risks that usually exist in the absence of an intermediary providing security (for example, an escrow agent or a bank issuing a guarantee, such as a letter of credit). In this perspective the fact that cryptocurrency creates a platform for programming and implementation of smart contracts (such as the Ethereum or Tezos) is crucial. Minimizing the costs of such operations is extremely useful for people, who cannot afford the costs that exist in the conventional financial sector (for example, the costs of an escrow agent or a bank issuing a guarantee). Thus, the cryptocurrencies that allow the use of these smart contracts, from the point of view of their promoters, perform the function of empowering financially modest people. In this regard, these motives can be called “democratic” and “legal” (in the sense that the wider use of complex legal instruments is seen as a noble goal, important for the progress of society). Regardless of or in conjunction with any of the above motivations, promoters of cryptocurrencies may feel that they are indispensable because governments or central banks in developed and rich countries have chosen to issue money by their power (i.e. Central Bank money). One can say that in the United States this power has been technically unlimited since the abandonment of gold equivalent of US dollar in 1971. The same can be said about the Bank of England (BoE), the Bank of Japan (BoJ) and the European Central Bank (ECB), although the powers of the latter were to be strictly limited by Maastricht Treaty and the Treaty of Lisbon (in particular, the ECB was not allowed to finance member states). Economic theories also advocated the approach that central banks should very carefully increase the money supply (“monetary orthodoxy”), otherwise inflation will be unleashed (the currency will be depreciated). German hyperinflation of 1922–1923 and many, much later, examples in developing countries illustrate the inflationary effect of a significant increase in the money supply. (BIS, COMMITTEE ON PAYMENT AND SETTLEMENT SYSTEMS, The role of central bank money in payment systems 2003).

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Starting with the 2008 financial crisis, the US Central Bank (Federal Reserve System, abbr. FRS) has launched programs called “quantitative easing”, in practice consisting in the acquisition of government debt and, thus, financing government deficits. From late 2008 to 2014, the volume of government debt if the Federal Reserve System increased from approximately USD 500 billion to more than USD 500 4,000 billion. The Bank of the United Kingdom followed the same path (from a low level in 2009 to £375 billion in 2012). The ECB also decided to make a choice in favor of “quantitative easing”, despite the explicit contractual ban on financing the public debt in member states: according to the Eurosystem balance sheet, “securities held for monetary policy purposes” rose from EUR 803 billion as of December 31, 2015 to EUR 1,653 billion as of 31 December 2016. The situation in Japan is even more acute, with a balance sheet of the Bank of Japan drawn up in August 2008 totaling 109,900 billion yen (i.e. $1,000 billion), of which JPY 45,200 billion were Japanese government bonds (JGB, 40%), totaling JPY 578,500 trillion, of which JPY 478,500 were Japanese government bonds (about 80%) in November 2019. Thus, the Bank of Japan’s balance sheet consists mainly of domestic public debt. In another context, even the much disciplined Swiss National Bank (SNB) massively increased its balance in order to sell Swiss francs and buy Euros at various stages of the “Euro crisis” (Greek debt in 2009–2010, Cyprus crisis of 2013, expected default of Deutsche Bank in 2017 or Italian banks in 2018, etc.) Cash reserves increased from 50 billion Swiss francs in 2008 to over 800 billion Swiss francs in 2019. In addition to the radically different goal of preventing the Swiss franc from rising excessively against the Euro, the difference between the practices of the FRS, Bank of England, ECB and the Bank of Japan is that these assets do not consist of domestic government bonds, but of foreign assets (bonds of foreign governments or simply financial assets such as bluechip stocks), but the common feature is that the means of acquiring these assets were nothing but the issuance of money by the Central Bank (“money printing”). Contrary to expectations, these unorthodox measures did not cause massive inflation, at least visible, that would be notable in consumer goods. It probably created financial bubbles. What is certain is that it has made the national currency of rich developed states completely virtual. This observation does not imply a negative attitude towards the actions of central banks, since it can be very well understood that in the absence of other decisions they had to act by virtue of the social and political responsibility of state bodies (the Central Bank, in every sense of the word, was acting “in the worst case scenario”). The reality is that the economic essence of state currencies now consists solely in the trust of their users in their future value, as well as in each government’s ability to limit (if it so orders) payments in its currency that fall under its jurisdiction. The approaches of some cryptocurrency promoters are related to the structurally inflationary actions of central banks (even if they have not become materialized, with the exception of probable financial bubbles) and the belief that strict discipline regarding the money supply in a well-managed cryptocurrency can ensure the stability of the cost of the means of payment, while government currencies are structurally weakened. The value of Bitcoin, for which money supply is limited, is structurally not

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inflationary. Other cryptocurrencies can implement the same or a similar idea, for example, with a strictly defined growth in the money supply (e.g. without increasing the supply by more than 1–2% per year). Interestingly, these approaches coincide with the anxiety and proposals of the influential winner of 1974 Nobel Prize in Economic Sciences Friedrich von Hayek (known, in particular, for his essay “Road to Serfdom”, 1944, warning of the danger to freedom emanating from any “big government” (be it fully democratic). In 1976, that is, five years after the conversion of US dollar into gold was abandoned, he published an essay on “denationalization of money”, in which he promoted the idea of private companies, launching their own currencies – the most reliable (i.e. the most disciplined, with hard-line money issuing policy) would be the most successful. The implementation of private currencies and realization of his idea in 1976 were impeded by technical hitches, while since 2008 cryptocurrencies have shown that this has become quite possible. As will be briefly described below, the aspect of “monetary discipline” led to a widespread - initially unexpected - choice of legal framework adopted for cryptocurrency launches, i.e. the legal form of non-profit foundation. Since there are more than 6,000 cryptocurrencies, it is impossible to describe all the major motivations of their promoters. Among many, these can be attributed to philosophers promoting “cryptocommunism” or to the most diverse social goals, potentially achieved (partially) thanks to cryptocurrencies. (Jerôme Blanc 2018). Let us move on to legal issues. In legal systems that largely recognize freedom of contract, cryptocurrencies do not constitute a legal challenge in terms of understanding how to handle cryptocurrencies and smart contracts. Cryptocurrency payment is legally valid, and the obligation to pay cryptocurrency is enforceable, provided that it was contractually agreed. There is no need for any new legal concept. The same applies to “smart contracts”. Ensuring automatic execution corresponds to what the parties to the contract accepted in the contract, it is not only practical, but also legally feasible. There is no need for any new legal concept. (Mark Alizart 2019). Practical implementation may entail certain features – as a rule, freezing of assets or cancellation of a contract when a party refers to an error or distortion of information. Preventing the execution of a smart contract is likely to require a wider use of prescriptions for urgent remedies. This does not imply a change of any legal concept. The use of cryptocurrencies does not require new concepts in accounting: as for their presence in the balance sheet, a certain amount of cryptocurrency is an asset, since it can practically be transferred for the observed cost. Extremely high volatility (and, possibly, security issues) will allow any corporation that owns cryptocurrencies create large reserves (up to the total value of held cryptocurrencies) if it makes such a decision on the basis of a reasonable rule, known in several legal systems as the concept of prudence (this only has a deferred effect on the realization of the profit received from cryptocurrency operations, since the profit becomes final when it consists of profit in assets that do not justify reserves). Another question, for example, is whether cryptocurrencies can be used as assets to contribute to the company’s capital in kind. The answer seems obvious to the extent that cryptocurrency has an observable value and, thus, can be defined as an asset. Whatever it be, since 2017 it has been accepted by several countries (in particular Switzerland, the cantons of Zug and Neuchâtel).

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As for motivation, one of the most interesting aspects is the choice of an appropriate legal structure for launching and administering cryptocurrency. While Bitcoin was launched without reference to any legal system and without any legal entity to manage it anonymously, the ensuing cryptocurrencies were launched in a more “classic” way, in the sense that identifiable persons explained the planned actions and legal structuring was done. Very important cryptocurrencies, such as Ethereum in July 2014, as well as Cardano (2016), Interchain and Tezos (2017), chose the structure of a Swiss Foundation. This legal form is rather “primitive” (the legislation consists of 20 articles contained on 4 pages), but one of its features, associated with the unanimous absence of shareholders as owners, is a fixed goal: once the goal is set, it is difficult to change it, it is possible only with the approval of a public body (“foundations supervisory authority”), if it can be demonstrated that the change is necessary to better meet (the essence of) the original goal. This is especially important in connection with concerns about current - structurally inflationary - monetary policy of central banks. It has been noticed that they have significantly increased the money supply due to their social and political responsibility with the consequence of depreciation of the state currency. In contrast, if the Charter of a private foundation that manages a cryptocurrency states that the cryptocurrency supply should not increase at all, or should only increase by 1 or 2% per annum, then there is no reason why the governing body of such foundation should increase the cryptocurrency supply beyond this limit. Apparently, in the absence of owners with powers similar to powers of shareholders in a corporation, this goal cannot be changed (except within strict limits compatible with the initial purpose); thus, the foundation form suggests that structurally no actions with structurally inflationary effects will be taken. In addition, if the fund is non-commercial in nature, this ensures that the profit (as a rule, obtained as a result of very low fees associated with the operation of the network or with the increase in the value of the cryptocurrency) is not distributed among the founders. In the context of decentralization of power, this is important in the eyes of numerous members of “cryptocommunities”. At the same time, many other legal forms (for example, corporations, commercial foundations) are perfectly suitable. It is important that the parameters and factors are clearly explained to the participants and users. Notoriously, fraud, embezzlement and theft have taken place in connection with cryptocurrency launch and management. It does not seem that cryptocurrencies represent some kind of a conceptual gap. Avoiding a fraud and not becoming a victim thereof has always required attention. When despite proper attention a person incurs damage from a cryptocurrency transaction because a false promise has been made, the harmful effect is likely to be a punishable fraud under criminal law. Network or crypto exchange managers, as well as depositing agents, who use trusted cryptocurrency for purposes other than those agreed upon, most likely have committed a theft. If the criminal law is formulated with clear concepts, then, apparently, major legislative changes are of no use. On the contrary, the implementation of legal norms will require the prosecution authorities to have a good understanding of the practical realities that characterize cryptocurrencies. Administrative law in its many aspects is the field of law, to which legislators can apply a wide variety of approaches.

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It seems that in many jurisdictions it has been accepted that, at least when cryptocurrency is a pure means of payment, its transfer alone doesn’t constitute a transaction subject to the value added tax. As for corporate taxation, it is probably preferable that tax authorities follow the approaches adopted in accordance with accounting rules. Currently, the practice looks cautious and evolving. As far as the legislation on financial instruments is concerned, it is clearly evolving, as shown by the European (inflationary) legislation (starting with the 1993 Directive “before MiFID” on 20 pages and ending with the first Markets in Financial Instruments Directive in 2004, consisting of 44 pages, which within ten years was replaced by a second MiFID complex of approximately 550 pages). As for the financial market supervision, it is obvious that cryptocurrencies should not enable bypassing the authorization regimes established by banking legislation. Experience shows that organizations established for this purpose are pursued and dissolved by oversight bodies. With regard to anti-money laundering, it is obvious that conventional legislation (basically promulgated in 1990) was focused on the supervision over financial intermediaries, in particular with the obligation to report suspicious transactions. To the extent that some cryptocurrency transactions are carried out without intermediary (peerto-peer), these legal instruments do not apply. However, it remains clear that the crime of money laundering is also punishable in cases when it is committed by persons acting without mediation. Moreover, the blockchain is a record of transactions, which in some respects is more readable to prosecutors than bank transactions. Thus, cryptocurrencies by no means pose an increased risk of money laundering, provided that the prosecution authorities have a good understanding of practical realities. The study results substantively determine the essence of its scientific novelty. Cryptocurrency and blockchain platform, having significant advantages (decentralized emission, cashless form, impossibility of counterfeiting, system openness to other payment means), are developing and are actively used in many countries. Governments are actively regulating this technology, which is actually an alternative to the financial system. Cryptocurrency, as a form of digital currency, affects the economic policy and development of the economy of any country. The turnover of virtual money is also predetermined by the development of e-commerce and the need for relevant electronic money transfers. Unlike traditional types of money, modern virtual money is characterized by a high level of protection from cybercriminals. Therefore, in the future there is a real possibility of further distribution of cryptocurrencies as a more secure payment tool. Bitcoin is the most popular cryptocurrency.

4 Conclusion Obviously, cryptocurrencies are tools that provide additional practical opportunities for individuals, organizations and society. From the macroeconomic point of view, as well as from the point of view of people’s ability to control transferable value reserves something the currencies must enable people to do - they can be very useful in today’s context, where monetary policy has had to massively create structural inflationary

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potential. Private law takes effect immediately in order to satisfactorily resolve issues arising in connection with the use of cryptocurrencies, as regards administrative law, not a single question seems insurmountable. The most capitalized cryptocurrency is Bitcoin. Its market capitalization is USD 72.18 billion, which is almost 5 times higher than that of Ethereum and 19 times higher than that of Litecoin. The cryptocurrency market, as well as its infrastructure, are still in the very initial stage of their development. And as new information systems and cryptocurrency platforms develop, risks will appear, investors will need to be constantly aware not only of how many new currencies have appeared on ICO, but also what risks they carry. The following risks related to the circulation and use of cryptocurrencies can be identified: absence of a single emission center, lack of safeguards for the rights of consumers of financial services, emergence of unfair schemes, including for the purpose of laundering of illegally obtained proceeds and financing of terrorism, as well as capital outflow. Thus, the cryptocurrency market participants, with all their drawbacks, are growing every day, new representatives are constantly appearing on the exchange, competing with each other on an on-going basis. Bitcoin remains the most popular cryptographic currency today, with price of 338 thousand rubles per coin. This token was able to gain universal recognition in just a few years and create serious competition for online banking. In our country, bills related to this area are being actively developed. In the coming years, there will be a lot of nationwide changes that will take the use of cryptocurrencies in Russia to a new level. In the long run, the price of Bitcoin and other cryptocurrencies will depend on how well they accomplish the functions of money. If it is widely accepted as a means of circulation and payment, and if its exchange rate is stabilized to serve as a means of preserving value, its price will be high. Conversely, if it becomes similar to gold, which attracts attention only in crisis periods, then its price will be lower than the expected levels. The worst case scenario – if it turns out to be temporary and loses its purchasing power after being replaced by something new and unique. In this case, Bitcoin will only get the laurels the first cryptocurrency, which will be inscribed in the history in golden letters. Different states have a different attitude to the Bitcoin payment system, and they can introduce all kinds of prohibitions on its use at any time. In a number of states, Bitcoin cryptocurrency operations are officially authorized, including as a means of payment. But at the moment it can already be argued that in such countries as Japan, Switzerland, Singapore, Canada, Denmark, Sweden, Germany, Australia, Finland, Cyprus, USA, Norway and Czech Republic cryptocurrency is the most important instrument of financial transactions, and, along with high technology, is valued as the currency of the future.

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References Alizart, M.: Cryptocommunisme. Puf, Paris (2019) Blanc, J.: Les monnaies alternatives. Puf, Paris (2018) Vailland, G.: La fulgurante recréaction. Montrouge, Paris (2016) Rouiller, N.: Legal Instruments and Environment of International Business. Schulthess Verlag, Zurich (2018) Cryptomonnaies: Registres distribués et entreprises, 2nd edn. In: (Dürr/Lardi/Rouiller ed.) Droit et gestion d’entreprise, Zurich, Schulthess Verlag (2020) BIS Committee on Payment and Settlement Systems, The role of central bank money in payment systems (2003) Goodman, L.M.: A self-amending crypto-ledger. Puf, Paris (2014) Hautcœur, A., Ymonet, L., Riva, A.: De la concentration des ordres de bourse à la centralisation de l’information boursière. Enjeux et perspectives de la révision de la directive MIF. Puf, Paris (2010) The Swiss Federal Council: Report of the (Swiss) Federal Council of December 2018, “Legal framework for distributed ledger technology and blockchain in Switzerland”. https://www. newsd.admin.ch/newsd/message/attachments/55153.pdf. Accessed 21 Jan 2020 Tirole, J.: There are many reasons to be cautious about bitcoin. Financ. Times (2017). https:// www.ft.com/content/lc034898-d50f-lle7-a303-9060cble5f44. Accessed 1 Feb 2020

Natural Resource Rent as a Basis for Valuation of Natural Capital in the Context of the Transition to the Sixth Technological Mode Olga E. Medvedeva(&)

and Artem S. Savostitsky

State University of Management, Moscow, Russia [email protected], [email protected]

Abstract. The purpose of the article is to substantiate the need to develop the methodology for the valuation of natural capital in the context of the transition to the sixth technological mode based on the assessment of natural rent. The research methodology consists in conducting a comparative analysis of methods of valuation of natural rent, identify the main methodological problems of its measurement and develop proposals for their solution. The scientific novelty of the study, considered as the increment in scientific knowledge, is the identification of a fundamentally new factor in the formation of modern economic models of the development of society in the context of sixth technological mode and justification of a new methodology for measuring thereof at macro level as part of the national wealth. As a result of the research, the authors identified that when assessing natural capital, which is a real factor in the formation of new economic models for the development of society, two components should be distinguished - physically used natural resources and intangible natural assets in the form of ecosystem services and assimilation potential. For their valuation, it is advisable to apply the theory of natural rent, the main problems of measuring which are the allocation of total income, income generated by physical capital, and income generated by entrepreneurial efforts in the form of entrepreneurial profit. Economically used resources can be estimated using the traditional formula for calculating rents when solving the two problems indicated above. The methodology for assessing intangible natural assets has not yet been formulated and requires further elaboration. At the same time, the methodology for measuring natural rent is also applicable to them. In particular, the rent of assimilation potential can be estimated through the value of uncompensated environmental damage caused by morbidity and mortality due to air pollution from harmful emissions from industrial enterprises and transport. As a result of the study and the application of the author’s methodology, an assessment of Russia’s natural capital of 18.37 trillion rubles was obtained with the allocation of the main structural elements. A comparison of the country’s natural capital income discount estimated at a market rate showed that it is quite close to the budget revenues that are officially published on the website of the RF Ministry of Finance.

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 40–46, 2021. https://doi.org/10.1007/978-3-030-59126-7_5

Natural Resource Rent as a Basis for Valuation of Natural Capital Keywords: Value
Rent Assimilation potential JEL Code: B41

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Natural capital
Intangible natural assets



O23
O32

1 Introduction Amidst the transition to the sixth technological mode, the formation of economic strategies for the development of economy is impossible without development of methods of estimation of cost of money, capital and estimation of economic efficiency of its use. Especially relevant is the issue of valuation of natural capital in the context of the sixth technological mode, which becomes a real factor in the formation of new economic models and paradigms of social development, such as sustainable development, low-carbon economy, etc. At the same time, natural capital can be interpreted quite broadly: both the value of natural resources actually used in physical production and the value of intangible benefits created by nature. The latter are the intangible assets, the quality of which can significantly affect the economic performance of economic progress. These include ecosystem resources and assimilation capacity (the ability of the natural environment to cleanse and level out the technogenic pollution). The requirements for maintaining a life-sustaining quality of the environment achieved through various environmental measures and technologies will be one of the key parameters of the sixth technological mode. This raises the question of the methodology for measuring natural capital, considered the newest factor in the formation of the sixth technological mode. However, a common methodology for measuring economic natural capital as a whole and its individual components is not fully shaped. The methodology for valuation of intangible natural assets, which is compatible with the methodology for valuation of physical natural resources and, moreover, with the valuation of ordinary tangible assets, has not yet been formulated to the level of standards and requires further development. If we consider income from natural resources as prevailing, then methods for assessing the natural resource rent generated by natural resources are undoubtedly important for the development of economically sound solutions for using the natural resource potential of the country. According to the authors’ calculations, only oil and gas revenues account for 46% of total Federal Budget revenues in 2018 (annual information on Federal Budget execution, 2019). For most economists, it is impossible to create an even more exotic resource than the assimilation potential.

2 Methodology The valuation of natural capital from the methodological point of view can be singled out into an independent section of economic measurements, as natural resources have properties that are not characteristic of man-made objects and require the application of a largely rental approach, which has a number of issues not solved by economic science. These issues include the underestimation of the value of natural objects during

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the discounting procedure and the uncertainty in establishing the period for calculating incomes when assessing natural resources, the use of which can take place indefinitely – land, air, water, etc. This area is not regulated at the statutory level in Russia, with the exception of a number of industry methods for assessing environmental damage for its recovery from violators of environmental legislation and the cost of a number of natural resources in the national wealth for the purpose of Rosstat reporting. In fact, these documents are an intra-departmental evaluation practice that is not typical for mass application. The valuation of natural intangible natural assets is one of the latest trends in economic measurement, defined as the environmental valuation for sustainable development. There is no officially recognized methodology for their implementation. As a result of this situation, ecosystem services and assimilation potential in Russia are not assessed, and economically unjustified monetary parameters (rates) assigned by the state are used for determining the environmental damage in value terms, which leads to unpredictable results and does not allow for the creation of clear economic instruments of the country’s environmental policy. International practices and researches sealing with the valuation of ecosystem services also lack any standardization similar to that in professional valuation and international financial reporting standards. A methodology for the valuation of natural capital, including intangible natural assets in the form of assimilation potential, can be used as an acceptable uniform methodology. The study of natural resource rent and the basis for its formation was performed by A. Smith, D. Ricardo, I.G. Thunen (A. Smith 2007; Yatsky S.A. 2017; Blaug M. 1994), but the issues of its measurement and use are not fully examined. Soviet economists also developed methods for assessing natural resource rent (K.G. Gofman 1975; A.A. Golub et al., 1998), allocating profit according to the established plan (E.S. Melekhin, S.A. Kimelman 2004), the model for the mixed valuation of rent and expenses (E.S. Karnaukhova 1977), the methods for the valuation of land and other natural resources on the basis of their development costs (Norms of cost of development of new lands instead of retirement of agricultural lands for non-agricultural needs 1995). The authors found that the proposed valuation models could have been “calculated” relatively well in a planned economy, as they required a large amount of finance and labor costs for data collection and processing, which could have been allowed under the funding system in effect. However, they also did not solve the key methodological problems of natural rent valuation. Besides, their results have not found any applied application except for establishment of rates of payment for negative influence (the Governmental Order of the Russian Federation 1992). Now, in the context of digitalization and the use of the latest information technologies, issues of fast data processing are practically eliminated. However, there are still issues of methodological substantiation and support of calculations. With the development of the applied theory of valuation and its dissemination in Russia, the first problem was solved. It is generally easy to calculate the cost of invested capital or the cost of developing a particular natural resource and to determine the appropriate percentage of return based on general or sectoral rates of return

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(percentage) on invested capital, for example, according to the amount of alternative investments. The amount of an entrepreneur’s profit can be obtained by subtracting the costs of product manufacturing and the income of the owner of the natural resource which is the natural rent determined by the market, from the product market value. In its turn, the natural resource rent can be calculated by a reverse calculation if the market value of the entrepreneur’s profit is known. If such data is not available, then in practice the issue is solved by attributing the value of the entrepreneur’s profit to the natural resource rent without any justification, or distribution is agreed by the parties participating in the transaction. In the first case, it is generally considered a priori that since the source of all income, except for the income on capital, is a natural resource, it is considered in the long term as an asset that creates a “net” natural resource rent. D.S. Lvov proposed a method of bidding or auctions, which will identify the market value of certain natural resources by analogy with auction bidding for art objects as the most correct method of allocating “net” natural resource rent for assessing natural resources that are not sold in markets. With regard to land, this thesis was particularly relevant at the first stages of the land market formation in Russia in the 2000s. Today it is still relevant for aquatic bio resources, forest and mineral resources. When allocating natural resource rent through the bidding mechanism, any fee that is set as a result of this auction will actually be a “net” natural rent. Thus, the concept of natural resource rent coincides with the usual meaning of this word, which is understood as payment for someone else’s property (D.S. Lvov 2001). Applied methods for the use of proposed methodology in modern conditions with respect to water and land resources, as well as assimilation potential are proposed in the works of Artemenkov and Medvedeva (A.I. Artemenkov, O.E. Medvedeva 2017; O.E. Medvedeva, A.I. Artemenkov 2019). Russia has also seen a gradual increase in state revenues in recent years through the extraction or capturing of some form of natural rent, mainly in the form of oil and gas revenues. The authors suggested that the entrepreneur’s profit should not be taken into account in the calculation of rental income, as this value belongs to personnel and management costs and is usually deducted from total income. In order to measure the value of physically used natural resources, it is reasonable to apply the theory of natural resource rent. Here the main methodological problem that has not been solved so far is the separation of total income, the income generated by physical capital and the income generated by entrepreneurial efforts in the form of entrepreneurial profits. To solve this problem, the authors suggest using the average interest rate on bank deposits of leading banks as the income generated by physical capital. The entrepreneur’s profit should not be taken into account in the calculation of rental income, as this value refers to personnel and management costs and is usually deducted from total income. The methodology for valuation of intangible natural assets at the macro level as part of national wealth in the form of assimilation potential implicates determining the amount of damage caused by pollution of a certain natural environment, such as air, not reimbursed by the polluter (mainly by industry and the transport sector of the economy), but at the same time obtained by it in the form of an unaccounted financial gain

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(only until the moment of such reimbursement), and greatly increasing the capitalization of companies. A specific methodology for measuring the value of assimilation capacity is the calculation of environmental damage and can be demonstrated using an algorithm for calculating damage from morbidity and mortality in Russia, caused by air pollution.

3 Results The authors found that if the rent of natural resources is known, it is easy to evaluate natural capital, economic capital within the national wealth, based on its value at an appropriate interest rate of capitalization. The following is a calculation of the cost of the latter, based both on the authors’ estimates and on the latest officially data from MRRO Russia. Total value of land and water resources of Russia at the end of 2017 amounted to 73.57 trillion rubles (Ministry of Natural Resources for the first time estimated the cost of all oil in Russia 2019), including mineral resource – 55.2 trillion rubles. The structure of natural capital of the Russian Federation is given in Table 1. Table 1. Structure of natural capital of the Russian Federation S/no. 1 2 3 3.1 3.2 3.3 3.4 3.5 3.6

Indicator Value, trillion rubles Water resources 4.28 Land resources 14.10 Mineral and energy resources 55.2 oil 39.6 natural gas 11.3 coking coal 2 iron ore 0.808 diamonds 0.505 gold 0.48

The evaluated natural resources are actually used in economic assets, so the annual income of the country should be at least 5.7–11.0 trillion rubles at a discount rate of 7.75–15%. These figures are quite close to the budget revenues officially published on the RF Ministry of Finance website.

4 Recommendations Currently, in addition to the rent that comes from natural resources, there is an assimilation potential rent, which means either saving costs of pollution reduction if it is assimilated by the natural environment, or saving costs of paying for negative environmental impacts. At the transnational level, this rent is also reflected in the

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differences in pollution charges in different countries, which are well monitored by multinational companies in order to save costs for the location of “dirty” production facilities. The study found currently present this rent is virtually not registered and remains the property of domestic and foreign companies operating in Russia. This is due to the fact that payments for negative environmental impact (NEI) do not perform their original functions to compensate for environmental damage and according to our preliminary estimates constitute one tenth of a percentage point of the damage (0.3% or 330 times less) arising only from emissions of major pollutants from stationary sources, which we estimated at 1.1 trillion rubles in 2017. About 90% of this value is the damage to public health. The expenses on air protection in the same year was about 9% of the total damage. The remaining 91% belong to the pension potential of industry, rather than the “potential” of society and state. Taking into account the global position and the fact that air transport is largely a cross-border transit environment, conditions are created for speculative and uncompetitive activities of industrial enterprises owners in the country due to the “free” use of the assimilative potential of the Russian natural environment. Acknowledgment. The paper was prepared with support from the Russian Scientific Fund, project No. 18-18-00488.

References Artemenkov, A.I., Medvedeva, O.E.: Stoimostnaya ocenka vodnyh resursov Rossii po vodnoj rente. Imushchestvennye otnosheniya v Rossijskoj Federacii 8(191), 62–73 (2017) Blaug, M.: Ekonomicheskaya mysl’ v retrospective. Delo Ltd., Moscow, Russia (1994) Golub, A., Markandiya, A., Strukova, E.: Problemy iz”yatiya rentnyh dohodov. Voprosy ekonomiki 6, 51 (1998) Gofman, K.G.: Ekonomicheskaya ocenka prirodnyh resursov i izderzhek zagryazneniya okruzhayushchej sredy (voprosy teorii i metodologii). VINITI, Moscow, Russia (1975) Karnauhova, E.S.: Differencial’naya renta i ekonomicheskaya ocenka zemli. Ekonomika, Moscow, Russia (1977) Kimel’man, S.A., Melekhin, E.S.: Prirodnaya renta kak osnova perekhoda k social’no orientirovannoj ekonomike Rossii (na primere gornoj renty, obrazuyushchejsya v neftedobyvayushchej otrasli). Markshejderskij vestnik 2, 13–19 (2004) Lvov, D.S.: Ekonomika razvitiya, «Ekzamen». Russia, Moscow (2001) Medvedeva, O.E., Artemenkov, A.I.: Ocenka ushcherba ot zagryazneniya atmosfernogo vozduha v Rossii. sovremennye podhody i metodika. Imushchestvennye otnosheniya v Rossijskoj Federacii 8(215), 31–42 (2019) Metodicheskie rekomendacii po opredeleniyu rynochnoj stoimosti zemel’nyh uchastkov. Utv. Rasporyazhenie Minimushchestva RF ot 06.03.2002 N 568-r (2002). http://www.consultant. ru/document/cons_doc_LAW_36189/4835c7a48f99410e12c4d922e1da58efafe8bc06/. Accessed 6 Feb 2020 Minprirody vpervye ocenilo stoimost’ vsej nefti v Rossii (2019). https://www.banki.ru/news/ lenta/?id=10891169. Accessed 6 Feb 2020

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Normativy stoimosti osvoeniya novyh zemel’ vzamen izymaemyh sel’skohozyajstvennyh ugodij dlya nesel’skohozyajstvennyh nuzhd. Prilozhenie k Postanovleniyu Pravitel’stva RF ot 27 noyabrya 1995 g. N 1176 (1995). https://base.garant.ru/10164502/53f89421bbdaf741eb2d 1ecc4ddb4c33/. Accessed 6 Feb 2020 Postanovlenie Pravitel’stva RF ot 28 avgusta 1992 g. N 632 “Ob utverzhdenii Poryadka opredeleniya platy i ee predel’nyh razmerov za zagryaznenie okruzhayushchej prirodnoj sredy, razmeshchenie othodov, drugie vidy vrednogo vozdejstviya” (1992). http://base.garant. ru/10102370/#ixzz6DCGMkwoc. Accessed 6 Feb 2020 Smit, A.: Issledovanie o prirode i prichinah bogatstva narodov. Eksmo, Moscow, Russia (2007) Tarasevich, L.S., Gal’perin, V.M., Ignat’ev, S.M.: 50 lekcij po mikroekonomike. Uchebnoe posobie. «Ekonomicheskaya shkola» (2000). http://50.economicus.ru/index.php?ch=4&le= 36&r=2&z=1. Accessed 6 Feb 2020 Yackij, S.A.: Teoriya renty d. Rikardo i sovremennost. Vestnik YUgorskogo gosudarstvennogo universiteta 2(45), 43–48 (2017)

Sustainable Development and Principles of the Green Economy as a Concept for Development of “Smart Technologies” Irina D. Anikina(&) , Ekaterina P. Kucherova and Yuriy A. Bukhantsev

,

Volgograd State University, Volgograd, Russia {anikina,ZemlyanskayaEP,BuhancevJA}@volsu.ru

Abstract. Purpose: The purpose of the paper is to study the conceptual foundations of formation of “smart” integrated systems of information and analytical provision and ecological controlling in the sphere of agro-industrial complex in the interests of government, society, and business. Design/Methodology/Approach: The authors distinguish the main tasks of state management of the green economy and the tasks of eco-oriented business for the purpose of provision of sustainable development in view of the interests of society, which require systemic solution: increase of ecological culture, information support for business, creation of highly-effective systems of internal ecological control, and improvement of ecological indicators. These tasks should be solved with the help of integrated systems of “smart eco-controlling” based on the information and communication technologies that are used in electronic agriculture, ensuring stimulation of the leading directions in the sphere of ecologization of agriculture and control and restraint of the negative factors. The obstacle on the path of implementation of “smart eco-controlling” is the absence of common objects, tasks, and methods of evaluation of ecological risks, as well as evaluation of ecological security and effectiveness in the agroindustrial complex. Results: The authors offer a concept of integrated system of “smart ecocontrolling” of business, which is based on the principles of sustainable development and “green” economy and is aimed at solving the tasks of government, society, and companies. The problem link in the chain of information and analytical interaction is business, underdevelopment of the scientific and methodological provision of which is caused by a low level of competencies and limited resources. The modern “smart technologies”, which are based on implementation of regulated procedures, which conform to the general concept and principles, come to the foreground. Conclusions/Recommendations: A perspective method of solving the set task is development and implementation of “smart eco-controlling” based on the cloud technology of storing and processing of large arrays of accounting information and blockchain, which allows generalizing information on business’s influence on ecology. The developed regulations and procedures of ecocontrolling for organizations of the agro-industrial complex reflect the parameters and principles of implementing the potential of digital technologies within realization of the policy of sustainable development and the green economy. © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 47–55, 2021. https://doi.org/10.1007/978-3-030-59126-7_6

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I. D. Anikina et al. Keywords: Smart technologies
Internal audit
Green economy
Sustainable growth
Ecological and economic effects
Eco-controlling
Ecological audit
Ecological control JEL Code: M420


M480
Q560

1 Introduction The importance of studying ecological problems in the modern economy is beyond any doubt – as quality of the environment forms population’s quality of life. Attention to ecological problems led to formation of the concepts of sustainable economic growth and “green growth” in the Russian Federation (Strategy of Ecological Security 2017). Development of the systems of information and analytical provision and support for managerial decisions of business is in the focus of government’s representatives, which is reflected in the “Foundations of state policy in the sphere of ecological development of the Russian Federation until 2030”, approved by the President of the Russian Federation, and the Government decree dated May 5, 2017, No. 876-r, which defines the concept of improving the system of stimulation of business for openness and transparency of the results of ecological influence of their activities on society and environment. One of the important directions of improvement of the information and analytical provision of business solutions in the sphere of ecology is digitization of management of the agro-industrial complex’s companies. The problem of reduction of the negative effect on the environment is very important for the Russian economy and the global economy on the whole. Agriculture influences the state of the environment, according to the scholars from the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES): more than 75% of fresh water is used for agricultural purposes, including cattle breeding; 25% of land is occupied by pastures; production of food plant crops grew by 300% since 1970. In the modern conditions of increase of the scale of e-agriculture and wide implementation of devices sensors, analyzers, and apps that ensure control over the production and technological processes via the Internet, radio, and satellites, the possibilities for dissemination of the leading agricultural practices, which are not that hazardous for the environment, grow. Implementation of such potential is possible due to dissemination of “smart eco-controlling” – a technological tool that is integrated into a complex system of support, coordination, and management of organization in the issues of activities’ ecologization, based on innovative technological control of economic processes in e-agriculture. Such a tool, which is based on the principles of collection, cloud storing, processing of big data with the help of blockchain, and instantaneous analysis of data with the help of AI (as opposed to the traditional methods of “manual” control) will allow obtaining full information on the companies’ activities any time, excluding errors and reducing risks of companies with the help of feedback.

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2 Methodology The authors used general scientific methods and the process and systemic approaches to the studied problems. The scientific basis of this research consists of the works on the issues of organization and methodology of the information and analytical provision of agricultural companies - Barilenko (2018), Kovalenko et al. (2019); on the issues of methodology of internal control and audit – Sheremet and Suyts (2019); on the foundations of integrated risk-oriented internal control and audit – Andreev (2019); on the issues of use of smart innovations in agriculture - Eldieva (2018), Anishchenko (2019); on ecological audit - Gatilova (2015) and Chkhutiashvili (2017). The issues of organizational and methodological provision of the integrated systems of eco-controlling in the agro-industrial complex have not been developed sufficiently: – specific objects of eco-controlling of the anthropogenic and economic origin are not determined; there is no common understanding of the tasks of eco-controlling; – methods of complex evaluation of ecological risks (including those with material, time, cost, intellectual, information, and labor character of damage to human, environment, and business) and methods of evaluation of the level of buisness’s ecological security and economic effectiveness are not determined; – specifics of organizations’ activities are not taken into account: territorial distribution and types of activities; diversification of production of the goods of the agroindustrial complex in view of the ecological situation.

3 Results The most developed and popular form of provision of ecological security and preservation of nature complexes in Russia is the system of ecological audit. Its legal basis is the Federal law No. 307-FZ “On audit activities” and Federal law No. 7-FZ “On environment protection”, which defines the term “ecological audit” and establishes the authorities of government bodies in this sphere and provisions on environment protection. The number, scale, and diversity of the objects of ecological audit, performed by government bodies, brings the preventive function of audit down to the minimum, turning it into the tool of “intimidation” and statement of the fact of the existing deviation from the norms (violation) with the delay effect. In the modern conditions, companies of the agro-industrial complex that face diverse risks require the coordination support aimed at prevention of errors. Thus, there appears an objective necessity for standardization of the procedures of internal ecological controlling of organizations of the agro-industrial complex. It is necessary to consider the specific directions of activities, a set of factors of influence on the environment, and specific conditions of functioning of a specific economic subject, which is impossible without application of the innovative digital smart technologies. These technologies should be based on the concept of “smart eco-controlling”, which is

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implemented within each economic subject and which ensures formation of a regulated set of mass data and their further intellectual processing. In the process of development of the standardized procedures for internal ecological controlling of organizations of the agro-industrial complex it is necessary to solve the following tasks: – diagnostics of the level of ecological control maturity; – creation of a targeted (formalized) model of internal ecological control with consideration of individual landmarks and tasks; – development of the measures for control systems’ development; – evaluation of the control system at the level of business processes; – formation of eco-oriented culture. The system of “smart” ecological controlling consists of the following elements: 1) monitoring of ecological security of business: goals, principles, objects, indicators, norms, deviations, and managerial actions; 2) form processes in the directions of ecological control: control of production and consumption waste; control of ecological policy; control of the main means of nature protection use; control of nature protection expenditures; 3) complex of procedures and work documents on internal control for the distinguished directions of eco-controlling. The structure of one of the offered regulations is shown in Table 1. Table 1. The structure of regulations on audit of production and consumption waste. 1 General notions 2 General provisions 3 Purposes and tasks of the system of internal ecological audit/control 4 Bodies and persons responsible for internal ecological audit/control 5 Order of work of the internal audit/control department 6 Accountability of the internal audit/control department 7 Main procedures of audit/control of production and consumption waste 8 Order of formation of the audit report 9 Final provisions 10 Appendices Source: developed by the authors.

Part 1 contains the description of notions used in the regulations – e.g., “production and consumption waste”, “paperwork”, “audit report”, etc. Part 2 “General provisions” contains the general information on the organization and internal ecological audit/control and definition of the regulatory basis for its conduct. This system, for example, is built based on the provisions of the Federal law “On audit acitivities” and “On environment protection”. Part 3 contains goals and tasks. For example, “The goal of waste audit is to form an opinion on observation of the existing norms and instructions in the sphere of waste

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processing. Tasks: verifying the accounting of waste movement; verifying the order of storing and utilization of waste; verifying the established rules and norms”. Part 4 determines structural departments with the functions of internal control, their tasks, and organizational structure. For example: service of internal audit or control. Part 5 contains the rights and responsibilities, procedures and order of interaction of the internal audit department with other departments. Part 6 regulates the order of accountability of the head of the internal audit department to the owner and CEO of the agricultural organization, the frequency of provision of reports, etc. Part 7 contains a complex of consecutive interconnected procedures on performing an audit of production and consumption waste. These procedures are shown in Tables 2, 3, 4 and 5. Table 2. Form-process of control of production and consumption waste. Issue Norms of emergence and limits of placement of waste Passport of waste production and consumption Professional training of persons who work with waste Document accounting of production waste Timeliness of provision of data to controlling bodies Timeliness of payment for waste treatment Source: developed by the authors.

Regulatory act Article 11, production Article 11, production Article 15, production Article 19, production Article 19, production Article 23, production

Federal law No. 89-FZ “On and consumption waste” Federal law No. 89-FZ “On and consumption waste” Federal law No. 89-FZ “On and consumption waste” Federal law No. 89-FZ “On and consumption waste” Federal law No. 89-FZ “On and consumption waste” Federal law No. 89-FZ “On and consumption waste”

Document reference Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No

The next stage of ecological audit is verification of paperwork and accounting of recyclable waste. Verification of initial documents envisages verification of the correspondence to the established form and requisites, evaluation of correctness of accounts’ correspondence, and arithmetic control of the natural and cost parameters of operations (Table 3). The offered form allows establishing the correctness of paperwork for waste and their reflection in accounting. Also, the applied methodology of evaluating the recyclable waste and the procedures of approval by certain services and specialists are verified. The third stage of internal ecological audit envisages verification of the volume and direction of waste elimination in view of types and groups of the influence on the environment. The initial source of information is contracts for waste elimination, request forms of waste accounting, established limits of waste placement, etc. This procedure is shown in Table 4.

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I. D. Anikina et al. Table 3. Form-process of control of recyclable waste movement.

Source of information

Economic operation

Report on resources’ movement Report on resources’ movement

Used waste for realization price Writing off of materials for production, without regard for waste Revenues from realization of production waste

Release note for the supply of materials to outside parties … … Write-off certificate Recyclable waste is written off Source: developed by the authors.

Control indicators Debit Credit side side 10.6 10.1 20.1

10.1

50

91.1

… 91.2

… 10.6

Sum

…

Table 4. Form-process of control of waste removal and elimination. Waste

Direction of Initial document elimination Document No.

Lamps containing mercury

Volgograd, XXX LLC

Form of accounting of removed waste Form of accounting of removed waste Total for 1st class of hazard

Record Volume of of waste waste

Auditor’s calculations

1268 September 13, 2019

3,500 pcs

3,500 + 2,700 = 6,200

1369 October 10, 2019

2,700 pcs

Date of removal

6,200

Source: developed by the authors.

The offered process will allow controlling timeliness of waste removal from the company’s territory; established directions of waste elimination; initial documents that reflect waste removal (e.g., record of removed waste); accounting register, which reflects the information on the total volume of waste. At the final stage of control of waste accumulation, observation of the limit of its volume and rules of storing is verified (Table 5). Table 5. Form-process of control of the rule of waste treatment and storing. Waste

Hazard class

Accumulated at the period of control, tons

Volume of waste per year, tons

Limit of allowed accumulation

Waste oils

2

17.36

68.59

105.9

…

…

… … … Source: developed by the authors.

Conditions of storing Norm Fact In special … closed reservoirs … …

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The presented form contains factual data of accounting and stock control of waste, norms of waste, and the required and factual conditions of their storing. As a result of execution of the procedure of internal audit, an idea of the volume of waste and its structure in view of hazard classes is formed. The complex of procedures and work documents of internal ecological control is the basis of development of the totality of indicators, methodology of their calculation, and establishment of normative values for evaluating the ecological security of organizations of the agro-industrial complex with application of the “mart eco-controlling” technology. The following tools of improving the activities of the system of internal ecological audit/control are offered: – developing the functional strategy of ecological control; – preparing the changes of the organizational structure and creating employees’ map of competencies; – developing a risk-oriented methodology of control; – forming customer-oriented control reports; – developing a system of the key indicators of effectiveness of internal ecological control and the methodology of their calculation; – preparing recommendations for authomatization of internal control; – preparing the regulatory documents.

4 Conclusions As a result of the research, the authors have defined the notion “smart eco-controlling”. Its main elements have been distinguished: sub-system of monitoring of ecological security; procedures of internal ecological control; forms of work documents (formprocesses) in view of the directions of ecological audit (controlling). The regulations for ecological audit have been developed. It is the basis of the “smart eco-controlling” concept. The authors have developed standardized form-processes of “smart ecocontrolling”, which include a set of systematized parameters, between which there is a consensus, which is the final stage of application of the blockchain technology based on analysis of large arrays of information. Such procedures allow implementing the concept of sustainable growth and “green” economy in the agro-industrial complex. The possibility of practical application of the project is connected to the use of the developed regulations and procedures in the activities of organizations of the agroindustrial complex: for execution of normative requirements in the sphere of ecology, evaluation of ecological risks, and evaluation of ecological security and economic effectiveness of business. The integrated system of “smart eco-controlling” of business aims at solving the following tasks of the government:

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– improving the scientific & methodological provision in the sphere of environment protection, which results in increase of ecological culture and ecological education of business of agro-industrial companies; – information support for organizations of the agro-industrial complex in the sphere of ecological security provision. Solving this task will lead to decrease of burden on the bodies of state ecological supervision through standardization of ecological procedures in the agro-industrial complex: use of the data of eco-controlling during decision making for supporting business, which will ensure increase of effectiveness of using budget means. As for society, the task of prevention of the negative influence of pollution on environment and rational use of natural resources is solved. The following tasks are solved for companies: – creation of an effective system of internal ecological control in an organization of the agro-industrial complex, in favor of owners and managers. – modern methodological provision of the systems of internal ecological control of organizations of the agro-industrial complex, developed based on the International professional standards of internal audit; – evaluation of effectiveness of the control system, its improvement and monitoring of drawbacks’ elimination. – development and improvement of the activities within the system of the key indicators of effectiveness and the model of competencies of workers of the system of internal ecological control in an organization of the agro-industrial complex. The research results could be used in the practice of formation of an integrated system of ecological controlling with application of smart technologies in the sphere of information and analytical provision of state management, including by using the automatized systems of management, accounting, and electronic audit, cloud technologies, blockchain technology, and analysis of big Data of the structured and nonstructured types. Acknowledgments. The reported study was funded by RFBR according to the research project No. 19-010-00356.

References Andreev, V.D.: Osnovy integrirovannogo risk-orientirovannogo vnutrennego kontrolya i audita khozyaystvuyushchikh sub”ektov [Foundations of integrated risk-oriented internal control and audit of economic subjects]. INFRA-M, Moscow (2019). https://znanium.com/catalog/ product/999891. Accessed 10 Nov 2019 Anishchenko, A.N.: «Umnoe» sel’skoe khozyaystvo kak perspektivnyy vektor rosta agrarnogo sektora ekonomiki Rossii [“Smart” agriculture as a perspective growth vector of the agrarian sector of the Russian economy]. Prodovol’stvennaya Politika i Bezopasnost’ 6(2), pp. 97–108 (2019)

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Barilenko, V.I., Efimova, O.V., Nikiforova, E.V., et al.: Informatsionno-analiticheskoe obespechenie ustoychivogo razvitiya ekonomicheskikh sub”ektov [Information and Analytical Provision of Sustainable Development of Economic Subjects]. Rusayns, Moscow (2015) Barilenko, V.I.: Uchetno-analiticheskoe i kontrol’noe obespechenie upravleniya innovatsionnym razvitiem ekonomicheskogo sub”ekta [Accounting & Analytical and Control Provision of Economic Subject’s Innovative Development Management]. KNORUS, Moscow (2018) Gatilova, A.V.: Ekologicheskiy audit - innovatsionnyy trend prirodookhrannoy deyatel’nosti [Ecological Audit – An Innovative Trend of the Nature Protection Activities]. Monograph. LAP LAMBERT Acad. Publ., Germany (2015). https://znanium.com/catalog/product/ 1071892. Accessed 10 Nov 2019 Kovalenko, N.Y.: Ekonomika sel’skogo khozyaystva [Agricultural Economics]. Yurayt Publ., Moscow (2019). https://biblio-online.ru/bcode/432996. Accessed 10 Nov 2019 Russian Federation. Presidential Decree dated April 19, 2017, No. 176 “On the Strategy of ecological security of the Russian Federation until 2025”. http://kremlin.ru/acts/bank/41879/ page/1. Accessed 10 Nov 2019 Russian Federation. “Foundations of national policy in the sphere of ecological development of the Russian Federation until 2030” (approved by the President of the Russian Federation on April 30, 2012). http://www.consultant.ru/document/cons_doc_LAW_129117/. Accessed 10 Nov 2019 Russian Federation. Decree dated May 5, 2017, No. 876-r “On adoption of the Concept of development of public non-financial reports”. http://government.ru/docs/27645/. Accessed 10 Nov 2019 Russian Federation. Federal law dated December 30, 2008, No. 307-FZ “On audit activities”. http://www.consultant.ru/document/cons_doc_LAW_83311/. Accessed 10 Nov 2019 Russian Federation. Federal law dated January 10, 2002, No. 7-FZ “On environment protection”. http://www.consultant.ru/document/cons_doc_LAW_34823/. Accessed 10 Nov 2019 Chkhutiashvili, L.V.: Teoriya i organizatsiya ekologicheskogo audita: monografiya [Theory and Organization of Ecological Audit: Monograph]. INFRA-M, Moscow (2017). https://znanium. com/catalog/product/535321. Accessed 10 Nov 2019 Sheremet, A.D., Suyts V.P.: Audit. INFRA-M, Moscow (2019). https://znanium.com/catalog/ product/1005852. Accessed 10 Nov 2019 Eldieva, T.M.: Napravleniya ispol’zovaniya umnykh innovatsiy v sel’skom khozyaystve [Uses of smart innovations in agriculture]. Mezhdunarodnyy Sel’skokhozyaystvennyy Zhurnal 61(6 (366)), 46–49 (2018). https://doi.org/10.24411/2587-6740-2018-16094 Van Es, H., Woodard, J.: Innovation in agriculture and food systems in the digital age. Glob. Innov. Index 13, 97–104 (2017). https://de.statista.com/statistik/daten/studie/158267/ umfrage/staatsquote-in-den-usa. Accessed 10 Nov 2019

Analysis of Innovative Projects of Early Development Stages Using Neural Networks Pavel V. Tereliansky1(&)

and Ekaterina I. Konchenkova2

1

2

State University of Management, Moscow, Russian Federation [email protected] Volgograd State Agrarian University, Volgograd, Russian Federation [email protected]

Abstract. The paper discusses the methodology and criteria for evaluating innovative projects at early stages of development in the venture capital market in Russia. Also, an example of a visualization of project information in the form of a colored image is provided. The resulting images are proposed to be processed using neural networks. Evaluating innovative projects at early stages of development and making investment decisions involves analyzing and systematizing a large amount of different information. The authors propose to identify a number of criteria that can provide a complete description of the project in order to give an overall assessment of the project. It is proposed to move away from the standard numeric or verbal rating scales, replacing them with a gradient scale of blue (for positive ratings) and a gradient scale of red (for negative ratings). In this way, a visual description of the project is formed – a color map. As a result, the authors identified 56 criteria for evaluating innovative projects at early stages of development, which are summarized in a Table 1. The criteria are divided into 8 groups (clusters). The set of estimates of the innovative project received from the investor is proposed to be used for analysis and processing with the help of color maps. An excellent option for recognizing objects of this kind can be the using of deep convolutional networks. The input data for the neural network will be rectangular arrays of numeric data that display the intensity of color estimates. The network will have four output results that predict the class of the innovation project in question. Having a separate output for each type of recognized object, you can use the neural network to classify objects into groups. In this case, the recognized and classified objects are color maps of the innovation project. For better training of the neural network in order to classify color maps, a fairly large dataset is required, which is often impossible to imagine for unique and non-repeating projects, so the authors suggest using arrays of expert estimates. Keywords: Business angels
Evaluation criteria Pooling
Pixels
Fully connected network JEL Code: C65


Images
Convolution



D81

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 56–65, 2021. https://doi.org/10.1007/978-3-030-59126-7_7

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1 Introduction Evaluation of innovative projects at the seed or pre-seed stages and investment decision-making by business angels are a fairly time-consuming process, which implies the analysis and systematization of an immense amount of information. In the modern financial world, business angels can be considered an integral part of the formation of a competitive economy. The amount of investment of private investors can be comparable to that of venture capital funds, of which only 2% (Bragina 2014; Katasev et al. 2015) account for investment in companies at the early stages of their development.

2 Background and Methodology Seed and preseed innovative projects usually represent unique ideas. But at the same time, these ideas are high-risk and are characterized by a high degree of uncertainty (Kempbell 2008; Kashirin and Semenov 2008). In the Russian Federation, the market of private (business angel) venture investment is not yet clearly formed and there is no sufficiently large statistical database for the analysis (Bragina 2014). That is why the selection of the most relevant project evaluation criteria, that would be used for the optimization of evaluation of innovative projects, may be a rather acute problem. It should be noted that in the Russian private venture capital market under consideration there is an urgent need for investors to develop a universal algorithm that would allow a business angel to work with a sufficiently large flow of investment applications, as well as the possibility of further development of the automated decision-support system for each innovative project under consideration. It is the solution to the abovementioned problems that will greatly facilitate the work of private venture capitalists and accelerate the process of decision-making for each innovative project under consideration. Evaluation of innovative projects at the seed and pre-seed stages, as well as the decision to invest in a particular project, is a rather labor-intensive process (Kashirin and Semenov 2008; Bragina 2014), which includes analysis and processing of a sufficiently large volume of heterogeneous information. For the foregoing reasons, the authors identified a number of criteria capable of showing the broadest picture of the innovative project under consideration, using color and generating color maps in the evaluation of available information. The closest analog of a color map is a heatmap proposed and patented by Cormac Kinney in 1991, although the history of application of such visualization of large arrays of statistical data extends back over more than a hundred years (Wilkinson and Friendly 2009). In consequence of this work, the authors propose to use the 56 criteria of evaluation of innovative early development projects obtained from the analysis of a vast number of project examples (presented in Table 1). All of them were divided into 8 groups. In the absence of an estimate for a particular criterion, 0 is entered in the cell which corresponds to this criterion. It should be noted that the private investor may optionally choose to establish a rate scale suitable to him/her. The problems of the selection of estimate scales, as well as the methodology of the expert estimates and the scaling itself are addressed in the work by (Tereliansky 2013).

Dynamics of the segment under study

Way of investor’s “exit” from the project

Comfort communication of investor with the team

Status of business under consideration at the moment of valuation

Goods (services) distribution system

Financial and economic status

Qualifications of administrative-andmanagerial and operating personnel

Qualifications of scientific and engineering personnel

1

2

3

4

5

6

7

Price

Development of new markets

Availability of competitors controlling more than 30% of the market

Possibility of replication of the product by competitors

Cost of production of products (services)

Reliability and longevity

Competition in the selected market

Utilization of scientific and technological potential

Production cooperation

Costs associated with raw materials, consumables and components

Utilization of technological potential

Overhead expenses

Product (service) quality assurance and control system

Barriers to “market entry”

Market accessibility

Safety of product under development for consumer

5. Performance characteristics

Industry growth rate

Functional and consumer attributes of goods (services)

Attractiveness of the product

Uniqueness of products (no counterparts)

Problem that is solved by the product in the market

4. Characteristics of marketing

Possibility to obtain credits from Russian banks

Possibility of attraction of financial resources from the state budget

Production support risk of product under development

Likelihood of technical success project implementation

Amount of finance already invested in the project Cost and time of products (services) development

Socio-political risk of project implementation

Risk of sales of products

Likelihood of commercial success of project implementation

Economic risk of project implementation

Extent to which the project under consideration is feasible within the target time limit

8. Project risks

Income potential after 5 years (annual)

Calculated profitability of the product under consideration

Provision of financial guarantees for the project

Possibility of attracting foreign investors

Expected rate of return

Investment payoff period of the project

Profitability of the project under consideration

7. Commercial effectiveness of a project

Possibility of attracting Russian investors

Total funding of the project

Proposed investor share in the company

6. Financial characteristics

Table 1. Criteria of evaluation of innovative projects

3. Characteristics of goods or services

Source: compiled by the authors according to (Bragina 2014).

Costs associated with market promotion of goods and services

Preparedness of the market for a particular product

Capacity of the market to accept new goods or services

Level of competition in the market under study

Industry and industrial market prospects

Capacity of the market under study

2. Characteristics of the industry and industrial market

1. Characteristics of the company as a whole

№

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The final linguistic evaluations of innovative projects can be formulated as follows: “The project has been elaborated in an excellent way; all necessary criteria have been examined in detail at a sufficient level. The project needs no improvement” corresponds to mark “5 (excellent)”; “The project has been elaborated in a good way. The project can be further improved if necessary” - “4 (good)”; “The project has been elaborated in a satisfactory way. The project needs to be further improved if an expert is interested in it” - “3 (satisfactory)”; “The project has been elaborated in an unsatisfactory way. It’s advisable to reject the project or substantially revise it” - “2 (unsatisfactory)”. Therefore, it is proposed to use color maps for the analysis and processing of estimates received by the innovative project from the investor. Color maps can be generated through visualization of data from Table 1. Example of map filling is presented in Table 2. Red color tones are used to indicate negative estimates, and blue gradient is used to indicate positive estimates. The higher (lower) is the estimate – the richer is the color. Table 2. Visualization of the example of a numerical estimate of an innovative project

Criteria

1

2

3

Characteristics 4 5

6

7

8

1 2 3 4 5 6 7

When working with color maps, data are converted into colored pictures that must be processed and classified by a computer program. This Table must be converted into an image for further processing by the neural network. Examples of color maps are shown in Fig. 1.

Unsatisfactory project

Excellent project

Fig. 1. Fragments of a color map (Bragina 2014)

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The use of deep convolutional networks (neural convolutional networks) may be an excellent way to recognize such objects. But at the same time, the input data for a neural network will not be numerical data, but color images. The task of feeding an image to the input of the neural network instead of the usual numbers may somehow complicate the understanding of the task of identification of images by the reader, but this point is not a problem in point of fact. Only numbers are accepted as input data by any neural network. As with the computer, the image is a set of numbers showing how dark each pixel is (through the example of cursive digit “8” in black and white from the MNIST cursive digits dataset) (Nenahov 2016; Novikova 2008):

Fig. 2. Digit “8” in the form of the number group (Katasev et al. 2015)

3 Discussion and Results It is expected that color maps will be processed in the same way. It should be noted that convolutional neural network will process color imagery, that is, the color map will be decomposed into three number groups (as shown in Fig. 2) – for blue (B), green (G) and red (R) colors (in RGB display system). It should be pointed out that our neural network will have 4 deliverables which forecast the class of the innovative project under consideration. With a separate output for each type of object being recognized, a neural network can be used for the classification of objects according to groups. In this case, the objects to be recognized and classified are color maps of the innovative project. When such large images are processed, it is necessary to use a sliding window method – a method of scanning all portions of a small image. However, in order to achieve higher-quality learning of a neural network with a view to classify color maps, a fairly big data set is required. The increase in the amount of data complicates things for the neural network under development, but this can be compensated by increasing the network itself (Koroteev 2018). In order to make the network bigger, several new layers are added to the neural network (Fig. 3): The network will be deep, as there will be much more layers in it as compared to a conventional neural network. But even if it is possible to create a really large and fasttrainable neural network with 3D graphics cards, there is a need for solving problems and multiparameter clustering of innovative projects in the form of large color images according to several classes (Koroteev 2018; Kostikova and Tereliansky 2014; Mironenko and Bragina 2014). Thus, the analysis and classification of innovative early development projects (Fig. 4) with the use of neural networks can be solved by means of a convolution operation (Lazarev and Sviridov 2011; Mesteckij 2002–2004; Nenahov 2016).

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Полносвязная нейронная сеть

Fully connected neural network

Входное изображение

Input image

Ядро свертки

Convolution kernel

Сверточный слой (СС)

Convolution layer (CL)

Слой подвыборки (СП)

Subsample layer (SL)

СС

CL

СП

SL

61

Fig. 3. Example of a deep neural network [Mesteckij 2002–2004]

Images can be processed by the neural network by means of a convolution in several steps. The first step (1) is to split the image (color map) into individual intersecting fragments. Following the division of the source image of the innovative project under consideration into fragments, 56 fragments of the same size were obtained, containing estimates of a particular criterion. The next step (2) is to feed each portion of a color map resulting from picture segmentation to the input of the convolutional neural network. That said, for each individual portion of the image that is fed to the input of the neural network, the same weighting coefficients of a neural network will be stored. That is, in fact, each fragment of the image will be treated and processed identically. However, when processing images that are reflective of the evaluation of innovative early development projects, it is necessary to consider the position of a particular segment in the overall image structure, because these segments reflect a particular assessment of a particular project criterion by the investor. Accordingly, the next step (3) in processing and analysis of color maps is to store the processing results of each image segment (map) in the same order as the original image. The result of this step is an array of data reflecting all portions of the source image – color map for a particular early stage innovative project. But this array will still be fairly large (Fig. 5).

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Неудовлетворительный проект

Unsatisfactory project

Удовлетворительный проект

Satisfactory project

Хороший проект

Good project

Отличный проект

Excellent project

Какую оценку заслуживает поступивший проект?

What mark does the submitted project deserves?

Оцениваемый проект

Project being evaluated

Fig. 4. Example of color card classification (Bragina 2014)

To reduce the size of the data array obtained in step 3, it is necessary to reduce downsample it by means of a pooling operation (4). The pooling layer is a nonlinear packing of a feature map. That said, a group of several pixels (typically 2x2 pixels) is compacted to one pixel by a nonlinear transformation (Mesteckij 2002–2004; Tereliansky 2017). The most common function for pooling is the function of the maximum. The transformations in the pooling process will affect non-overlapping rectangles or squares, each of which must be reduced in size to one pixel. That said, a pixel with the maximum value will be selected during the collapse process. This operation can allow developers to significantly reduce the spatial volume of the image that is fed to the input of the neural network. The pooling operation may be treated as follows: if certain signs have already been identified during previous image convolution operations, such level of detail is longer necessary for further processing. And for this reason, input image will be compressed to less detailed. In addition, filtering of already unnecessary details in the image will help a neural network not to learn once again. The pooling layer will usually be situated after the convolution layer and before the next convolution layer.

Analysis of Innovative Projects of Early Development Stages

Оригинальное входное изображение

Original input image

Массив, отражающий результаты шага 3

Array reflecting results of step 3

63

Fig. 5. Array of results of step 3 (Bragina 2014; Nenahov 2016)

The final step (5) of image processing in the form of color maps that are received at the input of the neural network is to classify the result obtained. The result obtained during the previous steps of the image processing is a set of numbers that can be used as input data to another neural network. It is the last neural network that will determine the class which the color map of the innovative project submitted for approval will belong to (Kuznecov et al. 2019). This step of image processing, unlike the stage of convolution, will be the result of operation of a fully connected neural network. Accordingly, all steps in the process of processing of the color map will be as follows (Fig. 6): Input image

Convolu tion

Max Pooling

Fully connected network

Qualifier

Fig. 6. Processing a color map of the innovative project (Bragina 2014; Katasev et al. 2015)

4 Conclusions Thus, the processing of any image (including color image) is a sequence of several steps – convolution, pooling, and fully connected network. When solving problems in the real world, all these steps can be combined together as many times as necessary in solving the same problems. It should be noted that there may be a fairly large number of convolution layers in the neural network under development. Exactly as it is possible to use pooling layers precisely in those places where the developer needs them to be to reduce the dimension of input data and data transferred between layers. The main idea here is to reduce the large image (see Fig. 1) step by step until the only desired result

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for classification is obtained (Kuznecov et al. 2019; Tereliansky 2017; Rogachev and Skiter 2009). The more convoluting layers will be in the neural network under development, the more complex functions future neural network will be able to learn to recognize.

References Bragina, E.I.: Mnogoparametricheskaya klasterizaciya dlya innovacionnyh proektov rannih stadij razvitiya na rynke venchurnogo investirovaniya setyami prostejshih nejroprocessorov [Multiparameter Clustering for Innovative Projects of the Early Stages of Development in the Venture Investment Market by Networks of Simple Neuroprocessors]. E.I. Bragina/Avtoreferat. Science, Volgograd (2014) Katasev, A.S., Kataseva, D.V., Kirpichnikov, A.P.: Raspoznavanie rukopisnyh simvolov na baze iskusstvennoj nejronnoj seti [Handwritten character recognition based on artificial neural network]. Vestnik Tekhnologicheskogo Univ. 11, 173–176 (2015) Kashirin, A.I., Semenov, A.S.: V poiskah biznes-angela. Rossijskij opyt privlecheniya startovyh investicij [In search of a business angel. Russian experience in attracting of start-up investments]. Vershina, Moscow (2008) Kempbell, K. (ed.): Venchurnyj biznes: novye podhody [Venture Business: New Approaches]. «AL’PINA BIZNES BUKS», Moscow (2008) Koroteev, M.V.: Obzor nekotoryh sovremennyh tendencij v tekhnologii mashinnogo obucheniya [Review of some current trends in machine learning technology]. E-Management 1(1), 26–35 (2018). http://doi.org/10.26425/2658-3445-2018-1-26-35 Kostikova, A.V., Tereliansky, P.V.: Dinamicheskoe nechetkoe modelirovanie social’noekonomicheskih processov obshchestvennoj zhizni: na primere kachestva zhizni naseleniya: monografiya [Dynamic fuzzy modeling of socio-economic processes of public life: on the example of the quality of life of the population: monograph]. VolgGTU, Volgograd (2014) Kuznecov, S.Yu., Kostikova, Yu.A., Sajkina, A.V.: Intellektual’nyj analiz dannyh: ucheb. posobie [Intellectual Data Analysis: A Student’s Textbook]. VolgGTU, Volgograd Lazarev, V.M., Sviridov, A.P.: Nejroseti i nejrokomp’yutery [Neural Networks and Neurocomputers]: Monografiya. Science, Moscow (2011) Malkahi, D.: Investirovanie na srok - Prakticheskoe rukovodstvo po privlecheniyu akcionernogo kapitala v Irlandii [Long-Term Investing - A Practical Guide to Raising Equity in Ireland]. Oak Tree Press, Moscow (2005) Mesteckij, L.M.: Matematicheskie metody raspoznavaniya obrazov: kurs lekcij [Mathematical Methods for Pattern Recognition: Lecture Course]. MGU, Moscow (2002) Mironenko, T.N., Bragina, E.I.: Razrabotka intellektual’noj sistemy dlya resheniya slozhnyh zadach v sfere promyshlennoj politiki na osnove metoda Monte-Karlo [Development of an intelligent system for solving complex problems in the field of industrial policy based on the Monte Carlo method]. Ekonomika, statistika i informatika. Vestnik UMO 3, 158–161 (2014) Nenahov, I.S.: Neetalonnaya ocenka kachestva televizionnyh izobrazhenij na osnove lokal’nyh binarnyh shablonov i algoritmov mashinnogo obucheniya [Non-standard Assessment of the Quality of Television Images Based on Local Binary Patterns and Machine Learning Algorithms]: Dissertaciya. Science, Yaroslavl’ (2016) Novikova, N.M.: Strukturnoe raspoznavanie obrazov [Structural Pattern Recognition]. Uchebnometodicheskoe posobie dlya vuzov. Voronezh: izdatel’sko-poligraficheskij centr Voronezhskogo gosudarstvennogo universiteta (2008)

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Tereliansky, P.V.: Problemy primeneniya mnogomernyh indeksov dlya formirovaniya kortezhej [Problems of using multidimensional indexes to form n-tuples]. Menedzhment v zdravoohranenii: vyzovy i riski XXI veka: sb. mater. vseros. nauch.-prakt. konf. (g. Volgograd, 16–17 dekabrya 2016 g.). In: Soboleva, S.Yu., Knyazev, S.A. (eds.) Volgo¬gradskij gos. medicinskij un-t Min-va zdravoohraneniya RF [i dr.], pp. 16–18. Science, Volgograd (2017) Rogachev, A.F., Skiter, N.N.: Matematicheskoe modelirovanie i effektivnost’ vnedreniya tekhnologicheskih innovacij [Mathematical modeling and the effectiveness of the implementation of technological innovations]. Izvestiya Nizhnevolzhskogo agrouniversitetskogo kompleksa: Nauka i vysshee professional’noe obrazovanie 4, 109–113 (2009) Wilkinson, L., Friendly, M.: The History of the Cluster Heat Map (in English). The American Statistician, New York (2009) Tereliansky, P.V.: Neparametricheskaya ekspertiza [Non-parametric Expertise : The Monograph]. VolgGTU, Volgograd (2013)

Efficiency and Perspectives of Import Substitution Development in the Sphere of Leading Technologies Alla V. Litvinova(&) , Natalya S. Talalaeva and Mariya V. Parfenova

,

Volzhsky Branch of Volgograd State University, Volzhsky, Russia {litvinova.av,talalaeva,m.parfenova}@vgi.volsu.ru

Abstract. Purpose. The purpose of this paper is to assess the efficiency of import substitution in the sphere of leading technologies in Russia and to develop measures aimed at increase of its role in Russia’s transition to the innovative and technological model of development. Methodology. The authors use the methods of structural and dynamic analysis, aimed at determining – with the help of Microsoft Excel – the tendencies that define the level of technological potential of Russia at the modern stage and its import dependence on innovation-driven and hi-tech goods and services as compared to foreign countries, including the leaders of the global market of technologies. Results. The performed analysis allows concluding that low positive dynamics, stagnation of the level of technological development of Russia, and its high import dependence on deliveries of foreign technologies lead to low efficiency of import substitution in this sphere and absence - at the modern stage – of the objective preconditions for wide use of the leading, innovation-driven, and smart technologies in all spheres of the Russian national economy. Conclusions/Recommendations. Elimination of low efficiency of technological development and import substitution is possible based on wide increase of the main factors of competitive technological potential of Russia - personnel, ideas, and capital and on stimulation of Russian business’s participation in R&D, radical changes in the system of distribution and control of spending of budget assets for import substitution in the sphere of technologies, and creation of special tax regimes that would stimulate domestic organizations for mastering of new technologies and innovations. Keywords: Import substitution JEL Code: E66


Efficiency
Leading and smart technologies


O21

1 Introduction Russia faced to paths in mastering of the leading, including smart, technologies: remaining a recipient of technologies manufactured abroad or trying to overcome technological underrun, substituting foreign technologies with Russian ones. Theoretically, Russia could use imported science-driven technologies and goods for the © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 66–76, 2021. https://doi.org/10.1007/978-3-030-59126-7_8

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purposes of mastering and wide dissemination of smart technologies – however, this is not expedient due to certain reasons. Firstly, the cost of technologies that are used in a certain sphere grows with each conversion; growth of the innovative component leads to increase of this effect by means of intellectual rent, and added value during production and use of imported technologies is formed abroad. Secondly, high technologies are relatively independent from nature and climate conditions and transport & geographical factors; also, norm of profit for technological conversions are not too sensitive to the changes of market prices. At the same time, the need for low technologies and low-tech goods is limited, and demand for them is not very elastic – so the excess of these products in the market could cause a quick decrease of prices. Thirdly, domination of deliveries to the external market of low technologies and low-tech goods leads to the country’s dependence on external situational and geo-political factors. Their unfavorable influence might cause a probability of quick reduction of the country’s incomes and growth rates of its economy and the emergence of unfavorable phenomena in all spheres of public life. The necessity to overcome and prevent these phenomena is an objective precondition of import substitution in the sphere of high technologies (including smart technologies), which should lead not just to replacement of foreign products with domestic analogs but to appearance of competitive technologies that would be in high demand in the domestic and external markets. This thesis is especially important for Russia. A country’s inability to manufacture and export popular leading, including smart, technologies and focus on the resource potential in economic development predetermine the country’s need for import of such products and its resource orientation in their export. Undervaluation of the role of technological factors of development led to the situation when, despite the performed efforts, economic well-being still depends on export of energy sources – which puts Russia on the roadside of the global progress. The growing threats to Russia’s economic security increase the necessity for making import substitution a process that would be a source of technological update and increase of competitiveness of the Russian economy, as well as solving the key social tasks of its development. In the opposite case, Russia is doomed for weakening of its positions in development of the world economy and the loss of effective participation in the international division of labor. The most studied aspects of the leading technologies in view of import substitution are information technologies (Basaeva and Kochiev 2018; Galushin 2018; Rybachok 2015). The role of information technologies in the modern society’s development is obvious and is manifested in quick development of the digital economy around the world, including Russia. The digital economy is one of the thirteen strategic directions of development of the Russian Federation until 2024 (Decree of the President of the Russian Federation, 2018). However, smart technologies are not just the development of IT industry and infrastructure. Russia’s future depends on the level of progress and innovativeness of technologies that are applied in all spheres of the economy – energy, metallurgy, chemical sphere, etc. It should be acknowledged that scientific studies that contribute into development of import substitution of leading technologies in certain sectors and types of economic activities – in particular, provision of finishing treatment of components of science-driven items (Banichev et al. 2015), fuel and energy complex

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(Lapaeva and Dedeeva 2015), and food and processing industry (Khleboprodukty 2015) – become very popular. The state and perspectives of development of Russian leading technologies in all spheres of the economy are connected primarily to increase of the role of scientific R&D and innovations. The role of innovations as a leading factor of provision of efficiency of import substitution has been acknowledged by most researchers (Bondar and Kobzev 2017; Aregbeshola 2017; Ullrich 2017) and is confirmed by the experience of the global economy’s development. All developed and leading countries have large innovative potential and high indicators of efficiency of the innovative activities that are conducted by their residents. According to (Bondar and Kobzev 2017), the modern tendencies of import substitution predetermine its essence as an innovative process that ensures creation of the necessary conditions for manufacture of innovative import substituting technologies and goods. A country with low technological potential, which is a consumer of foreign leading technologies with domination of hi-tech import and low values of hi-tech export, is doomed for constant underrun in the issues of implementation and wide dissemination of leading technologies.

2 Methodology Statistical accounting of Russia’s technological development is built on the official information of the Federal State Statistics Service on the level of the leading production technologies, scientific research, and innovative activity of manufacturers. Efficiency of import substitution in the hi-tech sphere is evaluated based on statistically correct information on the dynamics of indicators of technological and innovative potential of Russia. The authors of this paper use the methods of structural and dynamic analysis as applied to data for 2010–2018. The task of this research is to determine – with the help of Microsoft Excel – the tendencies that determine the level of technological development of Russia and its import dependence on deliveries of innovation-driven, hi-tech goods and services. The idea is that positive dynamics of these processes is the indicator of efficiency of import substitution in the sphere of leading technologies and ensures establishment of the geo-political role of a country as one of the global leaders, which determine technological development of the global economy. The research is performed in view of the target settings and priorities of technological development adopted by the UN and in view of comparison of Russia to foreign countries with different levels of the innovative and technological potential.

3 Results Dynamics of the indicators that characterize Russia’s achieving the goal “Industrialization, innovations and infrastructure” according to the UN program “Transforming our world: the 2030 agenda for sustainable development” (Resolution A/RES/70/01 2015) (Table 1) show either stagnation (share of added value of the sphere “Processing production” in GDP, share of products of the hi-tech and science-driven spheres in

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GDP as compared to previous year, share of expenditures for R&D in GDP) or reduction of the values of the most important indicators (employment level in the processing industry, number of researchers), which characterizes the situation with development of Russia’s technological potential in the recent decade as very unfavorable.

Table 1 Dynamics of the indicators that determine achievement of the goal “Industrialization, innovations and infrastructure” in the UN program “Transforming our world: the 2030 agenda for sustainable development”. Indicators 2010 2015 Share of added value of the sphere “Processing production” in Russia’s GDP in % as compared to previous year 14.9 13.9 per capita, RUB 41,545 70,818 Employment in processing industry, 15.2 14.3 % of total number of the employed 1.13 1,1 Share of expenditures for R&D and engineering in GDP, % 3,094.3 3,065.1 Number of researchers (in equivalent of full employment) per 1 million people Share of products of hi-tech and 22.8 21.0 science-driven spheres in GDP, % Source: (Resolution A/RES/70/01 2015; Rosstat 2019).

2016

2017

2018

13.3 70,434 14.4

13.5 76,630 14.2

n/a n/a 14.1

1,1

1.11

1,0

2,921.5

2,795.6

2,764.5

21.5

21.6

n/a

An expanded system of indicators of efficiency of import substitution in the sphere of leading technologies in Russia and other countries is shown in Table 2. The data in Table 2 show that the share of hi-tech goods in import exceeds the share of hi-tech goods in export in foreign trade turnover of all countries. However, in developed and leading countries, which are the acknowledged leaders of technological development, exporters of high technologies, and possessors of substantial innovative potential (UK, Germany, China, Japan, and USA) there is no large gap between the share of hi-tech export and the share of hi-tech import; also, the share of hi-tech goods in export is much higher as compared to the similar indicator in other countries. Thus, the share of hi-tech export in Germany exceeds the share of hi-tech import by two times on average, in USA – 2–2.1 times, in the UK - – 1.6–1.7 times, in China – 1.3–1.6 times, and in Japan - 1.7 times. In Canada and Mexico, which occupy a medium position in the ranking of technologically developed countries, this indicator equals 3 times, in Russia – 3–4 times. In countries that are outsiders of technological development, the share of hi-tech export is much lower than the share of hi-tech import – e.g., 4–5 times in Moldova and 708 times in South Africa. In Azerbaijan, the difference between these indicators in the studied period constitutes 17–23 times. The share of hitech export in developed countries has the following values: Germany – 13.6–16.9%,

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Table 2. Indicators of efficiency of import substitution in the sphere of leading technologies in different countries. Indicators Russia Share of hi-tech goods in export, % Share of hi-tech goods in import, % R&D expenditures, USD million Share of R&D expenditures in GDP % Germany Share of hi-tech goods in export, % Share of hi-tech goods in import, % R&D expenditures, USD million Share of R&D expenditures in GDP, % USA Share of hi-tech goods in export, % Share of hi-tech goods in import, % R&D expenditures, USD million Share of R&D expenditures in GDP, % UK Share of hi-tech goods in export, % Share of hi-tech goods in import, %

2010

2011

2012

2013

2014

2015

2016

2017

2018

9.1

7.9

8.4

10.0

11.4

13.8

12.6

12.5

11.0

44.4

48.2

49.9

48.5

61.2

64.6

67.0

68.3

67.2

33,083

35,188

37,913

38,610

40,339

39,734

39,874

43,064 43,451

1.13

1.01

1.03

1.03

1.07

1.10

1.10

1.11

1.0

15.2

15.0

15.9

16.1

16.0

16.6

16.9

13.6

15.7

34.0

33.0

31.9

32.3

33.4

35.2

36.4

36.3

…

87,048

95,810

100,490 102,905 109,563 113,922 118,473 …

…

2.71

2.80

2.87

2.82

2.87

2.92

2.94

3.04

…

20.0

18.1

17.8

17.8

18.2

19.0

20.0

13.9

18.9

37.0

35.8

38.0

38.8

39.7

42.8

43.1

43.3

…

410,093 429,792 434,348 454,821 476,460 496,585 511,089 …

…

2.74

2.77

2.69

2.72

2.73

2.74

2.74

2.80

…

21.0

21.4

21.7

21.8

20.6

20.8

21.1

21.1

22.3

31.3

30.3

27.6

30.9

34.9

36.8

35.9

36.1

…

(continued)

Efficiency and Perspectives of Import Substitution Development

71

Table 2. (continued) Indicators

2010

2011

2012

2013

2014

2015

2016

2017

2018

R&D expenditures USD million Share of R&D expenditures in GDP, % China Share of hi-tech goods in export % Share of hi-tech goods in import, % R&D expenditures, USD million Share of R&D expenditures in GDP, % Japan Share of hi-tech goods in export, % Share of hi-tech goods in import, % R&D expenditures, USD million Share of R&D expenditures in GDP, % Canada Share of hi-tech goods in export, % Share of hi-tech goods in import, % R&D expenditures, USD million Share of R&D expenditures in GDP, % Azerbaijan Share of hi-tech goods in export, %

37,573

38,779

38,490

41,532

43,811

45,345

47,244

…

…

1.67

1.67

1.60

1.65

1.67

1.67

1.69

1.67

…

27.5

25.8

26.3

27.0

25.4

25.6

25.2

23.8

…

39.4

36.2

35.9

36.4

37.0

40.9

40.9

40.0

…

213,486 247,808 292,196 334,117 370,590 407,415 451,201 …

…

1.71

1.78

1.91

1.99

2.02

2.07

2.12

2.13

…

18.0

17.4

17.4

16.8

16.7

16.8

16.2

13.8

17.3

23.3

20.8

21.5

22.7

23.7

28.2

28.2

28.8

…

140,619 148,389 152,326 164,656 169,554 169,673 168,645 …

…

3.14

3.24

3.21

3.31

3.40

3.28

3.14

3.21

…

14.0

13.4

13.8

14.0

13.6

13.8

12.9

12.8

15.7

41.1

40.1

41.1

41.2

41.3

43.4

44.1

44.0

…

24,903

25,570

26,019

26,506

27,793

26,386

26,072

…

…

1.83

1.79

1.78

1.71

1.72

1.65

1.60

1.59

…

1.1

1.3

7.2

13.4

7.0

2.5

2.1

1.2

4.0

(continued)

72

A. V. Litvinova et al. Table 2. (continued)

Indicators

2010

Share of hi-tech 40.7 goods in import, % R&D 309.1 expenditures USD million Share of R&D 0.22 expenditures in GDP % South Africa Share of hi-tech 4.6 goods in export % Share of hi-tech 35.4 goods in import % R&D 4,428.3 expenditures, USD million Share of R&D 0.74 expenditures in GDP, % Mexico Share of hi-tech 16.9 goods in export % Share of hi-tech 47.2 goods in import, % R&D 9,291 expenditures, USD million Share of R&D 0.54 expenditures in GDP % Republic of Moldova Share of hi-tech 8.3 goods in export % Share of hi-tech 20.9 goods in import % R&D 60.0 expenditures USD million Share of R&D 0.44 expenditures in GDP, %

2011

2012

2013

2014

2015

2016

2017

2018

48.6

42.0

38.9

37.7

37.7

34.6

28.0

…

304.7

322.3

339.1

352.2

382.2

348.4

…

…

0.21

0.21

0.21

0.21

0.22

0.21

0.19

…

5.0

5.4

5.5

6.9

6.2

5.3

4.6

5.3

35.2

34.3

34.3

32.5

34.3

34.3

33.5

…

4,652.2

4,836.9

4,977.5

5,478.1

5,811.3

…

…

…

0.73

0.73

0.72

0.77

0.80

…

…

…

16.5

16.3

15.9

16.0

14.7

15.3

15.2

21.0

45.3

46.4

47.4

47.1

48.6

49.0

47.3

…

9,775

9,799

10,292

11,519

11,376

11,026

…

…

0.52

0.49

0.50

0.54

0.53

0.50

…

…

6.3

4.8

2.4

4.8

4.0

3.1

5.1

2.5

22.3

20.8

20.6

21.2

20.7

21.6

22.4

…

60.3

62.8

59.2

66.1

66.2

62.8

…

…

0.40

0.42

0.35

0.37

0.37

0.33

0.30

…

Source: (Rosstat 2019; Russia and Countries of the World 2018; Statistics of the World Bank 2020).

Efficiency and Perspectives of Import Substitution Development

73

the USA – 14–20%, the UK – 20–22%, China – 24–26%, and Japan – 14–18%. A negative tendency of foreign trade turnover of developed countries is reduction of growth rates of hi-tech export in recent 4–5 years, which is a result of the crisis tendencies in the global economy. The share of hi-tech goods in Azerbaijan’s export is below 2.5%, in Moldova’s export – 4–5.1%, in South Africa’s export – 4–7%. Russia, with its resource specialization in the international division of labor, has the share of hitech export that is relatively low (8–14% in the studied period). Special attention in evaluating the level of technological development of the countries presented in Table 2 should be paid to the value and dynamics of their expenditures for R&D. All developed countries in the studied period showed moderate growth of the absolute values of these expenditures and their share in GDP until 2015; however, after 2015 their growth rates either remained unchanged or decreased (except for Germany, USA, and China). Developed countries are peculiar for a relatively high share of R&D expenditures in GDP: the UK – 2%, Germany and the USA – 3%, and Japan – above 3%. In Moldova and Mexico, this indicator does not exceed 0.5%, in South Africa – 0.8%. The lowest share of R&D expenditures in GDP among the studied countries is observed in Azerbaijan (0.2%). Russia is also peculiar for a low level of these expenditures. Despite the positive dynamics of the volumes of expenditures and their growth rates, Russia is behind developed countries by the share of these expenditures in GDP – the value of this indicator does not exceed 1.1% in the studied period. Russia’s low technological potential is confirmed by the data that characterize the relative share of organizations that implement technological innovations in the total number of organizations. Thus this indicator in Russia constituted 7.5% in 2016–2017 (Canada – 52.7%, Germany – 50.0%, the UK – 44.5%, Japan – 28.3%, and China – 17.2%), which is higher only in comparison to Mexico (6.8%) and Romania (5.4%) (Russia and Countries of the World 2018; Gokhberg 2019). There are also positive tendencies in scales and dynamics of the indicators that determine the intensity of expenditures for technological innovations in Russia (Table 3). Thus, in 2010–2018, expenditures for technological innovations grew by 3.1 times, and their share in the total volume of supplied goods and performed works and services – by 1.5 times. The share of expenditures for technological innovations in the total volume of supplied goods and performed works and services in Russia for the recent three years is similar to the indicators in develop countries – e.g., Germany (3.11%), the UK (1.4%), and France (2.29%) (Gokhberg 2019). A vivid contradiction between the low relative share of organizations that implement technological innovations and the positive dynamics of absolute and relative indicators of expenditures for technological innovations is explained by the concentration of innovations in a limited number of types of economic activities, which decreases the country’s achievements in this sphere. In particular, expenditures for technological innovations in 2018 were concentrated in the sphere of scientific R&D (33.3%); water supply, waste water disposal, organization of collection and elimination of waste (6.6%); auxiliary activities in the sphere of production of agricultural plants and post-harvest care (6.4%); growing seeds (5.2%); mixed agriculture (5.0%). At the same time, processing productions account only for 1.7% in the total volume of supplied goods and performed works and services; activities in the sphere of telecommunications – 2.5%; development of software and corresponding services – 3.2%;

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Table 3. Dynamics of the indicators of intensity of expenditures for technological innovations in Russia. Indicators Expenditures for technological innovations, RUB billion Share of expenditures for technological innovations in the total volume of supplied goods and performed works and services, % Source: (Rosstat 2019;

2010 2011 2012 2013 2014 2015 2016 2017 2018 468.5 607.2 608.3 812.9 809.8 802.5 1,284.6 1,405.0 1,472.8

1.4

1.7

1.6

2.0

1.8

1.6

2.4

2.4

2.1

Russian Statistical Yearbook 2017).

activities in the sphere of information technologies – 1.0% (Rosstat 2019). An inevitable consequence of the low level of expenditures for technological innovations is the insufficient level of development of leading, including smart, technologies in the perspective spheres of the Russian economy. The performed analysis allows concluding that absence of the positive dynamics, stagnation of the level of Russia’s technological development, and its high dependence on the import of innovation-driven, hi-tech goods and services cause the low efficiency of import substitution in the sphere of consumed technologies and the absence – at the modern stage – of the objective preconditions for a wide use of the leading, progressive, and smart technologies in all spheres of the national economy.

4 Conclusions The analysis shows that Russia has a rather low technological potential. Increase of technological potential at the modern stage is the main challenge for the country and its ability to overcome the stagnation in the innovative development. Russia has to overcome the belief of its specialization as a supplier of energy sources in the international division of labor and the different between low expert and high import of hitech goods and services. Strengthening import substitution in the sphere of leading technologies is Russia’s only chance to increase its significance in the global economy and politics. The key measure in this direction should be increase of the influence of factors that stimulate the decrease of import dependence of Russia and increase of effectiveness of the national innovative system. In the structure of sources of financing of domestic expenditures for R&D in 2018, budget assets accounted for 64.3% (RUB 660.9 billion) and assets of the entrepreneurial sector – 17.2% (RUB 176.5 billion) (Rosstat 2019). Low efficiency of technological development and import substitution shows that the existing volume of budget support and ways of its distribution are not sufficient for quick increase of global competitiveness in the sphere of technologies and

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Russia’s expansion in external markets. Assistance and support for the entrepreneurial initiative, aimed for strengthening of Russian business’s participation in R&D, which are the main source of technological innovations in the country, are the main driver of the import substitution technologies in all sectors of the national economy and, primarily, in the sectors that are most perspective in the aspect of innovative development and increase of the share of hi-tech production in GDP (medicine, IT, bio-technologies, alternative and renewable energy, etc.). There’s a need for cardinal changes in the system of distribution and control over spending of budget assets for import substitution in the sphere of hi-tech. It is necessary to increase the number of Russian organizations that participate in R&D. These measures lie primarily in the sphere of creation of special tax regimes, which could stimulate domestic organizations for mastering of new technologies and innovations and their movement to the external market. The shortfall in budget revenues will be compensated by expansion of the tax basis of export-oriented companies in the future. It is necessary to preserve and increase the main factors of competitive technological potential of Russia – personnel, ideas, and capital. It is necessary to reconsider the whole complex of measures that ensure support for export-oriented spheres and organizations, evaluate the economic effect, and implement the corresponding changes in the programs of Russia’s development in the short-term and long-term. Acknowledgments. The research was performed with support from the Russian Fund for Fundamental Research within the scientific project No. 19-010-00519 A “Complex evaluation of efficiency of import substitution and its influence on economic growth in Russia”.

References Aregbeshola, R.A.: Import substitution industrialization and economic growth. Evidence from the group of BRICS countries. Future Bus. J. 3, 138–158 (2017) Banichev, A.P., Motrenko, P.D., Babichev, I.A.: Vibrovolnovye tekhnologii v programme importozameshcheniya tekhnologicheskogo obespecheniya finishnoy obrabotki detaley naukoemkikh izdeliy [Vibrowave technologies in the program of import substitution of technological provision of finishing treatment of the components of science-driven items]. Fundamental’nye i Prikladnye Problemy Tekhniki i Tekhnologii 6(314), 62–64 (2015) Basaeva, D.I., Kochiev, A.I.: Importozameshchenie v sfere informatsionnykh tekhnologiy [Import substitution in the sphere of IT]. Aktual’nye Voprosy Sovremennoy Ekonomiki 1, 65–71 (2018) Bondar, A.V., Kobzev, I.I.: Innovatsionnoe importozameshchenie [Innovative import substitution]. Potrebitel’skaya Kooperatsiya 1(56), 13–18 (2017) Galushin, P.V.: K voprosu obespecheniya informatsionnoy bezopasnosti Rossiyskoy Federatsii i importozameshcheniya v sfere informatsionnykh tekhnologiy й [On the issue of provision of information security of the Russian Federation and import substitution in the sphere of IT]. NovaUm.Ru 4, 3–9 (2018) National Research University “Higher School of Economics”. Indikatory innovatsionnoy deyatel’nosti: 2019: statisticheskiy sbornik [Indicators of Innovative Activities: 2019. A Statistical Collection]. National Research University “Higher School of Economics”, Moscow (2019)

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Lapaeva, O.F., Dedeeva, S.A.: Vnedrenie i primenenie innovatsionnykh tekhnologiy v toplivnoenergeticheskom komplekse v usloviyakh importozameshcheniya [Implementation and application of innovative technologies in the fuel & energy complex in the conditions of import substitution]. Vestnik Orenburgskogo Gosudarstvennogo Universiteta 8(183), 98–103 (2015) Rosstat. Rossiya i strany mira [Russia and countries of the world] Statistical collection. Rosstat, Moscow, 2010–2018 (2020). http://www.gks.ru/free_doc/doc. Accessed 11 Jan 2020 Rybachok, E.: Importozameshchenie kak uslovie vykhoda iz krizisa rossiyskoy ekonomiki (sfera informatsionnykh tekhnologiy) [Import Substitution as a Condition of Overcoming the Crisis in the Russian Economy (It sphere)]. In: Mezhdunarodnaya nauchno-tekhnicheskaya konferentsiya molodykh uchenykh BGTU im. V.G. Shukhova. Belgorod State Technological University, pp. 4028–4032 (2015) Word Bank. Statistics of the World Bank (2020). https://data.worldbank.org/indicator/TX.VAL. TECH.MF.ZS?locations=ET&view=chart. Accessed 11 Jan 2020 Ullrich, K.: Russia – import substitution during recession. KfW Res. Focus Econ. 173, 1–3 (2017) United Nations. General Assembly Resolution A/RES/70/01 dated September 25, 2015. Transforming our world: the 2030 agenda for sustainable development, 44 p. (2020). http:// www.un.org/. Accessed 11 Jan 2020

“Smart Technologies” in Project Management: Rationalization of Decision Making or a Source of New Risks for Information Security Elena V. Patsyuk(&), Aleksandr A. Krutilin, Marina N. Kiseleva, Lyudmila M. Lisina, and Anna N. Liberovskaya Sebryakovsky Branch of Volgograd State Technical University, Mikhaylovka, Russia [email protected], [email protected], [email protected], [email protected], [email protected]

Abstract. Purpose: The purpose of this paper is to substantiate the perspectives of project management based on “smart technologies” and to compile an algorithm of this process. Design/Methodology/Approach: For determining the ratio of pros and cons of “smart technologies” application in project management, the method of regression analysis is used. The influence of automatization (rationalization) of decision making (and cybersecurity) on the rate of economic growth and the innovation index in 2020 are evaluated. The research objects are 12 countries which transnational corporations are the largest and the most successful in 2020, according to Fortune (2020), being in the top 50 of the “Global 500” ranking. Findings: It is substantiated that “smart technologies” are in high demand in project management. The achieved rationalization of decision making is more important than new risk of information security, which, however, should be taken into account and reduced. Risks are present at each stage of the algorithm of project management with the help of “smart technologies”, but they are also peculiar for all these stages at any other technological mode, though with a different form. Originality/Value: It is proved that the risk component of project management remains unchanged during implementation of “smart technologies”, but the approach to risk management changes – as the risks acquire the cybernetic nature, instead of the social one. The developed algorithm of project management in the conditions of Industry 4.0 shows perspective “smart technologies” for each stage of this process and explains its logic. Keywords: “Smart technologies”
Project management Decision making
Source of risks
Information security


Rationalization


JEL Code: D81
G32
G34
L86
M11
M15
O22
O31
O32
O33

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 77–84, 2021. https://doi.org/10.1007/978-3-030-59126-7_9

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1 Introduction In the conditions of domination of the Fourth technological mode, active modernization of entrepreneurship takes place, especially in industry - for it is the key sphere influenced by Industry 4.0. This leads to creation of new subjects in industrial markets – “smart” companies, which activities are almost fully automatized based on AI. However, digitalization of economy is not consistent, which leads to simultaneous existence of “smart” companies and companies that do not use “smart technologies”, which could compete – which is a current state of affairs – and cooperate in the future. Long chains of added value, which are peculiar for markets with high competition, predetermined the necessity for “smart companies” to execute the orders of companies that do not use “smart technologies” – they are either at the previous stages of the added value chain or strive to optimize their activities with the help of outsource. Such cooperation will have a form of project management. Due to this, “smart companies” will stimulate the increase of innovative activity of industrial and other companies and accelerate economic growth, raising and implementing the economy’s production capacities. “Smart technologies” in project management are ambiguous, which restrains their application and slows down the development of Industry 4.0. They ensure acceleration and rationalization of decision making, but could cause new and high risks of information (cyber) security, the practices of provision of which are in the process of formation. An important problem of economic science in the modern conditions is objective and comprehensive study of the perspectives of application of “smart technologies” in project management, determination of their pros/cons ratio, and development of recommendations for their successful application. This paper aims at substantiating the perspectives of project management based on “smart technologies” and compiling an algorithm of this process.

2 Materials and Method The performed literature overview on the selected topic shows that certain issues of application of “smart technologies” in project management are studied in the works Andronova et al. (2019), Belik et al. (2020), Haabazoka et al. (2019), Ivanov et al. (2019), Natsubidze et al. (2017), Patsyuk et al. (2017), Pichkov (2016), Popkova (2019), Popkova and Gulzat (2020a, 2020b), Popkova and Sergi (2018, 2019, 2020), Popkova and Zmiyak (2019), Ragulina (2019), Ragulina et al. (2019), Sergi (2019), Sergi et al. (2019), Shulus et al. (2020), Strelets (2017), Zabaznova et al. (2014), Zabaznova et al. (2020), and Zavyalova et al. (2018). However, despite the theoretical and applied studies by different examples, there is still uncertainty regarding the influence of “smart technologies” on successfulness of project management and regarding the algorithm that is to be used for project management during application of “smart technologies”. This paper is to fill this gap. In order to determine the ratio of pros and cons of “smart technologies” application in project management, we use the method of regression analysis. It is also used for evaluating the influence of automatization (rationalization) of decision making (use of

“Smart Technologies” in Project Management

79

big data and analytics) and cybersecurity, which are calculated by IMD within assessment of digital competitiveness for 2019, on the forecasted rate of economic growth in 2020 according to the IMF, and the Bloomberg Innovation Index (2020). The research objects are 12 countries which transnational corporations are the largest and most successful in 2020, according to Fortune (2020), being in top 50 of the “Global 500” ranking. The statistical basis of the research is shown in Fig. 1, countries are shown from left to right in the order of their position in the “Global 500” ranking. Based on the presented statistical data, the following equations of multiple linear regression are built: – y1 = 3.31 – 0.03*x1 – 0.02*x2, multiple R = 0.4796. According to this equation, the rate of economic growth is largely determined by application of “smart technologies” in project management – which is shown by vivid, though moderate, correlation of 47.96%. Improvement of country’s position in the ranking of automatization (rationalization) of decision making by 1 position leads to acceleration of its economic growth by 0.03%, and improvement of the position in the ranking of cybersecurity by 1 position leads to acceleration of economic growth by 0.02%. – y2 = 75.95 + 0.12*x1 – 0.01*x2, multiple R = 0.1926. The equation shows that the Innovation Index does not much depend on application of “smart technologies” in project management (correlation – 19.26%), and it could even decrease in case of their development (positive connection with the position in the automatization ranking). Therefore, rationalization of decision making based on automatization is more important than provision of cybersecurity, and thus risks of information security are justified during application of “smart technologies” in project management – though, of course, they have to be reduced.

3 Results Pros and cons of “smart technologies” application at different stages of the project management algorithm are shown in Table 1. As shown in Table 1, at the stage of setting of requirements and project planning it is possible to use such “smart technologies” as the IoT and alternate reality. They provide more opportunities for optimization and ensure project visualization. However, there is a risk of incomplete accounting of factors, complexity of formalization, and risk of data distortion. The ability of AI to accept a project order – without human participation – is doubtful at the current level of “smart technologies’” development. Customer could face additional complexities on formalization of the order, which will surely reduce the competitiveness of “smart” company as a performer. At the stage of technical execution of a project, ubiquitous computing, robots, and 3D print could be used. They stimulate quick and precise creation of test samples and full control of project; however, there is a risk of project termination due to “smart technologies’” failure or blackouts. At the stage of control over project implementation, Big Data are used. They allow for constant monitoring, full control over the project,

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Annual rate of economic growth, % 7.00

5.90

6.00 5.00 4.00

3.05

3.00

1.83

2.00

1.68

1.39

1.91

1.29

1.00

2.55 1.70

1.80

1.50

0.21

0.00

Innovation index, points 100 90 80 70 60 50 40 30 20 10 0

70 60 50 40 30 20 10 0

83.17

88.21

78.30 81.28

76.03

82.31

88.16 85.67 82.75 87.01 68.63

49.54

63 53

46 34

6

12

16

25

22 10 8

29

41 26

44

40 23

7

AutomaƟzaƟon (raƟonalizaƟon) of decision making, posiƟon

31

29

22 11

15 6

Cyber security, posiƟon

Fig. 1. Statistics of the rate of economic growth (y1), Innovation Index (y2), automatization (rationalization) of decision making (x1), and cybersecurity (x2) in countries of top 50 of Global 500 in 2020. Source: compiled by the authors based on Bloomberg (2020), IMD (2020), and International Monetary Fund (2020).

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Table 1. Pros and cons of “smart technologies” application at different stages of the project management algorithm. Stage

Setting requirements for project, planning of project Technical execution of project Control over project implementation Results of project execution (success at output)

Perspective “smart technologies”, except for AI Internet of Things (IoT), alternate reality (AR)

Pros of “smart technologies” application

Cons (risks) of “smart technologies” application

Expanded possibilities of optimization, project visualization

Ubiquitous computing (UC), robots (RB), 3D print Big Data

Quick and precise creation of test samples, full control of project

Risk of incomplete accounting of factors, complexity of formalization, and risk of data distortion Risk of project termination in case of failure of “smart technologies” and blackouts Risk of incorrectness of monitoring data due to program errors Risk of data leak and violation of the terms of project confidentiality, loss of novelty during innovations

PMBOK: observing contract terms SCRUM: customer’s satisfaction PRINCE2: balance and technical maturity

Constant monitoring, full control of project, quality assurance Contract terms are observed 100% Customer is fully satisfied with speed, quality, and price “scale effect” for performer, effectiveness for customer, technical competitiveness

Risk of compatibility: necessity for adapting customer’s business processes to automatized project management

Note: PMBOK – Project Management Body Of Knowledge; SCRUM – project management method; PRINCE2 – PRojects IN Controlled Environments. Source: developed and compiled by the authors.

and quality assurance – however, there appears a risk of incorrect monitoring data due to program errors. The results of project execution (success at the output) depend on full observation of contract terms (according to the criterion of PMBOK) and customer’s satisfaction with efficiency, speed, quality, and price (according to the criterion of SCRUM), but are also peculiar for a risk of data leak, violation of the confidentiality terms, and loss of novelty during innovations. The advantage of project management on the basis of “smart technologies” is also the “scale effect” for performer, effectiveness for customer, and technical competitiveness (according to the PRINCE2 criterion), and the drawback is the risk of compatibility: necessity for adapting the customer’s business process to automatized project management.

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The developed algorithm of project management based on “smart technologies” is shown in Fig. 2. Customer: company that developed and initiated the project 1. Ordering project via the IoT

6. control of project

Digital data base on the project

2. Planning and presenting the project plan with the help of alternate reality

AI 3. Order to act, via the IoT 5. Project implementation

5. Verification and approval of the project

4. Creation of a test sample with the help of 3D print

Robots (RB)

6. information through ubiquitous computing

Performer: “smart” company of Industry 4.0 that implements the project

Fig. 2. The algorithm of project management based on “smart technologies”. Source: developed and compiled by the authors.

As is shown in Fig. 2, the offered algorithm envisages ordering of a project via the IoT, with the help of special software at the “smart” company’s web-site. Receiving an order, AI performs project planning and presents its plan with the help of technologies of alternate reality to the customer. The plan is discussed, corrected, and specified. After this, AI issues an order to act – via the IoT – to the “smart” company’s robots. Robots create a test sample with the help of 3D print. The sample is presented to the customer, who checks it and points out its drawbacks or approves. Then the project is implemented by robots under control of AI. The project information is passed from robots to the digital data base and is controlled by AI and, is necessary, by the customer.

4 Conclusion Thus, “smart technologies” are in high demand in project management. Rationalization of decision making, which is achieved due to them, is more important than new risks of information security – which, however, should be taken into account and reduced. Risks are present at each stage of the algorithm of project management with the help of “smart technologies”, but they are also peculiar for all these stages at any other technological mode, though with a different form. This proves that the risk component of project management remains unchanged during implementation of “smart technologies”, but the approach to risk management

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changes – as the risks acquire the cybernetic nature, instead of the social one. The developed algorithm of project management in the conditions of Industry 4.0 shows perspective “smart technologies” for each stage of this process and explains its logic. It should be concluded that implementation of “smart technologies” requires modernization of the project management standards – primarily international: ISO 10006:2003, Quality management systems –Guidelines for quality management in projects, and ISO 21500:2012 Guidance on project management. Further studies in continuation of this work should be devoted to determining the differences between these standards and the current economic reality and to developing recommendations for their modernization.

References Andronova, I.V., Belova, I.N., Yakimovich, E.A.: Digital technology in the fishing sector: international and Russian experience. In: Proceedings of the 1st International Scientific Conference Modern Management Trends and the Digital Economy: From Regional Development to Global Economic Growth (MTDE 2019). Yekaterinburg, Russia. AEBMR-Advances in Economics Business and Management Research, vol. 81, pp. 277– 280 (2019) Belik, E.B., Petrenko, E.S., Pisarev, G.A., Karpova, A.A.: Influence of technological revolution in the sphere of digital technologies on the modern entrepreneurship. Lect. Notes Netw. Syst. 91, 239–246 (2020) Bloomberg. Innovation Index 2020 (2020). https://www.bloomberg.com/news/articles/2020-0118/germany-breaks-korea-s-six-year-streak-as-most-innovative-nation. Accessed 18 Feb 2020 Fortune. Global 500 (2020). https://fortune.com/global500/2019/search/. Accessed 18 Feb 2020 Haabazoka, L., Popkova, E.G., Ragulina, Y.V.: Africa 4.0 as a perspective scenario for neoindustrialization in the 21st century. African J. Econ. Sustain. Dev. 2(2), 20–38 (2019) IMD. World Digital Competitiveness Ranking 2019 (2020). https://www.imd.org/wcc/worldcompetitiveness-center-rankings/world-digital-competitiveness-rankings-2019/. Accessed 18 Feb 2020 International Monetary Fund. World Economic Outlook Database. Report for Selected Countries and Subjects: Gross domestic product, constant prices, percent change, 2020 (2020). https:// www.imf.org/external/pubs/ft/weo/2017/01/weodata/weoselgr.aspx. Accessed 18 Feb 2020 Ivanov, O., Zavyalova, E., Ryazantsev, S.: Public-private partnership in the countries of the Eurasian Economic Union. Central Asia Caucasus. Engl. Ed. 2(2), 33–47 (2019) Natsubidze, A.S., Likholetov, E.A., Malofeev, A.V., Zabaznova, T.A., Patsyuk, E.V.: Model of global crisis management of entrepreneurial activities. Contributions to Economics, pp. 515– 521 (2017). ISBN 978-3-319-60695-8 Patsyuk, E., Karpusova, S., Surkova, O.: Marketing tools of joint crises fighting in socioeconomic sphere of Russia and Europe. Contributions to Economics, pp. 605–611 (2017). ISBN 978-3-319-60695-8 Pichkov, O.B.: Social inequality in the US and Canada. Int. Trends (Mezhdunarodnyeprotsessy) 2(2(3)), 85–92 (2016) Popkova, E.G.: Preconditions of formation and development of industry 4.0 in the conditions of knowledge economy. Stud. Syst. Decis. Control 169(1), 65–72 (2019) Popkova, E.G., Sergi, B.S.: Human capital and AI in industry 4.0. Convergence and divergence in social entrepreneurship in Russia. J. Intell. Capital (2020, in press)

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Popkova, E.G., Gulzat, K.: Technological revolution in the 21st century: digital society vs. artificial intelligence. Lect. Notes Netw. Syst. 91, 339–345 (2020a) Popkova, E.G., Gulzat, K.: Contradiction of the digital economy: public well-being vs. cyber threats. Lect. Notes Netw. Syst. 87, 112–124 (2020b) Popkova, E.G., Zmiyak, K.V.: Priorities of training of digital personnel for industry 4.0: social competencies vs technical competencies. Horizon 27(3–4), 138–144 (2019) Popkova, E.G., Sergi, B.S.: Will industry 4.0 and other innovations impact Russia’s development? In: Sergi, B.S. (ed.) Exploring the Future of Russia’s Economy and Markets: Towards Sustainable Economic Development, pp. 51–68. Emerald Publishing Limited, Bingley (2018) Popkova, E.G., Sergi, B.S. (eds.): Digital Economy: Complexity and Variety vs Rationality. Springer International Publishing, Cham (2019) Ragulina, Y.V.: Priorities of development of industry 4.0 in modern economic systems with different progress in formation of knowledge economy. Stud. Syst. Decis. Control 169, 167– 174 (2019) Ragulina, Y.V., Alekseev, A.N., Strizhkina, I.V., Tumanov, A.I.: Methodology of criterial evaluation of consequences of the industrial revolution of the 21st century. Stud. Syst. Decis. Control 169, 235–244 (2019) Sergi, B.S. (ed.): Tech, Smart Cities, and Regional Development in Contemporary Russia. Emerald Publishing Limited, Bingley (2019) Sergi, B.S., Popkova, E.G., Bogoviz, A.V., Litvinova, T.N.: Understanding Industry 4.0: AI, the Internet of Things, and the Future of Work. Emerald Publishing Limited, Bingley (2019) Shulus, A.A., Akopova, E.S., Przhedetskaya, N.V., Borzenko, K.V.: Intellectual production and consumption: a new reality of the 21st century. Lect. Notes Netw. Syst. 92, 353–359 (2020) Zabaznova, T.A., Karpushova, S.E., Patsyuk, E.V., Surkova, O.A., Khmeleva, G.A.: Mechanism of rural entrepreneurship development on the base of micro-business. Asian Soc. Sci. 10(23), 168–177 (2014) Zabaznova, T.A., Patsyuk, E.V., Shchukina, N.V., Karpushova, S.E., Surkova, O.A.: The algorithm of creation of territories of rapid socio-economic development in the digital economy. Lect. Notes Netw. Syst. 91, 68–76 (2020) Zavyalova, E.B., Studenikin, N.V., Starikova, E.A.: Business participation in implementation of socially oriented sustainable development goals in countries of Central Asia and the Caucasus region. Central Asia Caucasus 19(2), 56–63 (2018) Strelets, I.A.: Multiplicative effects in networks. World Econ. Int. Relat. 61(6), C.77–C.83 (2017)

Preconditions of Development and Perspectives of Use of Smart City Technologies for Regional Market of Tourism Valentina Y. Moiseeva(&)

and Vladimir A. Zolotovskiy

Volgograd State University, Volgograd, Russia {v.chistobaeva,zolotovskiy.azi}@volsu.ru

Abstract. The purpose of this chapter is to determine the preconditions of development and to formulate the most perspective directions of using smart city technologies for regional market of tourism. The authors distinguish the main tendencies of smart technologies’ influence on tourism and formulate the preconditions of development of smart technologies in tourism: high information intensity of tourism and change of tourist’s consumer behavior. The vectors and perspectives of using smart technologies for development of regional market of tourism are determined. The authors use the methods of factor and subjectobject analysis within the systemic approach to determining the preconditions of development and perspectives of using the smart technologies for regional market of tourism. Despite the underrun in the rates of digitalization of the global tourist industry, the authors distinguish perspective directions that allow showing importance of smart technologies for branding of territory: systems for direct sale of certain service and tours with an opportunity of independent creation, smart systems of management and functioning of hotels and creation of tourist pool resources of big data that allow tracking and forecasting tourist flows and systematizing the categories of tourists. It is concluded that tourism, as the sphere of economy that is adaptable to the innovative changes, will allow using – in case of implementing of smart technologies – new opportunities and achieving the higher competitive strategic positioning of territory. Keywords: Smart technology tourism
Smart city JEL Code: K15


Smart system
Internet of Things
Smart


K23
Z30
Z32
Z38

1 Introduction Tourism is the sector of economy which develops dynamically. A lot of regions of the world, cities, and countries consider tourism to be the driver of territory’s socioeconomic development territory. According to the UN World Tourism Organization, growth of middle class in countries with developing economy, technological achievements, new business models, reduction of travel cost, and liberalization of visa regime led to increase of the global flow of tourists by 5% in 2018. Thus, the most important issues are provision of effective management and support for a tourist along © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 85–91, 2021. https://doi.org/10.1007/978-3-030-59126-7_10

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the course of the travel, digitalization of various spheres of tourism, implementation of innovative technologies, and increase of traveling accessibility for various categories of population. A range of external (growth of currency exchange rate, anti-Russian sanctions, and unstable political situation) and internal factors (replenishment of budget, development of regions, creation and restoration of infrastructure, development of non-resource sector of economy, and implementation of innovations in the social sphere) predetermined the development of regional market of tourism. This direction is one of the most important tasks the government faces.

2 Methodology The main provisions of the concept of informatization’s influence on functioning of various economic systems are reflected in the works (Gugelev and Mozhaev 2016; Inshakov et al. 2008; Castells 2000; Porter and Millar 1985), etc. The theoretical foundations of using smart technologies, which are applied for development of tourism, are reflected in a range of foreign studies. In the work (Harrison et al. 2010), “smart” is treated as real time use of the data of the surrounding world, integration and exchange of information, use of complex analytics, modeling, optimization, and visualization for making operational decisions. The term was expanded to the notion “smart city”, in which main attention is paid to the innovative use of technologies, optimization of resources, effective and just management, and sustainable quality of life. M. Höjer and J. Wangel (Höjer and Wangel 2015) state that these are not just individual technological achievements, but also interconnection, synchronization, and coordinated use of different innovative, economic, and social developments, based on Big Data, open data, and new means of communication and exchange of information. Despite the wide popularity of the elements of smart technologies in the modern world, researchers note the absence of a complex approach to consideration of the problem of using smart technologies in tourism. Theoretical studies largely focus on description of the phenomenon in the form of thematic studies (Boes et al. 2015a, b; Nurhasan 2019) or discussion of separate technological innovations (Huang and Chen 2015; Boes et al. 2015a, b; Gomez-Oliva et al. 2019). Thus, the systemic study in the conditions of global informatization of all economic systems and preconditions of development and perspectives of using the smart city technology in the sphere of innovative socio-economic developments, aimed primarily at regional market of tourism, is very topical.

3 Results In the globalizing world, socio-economic and technological development of countries and regions of the world is impossible without formation of the information society, which main component is development of the information and communication technologies. The dynamic process of digitalization of the Russian society leads to

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emergence of a new form of communicative interaction of the representatives of economic systems, including the tourist market, which is characterized by a desire for simplification of access to services, reduction of time required for search for products, and minimization of physical presence during receipt/provision of consulting services. A response to the transforming demands of the subjects of tourist activities is wide implementation of innovative smart technologies in the sphere of tourism. Smart tourism is an innovative tourist direction, which is based on infrastructure that uses modern technologies, guarantees sustainable development of tourist areas that are accessible for everyone, which simplifies the interaction between services’ consumer and the surrounding world, increases the quality of experience at the destination, and improves quality of life of people (Gretzel et al. 2015). The preconditions of development of smart tourism are as follows. High Information Intensity of Tourism Globalization of the world economy predetermines the main factors of competitiveness of the tourist business subjects – development of digitalization. Together with the tourist sphere’s dependences on Internet access, domination of electronic transactions and services that are provided via Internet, application of cloud technologies, wide use of mobile communications, and dissemination of the Internet of Things come to the foreground. No more than 30% of European travellers use the services of tourist operators when vising travelling agencies. Other travellers plan their trips with the help of online services. Russia is also peculiar for a tendency for growth of online sales in two directions – independent planning of tours with online purchase of tickets and accommodation reservation, as well as purchase of tour online – which leads to closure of a part of offline agencies or their reorientation at the digital environment. Changes in Tourist’s Consumer Behavior Most consumers of tourist services that are influenced by digitalization belong to the new Generations Z and Y – according to the terminology of Neil Howe and William Strauss, who offered their own interpretation of American history in 1991, based on the cyclic change of generations and life phases: childhood, youth, maturity, and old age (Howe and Strauss 1991). Generation Y (millennials – people born after 1981) is the first generation that is deeply involved in digital technologies and that is the main consumer of tourist services. The study of an advertising agency Expedia Media Solutions (Multi-generational Travel trends 2017) shows that representatives of generation Y perform 4.3 trips per year on average, which is by 30% more than generation Z (centennials – born in 1991– 2001), who have been surrounded by digital technologies since their birth. Generation Z could be called the first global generation. Based on a survey of Varkey Foundation (20,000 people in 20 countries), it was determined that centennials could be called the first global generation, for they consider borders to be an anachronism (Leonova and Konstantinov 2018). The main goal of travellers from generation Z is the search for adventures, possibility to be integrated in the life and cultural heritage of the territory, and sharing the personalized tourist experience with the help of content (Cavarnaro et al. 2018). A typical tourist in Russia, according to a survey by Travelport, prefers to purchase tourist from specialized companies, but the global tendency of digitalization of the travel industry and the change of generation of tourists, as well as

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domination of the consumer of Generations Y and Z, show a global change in this market (Bogomazova et al. 2019). In view of the information intensity of tourism, change of tourists’ consumer behavior, and the following high dependence on the information and communication technologies, the notion “smart” is applied to the notions that cover various spheres of tourist industry, including regional tourism. Development of regional smart tourism is closely connected to implementation of the smart city concept, which envisages not development of separate intellectual systems but a complex approach to synthesis of innovative socio-cultural, ecological, and economic sub-systems. Within development of tourism on a certain territory, it is not possible to change the existing infrastructure based on the smart city technology, due to high cost and limited resources. If a municipal entity is not planning to become smart, the process of complex development of smart tourism becomes complicated and is slowed down, which leads to decrease of the economic, ecological, and social effectiveness of innovations. Of course, it is necessary to note the dynamics of dissemination of digitalization in Russia due to preparation for 2018 FIFA World Cup. Despite the allocation of large assets for implementation of innovations, the absence of systematization and unification of information services of regions into the single digital space does not allow stating the possibility for wide implementation of smart technology, which reflects a specific feature of the process of digital transformation in Russia – the dominating role of government. According to the Federal target program “Development of internal and incoming tourism in the Russian Federation (2019–2025)”, it is forecasted that the number of tourists to purchase tours online will constitute 6.77 million per year by 2025; however, the subsidy-related position of perspective regions and their remoteness do not allow for high effectiveness of these investments. Researchers distinguish a range of reasons that restrain the process of digitalization of tourism in Russia, which include the absence of small and medium business’s ability to invest a lot of money in digitalization, absence of legal regulator for business subjects in the digital field and absence of access to import of ready solutions, and low level of populations digital literacy (Bogomazova et al. 2019). The foreign and domestic experience of successful implementation of the “smart city” concept in the existing cities, in which individual or complex projects on implementation of intellectual technologies and smart services, which are then unified into systems, allows designing and replicating them for the tourist and recreational centers of Russia, including in Volgograd Oblast.

4 Results As of now, the largest influence on tourists – active consumers of digital services – is performed not by information, provided by representatives of travel business, but by comments and recommendations of other users – generators of useful content in social networks. Creation of an innovative tourist concept opens the digital and online tourist market, which allows for the interaction of tourists, cultural and historical heritage of the territory, and locals – with the help of a smartphone. Thus, priority should be given

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to social and interactive communication and unification of the smart technology of the hospitality industry with the social aspects of human interaction. Smart technologies provide wide opportunities for implementing such interaction; creation of mobile apps and portals for tourists seems to be very effective. The first type of apps and portals within this direction is creation of an innovative channel of communication between traveller and the digital system of data storage, which provides information on the history of the tourist object, recollections, stories of locals, etc. This technology was implemented in Ceuta, a Spanish town with high cultural value; there, a new concept of apps was developed – “Being recollection” – a guide for tourists who use smart technologies (Gomez-Oliva et al. 2019). When user connects to Wi-Fi or Bluetooth network, created by intellectual POI, his smartphone receives push notifications and shows a page with all information and non-material heritage of the people’s knowledge and stories. These stories are presented in a short form of video interview, which could be watched with the help of intellectual POI. Adaptation and application of this technology are possible at the regional level, including in Volgograd Oblast – for it has a lot of historical objects of the regional and federal importance. The region’s cultural heritage comprises a large layer of history: from areas of living of prehistoric humans to the important events of the history of the USSR and the Great Patriotic War. Placing such intellectual interaction spots at the main tourist objects, including the Mamaev Kurgan memorial complex, the panoramic museum “Battle for Stalingrad”, Tsaritsyno Palace, etc. will allow increasing their attractiveness for the representatives of a younger generation of tourist services’ consumers. Information that is stored in these spots and transferred via Wi-Fi and mobile internet could contain not only historical chronicles and recollections but also data on the closes intellectual spots, transport routes, etc. The second perspective direction of regional smart tourism is creation of apps and web-sites based on hybrid technologies, which unify geographical information systems and alternate reality. The principles of their work are similar: user opens an app and points his gadget’s camera at the object’s marker, which scans the market and provides information on the closest destination or public places to visit. The technology of alternate reality is used in the process of scanning, which work as a marker of trigger scanning for showing the nodes. While the technology of geographical information systems is used for showing maps which reflect a route to the destination. This technology is actively implemented around the world, and the experience of its application in Malaysia is described in the work (Nuthasan 2019). Implementation of such hybrid app is possible at the regional level, including in Volgograd Oblast. Multiple geographic information systems, which function on the territory of the Russian Federation in the interaction with alternate reality technologies and social networks, will allow obtaining information on the location, variants of possible tourist routes, accommodation and catering options, etc. A smartphone’s camera scans the object’s market and the smartphone shows information on the closest destination or public places to visit. If a tourist is interested in visiting a certain location, he can check the maps and routes to this location. Smart technology allows actualizing and supplementing any objects and routes with the necessary information, reviewed, and pictures in real time. For satisfying the growing digital demands of

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consumers, the foreign experience of functioning of such apps predetermined the necessity for connection of tourist objects’ location to positioning and social networks. Experts of the online service OneTwoTrip conducted a survey among users of different generations and determined the role of Instagram in travel planning. 82% of representatives of generation Z (below 25) use mostly Instagram, which differs from behavior of tourists of other age groups. Less than 25% of millennial and users aged 45 + are inspired by pictures and videos from Instagram while making travel plans (RIA Novosti 2019). Satisfaction of demands of various age groups with the help of connecting hashtags and profiles of social network accounts to a certain spot would allow increasing the number of app users and implementing the smart tourism concept. It should be noted that implementation of certain elements of smart technologies in the regional market of tourism in Russia is aimed at increasing the experience of visitors, creating more comfortable conditions for they stay, raising mobility and speed of decision making, and increasing the level of tourist potential of territories and objects – but at creating a unified systematized digital space. The smart city concept envisages a complex approach to development of sub-systems, not development of separate apps and technologies. Despite the underrun in the rates of digitalization of the global tourist industry, the authors have distinguished perspective directions that allow showing importance of smart technologies for branding of territory: systems for direct sale of certain service and tours with an opportunity of independent creation, smart systems of management and functioning of hotels and creation of tourist pool resources of big data that allow tracking and forecasting tourist flows and systematizing the categories of tourists. The dominating role of government in the process of digital transformation of Russia requires large financial and information expenditures for replacement of the existing infrastructure. It is concluded that tourism, as the sphere of economy that is adaptable to the innovative changes, will allow using – in case of implementing of smart technologies – new opportunities and achieving the higher competitive strategic positioning of territory. Acknowledgments. The work was performed with support from the Ministry of Education and Science of the Russian Federation (project “Development of the methodology of virtual 3D reconstruction of historical objects”, scientific topic code 2019-0920, project No. in the system FZUU-0633-2020-0004).

References Gugelev, A.V., Mozhaev, O.A.: Formirovanie edinoy sistemy avtomatizirovannogo menedzhmenta protsessov zhiznennogo tsikla produktsii naukoemkikh predpriyatiy [Formation of the unified system of automatized management of the processes of science-driven companies’ products’ life cycle]. Bull. Saratov State Socio Econ. Univ. 2(61), 16–20 (2016) Inshakov, O.V., Mizintseva, M.F., Kalinina, A.E., Petrova, E.A.: Informatsionnoe razvitie ekonomiki regiona: Monografiya [Information Development of Region’s Economy: Monograph], p. 296. Finansy I Kredit Publisher, Moscow (2008) Castells, M.: The Information Age: Economy, Society and Culture, p. 608. GU VSE Publisher, Moscow (2000)

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Boes, K., Borde, L., Egger, R.: The acceptance of NFC smart posters in tourism. In: Tussyadiah, I., Inversini, A., (eds.) Information and Communication Technologies in Tourism, pp. 435– 448 (2015a) Boes, K., Buhalis, D., Inversini, A.: Conceptualising smart tourism destination dimensions. In: Tussyadiah, I., Inversini, A. (eds.) Information and Communication Technologies in Tourism, pp. 391–403 (2015b) Porter, M.E., Millar, V.E.: How information gives you competitive advantage. Harv. Bus. Rev. 85, 149–160 (1985) Harrison, C., Eckman, B., Hamilton, R., Hartswick, P., Kalagnanam, J., Paraszczak, J., Williams, P.: Foundations for smarter cities. IBM J. Res. Dev. 54(4), 1–16 (2010) Höjer, M., Wangel, J.: Smart sustainable cities: definition and challenges. In: ICT Innovations for Sustainability, Advances in Intelligent Systems and Computing, pp. 333–349 (2015) Huang, C.M., Chen, S.C.: Smart tourism: exploring historical, cultural, and delicacy scenic spots using visual-based image search technology. Appl. Mech. Mater. 764, 1265–1269 (2015) Gomez-Oliva, A., Alvarado-Uribe, J., Parra-Meroño, Mc: Transforming communication channels to the co-creation and diffusion of intangible heritage in smart tourism destination: creation and testing in ceuti (Spain). Sustainability 11(14), 38–48 (2019) Nurhasan, U., Pradibta, H., Suryadi, S., Alfinda A.: Smart tourist guide application for the introduction of Malang city tourism potential using hybrid technology. In: 4th Annual Applied Science and Engineering Conference Journal of Physics: Conference Series, vol. 1402, p. 066051 (2019) Gretzel, U., Sigala, M., Xiang, Z., Koo, C.: Smart tourism: foundations and developments. Electron Markets 25, 179–188 (2015) Howe, N., Strauss, W.: Generations: The History of America’s Future, 1584 to 2069. HarperCollins, Morrow, 538 p. (1991) Multi-generational travel trends (2017). https://info.advertising.expedia.com/hubfs/Content_ Docs/Rebrand-2018/MultiGen_Travel_Trends_European_Travellers-Small.pdf? hsCtaTracking=c4c56107-f08c-4278-85b7-9fc5832e3b7a%7C3ca9a412-0a25-47c8-82ec5830ec3b4e85. Accessed 20 Feb 2020 Leonova, M., Konstantinov, A.: Znakom’tes’, pokolenie Z [Please welcome, Generation Z] (2018). https://expert.ru/russian_reporter/2018/01/znakomtes-pokolenie-z/. Accessed 20 Feb 2020 Cavagnaro, E., Staffieri, S., Postma, A.: Understanding millennials’ tourism experience: Values and meaning to travel as a key for identifying target clusters for youth (sustainable) tourism. J. Tour. Futures 4, 31–42 (2018) Bogomazova, I.V., Anoprieva, E.V., Klimova, T.B.: Tsifrovaya ekonomika v industrii turizma i gostepriimstva: tendentsii i perspektivy. [Digital economy in the tourism and hospitality industry: tendencies and perspectives]. Servis v Rossii i za rubezhom 13, no.3(85), 34–47 (2019) Eksperty vyyasnili, kak puteshestvenniki pokoleniya Z ispol’zuyut Instagram. [Experts found out how travellers of Generation Z use Instagram] RIA Novosti (2019). https://ria.ru/20190904/ 1558216827.html. Accessed 20 Feb 2020 Federal target program. Development of internal and incoming tourism in the Russian Federation (2019–2025). https://www.garant.ru/products/ipo/prime/doc/56662025/. Accessed 20 Feb 2020

The Role of Smart Technologies in Formation of Urban Identity Anna A. Ozerina1,2(&) Oksana V. Golub1,2

, Tatyana S. Timofeeva1 , and Irina V. Vlasuk1

,

1 Volgograd State University, Volgograd, Russia {ozerina,timofeeva,golub,vlasuk}@volsu.ru 2 Volgograd State Medical University, Volgograd, Russia

Abstract. Purpose: The purpose of this paper is to determine the role of smart technologies in formation of urban identity. Design: The authors analyze scientific works on the issue of formation of urban identity and the main factors that determine it. Emphasis is made on development of smart urban environment as the key feature of a modern developing city. Findings: The authors present a conceptually new view of the main spheres of urban identity’s manifestation and the factors that form it in view of smart technologies. The leading role of smart technologies in all spheres of the modern urban life – from geographical location and visual environment to communication and cultural environment – is shown. Originality: The authors emphasize that during development and use of smart technologies their functional and content components are important; the content components has to take into account the uniqueness and psychological specifics of the territory. This will allow preserving the authenticity of each city and stimulating the formation of a positive urban identity of its residents. Keywords: Identity
City identity technologies
Image of the region


City brand
Society
Smart

1 Introduction Urban identity is an important direction of research due to its large role in formation of urban environment and creation of regional brands. At the modern stage, it is impossible to develop a concept of city’s image without taking into account the urban identity. In science, urban identity is an interdisciplinary and ambiguous notion, which led to emergence of a lot of approaches to its definition. Most authors agree that place of residence influences personality and determines person’s habits, settings, values, and quality of life (Drobysheva and Voytenko 2017; Evstifeev et al. 2016; Miklyaeva and Rumyantseva 2008; Ulyanychev 2019; Fedotova 2017; Webb and Webb-Gannon 2016). Smart technologies become an inseparable part of the modern urban environment. The psychological role of smart technologies consists in increase of speed and quality of communication ties between the members of a city community, formation of the feeling of security with the population, development of interaction in the system © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 92–98, 2021. https://doi.org/10.1007/978-3-030-59126-7_11

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“government – society – person”, and creation of a comfortable and accessible environment for each city resident. Having entered all spheres and sectors of urban activities, smart technologies stimulate the formation of urban identity (Tsvetkov 2018). Theoretical research of the foreign and Russian approaches allows formulating the following definition of urban identity: socio-psychological phenomenon that reflects person’s awareness of their belonging to the urban community, expressed in a certain attitude to the city and its residents and in the corresponding urban behavior.

2 Literature Overview The issue of urban identity has been studied by the following authors: R.V. Evstifeev, P. L. Krupkin, S.D. Lebedev, D.V. Maltseva, L.V. Zhvirblis, A.K. Mamedov, T.V. Kashkabash, S.A. Litvina, O.I. Muravyova, S.A. Bogomaz, N.G. Fedotova, A.V. Miklyaeva, P.V. Rumyantseva, K. Sangkyun, I. Chieko, M. Lalli, H. Treinen, and M.Webb. Based on these theoretical and empirical studies, we distinguish four spheres that determine formation of urban identity: socio-demographic, visual & spatial, communicative & spatial, historical & cultural, and socio-psychological. The socio-demographic sphere is a relatively constant characteristic of an urban dweller’s activities. It is set from the birth of a person. The place of birth and residence of a person with its spatial, demographic, urban, and infrastructural indicators influences the formation of the person’s territorial identity. It also largely forms the conditions and opportunities for socialization. Which kindergarten and school a kid goes to, whether there is a college or university in the city, what are the perspectives of career growth in the city, a possibility to purchase real estate – all these are factors that influence the adoption or rejection of the status of urban dweller. The visual and spatial sphere, within which urban identity is built, has architectural features and elements of infrastructure, as well as specific signs of urban life. Perception of streets, buildings, and monuments of the city by a person determines his view of himself as the city resident. The communication and spatial sphere includes two large groups of factors: interpersonal contacts and media space. Social contacts that are built – directly or indirectly - in the urban community influence a city resident’s feeling as a part of the city community. Media space sets a certain image of city, which is then projected for city residents, visitors, and even those who have never visited the city. The historical & cultural sphere contains features that create a unique, authentic image of the city, from its cultural features and historical past to specific persons who were born in it and created its unique environment. Certain events, famous people, local cuisine, and specific features of the city, its events and residents – these are the main factors of urban identity and the main coordinates of a city brand. The socio-psychological sphere reflects the level of residents’ satisfaction with life in the city, their opportunities, well-being, and safety of the urban environment. This sphere directly influences the residents’ motivation for manifesting certain urban behavior and actions, activity (or lack of activity), and the desire to continue living in the city.

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The positive content of the above spheres ensures the force of residents’ identifying themselves with the city. Satisfaction with each sphere of life depends on implementation of technologies that ensure the interaction between human and the environment. In other words, significance and meaning of the spatial, communicative and other environment are impossible without smart technologies in the modern world. The role of smart technologies in a modern city has been studied in the specialized and humanitarian works (A.L. Zhuravlev, T.A. Nestik, M.V. Mizrakhi, N. Komninos, L. Hudson, F. Aram, E. Solgi, E. H. Garcia, D. Mohammadzadeh, A. Mosavi, S. Shamshirband, O. Gassmann, J. Böhm, M. Palmié, O. Gassmann, J. Böhm, M. Palmié, M. Angelidou, A. Caragliu, C. Del Bo, P. Nijkamp, etc.). Most of the Russian and foreign scientific works on this problem in the sphere of social sciences, psychology, pedagogics, and economics are devoted to smart technologies’ influence on urban dwellers’ life. The scholars try to determine the change of behavioral, emotional, and communicative strategies of urban dwellers, their treatment of smart technologies, and their influence on smart technologies. A.L. Zhuravlev and T.A. Nestik consider the problem of technophobia and people’s attitude towards implementation and use of different smart technologies. The scholars outline the perspective directions of socio-psychological studies of person’s and community’s attitude towards new technologies and human’s attitude towards the emerging “smart environment” (Zhuravlev and Nestik 2016). The influence of smart technologies on the way of life and change of urban dweller’s position has been studied by the Russian and foreign scholars. M.V. Mizrakhi describes the situation when city residents use smart technologies for participating in the development of urban environment (Mizrakhi 2013). L. Hudson also showed that residents start participating in the “smart city” initiatives more actively. He notes that this is possible in case of organization of special courses on the topic of “smart cities” and offers a specific pedagogic technological for its realization (Hudson et al. 2019). In other words, mutual influence of smart technologies and psychological state of city residents is obvious. The specifics of urban identity formation in the conditions of dissemination of smart technologies in the urban environment have not been sufficiently studied.

3 Results Here we make an effort to structure the sphere of implementing smart technologies in urban environment that predetermine formation of urban identity. Results of the qualitative analysis, presented in Table 1, could be treated as a system of integration of smart technologies in the spheres of urban dwellers’ life activities, which allows for systematization of our views at formation of the studied phenomenon – “urban identity”. In other words, it becomes clearer how to use smart technologies for raising the quality of urban identity and strengthening it, as the factors of this phenomenon reflect the influence on its formation. Thus, in the sociodemographic sphere, which includes such factors as place of birth and duration of stay, stages of socialization and home ownership, it is possible to use smart technologies in

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Table 1. Spheres of implementation of smart technologies that predetermine formation of urban identity Spheres

Factors of urban identity

Sociodemographic

Place of birth and duration of residence Levels of socialization Home ownership

Visual & spatial

Elements of cultural landscape Infrastructure Urban symbols

Communicative & spatial

Social relations Mass media and Internet

Sociopsychological

Subjective satisfaction with the existing and accessible resources of the economic and social aspects Opportunity for implementing one’s values in a certain city Significant personal achievements and events Psychological security Landmark events of the city, prominent citizens, trends in fashion, clothing, interior, food, etc. City’s historical experience as such Uniqueness of city Cultural traditions (cuisine, music, etc.) Political structure, dominating ideas of public authorities and political structure

Historical & cultural

Implementation of smart technologies Smart home (energy saving system, notification systems, waste sorting and waste disposal), accessible digital educational environment (online learning with the use of ICT), telemedicine and robotic surgery, health-saving technologies, robotized city delivery (food and clothing) Smart urban environment (navigation systems, self-checkout in stores, ticket system, information screens, interactive bus stops, car sharing, safe traffic lights, robotization of parking systems, autonomous public transportation, systems of authomatization of buildings) ICT, mail, phone, hi-speed Wi-Fi Mass media, personalized advertising Safe urban environment (video analytics), smart services (evaluation of services’ quality, satisfaction with services, “Active citizen”), information on events

Mass media, screens, system of notification about events, QR codes at architectural objects with information about historical value, system of public services (digital signature, requests to the governor, ideas of law drafts)

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the following way: smart home, accessible educational environment, telemedicine, robotic surgery, health-saving technologies, and robotized city delivery (Sangkyun and Iwashita 2016). The visual and spatial sphere is presented by the following factors: elements of cultural landscape, infrastructure, and symbols. In this sphere, the technologies of smart urban environment are used. In the communicative & spatial sphere, the following technologies are implemented: ICT, mail, phone communication, and Wi-Fi. These technologies influence the formation of such factors of urban identity as social relations, mass media, and Internet. The socio-psychological sphere implements smart technologies: safe urban environment, smart services, and information on events, and includes the factors of subjective satisfaction with the existing and accessible resources of the economic and social aspects, opportunity for implementing one’s values in a certain city, significant achievements and events, and psychological safety. The historical & cultural sphere includes such factors of urban identity as landmark events of city, prominent citizens, trends in fashion, interior, and food; city’s historical experience as such; city’s uniqueness; cultural traditions; political structure and dominating ideas of public authorities, which formation depends on mass media; displays, systems of notification about events, QR codes at architectural objects with information about the historical value, and systems of public services. In our opinion, the most important aspect for formation of positive urban identity is the comprehensive system of digital environment (not its separate components) and the urban dwellers’ opportunity to use it, which is not always accessible for certain categories of citizens. Significance of accessibility of various types of services is directly connected to city dwellers’ satisfaction with life in the city (Lalli 1992). If a city dweller can use modern technological services and considers his city to be comfortable and developing, the level of his emotional connection to the city and his awareness as a part of the city community grow. There’s a possibility of conscious non-use of smart technologies by specific persons and groups of people – which is usually not taken into account in scientific studies.

4 Conclusions The authors have shown an important role of smart technologies during creation of urban identity. The spheres that predetermine its formation have been considered. It should be noted that the distinguished factors (e.g., place of birth, duration of living in the city, elements of the cultural landscape, city symbols, etc.) are relatively stable, and, therefore, city authorities cannot easily influence them. However, it becomes possible through dissemination of smart technologies. As a matter of fact, they are a mechanism of managing the factors of urban identity establishment. Smart technologies allow compensating for negative influences of imperfect architectural environment of a city or other city’s specific features. They also allow mobilizing the positive components of the city dwellers’ feeling themselves as a part of the city. Such view at the role of urban identity in formation of the city community and manifestation of the feeling of connection to the city’s events is reflected in works of certain scholars (Miklyaeva and Rumyantseva 2008; Dovbish 2012).

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We deem it important that smart technologies are a significant feature of the modern world. Comfortable life in a city depends not only on presence or absence of infrastructure and new technologies. Projects of smart cities, streets, and homes, should be developed in view of the unique culture and atmosphere of a specific territory. Certain authors note that neglecting the social demand during development of a smart city concept (or smart home concept) leads to their non-use by the target audience (Boykova et al. 2016; Vorobyova et al. 2019). “During development of technical innovations for a smart city, practitioners usually neglected social studies and extrapolated their own system of values, in which technological progress is an undisputable good, on all city residents. This led – during implementation of innovations – to unexpected effects: certain technologies, due to certain reasons, were not in demand by real residents; it appeared that people behaved in a way that was unexpected for the planners” (Vorobyova et al. 2019). Thus, we suppose that the local specifics of urban identity, which are a part of smart technologies implementation, will raise their effectiveness. City residents’ concern about environment and place of residence, as well as their perception of the city as a safe and stable one, largely depends on integration of the specifics of local culture in the implementation of smart technologies. The performed research allows stating that creation of a popular concept of smart city requires foundation not only on the technological component but also on the sociopsychological factors. It is necessary to study citizens’ needs and understanding of uniqueness of the territory on which new technologies are to be implemented. In practice, this will allow smart technologies to become a very effective product that will be in high demand by the consumers. Acknowledgments. The reported study was funded by RFBR and the government of Volgograd region according to the research project No. 19-413-340012.

References Hudson, L., et al.: Supporting urban change: Using a MOOC to facilitate attitudinal learning and participation in smart cities. Comput. Educ. 129, 37–47 (2019). https://doi.org/10.1016/j. compedu.2018.10.012 Lalli, M.: Urban-related identity: theory, measurement, and empirical findings. J. Environ. Psychol. 12(4), 285–303 (1992) Sangkyun, K., Iwashita, C.: Cooking identity and food tourism: the case of Japanese udon noodles. Tourism Recreation Res. 41(1), 89–100 (2016). https://doi.org/10.1080/02508281. 2016.1111976 Webb, M., Webb-Gannon, C.: Musical melanesianism: imagining and expressing regional identity and solidarity in popular song and video. Contemp. Pac. Proj. MUSE 28(1), 59–95 (2016). https://doi.org/10.1353/cp.2016.0015 Boykova, M., Ilyina, I., Salazkin, M.: «Umnaya» model’ razvitiya kak otvet na voznikayushchie vyzovy dlya gorodov [“Smart” model of development as a response to the emerging challenges for cities] Foresight 10(3), 65–75 (2016) Vorobyova, O.V., Manzhula, E.A., Yashina A.V.: Umnyy gorozhanin v umnom gorode: obzor podkhodov v Rossii i za rubezhom [Smart citizen in smart city: an overview of approaches in Russia and abroad]. Int. J. Open Inf. Technol. 7(5), 59–65 (2019)

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Dovbysh, E.G.: Setevye tekhnologii formirovaniya gorodskoy identichnosti [Network technologies of urban identity formation]. Yuzhno-rossiyskiy zhurnal sotsial’nykh nauk 4, 111–118 (2012) Drobysheva, T.V., Voytenko, M.Y.: «Faktory sotsial’no-psikhologicheskogo blagopoluchiya lichnosti v megapolise: predstavleniya detey o gorode prozhivaniya [Factors of sociopsychological well-being of a person in a metropolis: children’s ideas of their cities]. Inst. Psychol. Russ. Acad. Sci. Soc. Econ. Psychol. 1(5), 169–189 (2017) Evstifeev, R.V., Krupkin, P.L., Lebedev, S.D., Maltseva, D.V., Zhvirblis, L.V.: Gorodskie lokal’nye identichnosti kak osnova formirovaniya ustoychivykh mestnykh soobshchestv, Sluchay Vladimira, Smolenska i Yaroslavlya Vektory razvitiya sovremennoy Rossii [Urban local identities as the basis of formation of sustainable local communities. In: The case of Vladimir, Smolensk, and Yaroslavl. Vector of development of modern Russia]. Gumanizm vs postgumanizm, pp. 264–280, Moscow, Izdatel’skiy dom «Delo» (2016) Zhuravlev, A.L., Nestik, T.A.: Psikhologicheskie faktory negativnogo otnosheniya k novym tekhnologiyam [Psychological factors of negative attitude towards new technologies]. Psikhologicheskiy zhurnal 6, 5–14 (2016). https://elibrary.ru/item.asp?id=27487640 Mizrakhi, M.V.: « Umnyy gorod » : evolyutsiya kontsepta. Initsiativy gorodskikh soobshchestv v razvitii goroda [“Smart city”: evolution of the concept. Initiatives of local communities in city development] Scientific notes of Vernadsky Crimean Federal University. Sociology. Padagogics, Psychology, vol. 24, no. 3 (2013). https://cyberleninka.ru/article/n/umnyy-gorodevolyutsiya-kontsepta-initsiativy-gorodskih-soobschestv-v-razvitii-goroda. Accessed 25 Feb 2020 Miklyaeva, A.V., Rumyantseva, P.V.: Sotsial’naya identichnost’ lichnosti: soderzhanie, struktura, mekhanizmy formirovaniya: monografiya [Person’s Social Identity: Content, Structure and Mechanisms of Formation: A Monograph]. Herzen University Publ, Saint Petersburg (2008) Ulyanychev, M.A.: Razvitie goroda kak ob”ekt nauchnogo issledovaniya [City development as an object of scientific research]. Universum Soc. Sci. 1(52), 1–3 (2019) Fedotova, N.G.: Formirovanie gorodskoy identichnosti: faktornyy i institutsional’nyy aspekty [Formation of urban identity: the factor and institutional aspects]. Zhurnal Sotsiologii I Sotsial’noy Antropologii 20(3), 32–49 (2017) Tsvetkov, I.V.: Informatsionnye interesy gorozhan kak faktor regional’noy identichnosti [Information interests of citizens as a factor of regional identity]. Nauchnoe mnenie, no. 7– 8 (2018). https://doi.org/10.25807/PBH.22224378.2018.7-8.11.15

Evaluation of Poverty and Measures to Reduce It Rysty Berstembayeva1(&) , Shakizada U. Niyazbekova2 and Gulzhanat S. Kaldenova3 1

,

Kazakh University of Economics, Finance and International Trade, Nur-Sultan, Kazakhstan [email protected] 2 Moscow Witte University, Moscow, Russian Federation [email protected] 3 Department of Accounting and Finance, Baishev University, Aqtobe, Kazakhstan [email protected]

Abstract. In this study, the authors examine the criteria for the effectiveness of state socio-economic policy is to increase the welfare of citizens of the country. However, the standard of living of the population of the republic is extremely low. The article discusses the condition, problems and tasks of social policy in the country. The reduction in poverty according to official statistics is due primarily to the growth of targeted social assistance from the state. In addition, low indicators are associated with deficiencies in the methodology for their calculation. Results: 1. The causes of poverty were identified according to the results of a household survey in Kazakhstan. 2. The necessary measures to reduce poverty are presented. Keywords: The living standard
Living wage
Consumer basket standards
Poverty
Gini coefficient
State social policy JEL Classification Code: O10


Social


O20
O30
P33
P47

1 Introduction The situation in the regions of Kazakhstan is uneven. Naturally, the number of poor households in rural areas is higher than in cities. Among the regions of the republic, the most unfavorable from the point of view of poverty are the southern regions Dzhambyl, Turkestan, Almaty, Kyzyl-Orda regions. The main criterion for the effectiveness of state social policy is the growth of the welfare of citizens in all regions. Meanwhile, poverty levels are still a serious problem in every country. In Kazakhstan, poverty reduction is one of the national priorities. A number of state programs have been adopted, state social standards have been developed, and in projects, the development of social cards taking into account the specifics of each region. This involves solving social issues, including housing, the provision of free medical and educational services. © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 99–106, 2021. https://doi.org/10.1007/978-3-030-59126-7_12

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2 Background and Methodology The instrumental - methodical apparatus of research is based on analysis and synthesis, the method of induction and deduction, analogy, a systematic approach, a structuralfunctional approach, and promising methods. The indicated methods in their interconnection made it possible to most fully study the subject of this work and draw objective conclusions and generalizations.

3 Discussion and Results In the Republic of Kazakhstan, there are still problems of social inequality (Fig. 1).

Fig. 1. The share of the population of Kazakhstan with income used for consumption is below the subsistence level Source: According to the Republic of Kazakhstan Committee on Statistics

As can be seen from the data presented, according to official statistics, the share of the poor in Kazakhstan decreased from 2001–2018 by more than 10 times. In 2018, 12.7% of the US population and 16% of the EU population live below the poverty line (in some countries - Greece, Spain, this figure exceeds 21%). According to researchers at the University of Oxford, today in 103 countries where 76% of the world’s population lives (5.4 billion people), 26.5% of people (representing 1.45 billion people) live below the poverty line (Tereliansky 2016) Today, the poverty level is set at 70% of the subsistence level (20 789 KZT). In the 3rd quarter of 2019, 772,600 people (4.3% of the population of the republic) earned incomes below the poverty rate established in the republic. According to the World Bank method, the poverty level was set at 5.5 USD per day per person (Akimov 2018). According to this method, the number of people is much larger - 1,541 thousand people, which exceeds the official level by more than two times. International experts note that the poverty level should coincide with the subsistence level. In this regard, a radical change in existing approaches to the assessment methodology is necessary.

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A variety of approaches are used to assess the standard of living in world practice. This is due to the fact that the standard of living is a rather complex and multifaceted concept, which includes a number of determining factors. To assess them, specific indicators are needed, which should be combined into a certain system. In this regard, in the world there is no methodology based on the calculation of one integral indicator. Consider the existing world practice approaches to assessing living standards. One approach involves systematizing living standards in 4 groups: 1) Basic indicators of the standard of living, including the cost of consumption, indicators of household incomes, the ratio of income and cost of living, differentiation of incomes of different social groups, poverty level; 2) Criteria and indicators of living conditions of the population (provision of own housing, infrastructure, characterization of the social sphere, accessibility of social benefits); 3) Demographic parameters; 4) Climatic conditions, the availability of clean drinking water. The UN recommends to assess the living standard by indicators, some of which are not quantified, including (birth rate, mortality, life expectancy; sanitary, housing conditions, level of food consumption and access to social benefits, price level, transport availability, employment and working conditions, ensuring rights and freedoms, social protection system). The most common measure of standard of living is per capita income. In the CIS countries, the indicators used are the living wage budget and the minimum consumer budget (Niyazbekova 2019). In the Republic of Kazakhstan, the criterion for assessing poverty is established by current legislation. To calculate the number of poor people in the republic, the concept of absolute poverty is used. The criterion for this is the cost of living indicator. The legislation determines that the cost of living is the required minimum cash income for 1 person, which in its value coincides with the cost of the minimum consumer basket and ensures the individual meets the minimum needs at the level accepted by society at this stage of development. Since January 2018, the structure of the consumer basket has been changed. A fixed share of expenses on non-food products and services is set at 45% of the cost of the minimum consumer basket. The amount of the subsistence minimum for 2020 is set at 31.183 KZT. Experts have calculated from previous years that the structure of the consumer basket this year will be as follows: 55% - a food basket, 45% - non-food products and services (Blokhina 2018). To assess the poverty level in the country, the so-called equivalence scale is used 0.8 for every second and subsequent family member. The current legislation established that for calculating the average per capita income, two approaches are used: 1) The results of a sample survey of household budgets (which are carried out quarterly by the relevant state bodies); 2) An assessment of the nominal incomes of the population at the macro level (this generalizing indicator is calculated on the basis of data on enterprises and

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organizations on the average wage, paid social transfers, income from entrepreneurial activity, etc.). In addition, since 2001, the opinions of households have been revealed in the republic on the basis of a questionnaire, which contains aspects such as satisfaction in housing and the environment, access to education, healthcare, etc. Thus, according to the results of a household survey, the following opinions were identified regarding the causes of poverty (Table 1) (Niyazbekova 2018). Table 1. Causes of poverty based on household survey in Kazakhstan (%) Low income 70,4 Absence of permanent job 21,7 Low pension 20,7 Low quality of education 18,2 Health problems 14,9 Inadequate qualification, work experience 13,5 Absence of work 9 There are socially unadapted members in the family 2,6 Emergency situations, disasters 1,5 Theft, robbery 0,2 Other 2,5 Source: done by authors

There are problems of a methodological nature. In world practice, the recommended value for assessing poverty for the CIS countries is USD 4.3 per person per day. In Kazakhstan, the poverty level is set at 70% of the subsistence level (from October 1, 2019), it was gradually increased from 40%. Meanwhile, in a number of countries it is legally established that the poverty level coincides with the subsistence level. This explains the fact that the poverty level in Kazakhstan, according to official statistics, is lower than the corresponding indicator of other countries (Fig. 2). Thus, we can conclude that there are drawbacks in the methodology for assessing the level of poverty, since the level of poverty does not reflect the real situation. In Kazakhstan, inequality and poverty are measured by consumption (Fig. 3). Meanwhile, in world practice, a different approach is used as a criterion - per capita cash income. This complicates international comparisons and does not show the real situation in the republic The second problem is the shortcomings in the methodology for assessing the cost of living, which serves as the basis for calculating social indicators (including poverty), the amount of benefits paid by the state to socially disadvantaged groups of the population. The cost of living is calculated on the basis of the consumer basket, which in each country has its own significant differences. Consider the features of its formation in Kazakhstan and Russian practice.

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threshold value

Kazakhstan

103

Russia

Fig. 2. The poverty level in Kazakhstan and Russia in 2015–2018. Source: According to the Republic of Kazakhstan Committee on Statistics

Fig. 3. Ratio of income used for consumption, with a living wage. Source: According to the Republic of Kazakhstan Committee on Statistics

If the consumer basket in Kazakhstan contains 43 names of goods and services, then in the Russian Federation - 156, i.e. 3.6 times more. The ratio between the food and non-food parts of the consumer basket in Kazakhstan is 55:45, in Russia - 50:50, in some European countries - 20:80. If we consider the cost of the consumer basket, then in Kazakhstan it is 25,459 KZT, in Moscow - KZT 82,402 (RUB 15,092), that is, in Kazakhstan it is 3.4 times cheaper. Thus, the cost of the consumer basket, which is the cost of living, is far from reality. The standard of living of Kazakhstanis is directly related to solving the problems of unemployment. In the context of the crisis, government support measures are needed to prevent job cuts, stimulate the development of private initiative and self-employment. Government agencies need to step up employment centers, especially in remote regions with financially poor local budgets.

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Assessment of living standards in Kazakhstan requires improvement of the methodology. First of all, a review of the composition and structure of the consumer basket is necessary. The value of the living wage does not reflect the real situation and in this form cannot objectively serve as the basis for calculating social benefits. The poverty level in Kazakhstan is also not true, the gap between this indicator in cities and rural areas is widening. First of all, it is necessary to revise the poverty assessment methodology. In our opinion, in order to ensure an objective assessment, the poverty criterion should be brought from 70% of the cost of living to 100%, i.e. the cost of living should indicate the poverty line. Secondly, it is necessary to carefully study the issues of “filling” the consumer basket. In its current form, it does not reflect the size of the minimum human needs, neither in terms of the set of goods and services, nor in the value of the products included in it. Thirdly, to assess poverty, it is necessary to take into account not only incomes, but also property, and the provision of housing for people (Averkin 2018). This is due to the fact that, as a rule, the poor include young families who do not have their own housing, who are forced to spend their income not only on food, but also accommodation (payment of rent, mortgages). Fourth, public authorities should carefully assess the social needs of residents living in different regions. For the objectivity of such an assessment, we should switch to using the average wage indicator and make a weighted multi-factorial assessment of its formation in different regions. It should bring the minimum wage, which is one of the social indicators and approved by the law on the republican budget for the current year, to 50% of the average wage in the republic. This will create real mechanisms of social protection, taking into account the differentiation of the regions of the republic.

4 Conclusions Summarizing the above, noted that in order to solve these problems it should be considered appropriate to conduct the following activities: – revision of the composition of the consumer basket, taking into account the current level of prices for goods and services; – implementation of measures to reduce poverty; – the creation of effective incentives for the development of entrepreneurship; – consolidation at the legislative level to prevent employers from reducing jobs; – promoting youth employment, the development of regional employment centers; – review of the methodology for calculating social benefits, the minimum consumer basket in order to create effective state guarantees to support socially vulnerable segments of the population.

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Household Food Security in Kazakhstan Ainur S. Baidalinova1(&) , Shakizada U. Niyazbekova2 Zhanar Baigireyeva3 , and Assem Myrkanova4

,

1

Financial Academy, Nur-Sultan, Republic of Kazakhstan [email protected] 2 Moscow Witte University, Moscow, Russian Federation [email protected] 3 Kazakh Humanitarian Juridical Innovative University, Semey, Republic of Kazakhstan [email protected] 4 L.N. Gumilyov Eurasian National University, Nur-Sultan, Republic of Kazakhstan [email protected]

Abstract. This study focuses on household food security issues in Kazakhstan at the current stage of development. The food security of households in Kazakhstan, in this study, is calculated from the perspective of economic and physical accessibility of families of the Republic of Kazakhstan to food products. Today, the problem of household food security is exacerbated by insufficient quantities of food, rising food prices, as well as increasing trends in the consumption of harmful, “unhealthy” food, poor-quality, falsified foods. Research Outcomes: 1. The study found that the economic availability of food in Kazakhstan remains low, due to the fact that the growth rate of monthly average per capita food expenditures is higher than the growth of real cash income indices. 2. The analysis showed that the physical accessibility of food is quite high due to the successful implementation of the state policy on the state program “Nurly Jol” for 2015–2019. There is a low level of food deprivation in the country, on the basis of which the country will not face the threat of hunger in the future. 3. The threats to household food security in Kazakhstan are manifested in economic access to food. Under the current conditions, the government needs to: review the cost and structure of the consumer basket upwards, finance employment support programs, blue prints to employ the unemployed, regulate the level of food prices and provide targeted food assistance. Keywords: Food security
Accessibility
Food security assessment
Financial availability
Metrics
Revenue
Costs
Population
Famine
Food deprivation
Consumer basket
Subsistence level JEL Code: D11


I31
Q18

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 107–114, 2021. https://doi.org/10.1007/978-3-030-59126-7_13

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1 Introduction A country’s food security is an integral part of its economic well-being and a fundamental vector of its national security. Today, the problem of food security of the state is aggravated by the insufficient quantity of foodstuffs caused by natural and climatic disasters, which in turn cause drought, floods, crop failures, this affects yields, the volume of agricultural production; unsteady pricing in the food market; and also by growing trends of eating harmful, “unhealthy” food, feeding with poor quality, falsified food. Thus, the above factors affect the population’s access to food and their health. Household food security refers to the level of economic and physical access to safe and quality food at the family level. Abroad, a lot of attention is paid to the problems of household food security, while in the CIS countries and Kazakhstan, among others, most scientists study it as part of the state food security. Many articles and studies have been devoted to the problems of food security, but the food security of households in Kazakhstan at the current stage of development has not been studied, our study is designed to fill the gap in the analysis of food security in Kazakhstan.

2 Background and Methodology In the process of research, system analysis, construction of information processing methods, and others were used. In this article household food security from the point of view of economic, physical availability of food, level of food deprivation is investigated. The economic accessibility of food characterizes the level of a citizen’s income, which allows him to buy food at least at a minimum level of consumption, regardless of social status and location.

3 Discussion and Results It is well known what social importance and significance is attached to the availability of food in the food basket for the citizens of the country. The Government of the Republic of Kazakhstan should carefully monitor the formation of pricing policy in the food market and implement state regulation not only on problematic issues, but also to form preventive measures in accordance with the pricing policy of socially important food products, to establish equal access to all important products. Table 1 shows the criteria for assessing the level of economic access to food.

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Table 1. Criteria for assessing the level of food availability No. Criteria

Level High Middle Low Critical 0,0 0,01–0,10 0,11–0,20 Over 0,20 0,0–0,07 0,08–0,20 0,21–0,70 Over 0,70

1 2

Poverty coefficient Coefficient of purchasing national income capability 3 Gini income concentration coefficient 0,0–0,10 0,11–0,30 0,31–0,50 Over 0,50 Note – compiled by the authors

Table 2 shows the scale of food availability for some countries. Table 2. Scale for assessing the level of food availability No.

Indicators

1

Food availability coefficient Countries

2

Standards of living High Middle Below 10% 10–20%

USA, Great Britain, Switzerland Note – compiled by the authors

France, Spain, Italy, Portugal

Low 21– 30%

Critical Over 30%

Latvia, Estonia

Belarus, Ukraine, Moldova

According to the FAO (Food and Agriculture Organization of the United Nations) methodology, a significant indicator of food security monitoring is the rate of food deprivation, calculated as the proportion of the population that eats food below the minimum acceptable level of calories. The ultimate goal is to achieve food security for all and make sure that people have regular access to enough high-quality food to lead active, healthy lives. For Kazakhstan, it means increasing productivity and sustainability of agriculture, forestry and fisheries - promoting evidence-based policies and practices to support high productivity agricultural sectors (crop, livestock, forestry and fisheries) while ensuring sustainable use of natural resources. Achieving these nutrition-related goals requires that national and sectoral development policies and programmes are complemented by effective community-based action aimed at improving household food security and promoting the year-round consumption of nutritionally adequate diets. If the proportion of the population suffering from hunger is less than 5 percent, it is considered that the level of food security in the state is high enough, if more than 35 percent, then the country faces the threat of hunger. But at the same time, the daily calorie intake for the normal life of a person is 2600, while the consumption of food is 2150 calories, a person is undernourished. In this article, we will study household food security from the perspective of economic,

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Table 3. Coefficients to assess the level of economic availability of food in Kazakhstan for 2010–2018 No. Coeff.

2010

2011 2012

2013 2014

2015

2016

2017

2018 Average Rate

1 2

0.07 0.35

0.06 0.35

0.03 0.32

0.03 0.29

0.03 0.28

0.03 0.29

0.04 0.29

Poverty coeff. Purchasing capability coeff. 3 Gini coeff. 4 Food availability coeff. Note – compiled by

0.27 0.28 0.207 0.21

0.04 0.32

0.28 0.27 0.195 0.19

0.03 0.31

0.27 0.27 0.27 0.28 0.28 0.189 0.184 0.175 0.172 0.16

0.04 0.31

Middle Low

0.28 0.185

Middle Middle

the authors

physical accessibility of food, the level of food deprivation. Table 3 presents the results of the calculation of coefficients to assess the level of economic availability of food. Analysis of Table 3 leads to the conclusion that all coefficients for estimating the level of economic availability of food, in general, are acceptable, indicating that the majority of the population has no nutritional problems and does not experience hunger. The average level of economic availability of food in Kazakhstan in the period from 2010 to 2018 was estimated at 18.5%, which characterizes the average standard of living in our country. The overall economic availability of consumer goods remains low due to the fact that the growth rate of the CPI for food commodities is higher than that of real money income indices. As a percentage of the previous year, the average annual growth rate for the period 2010–2018 is about 4 per cent and the CPI is 7.5 per cent per annum. Application of methods of regression-correlation analysis allows to estimate force of interrelation between factors and results of investigated indicators. Thus, between these two indicators there is a weak inverse relationship with the correlation coefficient (r = −0.34), which suggests that the dynamics of CPI has a negative impact on real monetary incomes of the population in Kazakhstan. A particularly sharp decline in their purchasing power is observed after 2012 and 2014 due to a set of reasons. This result was significantly affected by factors such as the general global economic downturn and the devaluation of the KZT in 2014 due to the country’s balance of payments problem due to imports of consumer goods, respectively. The raw material orientation of Kazakhstan’s economy and the high share of imports of goods and raw materials, the low share of production of own goods with high added value led to a strong recalculation of prices for all types of goods, including food. The economic availability of food remains low overall due to the fact that the growth rate of monthly average per capita expenditure on foodstuffs is higher than that of real cash income indices. Between these two indicators there is a direct below average dependence with correlation coefficient (r = 0,51), which suggests that regardless of the uneven dynamics of real monetary incomes, the average monthly per capita expenditure on food products grows steadily.

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The structure of cash expenditures of the population of the Republic of Kazakhstan for the years 2010–2018 shows that up to 93% of consumer spending per month on average, and up to 45% of average per capita cash expenditures are spent on food products. The population’s ability to save and invest is at a very low level, which can be considered a risk factor not only for food, but also for economic security in general. Table 4 shows the indicators of physical accessibility of food in Kazakhstan for 2014–2018. Table 4. Food accessibility indicators of the RK for 2014–2018 No. 1

Indicators Share of paved roads length of total length of roads, % 2 Density of roads per 100 km2 area 3 Density of railways per 100 km2 area Note – compiled by the authors

2014 89.6

2015 89.3

2016 90.3

2017 90.3

2018 90.4

3.2 0.55

3.2 0.55

3.2 0.57

3.0 0.59

3.1 0.61

Analysis of Table 4 leads to the conclusion that the physical availability of food is quite high due to the successful implementation of the state policy on the state program “Nurly Jol” for 2015–2019. Its strategic goal is to ensure the integration of Kazakhstan’s transport infrastructure into the world transport system. The nutritional adequacy (caloric value) indicators in Kazakhstan are shown in Table 5. Table 5. Nutritional adequacy (caloric intake) indicators in the Republic of Kazakhstan Indicators

Coefficient of variation of energy value food consumption (by FAO), %

Minimum requirements for energy value - MDER, (cal/person/day)

Energy value of food consumed - DEC (cal/person/day)

Note – compiled by the authors

Years

2005 2011 2015 2016 2017 2005 2011 2015 2016 2017 2005 2011 2015 2016 2017

Republic of Kazakhstan 25.2 27.8 29.5 30.1 30.8 1,854 1,844 1,872 1,819 1,868 2,420 3,140 3,164 2,975 3,192

Included: Urban location 24.2 26.6 29.0 31.4 31.8 1,857 1,843 1,881 1,824 1,867 2,390 3,070 3,112 2,935 3,162

Rural location 26.1 29.0 30.9 31.8 31.9 1,849 1,845 1,860 1,813 1,870 2,460 3,230 3,233 3,028 3,233

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Indicators of food deprivation in Kazakhstan in 2018 were 3, including 3 among urban areas and 3 among rural areas. It can be concluded that the country has a low level of food deprivation, the country will not face the threat of hunger in the future. Based on the analysis of the coefficient of variation in the energy value of consumed food, it can be concluded that at its value - 30, there is an uneven distribution among households manifested by income (or expenditure), at value - 20 it is manifested by biological factors. This indicator does not have a significant decreasing trend over the study period. Thus, the main threat to household food security in Kazakhstan is the economic availability of food. Economic availability of food is linked to households’ cash income and poverty reduction, as low income and poverty limit the right of households to buy necessary food for a healthy, active life.

4 Conclusions Thus, the economic availability of food in Kazakhstan is determined by the minimum subsistence level, the minimum monetary income per person, which is equal to the value of the minimum consumer basket. The authorized body in the field of state statistics calculates a food basket according to scientifically substantiated physiological norms of food consumption, which are approved by the authorized body in the field of sanitary-epidemiological well-being according to the requirements of the authorized body in the field of public health. It should be noted that the number of poor people in Kazakhstan is increasing every year and in 2018 real incomes of the population of Kazakhstan increased by only 5%. Thus, without government regulation and support, household cash incomes cannot be increased and poverty cannot be alleviated. In this context, the government needs to: review the value and structure of the consumer basket upwards, finance employment support blue prints, employment programs for the unemployed, regulate food prices and provide targeted food assistance.

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Impact of Demographic and Gender Factors on Types of Communication Promotion in Social Networks Lyudmila G. Akhmaeva(&), Dmitry V. Dolgopolov, and Anastasia I. Eremeeva State University of Management, Moscow, Russia [email protected], [email protected], [email protected]

Abstract. The aim of the article is to analyze the evolutionary development of social network platforms as advertising platforms for attracting and interacting with the target audience. Using the methodology of analysis of the engagement rate of the audience of advertising posts in the accounts of popular bloggers, the conclusion is made about gradual evolutionary change of the engaged audience of social networks of different ages of creation, as well as about specialization of platforms on gender and demographic segments. The article gives recommendations on further directions of research of the phenomenon of advertising market development in social networks in the context of the evolutionary institutional theory. Keywords: Marketing Advertising integration


Advertising
Bloggers
Target audience


JEL Code:: M37

1 Introduction In today’s world, personal blogs are gradually winning over print media, radio, television news and analysis programs in the fight for audience attention, and with them, such traditional methods of contact with the audience as outdoor advertising, glossy magazines, leaflets. Authors start blogs to convey their own thoughts and positions to the interested audience, they provide an opportunity to describe their views on things, events, phenomena, directly contacting the audience. Users have more confidence in blog posts than in news reports because most blogs are uncensored, with a certain character and assessment. Popular blog authors can boast of an audience that exceeds that of many TV channels, and television and traditional online media are far behind in terms of trust. How can blogs be useful from the viewpoint of marketing? They are very useful for tracking user trends and moods in the industry, as well as for building brand trust and proximity to the target audience.

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 115–123, 2021. https://doi.org/10.1007/978-3-030-59126-7_14

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Today, it is bloggers who are at the forefront of influencer marketing—and judging by trends, the situation will not change in the near future. Traditional marketing tools are getting out of date: people do not pay attention to bright billboards and banners in the streets, automatically skip ads in social networks, do not hear audio advertising in supermarkets and do not watch commercials on TV. Influencer marketing, on the contrary, is becoming more and more relevant in digital format, allows to effectively build communication with the target audience and attract new followers. It gives people the opportunity to explore the brand on their own, just by pointing the right direction. The best way to make a statement today is through someone who people trust. The most interesting posts from the point of view of the blogger’s audience are actively quoted, discussed in hundreds and thousands of comments, thus popularizing the blogger, increasing their credibility and trust in them by the audience. Undoubtedly, this phenomenon represents a certain subculture in the media space, as it has all its characteristics: stable patterns of behaviour, special worldview, slang, values. Thus, in connection with popularity of Internet communication and strong penetration of the mobile Internet into modern life, bloggers to a certain extent already act as an alternative to professional opinion.

2 Methodology Modern scientific research in the field of marketing and advertising in social networks is quite rare, despite the increasing role of this media in modern society. Most western researchers study the phenomenon of social networks and their growing popularity in connection with modern concepts of sociological science—the impact of social networks on the development of society, organizations and individuals (Pfarrer et al. 2019). The researchers also consider the engagement of different demographic groups in “classic” social networks (Gil-Clavel and Zagheni 2019)—such as Facebook, Twitter, MySpace and others, which are now fully established market platforms for the promotion and monetization of content. This article examines the development of modern social networks in the context of the formation of a market advertising environment within them for the monetization of content and placement of various types of advertising. By analyzing the engagement rates of the audience of popular accounts a comparison is made between advertising and non-promotional posts at various venues. For the purpose of unification of the calculation process engagement rate is calculated the following way: Engagement rate ¼

quantity of likes þ quantity of comments : quantity of followers of the account

To meet the purposes of this article we will limit ourselves to examples of the impact of demographic and gender factors on the types of communication promotion of content.

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3 Results Youtube. YouTube is the world’s largest video hosting service, which this year celebrates its 15th anniversary. From a family video hosting service, it has grown to a media platform that provides billions of views with vivid video content created by professionals and amateurs around the world. It is physically impossible to watch all videos posted on YouTube: every minute users of this video hosting post about 500 h of new videos. The service has a mostly young audience: according to YouTube’s own estimates, the core audience is people aged 18 to 34 years. In total, about two billion people use the service, which is more than a third of all Internet users in the world. Together they view approximately one billion hours of content a day, using the service primarily from mobile devices (smartphones and tablets). According to YouTube’s own estimates, mobile devices account for about 70% of all viewing time (Cooper 2019). Despite its mostly young audience, YouTube has a place for authors of all ages and orientations. One of the most famous and respected Russian bloggers targeting adult male audiences is Puchkov (2020), also known as Goblin. His activity can serve as a successful example of effective communication between the author of content and its viewers, many of whom are mature adults. By the beginning of 2020, 1.6 million people have signed up for Dmitry Puchkov’s Channel. According to the research of the Romir holding company, Dmitry took the fourth place in the trust rating in the category “Internet, Geography: Russia, cities 100 thousand +” along with Yuri Dud, Anastasia Ivleeva and Garik Kharlamov (Romir 2019). In his work, Dmitry uses all popular tools and social networks, including his own website, Telegram-channel, Facebook, Twitter, Instagram, YouTube channel, VKontakte, LiveJournal. Content is identical at all sites, placed in parallel, this is done by specialists from Dmitry’s team. Video and audio are also placed in the iTunes Store, audio is released in Spotify and LitRes and news is put in RSS. According to Dmitry Puchkov himself, his target audience “ranges from middle and senior students to about 35-year-old people. 95–97% are male, graduating or already graduated. First, and the most important thing: they have money, unlike children, they can buy something for themselves. For example, it is the most important feature for advertisers, because a child may have 5 million subscribers, but these subscribers do not have money, and they are absolutely meaningless, even if there are 10 million of them—they will not buy a video card for 2 thousand dollars, they do not have that much money, their mother will not give it. There is a large percentage of people involved in IT, a lot of those who play computer games, those who love movies, are interested in a variety of things. For the most part, they are those who are politically active, usually left-wing people. I cannot say that they are communists, but they are people who, at least in their own country, have a positive attitude towards it and respect for their own ancestors, their deeds, their accomplishments, they worry about defeats. I think it’s a normal Russian person. I call everyone who lives in Russia a Russian. That’s the audience. I think it’s a good audience. It always turns out at first that I influence it, like, let’s say, a senior partner, and then a community is formed, and they influence each other within this community, without my participation. Well, there is a mediated community, the one that lives on its own, without me” (Oper 2019).

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With this quote, Dmitry reports that advertising integration on his channel should be clearly segmented by demographics (students and adults aged 35 years and older) and gender (men). Advertised products, goods and services should be of interest to both Dmitry himself and his particular audience. Dmitry’s channel on YouTube contains a wide variety of content on several main topics, each of which has its own section: Blue Phil, OperGamer, Goblin News, Razvedopros, In prehensile paws, Caba40k, Soapy Oper. Let us look at engagement rates by the number of subscribers of the most popular videos for each of the section in the history of their existence. 1. Goblin News: a video about the state revolution in Ukraine. 4,048,808 views, 113 thousand likes, 16 thousand dislikes, 11,364 comments. The engagement rate is 6.7%. 2. Blue Phil: a review of the movie “Viking”. 2,931,721 views, 41 thousand likes, 4.2 thousand dislikes, 4,055 comments. The engagement rate is 2.5%. 3. Caba40k: a video about cooking steaks with blogger Slavny Druzhe. 2,044,884 views, 65 thousand likes, 2.3 thousand dislikes, 1,378 comments. The engagement rate is 4%. 4. Razvedopros: an interview with American policeman Mikhail. 2,130,369 views, 66 thousand likes, 2.4 thousand dislikes, 2,392 comments. The engagement rate is 4.1%. 5. OperGamer: a video about the game Dota 2 being erroneously mentioned as “Doca 2” in the news. 701,850 views, 44 thousand likes, 1,200,000 dislikes, 2,282 comments. The engagement rate is 2.8%. 6. In prehensile paws: a video about the new YouTube rules. 302,007 views, 14,000 likes, 1.1 thousand dislikes, 1,388 comments. The engagement rate is 1%. 7. Soapy oper: a review of the series “Rome” with the historian Klim Zhukov: 1,090,090 views, 21 thousand likes, 903 dislikes, 800 comments. The engagement rate is 1.4% (Youtube 2020). Thus, the impressive number of views of Dmitry’s videos, as well as a tangible indicator of audience engagement illustrate the significant impact of demographic and gender factors on the content he promotes. It should be noted that advertising integration on the channel is quite rare, mainly in the section “In prehensile paws” (computer and electronic equipment) and “Blue Phil” (video projectors). The main monetization component of the channel falls on payments from YouTube from ads inserted into commercials automatically. It should also be noted that in many of his commercials Dmitry promotes his own online store OperShop, as well as some friendly establishments such as Mollie’s bar in St. Petersburg. Instagram. According to statistics, Instagram was among the three most popular social networks in 2019 (Mediascope 2019). The audience age is 12–24 years. Blogging is actively developing on Instagram. The authors of many accounts shoot small videos (vines) on different topics. Unique and high-quality content allows them to monetize their accounts with the help of advertising. However, users are quickly losing interest in posts with aggressive advertising, and bloggers are figuring out how to present ads in a way that does not deter subscribers

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and attract advertisers. For example, a popular blogger Masya Shpak positions herself as a modern woman who takes a great look over her figure, does sports and sticks to the principles of healthy nutrition. She shoots videos of her gym trainins, cooking lowcalorie meals and visits to beauticians. The number of subscribers to her account has already reached two million. There is skillfully hidden advertising in almost all Masya’s videos. For example, the author of the blog inserts a pot of GEFEST brand into the frame in the culinary video, and Masya is wearing sports clothes by the brand Ura Eva in the video from the gym. There is an advertising text in the post that does not call for action, but sounds like information. One of the most popular bloggers on Instagram today is Anastasia Ivleeva, who takes the first place in the top Instagram accounts of Russia (Adinblog 2020). The girl positions herself as a humorous blogger and shoots small videos. She started her Instagram page in 2015. In the first year her account attracted three million subscribers, and now there are over 14 million, most of the audience is girls (BrandAnalytics 2020). Anastasia also launched the Agentshow channel on YouTube, with three million subscribers and 8 million views each. She also has a page on the social network “VKontakte”, but it is more supportive than basic. Despite the fact that Anastasia Ivleeva has become a popular TV presenter on “Friday” channel, she continues to run the Instagram page and place advertisements on it. The blogger uses 2 ways to increase its efficiency: humorous vines and contests. In order to identify the engagement rates by the number of subscribers, we will consider 5 promotional videos and 5 contests that were held in 2019 on the Instagram page of Anastasia Ivleeva. 1. The most successful in all indicators was the contest that Anastasia held together with PROSTO brand: the engagement rate is 8.7% (5 thousand comments and more than one million likes). 2. The second most popular vine was the advertisement of McDonalds. The engagement rate of the video is 8% (5 thousand comments and a million likes). 3. The third advertising vine is about jewelry brand Sokolov Russia. The engagement rate of this video is 8% (4 thousand comments and over a million views). 4. The next most popular video is advertising integration with the Lamber brand. The engagement rate of the video is 7.8% (3 thousand comments and a million likes). 5. The joint contest with the company Tenaten brought together 5 thousand comments and a million likes. The engagement rate is 7.6%. 6. The advertising vine, shot before the launch of the interactive screen with Orbit invitations, collected 900 thousand likes and 3 thousand comments. The engagement rate is 6.9%. 7. Another vine to promote the Philips brand received 4 thousand views and 900 thousand likes. The engagement rate of the video is 6.5%. 8. The following popular video was a joint contest with the well-known blogger Ida Galich and Aviasales. The engagement rate of the video is 6.5%. (800 thousand likes and 55 thousand comments).

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9. Dance Challenge with Pepsi got only 600 thousand likes and a thousand comments. The engagement rate is 4%. 10. Direct advertising integration with Kotex brand received the lowest engagement rate—3% (4 thousand likes and 400 thousand comments). Having analyzed the commercials, we can conclude that humorous advertisements and contests are the most effective tools of Instagram advertising market. Serious commercials, where social issues are brought up, showed the lowest engagement rate of subscribers. This shows that only humorous advertising vines are suitable for entertainment content. TikTok. One of the fastest growing platforms for teenage demographics (audiences under 18 years of age) is the social network TikTok, which provides an opportunity to download short videos to different users. According to the platform itself, more than 40% of its audience (more than half of which are women) are teenagers, who on average spend about 40 min a day watching videos from the platform. Users watch about 10 billion clips a month (Vasilkova 2019). At the same time, we can speak about the growing popularity of the platform among teenagers, which is expressed both in successful examples of commercial blogs with integration into other social networks— for example, supporting commercial accounts of facelifting coach Marina Dorn on Instagram and TikTok [Torshina]—and the desire of large commercial companies to carry out advertising integration on the platform, which will be discussed below. As an example of successful communication impact on the audience of the platform we can consider the TikTok-account Anastasia (Anastasia_yseeva_17), which is in the top 3 Russian channels of the platform in terms of the number of subscribers (more than 3.2 million people), likes and the number of shares of the video (users who shared the video on the platform by placing it in their accounts) [Account Rating]. As mentioned above, the main part of the mutual integration of the platform takes place in Instagram social network, where the channel owner also has an account (@anastasia_yseeva), as well as a separate page for promotional offers (@pr.yseeva) with 427 thousand and 1.2 thousand subscribers, respectively [Instagram]. The blogger is also represented in the social network Vkontakte—a personal page with about 2 thousand friends and 3 thousand subscribers, as well as a personal fan group with 675 subscribers (VK). It should be noted that the most active communication and promotion is carried out through the platform TikTok, while accounts on other social networks have a supporting function, which is expressed in the number of posts—if there were more than 600 videos published on TikTok, and only a little over 100 videos on Instagram, this indicates that the blogger has chosen social network TikTok as the main platform for their own promotion. However, the opportunities for advertising communication of the platform are very limited—despite the high level of engagement for an account on average (about 100 thousand likes per video), the engagement of the audience is very uneven—the number of likes on one video can vary from 15–20 thousand to 300 thousand, which is more than three times the spread in terms of engagement, and at the same time one of the most popular videos collected more than 600 thousand likes. The high level of instability in terms of engagement rates is also reflected in the low cost of advertising

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integration, as well as limitation of their number—according to one of the unofficial markets for advertising placement in TikTok, the cost of one advertising integration may vary from 50 rubles (with 30–40 thousand subscribers and several hundred thousand likes in the account) to 1000–2000 rubles (if the number of subscribers exceeds several hundred thousand with the number of likes in several millions) (Vkontakte 2020). Such low price policy of bloggers is explained both by the unwillingness of large advertisers to place integration into the platform with unstable communication efficiency, and by the predominance of teenage audience with relatively low level of effective demand. In her work Elena Torshina gives a telling example of blogger Ilya Monarch—his blog about crediting has a very narrow audience on TikTok platform (about 200 thousand subscribers with 600 thousand likes), and the main client traffic comes from Instagram platform (Torshina 2019). Let us look at the engagement rates by the number of subscribers of four promotional videos published on the channel in 2019: 1. Direct advertising integration through hashtag challenge with two major brands, retailer Magnit and Pepsi, is the most successful example—the engagement rate is almost 5.5% (190 thousand likes and almost 500 comments); 2. The second video with the same direct advertising integration shot in backstage style—the engagement rate is 1.9% (66.5 thousand likes and 150 comments); 3. Direct advertising integration with Nars Cosmetics brand—the engagement rate is 2.1% (76 thousand likes and 130 comments); 4. Direct advertising integration with Beeline telecommunications brand has the lowest engagement rate among commercials—1.4% (51.5 thousand likes and 170 comments) (TikTok 2020). The average audience engagement rate on the channel is about 3% (about 100 thousand likes on a video and about 300 comments), and as noted above, this average retains a high degree of variability—from 17.2% (the most popular video on the channel) to just over 1% (video with indicators of about 30 thousand likes and 100 comments). At the same time, it should be noted that the advertising integration on the channel is quite aggressive—in all four cases mentioned above, the description for the video contains the name of the product in the form of a hashtag, in advertising integration of Beeline corporate colors (black and yellow) are used, and demonstration of the product takes up most of the time the video. Aggressive advertising does not affect the level of audience engagement in any way—despite the aggressive promotion of the video Magnit/Pepsi has 2–3 times higher engagement rates than all other integration. Thus, it can be concluded that the social network TikTok has advantages for advertisers as a platform focused on the predominantly adolescent demographic with a bias towards female audience. Advertisers have opportunities for aggressive posting and collaboration with bloggers in the hashtag challenge format, which allows achieving high numbers of coverage on major blogging channels in the social network, but the platform engagement rates are highly variable and unstable, making it difficult to predict the effectiveness of the platform. For this reason, many channels designed for older demography consider this platform as a supporting or transitional platform for Instagram social network, where the stability of advertising communication is higher.

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4 Conclusions/Recommendations It is necessary to notice that the given research is a basis for further analytical conclusions on evolutionary development of the market environment in social networks— the dynamic analysis could reveal regularities of development of various platforms on stages of life cycle. While, for example, Youtube, as the earliest of the sites presented in the article, quite actively implements a transition from direct aggressive advertising integration to native advertising (at this, advertisers are companies of different levels and countries), aggressive advertising still takes precedence on TikTok, and advertisers are wary of the new type of media—about the same way as they treated YouTube at the stage of its intense growth. Instagram is a good example of active transition from active aggressive advertising integration of large companies to “soft” advertising communications. The study also found that the platforms are actively and firmly interconnected. At the same time, the engaged audience of the platforms is quite conservative in its preferences for content, which forms an attitude to advertising integration, perhaps explained by the QWERTY-effect, described in detail in the evolutionary institutional theory. For this reason, it can be concluded that there is a need not only for additional dynamic research platforms, but also for research in their mutual influence when interacting with the target audience for a particular blogger, as well as the advertiser.

References Pfarrer, M., Barnett, M.L., Etter, M.A., Hannigan, T., Reger, R.K., Zavyalova, A.A.: Social media and social evaluations. Proc. Acad. Manage. 2019(1). https://journals.aom.org/doi/10. 5465/AMBPP.2019.13845symposium. Accessed 09 Feb 2020 Cooper, P.: 23 YouTube Statistics that Matter to Marketers in 2020 (2020). https://blog.hootsuite. com/youtube-stats-marketers/. Accessed 09 Feb 2020 Gil-Clavel, S., Zagheni, E.: Demographic differentials in Facebook usage around the world. In: Proceedings of the Thirteenth International AAAI Conference on Web and Social Media (2020). https://arxiv.org/abs/1905.09105. Accessed 09 Feb 2020 Useeva, A.: TikTok-account of Anastasia Useeva (2020). https://www.tiktok.com/@anastasia_ yseeva_17/video/6761398342346984710. Accessed 06 Feb 2020 Vk. Exchange of TikTok bloggers in social network Vkontakte (2020). https://vk.com/tik_tok1. Accessed 06 Feb 2020 Vasilkova, P.: The Russian audience of TikTok is 8 million people per month. Adindex.ru (2020). https://adindex.ru/news/digital/2019/05/27/272427.phtml. Accessed 06 Feb 2020 Goblin, D.: Puchkov about YouTube, videobloggers and Roskomnadzor (2020). https://oper.ru/ news/read.php?t=1051619224&name=Goblin. Accessed 02 Mar 2020 Puchkov, D.: Dmitry Puchkov’s channel on YouTube (2020). https://www.youtube.com/channel/ UCWnNKC1wrH_NXAXc5bhbFnA. Accessed 09 Feb 2020 Adinblog. Portal Adinblog (2020). http://adinblog.ru/%D1%82%D0%BE%D0%BF/. Accessed 09 Feb 2020 Brnalytics. Portal BrandAnalytics (2020). (https://br-analytics.ru/mediatrends/authors/instagram/). Accessed 09 Feb 2020

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Mediascop. Portal Mediascop (2020). https://mediascope.net/upload/iblock/f97/18.04.2019_ Mediascope_%D0%95%D0%BA%D0%B0%D1%82%D0%B5%D1%80%D0%B8%D0% BD%D0%B0%20%D0%9A%D1%83%D1%80%D0%BD%D0%BE%D1%81%D0%BE% D0%B2%D0%B0_%D0%A0%D0%98%D0%A4+%D0%9A%D0%98%D0%91%202019. pdf. Accessed 09 Feb 2020 T30P. Rating of Russian TikTok accounts (2020). https://www.t30p.ru/TikTok.aspx. Accessed 06 Feb 2020 Romir. Who does Russia trust in 2020. Internet activists (2020). https://romir.ru/studies/romirkomu-doveryaet-rossiya-v-2020-godu–internet-deyateli. Accessed 09 Feb 2020 Iveleeva, A.: Instagram social network page of Anastasia Iveleeva (2020). https://www. instagram.com/_agentgirl_. Accessed 09 Feb 2020 Torshina, E.: How to get free traffic in TikTok, transfer it to the Instagram and sell it there: cases and reviews of Matvey Severyanin’s (infobiz), Ilya Monarch’s (credit lawyer), Marina Dorn’s (facelift) TikToks. Personal blog of Elena Torshina (2020). https://torshina.me/kak-poluchatbesplatnyij-trafik-v-tiktoke-perelivat-ego-v-inst-i-tam-prodavat-kejsyi-i-otzyivyi-o-tiktokematveya-severyanina-infobiz-ili-monarxa-kreditnyij-yurist-marinyi-dorn-fejsfitnes/. Accessed 06 Feb 2020

Analysis and Development of Algorithms for Blind Estimation of Channels with Memory in OFDMA Systems Evgeny S. Semenov(&), Lyudmila K. Rozhkova, and D. G. Osama Al-Qadi Volgograd State University, Volgograd, Russia [email protected], [email protected], eng. [email protected]

Abstract. Objective: The purpose of this work is to analyze and develop methods for blind estimation of channels with memory in OFDMA systems. Methodologies/approaches: To achieve this goal, the following research tasks were set: 1) To review technologies of OFDM and OFDMA system; 2) To review technologies of multiple access in OFDM systems, including OFDMA; 3) To analyze estimation methods for the impulse response of channels with memory, including methods for blind estimation; 4) To develop a model of signal transmission in the OFDMA system; 5) To develop an algorithm and use it to estimate the impulse response of the transmission channel in the given model; 6) To estimate the received discrete message in the received model, based on the received impulse response readings. Results: Based on the theoretical data presented in this paper, an algorithm for estimating discrete messages based on the values of impulse response estimation of the transmission channel has been developed, as well as a signal transmission model in OFDMA system, which is used to estimate the received discrete messages using this algorithm and without it. Value: One of the main tasks is the reduction of error probability when transmitting data in a multiple access system (OFDMA) which can be solved using an algorithm for estimating the received discrete message based on the use of impulse response readings. Keywords: Multifrequency
Transmission
Impulse response
Multiple access
OFDMA
Estimation algorithm development
Model design JEL code: С13


C61
C63
C67
C83

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 124–131, 2021. https://doi.org/10.1007/978-3-030-59126-7_15

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1 Introduction In recent decades, many effective technologies for high-speed wireless data transmission have been developed in the field of telecommunications. One of them is multifrequency transmission (OFDM – Orthogonal Frequency Division Multiplexing). In multifrequency transmission systems, the transmitted stream is divided into several low-speed streams that are transmitted on different subcarriers. At the same time, data rate can be increased without reducing the symbol length and keeping intersymbol interference at an acceptable level. These technologies are the basis of modern cellular communication systems cdma2000, UMTS, Wi-Fi, WiMax, LTE etc. (Manelis 2010). The technology of multi-frequency transmission has become widespread because when applied it overcomes the limitations of increasing channel capacity. Increasing channel capacity along with reducing the occurrence of errors in the transmitted data, is one of the main criteria, requirements for which are constantly increasing. That is why in the current time the task of improving methods and algorithms for processing, as well as models for estimating the received discrete message, is acute. Currently, in relation to the increasing number of devices, and respectively the number of users (clients) of networks, the role of multiple access data transmission systems (OFDMA) is becoming more and more important, since such systems allow data to be transmitted simultaneously to several users. OFDMA can support multiple identical downlink streams or users with different data rates. Based on the state of the subchannel, different baseband modulation schemes can be used for individual subchannels, such as QPSK, 16-QAM, and 64-QAM. This is called adaptive subcarriers, bits, and power distribution or QoS distribution. In OFDMA, frequency hopping, one of the spectrum spreading form, can be used to provide security and resistance to inter-network interference. User data is modulated using a baseband modulation scheme (such as 16-QAM) so that user symbols correspond to the number of allocated subcarriers. symbols are assigned to subcarriers using the assignment map, which is defined by the subcarrier assignment scheme. When all users are mapped to the OFDM symbol, it is passed with the addition of a multi-user profile. On the receiver side, W- user data can be obtained by knowing the subcarrier assignment scheme. Compared to other systems based on OFDM, the implementation of OFDMA systems has a simpler implementation algorithm (Prasad et al. 2009). Thus, reducing the probability of errors during data transmission in a multipleaccess system (OFDMA) is one of the main tasks that can be solved using an algorithm for estimating the received discrete message based on the use of impulse response readings.

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2 Materials and Method The features of OFDM systems and OFDM signals are described in Tarokh (2009), Ajose et al. (2017), Prasad et al. (2009) and Vinokurov (2017). In addition to this, methods for channel estimation based on impulse response, including blind estimation methods, are considered in Manelis (2010), Voroshilin et al. (2011), Arkhipov and Neustroev (2010), Shutov (2013), Goryachkin (2003, 2011), Kartashevsky et al. (2016) and Kuznetsov (2017). Impulse response – system response to the input signal, which is a Delta function (a single impulse under zero conditions). In digital systems, the input signal is a pulse with minimum width (equals to the sampling period for discrete systems) and maximum amplitude. To estimate the impulse response using the least squares method the following expression is used: kMHK ¼




FT RF

1

FT Rsbx

ð1Þ

where sbx– m- dimensional column vector of observations with coordinates; R– positive-definite and symmetric weight matrix; F– matrix of size (m  r). It follows that the optimal estimation of the impulse response is found as a result of a linear operation on the output data. (Voroshilin et al. 2011). The main idea of blind estimation methods is that the estimation is performed on a priori unknown input signal, that is, “blindly”. The essence of the method of blind estimation by least squares smoothing is to use an isomorphic relation between the input and the observed region. The input sequence xk and the observed readings yk in the absence of noise can be represented as (Goryachkin 2011): xt ¼ ½xt ; xt þ 1 ; . . .;   Yt ¼ yt ; yt þ 1 ; . . . ;

ð2Þ

xt;w ¼ spanfxt ; xt þ 1 ; . . .xtw þ 1 ;

ð4Þ

Yt;w ¼ spanfyt ; yt þ 1 ; . . .ytw þ 1 ;

ð5Þ

ð3Þ

where xt,w и y t,w – areas filled with the last input-output vectors. It can be shown that when a channel is identifiable, there is w0 such that for any value of w > w0, the values of xl,w and Yl,w are equal. This implies that the input and observation spaces are identical (Горячкин 2011).

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The isomorphic relation between the input and observation spaces can be written as: Z = Yt;w Uyt þ l;w0 ;

ð6Þ

where Z – space filled with previous and future observations. This method has an attractive feature, which is the ability to jointly estimate the channel length and channel coefficients.

3 Results Based on the methods described above, a model of the OFDMA system was developed using the MATLAB environment (Figs. 1, 2 and 3).

QPSKModulation

Data source

Separation into OFDM blocks

IFFT

Addition of cyclic prefix

Combining OFDM blocks into a sequence

Fig. 1. OFDM transmitter of the developed model

AWNG generator

Multiplexer

AWGN Channel

Demultiplexer

Fig. 2. Transmission channel of the developed model

Separation of sequence into OFDM blocks

Removal of cyclic prefix

FFT

Combining OFDM blocks into a sequence

QPSKdemodulation

Data

Fig. 3. Receiver of the developed model

Based on the results of a series of experiments, the following data were obtained, presented in Table 1.

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Thus, the data obtained show that the number of readings received with error for the first and fourth users does not exceed 49 readings, for the second – 51 readings, and for the third – 48 readings. At the same time, the percentage of erroneous readings on reception is in the range from 4.7% to 4.9%. Table 1. Results of experiments on the model User number 1 2 3 4

Number of errors in the experiment, pcs 1 2 3 4 5 6 7 8 9 10 34 50 67 48 58 29 50 47 54 46 28 68 66 52 65 44 47 46 44 40 31 47 58 50 60 42 51 48 48 39 31 53 59 47 58 46 60 51 44 39

Average number of errors, pcs

Percentage of errors, %

48.3 50 47.4 48.8

4.7 4.9 4.6 4.8

From the above data, we can summarize a series of experiments by averaging the values obtained for each user (Table 2). Table 2. Average of results obtained by the series of experiments Parameters Average number of errors in the user’s at the receiver, pcs Average number of errors at the receiver of the user, %

User number 1 2 48.3 50 4.7

3 47.4

4 48.8

4.6

4.8

4.9

Average value for a series of experiments 48.63 4.75

Based on the data obtained, it can be seen that the average number of erroneous readings on the receiving side for sequences of 1024 readings does not exceed 49 readings. At the same time the error rate at the reception is on average 4.75%. Thus, we can conclude that the developed model of signal transmission with OFDMA system is sufficiently adequate. Simulation of the Algorithm for Impulse Response Estimation On the receiving side, the signal corresponding to the OFDM symbol and observed at the interval Ta= (N + M−1) Δt, is written in the form: (Kartashevsky et al. 2016)
 X Z t; Uj ¼ n  1 ukj hðt  k  D yÞ þ wðtÞ; k¼0

ð7Þ

Where Uj ¼ ½u_ 0 ; u_ 1 ; . . .; u_ N1 Tj – vector of the readings of OFDM-symbol envelope; W(t) – implementation of the additive noise; [.]T – symbol transposition.

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Using the method of least squares (Voroshilin et al. 2011) the values of impulse response estimation H of transmission channel of the developed model were determined, and the envelope values were obtained during the operation of the developed model receiver. According to formula (10), the values of the array were calculated Z(t, Uj), and then a comparison was undertaken between the obtained data with the original sequence and the data obtained as a result of the model. As a result of several experiments on transmission of a digital sequence of 1024 readings, the results were obtained in Table 3. Table 3. Results of experiments in modeling the estimation algorithm User number 1 2 3 4

The number of 1 2 3 4 13 16 28 20 7 36 25 20 10 20 18 17 8 17 20 17

the experiment 5 6 7 8 28 12 20 15 25 17 15 14 24 12 15 16 21 20 19 18

9 20 17 17 14

10 17 18 16 14

Average number of errors, шт

Percentage of errors, %

18.9 19.4 16.5 16.8

1.85 1.89 1.61 1.64

Therefore, the data obtained show that the number of readings received with an error for the first user does not exceed 19 readings, for the second – 20 readings, for the third and fourth – 17 readings. At the same time, the percentage of erroneous readings on reception is in the range from 1.61% to 1.89%. Comparison of results before and after application of the algorithm is shown in Tables 4 and 5. Table 4. Comparison of the average number of errors Average number of errors Before applying the algorithm, pcs After applying the algorithm, pcs

User number 1 2 48.3 50

3 47.4

4 48.8

48.63

18.9

16.5

16.8

17.90

19.4

Average value for a series of experiments, pcs

Table 5. Comparison of error percentages Percentage of errors Before applying the algorithm, % After applying the algorithm, %

User number 1 2 4.7 4.9

3 4.6

4 4.8

4.75

1.85

1.61

1.64

1.75

1.89

Average value for a series of experiments, %

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According to the presented data, it can be observed that in general, after applying the estimation algorithm, the number of errors at the receiver does not exceed 18 incorrectly received readings, and the error rate is 1.75%. In this way, we get that when estimating discrete messages based on the values of the impulse response estimation when processing received data the number of incorrectly received sequence readings decreases by an average of 31 readings. At the same time, the accuracy of receiving data increases by an average of 3%, as shown in Fig. 4.

Average number of errors on recepon

Fig. 4. Comparison of the average number of errors on reception when estimating discrete messages based on impulse response estimation (curve k_h) and without the algorithm (curve k).

4 Conclusion As a result of several experiments, it was found that the estimation of discrete messages based on the values of the impulse response estimation has higher accuracy, i.e. when using this algorithm, the number of incorrectly received readings of the transmitted sequence is on average 31 readings less with a comparison with the received that does not rely on the values of the impulse response estimations. Accordingly, the accuracy of receiving data when using this algorithm increases by 3% on average.

References Manelis, V.B.: Assessment and adaptation of signal parameters of mobile telecommunication systems: Abstract. dis. … Dr. tech. Sciences. Voronezh, Russia (2010) Tarokh, V.: New Directions in Wireless Communications Research. Springer, Boston (2009)

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Ajose, S., Bakare, R., Imoize, A.: BER comparison of different modulation schemes over AWGN and Rayleigh fading channels for MIMO-OFDM system. Int. J. Commun. Netw. Distrib. Syst. 18(2), 129–147 (2017) Prasad, Ramjee., Rahman, Muhammad Imadur., Das, Sekhar Suvra, Marchetti, Nicola: Singleand Multi-carrier MIMO Transmission for Broadband Wireless Systems. River Publishers, Denmark (2009) Voroshilin, E.P., Rogozhnikov, E.V., Vershinin, A.S.: A method for improving the accuracy of estimating the transfer function of a radio wave propagation channel. Bull. Tomsk Polytech. Univ. 5, 133–137 (2011) Arkhipov, A.E., Neustruev, A.V.: Blind assessment of the impulse response of a communication channel in a digital data transmission system (2010). http://www.mivlgu.ru/site_arch/conf/ murom2010/matherials/KRL2010/section4/19.pdf Impulse Response. MATLAB & Simulink Documentation. https://www.mathworks.com/help/ signal/ug/impulse-response.html MATLAB. https://matlab.ru/products/matlab Shutov, D.A.: Evaluation of the impulse response of a radio channel using blind identification methods. Radio Eng. Telecommun. Syst. 3, 76–81 (2013) Goryachkin, O.V.: Blind signal processing methods and their applications in radio engineering and communication systems. Radio and communications, Moscow, Russia (2003) Goryachkin, O.V.: Methods for blind identification and their applications (2011). http://tors.psuti. ru/book/sb_v1-19.pdf Kartashevsky, V.G., Semenov, E.S., Filimonov, A.A.: Receiving OFDM signals in scattered channels when estimating channel parameters. Radio Eng. 12, 48–54 (2016) Vinokurov, N.A.: The use of OFDM signals to compensate for intersymbol interference in PLC communication channels (2017). http://library.eltech.ru/files/vkr/2017/bakalavri/3182/ 2017BКP318215BИHOКУPOB.pdf Kuznetsov, K.V.: Semi-blind assessment of the state of a communication channel in OFDM systems (2017). http://library.eltech.ru/files/vkr/2017/magistri/1103/2017BКP110306КУЗH EЦOB.pdf Zhang, J., Zhang, Z.: Simulation and analysis of OFDM system based on simulink. In: Proceedings of the 2010 International Conference on Communications, Circuits and Systems (ICCCAS) (2010)

Linguopragmatics of Advertising Texts in the Era of “Smart Technologies” Elena A. Kurchenkova(&) , Irina V. Palashevskaya and Viktor V. Leontiev

,

Volgograd State University, Volgograd, Russia {kurlena,irina_777,leontiev}@volsu.ru

Abstract. Purpose: The purpose of the article is to describe the specific linguistic and pragmatic characteristics of online ad-texts in the era of smart devices, systems and technologies that create new opportunities and raise new challenges in communication. Methodology/approach: The study was conducted on the basis of the English and Russian languages, on the analysis of online ad-texts, including e-mail messages; banners on the pages of search engines; advertising posts in social networks, etc. Findings: Discussing the linguo-pragmatic characteristics of online advertisements, the authors focus on the discursive parameters, the cultural context of ad messages, their genre characteristics, structural and semantic complexes employed in compositional text construction, as well as the specific features of content representation and functioning of these text types. Originality/value: It has been established that online ad-texts occupy an intermediate position between texts of real and virtual communication; they are also characterized by a significant degree of conventionality and manipulativeness. Online ad-texts today tend to use tactical means of personal approach and reduction of distance between the sender and the targeted addressee. Keywords: Information technologies
Smart technologies
Linguopragmatics
Advertising discourse
Online advertising communication
Discourse genres


Online

JEL Code: M370

1 Introduction Modern society is being rapidly reshaped by waves of innovative “smart technologies” unlocking many opportunities for individuals around the world. By the term “smart technologies” we mean technologies based on information networks and computers, mobile and other smart personalized devices which communicate with one another and support online communication platforms, social media networks, instant messengers, information channels, portals, etc. Two decades ago, under the term “Computer-Mediated Communication” (Hardacker 2010) researchers understood communication, which significantly increased the © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 132–140, 2021. https://doi.org/10.1007/978-3-030-59126-7_16

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ability to overcome the communicative space within the time flow by means of computers (Leontovich 2000). Nowadays communication is supported by computers, smart devices, “wearable gadgets” (displaying the concept of “smart technology”), through the information networks that we use daily. The global development of increasingly sophisticated devices has made it impossible to imagine modern life without the phenomenon of “technology-mediated service encounter” (Blitvich et al. 2019). Such contacts drastically change our experience of social interaction, our everyday reality, reshaping our habits of creating, obtaining and sharing information with any person or many persons simultaneously. While this technological development offers various opportunities, it also includes manifold challenges, obligatorily implying a wide range of competencies, “digital literacy” skills, professional performance in the digital environment, the use of special speech textures, strategies of managing speech behavior and our presence in the digital environment, as well as representing ourselves and attracting the attention of another. The advancements in communication technologies and the cultural processes of globalization are rapidly transforming the format, presentation and pragmatic characteristics of advertising discourse. Advertising services that can be supplied electronically have experienced strong growth. Using all the expanding capabilities of the software, marketing is constantly developing and changing its strategies in order to reach potential consumers and grasp their shopping habits. Due to constant innovation, this type of interaction is open for scientific study, including linguistic research. On-line culture is always based on texts (Wilbur, 1996 - cited from: Crystal 2004) and when interacting online with text, communicants expect that the pragmatic result of such communication will exceed the results of real face- to-face contact. This aspect, in our understanding, plays a paramount role in advertising discourse supported by “smart technologies” for controlling our behavior.

2 Materials and Method The following methods were used in this work: conceptual, component, interpretive content analysis and introspection. In our study we come out from understanding of online advertising text as a semiotically complicated, multi-code message, suggesting structural and compositional interconnectedness of signs of various nature (graphemes, coloremes, kinemes, etc.), which has a meaningful unity, attractive representativeness and pragmatic orientation. In the pragmatic aspect of the communication process, semantic determination, syntactics of compositional units and presentation features of online advertising are considered by us as specially programming the behavior of the target recipient. The presentation features of the texts we study are setting behavior of the addressee through the system of stylistic means of the language and ways of persuading and controlling the attention of the addressee. A content analysis aimed at describing the explicit and implicit content of online advertising was used by us in those cases where certain textual elements, significant for the study, were characterized by the frequency of reproduction.

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The use of these methods and approach, in our opinion, determines the objectivity of the research results.

3 Results and Discussion 3.1

Linguostylistic and Linguopragmatic Characteristics of Advertising Texts in On-line Communication

Advertising is a form of mass communication in which informative, figurative, expressive-suggestive texts of unidirectional and impersonal nature are created and disseminated in order to induce people to choose and do what the advertiser needs (Kurchenkova 2006). The success of advertising communication is determined by finding an optimal form of influence on the addressee, which lead to the creation of the illusion of the right choice of the proposed product or service. In connection with this goal, the author selects one or another communication channel, among which the most important role in the modern world belongs to online platforms. Online advertising in general has three main goals: a) Attracting the attention of the user (client), b) convincing him/her to activate this particular advertising text, c) Meeting the expectations of the user (client) provoked precisely by the content of the advertising text (Janoshka 2004). Common genres of online advertising include pop-up advertisements and banners. According to the famous Spanish linguist F. Yus, a certain degree of understatement is characteristic of modern online advertising genres, which significantly increases the role of the recipient of this type of advertising to compensate for the information gap (Yus 2011). The development of smart technologies has led to the emergence of new textures of speech and on its basis the global communication networks that have a number of common features with the media, namely: 1) they use tools that allow transfer not only language signs, but also color, graphic and other elements; 2) authors and addressees need technical means for receiving messages; 3) there is a mosaic mixture of texts of various genres and codes; 4) territorial disunity of the creator and the recipient of the texts is obvious. The texts of online advertising represent a specific type of status-oriented institutional communication, since, representing a fragment of written speech placed into online communication sphere, they relate simultaneously to advertising and media discourses. Discourse is understood as a coherent text in conjunction with extralinguistic, pragmatic, sociocultural, psychological and other factors; text taken in the event aspect (Karasik 2002). To identify the specifics of the linguistic-pragmatic characteristics of advertising texts in the field of smart technologies, the following aspects are relevant: 1) communication participants; 2) the conditions of the communication situation; 3) organization of communication (strategies, deployment and division, control and variability

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of communication tools); 4) conversational methods (channel, style, genre) (Karasik 2002). Let us dwell in more detail on some of them. The distribution channel for advertising texts is not only a combination of technical means of delivering online messages, but also online communication platforms, the main advantages of which over other distribution channels of advertising are as follows: 1) Targeting, the ability to orient the advertising campaign to narrow and correctly defined consumer groups (age, gender, geographical, time, thematic); 2) The ability to analyze the behavior of the user (recipient) (tracking his surfing from site to site, according to comments in social networks); 3) Interactivity, the ability to contact with the seller and the product (study it, try the using, for example, a beta version of a program, a chapter of a book, etc., then buy); 4) The ability to place a large amount of information through the use of graphic, sound, video effects; 5) High speed of distribution and receiving of information; 6) Relatively low cost (compared with advertising on television). The main formal features of online advertising texts are common to advertisements of all speech textures include a compositional structure consisting of three structuralsemantic components, or complexes - appealing, informative, and address. However, online advertising has its own specific features. Mandatory elements of such texts are: an animated graphic (a text and/or visual image), an address complex that contains a hyperlink with some website name or email address. Sometimes the address complex is replaced by an image of a button with the inscription click here. The appeal complex, which performs the function of attracting attention, includes a message, slogan, animated or static image. A specific feature of online communication is the frequent use of emoticons in texts of advertising messages, especially in social networks. The genre space of online advertising includes Internet banners, electronic bulletin boards, web pages, direct mail, advertising on a personal page and in personal correspondence in social networks. An advertising banner is understood as a static or animated image with a text, usually occupying about 9–10% of the visible screen area and linking to a specific website hosted on other web resources. The prototype participants in the advertising discourse can be considered the seller and the buyer, but their communication online is distant, mediated by the time and space. Modern smart technologies developed by leading manufacturers of digital devices allow automatic accumulation of a database with users interested in a particular topic, as well as post information on Internet servers. They allow to track their surfing, topics of interest in search engines, correspondence and conversations of a user, and then send them advertising texts corresponding to their interests. This communication of the potential buyer and seller does not end there. In the future, when the buyer selects the proposed product or service, the purchase mechanism follows, which can occur online or offline when visiting the advertised company. The seller’s and the buyer’s contacts may take the form of a telephone conversation, personal correspondence in social networks, instant messengers, on the company’s website in the comments section.

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Circumstances and conditions for transmitting texts of online advertising are characterized by lack of time, the presence of interference, and insufficiency of perception. It uses various types and textures of speech. For example, an advertising text may occur online, that is, unexpectedly when communicating on social networks and the text may remain in the history of correspondence. It is reproducible, searchable, scalable, and can be visible to a potentially larger audience than just the participants in the conversation. Like any field of communication, online communication is characterized by the implementation of appropriate strategies. An important place in the successful advertising text is played by the personification strategy. We understand this term as allocation of the addressee from a number of others, the use of a personal communication strategy, which is provided by various means of manipulative influence (Kurchenkova 2006). We explain the use of this strategy as the central one in online advertising by the fact that smart technologies, providing access to huge information resources, facilitate and accelerate interpersonal communication. People nowadays have an opportunity for studying, banking, shopping without leaving home. However, at the same time, they also have a disconnecting effect and reinforce the tendency towards personal individualism. Online advertisements are known to use more imperative constructions, compared to other spheres of institutional communication. This fact can be explained by the idea that the participants of this discourse have got very close social statuses or the difference of their social statuses is practically of no relevance. Certain personal parameters of participants of the act of communication are leveled. Thus, the use of the “user name” allows to “hide” sex, age, nationality of his or her proprietor. Due to the fact that in general the initial type of communication for network discourse is a pin dialogue (Galichkina 2000), the use of dialogic speech in texts of online advertisement is characterized by the speech formulas that are inherent to the colloquial register. For example, the question-answer structures, using strategy of temptation: Would you like to get the mad adventures? They have been waiting for you…;Have you tried any of these shades? Sound off in the comments below if you have!;the unfinished phrases such as That expects you…; the imperative constructions, promising to the addressee the positive consequences of certain actions: answer 7 questions and win.; Start your own Mary Kay business that can go and grow with you!, exclamatory constructions such as: It’s Begun!!! We will take apart the example of advertisement text of the Day of the Unclosed Doors of one of High School institutions: Do you want to create your own games and bind your career with the industry of games? The High school of Business Informatics at Scientific-Research University of High School of Economics invites you to take part in “the Day of the Unclosed Doors” on the basis of the program of professional education “The management of game projects”. Please, register for the Day of the Unclosed Doors and get answers for all interesting you questions concerning the entrance to our Institute and education in it. In this text the strategy of personification is realized through a direct question: Do you want to create your own games and bind your career with the industry of games,

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and also through the use of imperative constructions such as Please, register for the Day of the Unclosed Doors and get answers. The lexical and syntactic receptions used as information strategies are based on the effect, produced by the words having the high potential of influence. These are techniques as: a 1) the use of stress elements: the Closing dates of discounts! Carefully, hot! It’s time to crush it! 2) the use of exaggeration (overstatements of quality and properties of commodities): Kaspersky Laboratory. Kills all well-known viruses. These are the best sellers that all go hunting for!; З) the use of the word-play : Drop a if you’re up for some pink - tastic pampering; 4) the use of elliptic constructions: Free from your PC. Get 2 phones; 5) the use of stylistically reduced vocabulary, computer jargon and other facilities of softening: You have come. You are distributing mobile phones! Here some inspo for a cool TikTok! Regulative strategies of online advertisement are realized through a hyperlink with pointing of address of certain web-site or the image of the button, pressing on which the client can get to the necessary page. Sometimes the banner itself plays the role of the whole button. Thus text on it can contain some information, and it also can be absolutely absent. Let’s look at the advertisement text of a famous company Apple. The text is placed on the company’s page in the social network Facebook. The text advertising the new product: Apple Watch has arrived and we feel the excitement is placed in status position: Get yours now in stores or online. Thump, thump. The further reference goes to the product on the web site of company. The text is accompanied by a short video clip, showing the clock of “Apple” with a fragile heart on the monochrome background of the same color as the brand company. A clock and fragile heart are gradually replaced by the fragile logo of the company. A page contains 289 reports of potential and real clients, containing comments and answers, both positive and negative. For example, I love my AppleWatch! In the text of comment the special symbol emojy is used: heart, clock, double heart that is the personal touch of cooperation in the social network. There are the main characteristics of online advertisement in this fragment. One should pay attention to the channel of transmission of the text that is the personal page of company in a social network. All possibilities of placing the information are used on the page. These are: the position of status, the statically envisaged record on the wall, the active reference to the web-site, the placing of video, the use of a special section for comments. Thus, advertisement text in the social network of Facebook can be considered to be related to the sphere of clever technologies of management by social behavior. It is necessary to classify as the smart technologies of managing the behavior of an addressee in advertisement discourse the “Native advertisement” which is able to overcome psychological barrier filters on advertisement text products. The valuable personal experiencing represented in Instagram, Twitter or Youtube can contain the advertisement information that can be applied and thus extend the circle of consumers of this or that product.

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Lingua- Stylistic and Linguapragmatic Characteristics of Direct-Mail

Let’s analyze such genre of online advertisements as mailing lists These texts are believed to be the internal parts of direct marketing that has been experiencing the real boom. Direct marketing envisages the constantly supported directed communications with separate consumers or firms, having the evident intention to buy the certain types of commodities. The term “direct marketing” unites the events aimed at getting the response of a consumer and at establishing the permanent long-term connection with him or her. For example, teleshops, telephone marketing, internet-marketing. Direct internet-distribution or direct mail is an advertisement appeal sent by mail to the certain representative of the target audience. One of types of undesirable advertisement texts is a spam, i.e. a genre of letters of advertisement character, coming to the electronic address of user without his consent (Egorova 2006). The mailing list is a text, which originally is believed to have been the direct (paper) mail, as well as the genre of electronic letter, coming from an epistolary genre. Online direct mail unites in itself a mass scope with the individual approach to a separate addressee. So, this type of sales promotion is characterized with the limited nature and the selectivity of the audience. It is a certain “written conversation” with separate individually chosen human being personally, and it takes place by means of the direct mail texts and comes virtually, but not physically. In the case of the direct-mail the basic genre is the personal letter implying the use of typical label formulae of phatic communication, such as greeting, farewell, signature, the features of that are dictated by both the cultural and language traditions and the sphere of online communication. For example, a final ceremonial phrase is often generated for every mailbox through the smart technologies, and it is usually put at the end of every letter automatically. The time of this type of communication is selected by the author of the text depending on the season and temporal circumstances of the communicative situation. Thus, the advertisement of cosmetic products and fashionable clothing differs in the special activity in spring, when women have got the natural desire to improve their appearance. In this connection the authors of texts offer the direct mail: Order our commodities, and you will get your red bag that will complete your spring character for nothing! (Yves Rocher). The structure of the main text of direct-mail corresponds to all canons of a letter and often contains the personal appeal, logo of the firm, the text itself, where it is suggested to take advantage of services, to write by mail or to buy the offered commodity; the final complex, consisting of the expression of the hope on further contacts, gratitude for attention, and also signature and post scriptum. In the afterword as a rule, a reminder is placed about a necessity to act quickly: don’t hesitate to contact us immediately. A letter is illustrated by pictures and photos of prizes, money signs (that allegedly will be got by a client-winner), by the photos of happy participants having won the prizes before that. The major place in the realization of success of communication in case with direct mail belongs to the contact-setting function. It is not secret for anyone that the greater part of advertisement distributions gets into the basket not opened.

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The letters with advertisement content look like a phenomenon of a small influence, and their orientation on an audience possesses electoral character. The presupposition is thus used: people, at least, their majority, look forward to the moment of receipt and reading of the mail. Therefore, contact-setting strategies of direct distribution are used not only for drafting the texts of letters but also for their registration. It is an important idea that on the primary stage of getting letter an addressee should want to know what had been said in a letter, but not to direct the letter into the basket. The whole arsenal of facilities of bringing in and withholding of attention of addressee is used for this purpose. From verbal facilities an important place is occupied by imperative suggestions: Know the secret of Great revelations of tarho! (My world), and also the use of lexical units, containing a value “free of charge”, “prize” “action”. For example: Hello! Within the framework of our promo-action we hand to you a ticket on the next drawing. To test success is possible, going across on this reference. In this text the final underlined words are the reference to the website, where the recipient of the letter can take part in the lottery. Such invoice of speech is specifically characteristic for online communication. Such elements of the personal appeal, as greeting, are used in a letter, polite appeal on you. As an element of affecting potential client the word “promo-action” is used and that implies a gift as a lottery ticket. The strategies used in advertisement electronic distribution are aimed at overcoming the negative relation of addressee to the spam. For this purpose, for example, manipulation is used with the subject of letter. Heading misleading an addressee is often used in a theme, masking promotional letters under personal one. For example: I found that you asked! I can’t wait any longer! Thus, in texts of direct mail the large attention is paid to the contact-setting strategy aiming to level the negative setting of addressee in relation to the undesirable reports.

4 Conclusion The research has shown that the analyzed on-line ad-texts occupy the intermediate position between the texts of real and virtual communication, as on one side, they retain initial printed ad-tests features, and, on the other hand, they incorporate lines peculiar exactly to network communication, using the extended possibilities of content representations (by means of video clips, hyperlinks, beta-versions of the promoted product and others, that allows the potential addressee to become an active participant of the certain advertisement campaigns). Basing on the analysis of presentational, structural and pragmatic descriptions of online advertisement, ways of its text-building, one can assert that an online ad-appeal is oriented to the greater reduction of communicative distance between a sender and a targeted addressee, employs the strategies of intimization, personalization and text attraction, pulling the addressee into communicative cooperation, weakening his or her privacy (direct mail), and tightening the sender into online space (context advertisement on the personal pages).

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References Galichkina, E.N.: On the Constitutive Features of Computer Discourse/Language Personality: Problems of Creative Semantics. Peremena, Volgograd (2000) Egorova, I.Y.: Structural-semantic and pragmatic characteristics of an advertising Internet text. In: Language. Culture. Communication: Proceedings of the International Conference in Volgograd 2006, pp. 253–259. Scientific Publishing House, Volgograd, Part 3 (2006) Karasik, V.I.: The Language Circle: Personality, Concepts, Discourse. Peremena, Volgograd (2002) Kurchenkova, E.A.: Direct mail as a form of advertising discourse. In: Working Papers, Volgograd State University, Series 2. Linguistics, vol. 5, pp. 142–149 (2006) Leontovich, O.A.: Computer discourse: a linguistic personality in the virtual world. In: Linguistic Personality: Institutional and Personal Discourse, Peremena, Volgograd, pp. 191–200 (2000) Crystal, D.: Language and the Internet. Cambridge University Press, Cambridge (2004) Blitvich, P.G.C., Fernández-Amaya, L., de la O Hernández-López, M.: An introduction to technology mediated service encounters. In: Blitvich, P.G.C., Fernández-Amaya, L., de la O Hernández-López, M. (eds.) Technology Mediated Service Encounters. John Benjamins Publishing Company, Amsterdam, Philadelphia, pp. 1–14 (2019) Hardacker, C.: Trolling in computer-mediated communication: From user discussions to academic definitions. J. Politeness Res. 6(6), 215–242 (2010) Janoshka, A.: Web Advertising. John Benjamins Publishing Company, Amsterdam, Philadelphia (2004) Yus, F.: Cyberpragmatics: Internet-Mediated Communication in Context. John Benjamins Publishing Company, Amsterdam, Philadelphia (2011)

Smart Technologies in Protest Communication: Current Practices and Trends Larisa N. Rebrina(&) , Nikolay L. Shamne , Marina V. Milovanova , and Elena Yu. Malushko Volgograd State University, Volgograd, Russia {lnrebrina,nikolay.shamne,mv_milovanova, e.malushko}@volsu.ru

Abstract. Purpose: The purpose of the study is to determine the main trends in the implementation of smart technologies in modern protest discourse based on the analysis of different protest communication practices, and to describe the relationship between technological and socio-cultural changes. Design/methodology/approach: Contextual, comparative and content analysis, and quantitative calculations are used. The authors analyze websites, forums of participants of protest actions, youtube hosting content, blog posts and social networks, petition platforms, and publications of Russian and foreign media. Findings: The main trends in the implementation of smart technologies in protest communication are identified: dissemination of new, horizontal, protest practices, whose informing and coordinating is based on smart technologies (smartmobs); use of smart technologies (smart data) to study protest activity and optimize the operation of participation platforms; participation practices directed against smart technologies used by the authorities to track and control protest actions, deanonymization of participants. The analysis indicates the relationship between technological and socio-cultural changes. The article illustrates the dialectic of innovative development in the sphere of protest activity, which affects both the political participation of citizens and the actions of the authorities, affecting, first of all, such areas as supervision, data collection and analysis, mobilization and coordination of actions, ensuring anonymity and confidentiality. Originality/value: The relevance of the topic is determined by the social significance of the protest phenomenon, the importance of its understanding in the context of the technological determinism of modern protest communication in media globalization. The regularities of smart technologies functioning in the sphere of protest communication and their influence on its participants have not been the object of research until now. Keywords: Protest communication Smart data
Smartmob JEL Code:: Y80


Smart technologies
Petition platform



Z00

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 141–151, 2021. https://doi.org/10.1007/978-3-030-59126-7_17

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1 Introduction Smart technologies have a huge impact on various aspects of social life and personal development, including a change in the socio-cultural context in the relationship between objective and subjective, collective and individual. Their influence in such an area as protest communication has not been sufficiently studied. At the same time, protest, as a manifestation of the crisis, is associated with an innovative cycle where each side seeks to change the balance of forces in its favour. The relevance of the topic is determined by social importance of the phenomenon of protest, the need for its understanding in the context of modern information and communicative space, and the dominant role of communication as the semantic axis of the information society and the technological determinism of the latter; the importance of studying significant changes in communication itself and its subjects, formats of collective interaction in the context of media globalization and today’s redefining (stochasticity of continuous, spawn, intelligent information environment that causes spontaneous processes of selforganization).

2 Materials and Methods Within the framework of this study, three groups of smart technology manifestations in the field of protest communication are considered: new protest practices generated by these technologies; the use of smart technologies (smart data) to analyze protest activity and optimize the respective platforms; political participation directed against smart technologies aimed at tracking and controlling protest actions. A set of methods adequate to the tasks and research material is used (contextual, comparative, content analysis, quantitative calculation method). The research material includes relevant content of websites and forums of protest participants, youtube hosting, media publications (Russian and non-Russian), blog and social media posts.

3 Results In the context of the modern functioning of the protest, three sets of manifestations of smart technologies can be distinguished. 3.1

Emergence of New Protest Practices Based on Smart Technologies

The actual practice of protest communication, derived from hoarding and performance, includes smartmobs (“smart crowd”; the term was introduced by Rheingold (2006)) as a form of self-structuring social organization with the use of high technologies (today, first of all, mobile phones and tablet computers), characterized by intelligence and rationality in the behavior of the participants; artificially modelled communication space, organically combining the individual and collective. This phenomenon is characterized by hybridity (features that are characteristic and unusual for a crowd): on the one hand, by a specific goal and action plan, self-identification of participants; on

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the other hand, by their anonymity in real space (as opposed to virtual), superficiality, brevity, often one-time nature of interaction, lack of interpersonal relationships, social structure and clear boundaries of the group (Bylieva et al. 2018). This causes ambivalence of assessments: a) smartmobs – a coordinated, organized, spiritualized crowd (Rheingold 2006; Thompson 2002); b) smartmobs – a social group with a common goal, group forms of control and interaction, role models and models of actions, self-identifying through belonging to a group of participants (Bylieva et al. 2018; Martos et al. 2015). Data exchange is organized on the basis of a peer-to-peer network with communicating nodes in the absence of a central element (i.e. a decentralized overlay network of equal participants, where each node functions simultaneously as both a client and a server). Participants are recruited and informed about the place, time, route, duration and rules of participation using modern ICT; but there is no leader or headquarters. Illustrative examples of smartmobs are, for example: a) “critical mass” – “organized coincidence”, a protest action of cyclists taking place in more than 400 cities around the world (since 1992, for the first time in San Francisco; in Russia since 2002) and aimed at greening transport and improving the infrastructure of cities KM (2019); b) organized by SMS in the Philippines in 2001, “black” (a symbol of mourning for democracy) protest against corruption of J. Estrada; c) coordinated via SMS, blogs, news sites, online photo galleries “Revolution of the penguins” in Chile in 2006, demanding reforms in the education system; d) organized by viral SMS, online messages in Twitter, LiveJournal and Facebook in 2009 during mass protests in Kishinev (15000 participants) against election results in Moldova, to inform about actions on a single web page created by the aggregator labelled as “Pman” (abbreviation of the name of the main square in Chisinau) (VestiNET 2019); d) a distributed May smartmob World Wide Flash Mob (WWFM 2019), yearly organized since 2005 through social networks and veloforum. The spread of smartmobs is a manifestation and consequence of transition from “centralized communication dominated by commercial mass communication” to “decentralized communication dominated by mobile mass communication” (Nicholson 2005), from direct interaction through mobile communication “one-to-one” to indirect interaction “one-to-many”; from a focus on these technologies when overcoming space-time restrictions by users and violating the integrity of the location of personal meetings to a focus on ensuring public unity within the framework of personal meetings in time and space (Nicholson 2005; ito et al. 2005). The development of the described format is associated with statistics on the use of the Internet and various mobile devices: mobile users account for about 70% of the Earth population (5.11 billion, an increase over the year – 100 million); daily Internet audience has increased by 1,000,000 users; the average user has 80 apps on a mobile device and uses them for about 3 h a day (at 6.5 h online daily; downloading applications has increased by 9% over the year); opening e-mail newsletters from mobile devices has increased by almost 1.8-fold in three years; the number of users of social networks – by 366 million in a year (about three and a half billion in more than 230 countries). An increase is projected in mobile traffic by 3 times in the world by 2021. Mobile connection speed has become higher by 18% and fixed Internet connections – by 30% in a year. But it should be noted that, in the opinion of most IT professionals, the mobile sector will become

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more susceptible to cyber-attacks in the future (SI 2019; Email Marketing 2019; SaMDaI 2019; GSofD 2019; DT 2019). Researchers identify different types of smartmob: a) by form and subject –personal, performance, artistic, criminal, charitable, business, political and educational (ChiouPirng et al. 2014); atomized (anonymity, impersonality, poor self-identification of individuals), interactive (gaming), advertising, political, performance (Molnár 2014); b) by participants, degree of theatricality, risks, duration, goals, environment - real, Internet mobs with different goals (for example, i-mobs “Giraffe” and “Buryak” on VKontakte, “video mob” in Harlem Shake, etc.), L-mobs (long duration, everyone commits planned at the time and place of their choice), extreme mobs (provocative, violating moral principles), mob-house (long-term action, simulating some kind of socio-communicative space), small-mob, date-mobs (dating actions), fan-mobs (mass jokes), art-mobs (characterized by aesthetics, entertainment, the use of props, the need for rehearsals), farshing (an action aimed at overcoming oneself, one’s complexes), monstration (an art action similar to happening - an impromptu procession with absurd slogans), bookcrossing (the circulation of books) (Lim et al. 2019); c) on the social characteristics of participants and the assessment of social consequences - flash robs (flash mob robbery/“turbazo”, first took place in Chile in 2011, “bash mob” in 2013 in Brazil) (Al-khateeb et al. 2015) and “rolezinho” (meeting of dysfunctional adolescents in affluent areas, intimidating others without wrongdoing) (Lima et al. 2016). D.S. Bilyeva and V.V. Lobatyuk offer a classification according to the following set of criteria: purpose, form, initiators of action, mode of participation and communication of mobbers (Bylieva et al. 2018). Analysis of existing studies and selected material allowed to refine the existing classifications and identify the following groups of smartmobs: 1) by the number of participants – large (from 500 participants); medium (from 100); small (up to 100); 2) by duration - ordinary; long smart mobs (L-mobs, mob-house); 3) by the chronotope – passing in a single real space and time; passing in a different real space/time; passing in a different physical space; 4) by the method of informing – simultaneous unlimited/limited audience; by the chain of informing choice; from group to group; from one to a group; 5) by relation to social norms, moral installations – ordinary; deviating (extreme mobs, flash robs, bash mob, rolezinho, farshing); 6) by the presence of a game/art component – performances, art mobs, mob games, fan mobs, monstration; 7) by subject – political, social, educational, quasismartmobs (commercial, advertising). 3.2

Using Smart Technologies to Analyze Protest Activity and Optimize the Performance of Relevant Platforms

Conditions, when each individual creates megabytes of information every second, requires a combination of its expertise and relevant statistics, which caused a change in trend: the transition from big data to smart data, which is essentially processed, analyzed, structured, segmented (by audience characteristics) and interpreted with the corresponding Big Data smart algorithm. Smart data involves a special collection technology, for example, collecting real-time data from accounts, information about search queries, downloads, etc., in cookies on users’ computers and subsequent

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transmission of this information to the webserver (in an HTTP request). The effectiveness of this technology, however, is reduced by the lack of data analysis tools and relevant specialists, limited access to data and the difficulty of transferring it, the vulnerability of Cookies and the negative attitude of users to Cookies (especially to external, super-, recoverable with JavaScript “zombie”-cookies) (Geary 2012; Mayer 2011; Schwartz 2001). An example is the German-language openPetition (oP 2019) platform with more than 6820000 participants, which provides search through a set of filters: petition status (in progress/new/active/expiring/completed at the initiative of the author/rejected by the platform/successful/unsuccessful); addressee (community /district/community association/city/administrative district/federal state/state/EU); placement (this/other platform); topic (broad list of public/political/economic topics) (see Fig. 1). Each petition is accompanied by the following headings: 1) signatories’ reasoning for their decision to sign/not to sign a petition; 2) news (status changes/petition text, external post-communication, authorities’ response, petitioner’s thanks for support); 3) comments of platform users; 4) signatories (name with geographic/administrative distribution, indication of quorum regions, number of signatories without authentication); 5) questions to the petition initiator; 6) a variety of statistics; 7) repost/recommendation (see Fig. 2).

Fig. 1. Search categories on openPetition platform (Source: https://www.openpetition.de/suche. )

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Fig. 2. Structuring petition information on openPetition. Source: https://www.openpetition.de/ petition/online/landschaftsschutzgebiet-fuer-die-bolmke-festsetzen.

The use of the platform is evaluated through the Matomo web analysis service. User information including an abbreviated IP address (anonymized during transmission) is collected with persistent and session (stored in temporary memory, deleted automatically at the end of the Internet session) cookies and is transmitted to the openPetition server. The use of cookies (for authenticating the visitor, saving personal settings, tracking sessions, collecting statistics) can be made relatively transparent to the participants (installing Cookies blocking and informing in browser privacy settings). According to the openPetition declaration (see Data privacy policy section), the platform collects the following user data: Name, address, language, IP address, initiated, signed petitions and created widgets with systematization by region and category, comments, ratings, participation in debates as a signatory, participation in surveys; as well as (if you indicate) a phone number, e-mail, photo, user’s resume, place of work, membership in organizations. According to openPetition, the information is used to authenticate verified users, to link them to administrative districts and levels, to recommend petitions with the corresponding administrative district and levels, with

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similar topics or destinations, to represent the geographical distribution of signatories, and provide direct communication to platform users (via contact form), sending (with consent) newsletters about the platform in accordance with user preferences and recommendations from partners of the platform. The data collected makes possible detailed statistics for each petition: map from the distribution of signatories by place of residence with tables for different administrative units; chart of the dynamics of the ratio of quorum to the number of signatories; number of signatures per day, average, minimum and maximum number of signatures per day; diagram of the significance of the petition to users (the petition personally concerns the signatory/relatives or acquaintances/may relate/does not relate/corresponds to interests/evokes a sense of responsibility); activity chart of user position (willingness to initiate actions/participate in them/promote online; desire to follow the news; evaluate the initiative as not relevant) (Rebrina 2019) (see Figs. 3 and 4). Statistical data makes it possible: a) further comparison of petition collections by region, status, source, addressee, topic (correlating collections by topic allows to determine the dominant areas of participation of petition initiators on openPetition: Bildung (education) – 10.63%, Verkehr (transport) – 9.41%, Soziales (social sphere) – 9.33%, Kultur (culture) – 7.61% (Rebrina 2019)); b) the study of sociodemographic

Fig. 3. View petition statistics on openPetition. Source: https://www.openpetition.de/petition/ statistik/landschaftsschutzgebiet-fuer-die-bolmke-festsetzen#petition-main.

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Fig. 4. View petition statistics on openPetition. Source: https://www.openpetition.de/petition/ statistik/landschaftsschutzgebiet-fuer-die-bolmke-festsetzen#petition-main.

and behavioral characteristics of the participants (see, e.g., (Schürmann 2014)), the classification of users of petition platforms (e.g., classification A. Jungherr и P. Jürgens: new lobbyists/neue Lobbyisten, hit activists/Hit-and-Run Aktivisten, activists/Aktivismus-Konsumenten, stakeholders/Stakeholder (Jungherr, Jürgens 2011). 3.3

Participatory Practices Against Smart Technologies Aimed at Tracking and Controlling Protests

The mass protests in Hong Kong at the end of August 2019 against the PRC Extradition Bill are a recent example of such actions against smart technologies aimed at

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control, surveillance, and the deanonymization of partisans. During these mass protests, the protesters broke smart poles with cameras with face recognition, cut electronic wires, disabled cameras, and tried to dazzle the city’s video surveillance system with laser pointers (Dudakov 2019). Hong Kong authorities pointed that more than 50 installed structures (it is planned to install more than 400 poles) has a goal of collecting information about the characteristics of the air, traffic jams, and used tear gas to disperse the demonstrators. Emerging innovations very effectively serve such a significant area for the authorities as to the area of supervision. China very actively uses closed-loop television systems (CCTV includes a video camera, usually based on CCD matrices, recorders, signal amplifiers, hardware and technical complexes, monitors and is used to monitor local objects), social media monitoring, sensor systems and face recognition technology, monitoring agencies and video analytics systems for mass events. Responding to this, in addition to destroying the smart poles, the participants coordinate their actions through messengers, often via Telegram with its geo-chats and private chats or FireChat (message exchange without Internet, under a system blockage of the mobile Internet or a failure of mobile communication via mesh or peer-to-peer network), Uber application, AirDrop mailing service, anonymous LIHKG online forum, encrypted channels; they use masks, umbrellas and a gamification strategy, confidential cryptocurrencies, realizing a new technological level of horizontal protest, confrontation between citizens and the police state, defending their right to anonymity and confidentiality as an essential component of today’s political agenda (along with the requirement to control IT giants) (Dudakov 2019). In traditional social networks, due to fear of deanonymization, there is a separation of coordination and information in the actions of the participants, only the last function is carried out.

4 Conclusion The authors identified three main trends in the use of smart technologies in protest communication. Firstly, new protest practices are emerging, for example, smart mobs is a hybrid self-structuring social organization of horizontal participation with the use of digital technologies that resulted from the transition to decentralized mobile mass communication, the growth in the use of the Internet and mobile devices; differing in the number of participants, chronotope, information, attitude to social norms, artistry, subjects. Secondly, smart data, which involve a special technology for collecting, structuring, segmenting and interpreting big data through intelligent algorithms, are used by partitioning platforms to optimize and analyze protest activity. The article shows the use of openPetition that is collected by cookies and analyzed with the Matomo web service to provide multi-functional search on the platform, collecting statistics, structuring petition information and personalized recommendations to users; the potential of smart data as a research tool. Thirdly, the smart technologies themselves used by the authorities can become the object of protest activity aimed at maintaining the anonymity and confidentiality of the

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participants. Authors demonstrated the relationship between technological and sociocultural changes. Both sides of the protest activity strive to use innovation to change the balance of power in their favour, improving supervision, data collection and analysis, coordination of actions, ensuring anonymity; participants are currently more active in applying digital mobilization; there are no effective tools to suppress decentralized, horizontal protests; artificial intelligence and machine learning are forecasted to undergo widespread application in protest. Acknowledgements. The study was carried out with the financial support of the RFBR within the framework of the scientific project No. 20-012-00193 “Protest communication in the modern information space of Russia and Germany”.

References Al-khateeb, S., Agarwal, N.: Analyzing Flash mobs in cybernetic space and the imminent security threats. In: The 2015 AAI Spring Symposium Series, pp. 2–5 (2015) Bylieva, D.S., Lobatyuk, V.V., Rubtsova, A.V.: Evolution of smart mob: from flash mob to smart city element. In: European Proceedings of Social and Behavioural Sciences, no. 35, pp. 225–235 (2018) Wang, C.-P., Akella, D.P., Bennett, C.F.: Flash mobs in the 21st century: mobile technology shapes human collective behavior. Int. J. Bus. Hum. Technol. 4(3), 24–32 (2014) DT – Digital trends 2019: Every single stat you need to know about the internet. https:// thenextweb.com/contributors/2019/01/30/digital-trends-2019. Accessed 20 Nov 2019 Dudakov, M.: The digital revolution in Hong Kong. The role of online tools in the mass protests of 2019. CINC analytical report (2019). https://zn.center/upload/img/1452421253.pdf. Accessed 25 Dec 2019 Email Marketing. https://www.emailmonday.com/email-marketing-automation-trendspredictions/. Accessed 25 Dec 2019 Geary, J.: Tracking the trackers: what are cookies? An introduction to web tracking, The Guardian (2012). https://www.theguardian.com/technology/2012/apr/23/cookies-and-webtracking-intro. Accessed 25 Dec 2019 GSofD – The Global State of Digital in October 2019. https://wearesocial.com/blog/2019/10/theglobal-state-of-digital-in-october-2019. Accessed 22 Dec 2019 Ito, M., Okabe, D.: Technosocial situations: emergent structurings of mobile email use. In: Personal, Portable, Pedestrian, vol. 20, no. 6, pp. 257–273 (2005) Jungherr, A., Jürgens, P.: E-Petitionen in Deutschland, Zeitschrift für Parlamentsfragen. Heft 1, 521–534 (2011) KM info. https://amp.google-info.org/890150/1/kriticheskaya-massa-veloprobeg.html. Accessed 25 Dec 2019 Lim, S.S., Bouffanais, R.: Tuning networks for prosocial behavior: from senseless swarms to smart mobs. IEEE Technol. Soc. Mag. 38, 17–19 (2019) de Lima, F.C., Baumgartel, S.A.: Flash mob and rolezinho: considerations on the aesthetic construction of a collective political body in a space of capitalist ostentation. UrdimentoRevista de Estudos em Artes Cenicas 1(26), 128–143 (2016) Martos, S.S., Martinez, S.M., Lara-Navarra, P.: Smart mobs as generators of big data: collective intelligence at the service of social innovation. In: Bid-Textos Universitaris de Biblioteconomia i Documentacio, vol. 34 (2015). https://doi.org/10.1344/bid2015.34.8

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Mayer, J.: Tracking the trackers: microsoft advertising (2011). http://cyberlaw.stanford.edu/blog/ 2011/08/tracking-trackers-microsoft-advertising. Accessed 20 Dec 2019 Molnár, V.: Urban youth culture reframing public space through digital mobilization. Space Cult. 17, 43–58 (2014) Nicholson, J.A.: FCJ-030 flash! mobs in the age of mobile connectivity. Fibrecult. J. 6. http://six. fibreculturejournal.org/fcj-030-flash-mobs-in-the-age-of-mobile-connectivity/. Accessed 25 Dec 2019 oP – openPetition. https://www.openpetition.de. Accessed 25 Dec 2019 Rebrina, L.: Online petitions of the German-language platform “openPetition” as a form of modern protest communication. In: ISMGE. Advances in Social Science, Education and Humanities Research, vol. 331. pp. 601–606 (2019) Rheingold, H.: Smart Mobs: The Next Social Revolution. Basic Books, Moscow, 416 p. (transl. engl.) (2006) SaMDaI – Statistics and Market Data about the Internet (2019). https://www.statista.com/ markets/424/internet/. Accessed 25 Dec 2019 Schürmann, B.: Die Strukturpolitischer Online-Partizipation am Beispiel von E-Petitionen. Eine Empirische Analyse der Nutzer von openPetition (2014). https://www.openpetition.de/pdf/ Masterarbeit_BenjaminSch%C3%BCrmann_OnlinePartizipation.pdf. Accessed 25 Dec 2019 Schwartz, J.: Giving web a memory cost its users privacy (2001). https://www.nytimes.com/ 2001/09/04/business/giving-web-a-memory-cost-its-users-privacy.html. Accessed 25 Dec 2019 SI – All Internet Statistics for 2019 - in the World and in Russia. https://www.web-canape.ru/ business/vsya-statistika-interneta-na-2019-god-v-mire-i-v-rossii/. Accessed 25 Dec 2019 Thompson, C.: The year in ideas: smart mobs. https://www.nytimes.com/2002/12/15/magazine/ the-year-in-ideas-smart-mobs.html. Accessed 25 Dec 2019 VestiNET – Revolution under the sign of the internet (2019). https://www.vesti.ru/doc.html?id= 273533. Accessed 20 Dec 2019 WWFM – World Wide Flash Mob. https://www.sites.google.com/site/wwfminfo/. Accessed 21 Dec 2019

Conditions and Trends of Green Energy Development in the Largest Economies of the Post-soviet Space Lyudmila Yu. Bogachkova1(&) , Lidiya S. Guryanova2 Nadezhda Yu. Usacheva1 , and Irina V. Usacheva1

,

1

2

Volgograd State University, Volgograd, Russia {bogachkova,n.y.usacheva}@volsu.ru Kharkiv National University of Economics, Kharkiv, Ukraine [email protected]

Abstract. Purpose: The research purpose consists in identifying efficient practices and prospects for the development of green energy in the post-Soviet space by means of comparative analysis of trends and conditions for supporting renewable energy generation in Kazakhstan, Russia and Ukraine. Design/methodology/approach: The research has been carried out using the methods of analysis and synthesis, descriptive statistics and comparative analysis, graphical and tabular visualization of the results. The sources used include the data of the International Energy Agency, the independent information and consulting company Enerdata, the National Energy Report of the Republic of Kazakhstan for 2019, the Analytical Center under the Government of the Russian Federation, the State Agency for Energy Efficiency and Energy Saving of Ukraine (State Energy Efficiency) and other sources. Findings: The article presents the results of comparative analysis of the dynamics of absolute and relative indicators of RES generation, in general, as well as solar and wind generation, in particular, in Kazakhstan, Russia and Ukraine over the period of 1995–2018. The specificity of the applied measures to support renewable energy generation in these countries has been described. Efficient practices and promising areas for improving the regulation of green energy have been identified. Originality/value: It is argued that green tariffs demonstrate high efficiency of RES generation support. Development of transparent competitive market mechanisms (green auctions) and creation of conditions for attracting investments in the capital market by means of green finance can help enhance the generation of “clean” electrical energy in the post-Soviet space. Keywords: Alternative energy (RES)
Wind and solar energy carbon development JEL Code: L52


Green energy
Renewable energy sources
Energy policy
Developing countries
Low


O2
O3
O38

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 152–163, 2021. https://doi.org/10.1007/978-3-030-59126-7_18

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1 Introduction High risks of anthropogenic pollution of the environment, global warming and catastrophic climate change have led scientists, politicians, public and government officials of most countries to understanding of the need for a transition to a low-carbon, resource-efficient and socially inclusive economy, the so-called green economy. Today, up to 80% of global emissions of greenhouse gases that pollute the environment and lead to an increase in its temperature are produced in the field of traditional carbon energy sector, which is based on the combustion of coal, gas, oil, oil products and other fossil fuels. Therefore, the key role in transition to the green economy is assigned to development of green energy based on the use of renewable energy sources (RES) such as water resources, solar energy, wind energy instead of fossil fuels. Transition to green economy is also intended to ensure the energy security of various countries (UN Environment Programme 2011; Porfiryev and Roginko 2016; Berezkina and Sinyugin 2019). Nuclear power plays a special role in the context of green energy development issues. As a matter of fact, representatives of science, politics and society have no shared opinion regarding the purity of a “peaceful” atom. In this connection, the issue of nuclear generation remains beyond the scope of the present research into the green energy. Modern long-term guidelines on the way of the global economy’s transition to a green model were outlined 5 years ago by the Paris Agreement, which was signed by 195 countries that voluntarily assumed the corresponding obligations (Paris Agreement 2015; Makarov and Stepanov 2018). Over the past 20 years, the sector of renewable alternative energy has been intensively developing throughout the world under the influence of current international policy. As early as 2015, the total installed capacity of renewable energy generation excluding hydroelectric power plants was close to the installed capacity of all Russian power plants put together; and taking into account hydroelectric power, the total capacity exceeded it by almost three times (Renewables 2015). According to the forecasts by Russian and foreign experts, by 2040 renewable energy sources can provide 35–50% of global electrical energy production and 19–25% of global energy consumption (World Energy Outlook 2019; Makarova et al. 2019). Rapid development of renewable energy puts downward pressure on the competitiveness of countries with large reserves of oil, gas and coal, including a number of republics of the former USSR. According to the well-known theory of competitive advantages (Porter 1990), participants of global energy markets are moving from a lower stage of competitiveness driven by surplus mineral resources to a higher stage where investment and innovation become the main drivers of competitiveness (Inshakov et al. 2019). The countries with developed economies are the first to implement the transition, which makes developing countries face the need of complying with global trends to ensure national competitiveness in the new conditions. High rates of RES development observed in the global economy over recent years are primarily ensured by state support as a key driver of alternative energy use. Moreover, the state measures of energy regulation vary significantly across countries.

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A wide overview of various RES support practices, as well as a cross-country analysis of the effectiveness of energy regulation measures, is presented in (Pegels et al. 2018). This article is devoted to comparative analysis of the conditions and trends in the development of renewable energy in Kazakhstan, Russia and Ukraine over the period 1995–2018 to identify common problems, efficient practices and prospects for green energy development in the post-Soviet space.

2 Results The choice of Kazakhstan, Russia and Ukraine is determined by two circumstances: firstly, it is their long-term joint development within a single state in similar socioeconomic conditions until the USSR disintegration in 1991; secondly, it is the scale of economies in terms of GDP and population, and, consequently, the scale of electrical energy production in these countries. To date, Kazakhstan, Russia and Ukraine have signed and ratified the Paris Agreement (Sabitova 2018; Gazeta.ru 2019; Parliament ratified 2016). Development of “clean” generation will contribute not only to the preservation of the environment, but also to the solution of a number of problems common to the countries under consideration. These include an overestimated level of energy intensity of the economy as compared to its global average value; lagging behind global trends in financial and technological development; a high degree of technological and physical depreciation of energy equipment and infrastructure networks. 2.1

Trends in the Development of RES Generation in the Electrical Power Industry of Kazakhstan, Russia and Ukraine in 1995–2018

Figure 1 illustrates the annual volumes of electrical energy production from RES of all types, including water resources, and Fig. 2 presents the shares of RES generation in the volumes of electrical energy production in the countries under consideration. Russia leads by a wide margin among the countries under consideration in terms of electrical energy production from all types of renewable energy sources, including water resources. Until 2018, Russia also ranked first in terms of the share of RES generation in the volume of electrical energy production (Fig. 2). Today, this share is estimated at approximately 17%, which allows Russia maintaining a high position not only against the background of the former Soviet republics, but also in comparison with the world level of 25%. However, Russia owes this position to hydroelectric power plants inherited from the Soviet period. In the post-Soviet period, Russia takes priority in developing nuclear rather than hydroelectric power: 11 reactors have been put into operation within the country and 7 reactors – abroad (Rosatom 2019). Excluding the water resources, the share of RES in the production of electrical energy in Russia is less than 1%. At the same time, the share of solar and wind energy is less than 0.2% (Fig. 4), which is significantly below the world level (about 5%) (IEA 2019; Renewables 2015). From 1995 to 2018, Kazakhstan, Russia and Ukraine had been demonstrating different trends in the dynamics of RES contribution to the production of electrical

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Fig. 1. Volumes of RES generation, including hydroelectric energy (TWh). Compiled using the data (IEA 2019; Enerdata 2019).

energy (Fig. 2). In Russia, this indicator had a slightly pronounced downward trend: its level dropped from 20% in 1995 to 17% in 2018. In Kazakhstan, this indicator made 13–15% over the period of 1995–2002; from 2002 to 2014, it had been steadily declining to 7.5%; since 2015, the share of RES generation has been growing rapidly. In 2018, Kazakhstan reached the Russia’s level in the share of RES generation in electrical energy production (17%). In Ukraine, the contribution of RES generation had been fluctuating around 7% over the entire period under consideration (Fig. 2). The volumes of production of solar and wind electrical energy in Kazakhstan, Russia and Ukraine are illustrated in Fig. 3, and the contributions of these volumes to the total electrical generation in the countries under consideration are shown in Fig. 4. As shown in Fig. 3, the production of large volumes of solar and wind electrical energy was launched in Russia in 2000, and for 10 years the country had been the leader in generation of these RES. However, in 2012, Ukraine ranked first in this energy sector, and since that time, it has been confidently holding the lead. In 2018,

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(%) 25 20

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Fig. 2. The share of RES generation, including hydroelectric energy, in the volumes of electricity production (%). Compiled using the data (IEA 2019; Enerdata 2019).

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solar power plants and wind power plants of Ukraine generated 1.95 TWh of electrical energy as compared to Russia’s 1.39 TWh and Kazakhstan’s 0.6 TWh (Fig. 3). Ukraine has also been the leader in terms of contribution of solar and wind generation to the total volume of electrical energy production over the past 5 years with Kazakhstan and Russia ranking second and third, respectively. In 2018, the share of

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solar power plants and wind power plants in electrical energy production amounted to 1.23% in Ukraine; 0.5% – in Kazakhstan; 0.12% – in Russia (Fig. 4). However, it should be mentioned that these indicators are still significantly below the global average (5%). Evolution of renewable energy is ensured by country-specific state measures, and reflects their relative effectiveness. 2.2

Conditions for the Development of Green Energy in Kazakhstan, Russia and Ukraine: Goals and Mechanisms of State Support, Problems and Prospects

Kazakhstan Within the framework of the Paris Agreement, Kazakhstan plans to reduce greenhouse gas emissions by 15% by 2030, and to increase the share of renewable energy in the country’s total energy balance to 50% by 2050 (Conception 2013). The power industry of Kazakhstan in terms of total installed capacity is the third after the corresponding sectors of Russia and Ukraine. Over the years of independence, Kazakhstan has significantly increased the volume of domestic electrical energy production and modernized the network infrastructure. According to the data for 2018, coal generation accounts for 70.4% of domestic energy production, and gas generation accounts for 19.4%. This results from the country’s sweeping coal reserves and the low cost of coal-generated electrical energy. At the same time, a significant part of the turbine equipment of thermal power plants is technologically and physically outdated – depreciation is estimated at 70% or more. As a result, Kazakhstan outruns the OECD countries by 3–5 times in terms of hydrocarbon fuel consumption per unit of the GDP and is one of the ten most carbon-intensive countries in the world, which reduces the competitiveness of domestic producers in world commodity markets. Therefore, RES are being actively developed in this country so as to replace coal generation (Kazenergy 2019, pp. 143–146; Sabitova 2018). Despite the fact that there are no large hydroelectric power plants in the republic, over the past 5–7 years, Kazakhstan has ranked second after Russia in terms of the contribution of RES generation to electrical energy production. This share more than doubled over the period of 2013–2015 (Fig. 1, 2). Mini-hydroelectric power plants produce 9.7% of the total electrical energy generation, while wind and solar power plants account for 0.4% and 0.1%, respectively. Since 2013, the world-famous mechanism of green tariffs has been implemented in the country on a specific basis. The specially founded Center for Accounting and Finance (CAF) is responsible for centralized and guaranteed payments to producers for the entire volume of RES generation at fixed rates, which are set for a period of 15 years and are annually indexed taking into account inflation. The obligation to buy renewable energy is entrusted to large traditional power plants (TPPs) rather than end consumers as is common in world practice with compensation for part of the producers’ income from the state budget (Kazenergy 2019, pp. 169–175). At the initial stage, green tariffs were several times higher than the price levels for traditional power plants. As a result, the total capacity of RES facilities, which were

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reported as construction objects in 2015, reached 30% of the total installed capacity of the Kazakhstan energy system. However, the integration of such a number of RES facilities into a centralized power system was not possible due to instability of solar and wind generation in the conditions of insufficient maneuverability of other installed capacities. Therefore, the year 2016 was marked by imposing restrictions on the commissioning of RES facilities, which assumed a gradual and systematic increase in their capacities in accordance with the approved targets. Thus, an excessive (as compared with targets) number of applications for RES facilities construction necessitated creating conditions for competitive selection of applications. The mechanism of green auctions as electronic bidding for reduced cost of electrical energy was launched in 2017 and is applied only to new projects for RES facilities construction, excluding the current ones. The winner of the auction is the investor who offers the lowest future price for generated electrical energy. The Center for Accounting and Finance (CAF) concludes an agreement with the winner for the purchase of all generated energy from the moment the power station is launched at the price determined at the auction. Failure by the investor to meet the deadlines for building a RES facility and putting it into operation entails heavy fines and termination of the contract. In 2018, the first tenders took place, which led to a significant reduction in the green tariff for RES support. Despite the apparent success of Kazakhstan in the field of RES generation over the past 5 years, there is a number of problems that still have to be solved when improving the system of state regulation of this energy sector. The main problem lies in the fact that traditional power plants are obliged to spend their own funds on the purchase of green electrical energy from the CAF at high green tariffs. The volume of green energy production is increasing every year, and the share of expenses on the purchase of RES in the revenues of traditional power plants is growing steadily, which threatens the financial stability of large power plants and the energy system as a whole. The solution to this problem will be facilitated by reduction of prices for renewable energy under the influence of the competitive mechanism of green auctions and development of competitive market mechanisms non-discriminatory in relation to traditional thermal power plants (Kazenergy 2019, p. 178). Russia Russia ratified the Paris Agreement in 2019 and undertook obligations to reduce greenhouse gas emissions by 25–30% of the level of 1990 year by 2030. Over the recent years, these emissions in Russia, taking into account the absorption capacity of forests, have amounted to about 52% of the level of 1990 year (Government of the Russian Federation 2019; TASS 2019). Russia has vast reserves of hydrocarbon energy resources, the export of which ensures a significant share of the country’s budget (the oil and gas sector brings up to 40% of the consolidated budget revenues); the country ranks second among European countries in terms of installed nuclear power (Rosatom 2019). These circumstances, together with a significant share of hydropower in the structure of the energy balance, determine the relatively low level and low rates of development of alternative (solar and wind) energy.

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However, Russia pursues a comprehensive policy for the development of alternative energy (Decree 2013). According to the accepted rules of localization of production, a manufacturer of renewable energy equipment must use only workpieces made in Russia or organize their own production in Russia. In case of violation of this requirement, a manufacturer is to pay high contractual penalties. To date, Russia has established its own production of solar modules and blades for wind turbines (Gimadi et al. 2019, pp. 17–18). Since 2013, the main measure of supporting alternative energy in modern Russia is represented with the mechanism for concluding power delivery contracts (PDC) for construction of RES facilities – wind power plants, solar power plants and /or small hydroelectric power plants. This measure is unique, since it helps subsidize the construction of RES facilities, rather than sell green electrical energy, as is done in most countries via green tariffs mechanism. The contract guarantees the return of costs for the construction of a renewable energy facility through an increased cost of capacity. However, such support is provided only to those RES generating facilities that are connected to a centralized electrical network. In the regional retail markets of electrical energy, renewable energy facilities are included in the regional programs of energy sector development and are provided with long-term tariffs ensuring a sufficient level of return on investment. Since 2017, certain incentives have been introduced for the development of RES micro-retailers, which implies the emergence of prosumers in the electrical energy market. Let us outline a range of problems concerning the improvement of the Russian system of alternative energy support. Firstly, it is the need to curb the outstripping growth in electricity prices for consumers, who are currently charged with paying for expensive renewable energy. Secondly, it is the need to create incentives for improving the efficiency of RES generation projects, since today such incentives are absent due to insufficient competition between investors. The third problem consists in constraining the development of renewable energy by the requirement of production localization (Report of the UNECE 2017). Finally, the fourth drawback of the regulatory system is that it does not stimulate the development of distributed generation in the territories not connected to the country’s centralized energy system. The area of such territories is about 60% of the country’s total area and is populated with about 20 million people (Porfiryev and Roginko 2016). It is obvious that the existing system of incentives for renewable energy generation in Russia needs to be reformed in the part of organizing competitive selection of investment projects; creating conditions for attracting investments in the capital market with the help of green bonds; attracting investment in the alternative energy in the territories of autonomous energy supply (for example, using the mechanism of accelerated depreciation). Ukraine Ukraine’s participation in the Paris Agreement provides for a reduction in greenhouse gas emissions by 2030 to 40% of the level of 1990 year (State Energy Efficiency 2020; Climate network 2018). The main types of generation facilities in Ukraine include thermal (coal and gas) and nuclear power plants; hydroelectric power plants, pumped storage plants, as well as

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solar and wind power plants. In the field of traditional energy, the leading role belongs to nuclear power plants. Despite the fact that nuclear power plants account for only 25% of the total installed capacity, their share in the volume of electrical energy production is more than 50%. Thermal power plants, on the contrary, account for 62% of the installed capacity, but produce only about 40% of the electrical power. This is due to significant technological and physical depreciation of the equipment and low efficiency coefficient. Hydropower is the third major electrical energy producer in the country (its contribution makes 9–10% of the total volume of energy generation). Maneuvering capacities of hydroelectric power plants ensure stability of energy supply at significant fluctuations in demand (Kopchinsky et al. 2018). For a long time (from 1995 to 2014), Ukraine had ranked second after Russia in terms of electrical energy production from all types of renewable energy sources, despite the relatively small value of this indicator (about 7% of the corresponding value for the Russian Federation) (Fig. 1). Over the last 5 years, it has been losing the second position to Kazakhstan (Fig. 1, 2). However, solar and wind energy has been experiencing a real boom in Ukraine over the last 10 years. Ukraine is significantly ahead of Russia and Kazakhstan, both in terms of production and contribution of solar and wind power generation to the total amount of electrical energy generated in the country (Fig. 3, 4). This result was achieved by the ongoing green energy support policy combined with the large-scale attraction of foreign capital. Since 2014, Ukraine has attracted € 3.3 billion of investments in renewable energy, including project financing from the European Bank for Reconstruction and Development (Chizhik 2018). The green tariff has been used as the main mechanism for supporting renewable energy sources for a long time. In Ukraine, this mechanism is ensured through the state’s obligation to buy the entire amount of electrical energy produced from renewable energy sources at a high tariff, which attracts investors. As a rule, this is done at the expense of budgetary funds, which Ukraine receives on credit from international financial organizations. The green tariff stimulates the rapid development of RES generation: over the past 3–4 years, the volume of investments in the industry has exceeded 1.1 billion euros (State Energy Efficiency 2020; Chizhik 2018). However, the increase in the total installed capacity and production of renewable energy generators provokes the growth in government spending on their development. At the same time, the technology of RES generation is developing and becoming cheaper worldwide, which leads to lower prices for electricity generated by solar and wind power plants. There are prerequisites for a planned reduction in budget funds allocated to support renewable energy sources. It can be implemented in two ways – through a gradual decrease in the guaranteed purchase price of green electricity and through a transition to new transparent market mechanisms for stimulating RES generation. Green auctions are one of such mechanisms in Ukraine just like in Kazakhstan. Bidders offer a lower price by competing with each other according to the criterion of the lowest cost of electrical energy. Thus, alternative energy is gradually entering the phase of market functioning without state support. Ukraine plans to hold the first green auctions for large renewable energy producers as early as 2020 (Chizhik 2018). The problems of modern regulation of the Ukrainian electric power industry include the shortage of highly maneuverable capacities and the underdevelopment of

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power grid infrastructure insufficient to ensure balancing of the power system in the process of integrating unstable solar and wind generation into it (Kopchinsky et al. 2018; Chizhik 2018). Further accelerated development of RES generation facilities and their harmonious integration into the future energy supply system requires creating modern highly maneuverable capacities and systems for regulating the frequency of electric current, as well as the development of modern smart networks, including local networks (smart grids, local grids).

3 Conclusion Support for green energy development in Kazakhstan, Russia and Ukraine is provided taking into account the obligations undertaken by these countries under the Paris Agreement. In all three countries, the dynamics of RES generation volumes (both for all types of RES in general and for solar and wind energy in particular) indicates positive trends in the development of green energy. However, the achieved levels of clean energy development indicators are still significantly lower than their global average values. Kazakhstan and Ukraine demonstrate a relatively high efficiency of green tariffs as a measure of RES generation support. Their application has its own specifics in each country. In Russia, the unique mechanism for concluding power delivery contracts (PDC) has been developed and used to support the green energy sector along with the requirements for localizing the production of equipment for the construction of RES facilities. The development of clean electrical energy generation in the post-Soviet space will be facilitated by improvement of state regulation of the energy sector through establishing transparent competitive market mechanisms (green auctions) and creating conditions for attracting investments in the capital market using green finance. Acknowledgments. The research has been supported by the grant of the President of the Russian Federation for the project “Development of an information system for evaluating the effectiveness of introduction and operation of renewable energy sources in the context of transition to smart production”, No. MK-1362.2020.9.

References Berezkina, M.Y., Sinyugin, O.A.: Prospects for low-carbon energy development in Russia. Environ. Energy Stud. 2 (2019). http://doi.org/10.5281/zenodo.3274715 Chizhik, K.: Why auctions are a way to develop alternative energy. IA LIGA Business Inform, Ukraine, 24 July 2018. https://biz.liga.net/ekonomika/tek/opinion/pochemu-auktsiony-etoput-razvitiya-alternativnoy-energetiki Climate network. Ukraine will increase its international obligations in combating climate change, Climate network of countries of Eastern Europe, the Caucasus and Central Asia, 13 December 2018 (2018). https://infoclimate.org/ukraina-uvelichit-svoi-mezhdunarodnyie-obyazatelstvav-protivodeystvii-klimaticheskim-izmeneniyam-kak-eto-povliyaet-na-politiku-gosudarstva/

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Conception. Conception of transition of the Republic of Kazakhstan to the green economy: Approved by the Decree of the President of the Republic of Kazakhstan on 30 May 2013, no. 577 (2013). https://greenkaz.org/images/for_news/pdf/npa/koncepciya-po-perehodu.pdf Decree. Decree of the Government of the Russian Federation of May 28, 2013 No. 449 (as amended on March 10, 2020) ‘On the mechanism for stimulating the use of renewable energy sources in the wholesale market of electrical energy and power’ (2013). http://www. consultant.ru/document/cons_doc_LAW_146916/ Enerdata: intelligence + consulting, Global Energy Statistical Yearbook (2019). https://www. enerdata.net/about-us/company-news/energy-statistical-yearbook-updated.html Gazeta.ru. The battle for degrees: Russia ratified the Paris agreement, Gazeta.ru. Business section, 23 September 2019 (2019). https://www.gazeta.ru/business/2019/09/23/12681889. shtml Gimadi, V., Amiragyan, A., Pominova, I., et al.: Support for RES generation: trends and opportunities. Analytical Center under the Government of the Russian Federation, Energy Bulletin, no. 71 (2019). http://www.ac.gov.ru/publications/bulletin Government of the Russian Federation. Decree of September 21, 2019 No. 1228 ‘On the adoption of the Paris Agreement’ (2019). http://government.ru/docs/37917/ IEA (2019). https://www.iea.org/data-and-statistics Inshakov, O.V., Bogachkova, L.Y., Popkova, E.G.: Energy efficiency as a driver of global competitiveness, the priority of the state economic policy and the international collaboration of the Russian Federation. In: Inshakov, O., Inshakova, A., Popkova, E. (eds.) Energy Sector: A Systemic Analysis of Economy, Foreign Trade and Legal Regulations. Lecture Notes in Networks and Systems, vol 44, pp. 119–134 (2019). https://doi.org/10.1007/978-3-31990966-0_9 Kazenergy. National Energy Report. Kazakhstan Association of Oil, Gas and Energy Organizations of KAZENERGY Complex (2019). http://www.kazenergy.com/upload/ document/energy-report/NationalReport19_ru.pdf Kopchinsky, G., Shenderovich, V., Shteinberg, N.: The way from survival to development in the electric power industry of Ukraine, Ukrinform Information Agency, 16 May 2018 (2018). https://www.ukrinform.ru/rubric-economy/2461764-kak-v-elektroenergetike-ukrainynakonec-perejti-ot-vyzivania-k-razvitiu.html Makarov, I.A., Stepanov, I.A.: Paris climate agreement: impact on world energy and challenges for Russia, Urgent Problems of Europe, no. 1, pp. 77–100 (2018) Makarova, A.A., Mitrova, T.A., Kulagin, V.A. (eds.) Forecast of energy development in Russia and in the world. Moscow School of Management SKOLKOVO (2019). https://energy. skolkovo.ru/downloads/documents/SEneC/Research/SKOLKOVO_EneC_Forecast_2019_ Rus.pdf Paris Agreement, United Nations, 12 December 2015 (2015). https://unfccc.int/sites/default/files/ russian_paris_agreement.pdf Parliament ratified, Parliament ratified the Paris Climate Agreement, Interfax-Ukraine Information Agency, 14 July 2016 (2016). https://interfax.com.ua/news/economic/357152.html Pegels, A., Vidican-Auktor, G., Wilfried Lükenhorst, W., Altenburg, T.: Politics of green energy policy. J. Environ. Dev. 27(1), 26–45 (2018). https://doi.org/10.1177/1070496517747660 Porfiryev, B.N., Roginko, S.A.: Alternative energy and socially oriented economics. J. St Petersburg Univ. 3, 4–19 (2016). https://doi.org/10.21638/11701/spbu05.2016.301 Porter, M.: The Competitive Advantage of the Nations. MacMillan Press, New York (1990) Renewables, Global Status Report. Key Findings, REN 21, UNEP. Paris, 31 p. (2015)

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Protective Coating Based on Carbon Nanotubes to Ensure Information Security of Particularly Important Objects and Confidential Information Ilya S. Dvuzhilov(&) , Yulia V. Dvuzhilova and Mikhail M. Belonenko

,

Volgograd State University, Volgograd, Russia {dvuzhilov.ilya,nevzorova}@volsu.ru, [email protected]

Abstract. Purpose: The purpose of the manuscript is to study the dynamics of two-dimensional extremely short optical pulses in an environment with a spatially modulated refractive index based on oriented carbon nanotubes. Approach: The authors obtained a physical model describing the behavior of the vector potential of the electric field of the pulse. The resulting effective equation, which characterizes the propagation of momentum in a given medium, was solved numerically. Findings: As a result, we obtained pictures showing the dynamics of pulses in the medium of oriented carbon nanotubes. It is shown that extremely short optical pulses can propagate steadily in such a medium, with a slight change in shape. The energy of the pulses remains localized in a limited spatial area. The dependences of pulse propagation on the period and depth of modulation of the refractive index of the medium were demonstrated. Originality: This study shows that based on the environment of oriented carbon nanotubes with a spatially variable refractive index, it is possible to create a protective coating that will ensure the information security of particularly important objects, including devices for storing, transmitting, processing information and their connections. Keywords: Carbon nanotubes
Extremely short optical pulses
Spatially modulated refractive index
Light bullets
Nonlinear optics
Information security JEL Code: O3 – Innovation
Research and Development Change
Intellectual Property Rights


Technological

1 Introduction Modeling of nanomaterials (nanopoints) to ensure the information security of a dedicated room is an acute task. A dedicated room is a service room where conversations (negotiations) of a confidential nature are conducted. Absorb materials allow you to provide technical protection of information, reducing the risks of information leakage © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 164–171, 2021. https://doi.org/10.1007/978-3-030-59126-7_19

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through the electromagnetic channel from: side electromagnetic radiation and guidance; eavesdropping GSM devices; hidden Wi-Fi video surveillance devices. Protection of information from electromagnetic radiation includes measures to prohibit the possibility of these signals leaving the zone and measures to reduce their availability. It should be noted the degree of danger of electromagnetic radiation in the implementation of measures to protect information. The range and direction of radiation are determined by the physical nature of the propagation of the corresponding type of electromagnetic waves and the spatial location of the source of the dangerous signal and its reception facilities. To reduce the risk of information leakage, it is assumed to apply absorbing material to the walls, floor and ceiling of the room. Moreover, due to the small thickness, it may not give away its presence, which will undoubtedly have a positive impact from an aesthetic point of view. Since the absorption surface based on a fixed-size nanomaterial has a narrow bandwidth, it is recommended to apply the material in several layers designed to shield the room from the frequencies of the main wireless network standards. Recently, composites that use nano-carbon materials, such as nanofibers, carbon nanotubes (CNTS) (Espinosa et al. 2007), nanowires, carbon aerogels, carbon nanofilm systems, nested nanoparticle. These nanoscale fillers have a number of advantages over traditional carbon materials (carbon fibers, carbon black, etc.) in terms of structural and electrical properties. Carbon-based structures play an important role in creating materials for absorbing and shielding electromagnetic radiation, due to their low specific gravity and corresponding electronic properties. CNTS, for example, are characterized by high values of the specific surface area and aspect ratio of particle sizes, they are highly anisotropic, and their characteristics (including electrodynamic ones) differ in the longitudinal and transverse directions. In the literature, there is a fairly limited number of data on the properties of arrays of vertically oriented CNTS. Polymer composite materials filled with carbon nanotubes are promising in terms of the characteristics of shielding and absorption of electromagnetic pulses. These materials have a fairly high electrical conductivity with a small CNT content (low percolation thresholds), while maintaining the technological characteristics of the polymer matrix (elasticity, lightness, environmental friendliness, etc.). In addition, it is possible to control the spatial distribution of CNTS in the polymer matrix and thereby regulate the electrodynamic characteristics of composite materials, which depend on the orientation of CNTS in relation to the direction of propagation of electromagnetic radiation. One of the main advantages of carbon nanostructures is that by changing the size and geometry of such objects, it becomes possible to control the conducting properties of the system, One of the main advantages of carbon nanostructures is that by changing the size and geometry of such objects, it becomes possible to control the conducting properties of the system, as well as its optical properties, which is extremely important for creating promising applications and materials, for the development of which it is necessary to solve problems about the propagation of electromagnetic pulses in various environments. Of particular interest is the evolution of structurally stable solitary pulses that propagate in nonlinear media (Fibich et al. 2004, Dresselhaus et al. 2000, Eletskii et al. 2004).

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To solve the problems described above, first of all, it is necessary to investigate how electromagnetic pulses interact with the CNT array. This kind of work has been known for a long time, for example, it was shown that the propagation of an extremely short optical pulse is stable in a medium with CNT (Fedorov et al. 2014). Also important is the research on the propagation of extremely short optical pulses in a medium with a variable refractive index based on CNT. The presence of such a medium distorts the shape of the pulse, and also slows its propagation, because there is interference of counter waves. The refractive index modulation period affects the group velocity of the optical pulse wave packet. It was shown that the increase in the period leads to the fact that the pulse is less often “reflected” from the lattice nodes, and its speed increases. So, the change in the refractive index modulation period can be controlled by the pulse propagation speed, which is an important result for solving various applied problems. Slowing of the pulse and the change of its shape occurs when increasing the modulation depth of the refractive index, because of strong interference. The propagation of two dimensional light bullets in a Bragg medium differs significantly from the propagation of pulses in media with a constant refractive index, this is due to the fact that the Bragg medium has a more complex transverse structure and, consequently, the internal vibrational modes of the bullet are excited. Discrete solitons in a system with a periodically changing refractive index propagate steadily, but slow down as a result of interaction with the Bragg lattice. And also there is an exchange of energy between different layers of CNT. The pulse on the “central” waveguide propagates almost without changing its shape, in contrast to the pulses on neighboring waveguides. The wider the pulse applied to the system, the greater the amplitude of the neighboring “central” waveguide (Belonenko et al. 2015). In media with a spatially modulated refractive index (Bragg, inhomogeneous) with carbon nanotubes, the propagation of two- dimensional extremely short optical pulses with a Bessel cross- section is quasi-stable. Part of the energy is transferred to the side “petals”. The inhomogeneity of the medium significantly affects the shape of the pulse and the speed of its propagation. The pulse shape is not affected by the parameter of the Bessel function (Belonenko et al. 2016). Three-dimensional extremely short optical pulses propagate steadily in strong magnetic fields, the presence of a magnetic field does not significantly affect the propagation of the pulse, so we can talk about the invariance of the performance of the element base of opto-and nanoelectronics to the influence of external magnetic interference (Nevzorova et al. 2017, Dvuzhilov et al. 2017). The propagation of a three-dimensional extremely short optical pulse (light bullet) in a periodically inhomogeneous medium of oriented carbon nanotubes in an optical resonator was stable. At long times, the pulse remains localized along the axis of the cylindrical resonator. The formation of a stable structure occurs due to repeated reflection of waves from the walls of the resonator and subsequent interference. This interaction reduces the width of the pulse in the direction of the transverse axis of the resonator (Belonenko et al. 2019). In a medium with carbon nanotubes, in which the refractive index has spatial modulation, as well as with additional consideration for energy dissipation and “pumping”, the propagation of three- dimensional extremely short optical pulses with a Gaussian and super- Gaussian cross-section is stable. To preserve the pulse amplitude over time of a super- Gaussian cross-section requires significantly less “pumping” of energy into the medium than for a Gaussian cross -

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section pulse (Dvuzhilova et al. 2019). In a photonic crystal with a spatial variable refractive index made of carbon nanotubes stable propagation of a two dimensional extremely short optical pulse is possible. The dependences of the propagation of a twodimensional extremely short optical pulse on the lattice period and the modulation depth were also established. When these parameters are changed, the propagation speed and shape of the pulse change. These results can be used in the construction of waveguides based on photonic crystals, in which there will be no energy loss at the bends of the material. Thus, all the previously obtained results served as an incentive for conducting a study aimed at studying extremely short optical pulses in a medium with a spatially variable refractive index in the presence of oriented CNTS. This research will allow us to model a reflective coating, which can be used to protect the information of dedicated premises, storage, processing, transmission of information and their connections, which is a priority task in modern society.

2 Methodology The electromagnetic field of a two-dimensional extremely short optical pulse in a medium with a variable refractive index of CNT is described using Maxwell’s equations, using Coulomb calibration (Slepyan et al. 1999). The vector potential and current have a single z-component, which depends on spatial coordinates and time (Landau et al. 1970). The pulse propagates perpendicular to the CNT axis, and its electric field and current generated by the interaction of electrons that are located in the nanotube conduction zone and the electromagnetic field of the PCOI are oriented parallel to the nanotube axis. The following basic approximations are used: first, there is no accounting for the electric field of the surface on which CNTS are located. Second, there is no accounting for inter-band transitions, since this reduces the boundaries of the pulse frequency, which is in the near -IR range. And third, we used the continuous medium approximation, so it is assumed that the resulting current is dispersed over the volume. The latter approximation is applicable because the area of space in which the optical pulse is localized is larger than the dimensions of CNTS and the distances between them. The distance at which there are strong changes in the value of the refractive index for a photonic crystal is even greater, so this fact does not have a significant impact.

3 Results The resulting effective equation was solved using numerical methods, namely the method of difference approximation. The difference scheme “cross” was used. The Courant condition was used to determine the time and coordinate grid. The accuracy of the obtained solution is about 99.99%. The initial conditions for the vector potential were set as a Gaussian cross section. The refractive index of the medium was modeled as:

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nðx; yÞ ¼ n 0  ð1 þ a  cos ð2 p x=vÞÞ

ð1Þ

where a – depth of modulation of the refractive index of the medium, v – the period of modulation of the refractive index of the medium. The results of numerical simulation showed the following (Fig. 1): the solution for a two-dimensional extremely short optical pulse in the medium of oriented carbon nanotubes over time remains limited in a small spatial area, which means that the balance between dispersion and nonlinearity of the CNT medium allows such a pulse to propagate steadily (Zhukov et al. 2013, Zhukov et al. 2014).

Fig. 1. Evolution of a two-dimensional extremely short optical pulse in a medium with a variable refractive index from oriented CNTS with a period of 2.5 mkm at various points in time 2 ps: A) 2 ps, B) 4 ps, C) 8 ps, D) 12 ps. Relative units of coordinates (mkm) and electric field are deposited along the axes (108 V/m). Source: Developed and compiled by the authors.

The form of the pulse changes over time, due to the action of dispersion effects. Owing to the simultaneous action of the dispersion effects of blurring and the nonlinearity of the medium, many peaks are formed in the transverse structure of the pulse, but despite this, this pulse remains localized in such a medium.

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As seen in Fig. 2 the depth of modulation does not significantly affect the shape of the pulse. The amplitude of the pulse almost keeps its value. The extremely short optical pulse remains concentrated in a limited area of space. Small changes are observed only in the transverse structure.

Fig. 2. Evolution of a two dimensional extremely short optical pulse with a variable refractive index from oriented CNTS with a period of 2.5 mkm with a different modulation depth indicator a at a time T = 8 ps A) a = 0,3, B) a = 0,45, C) a = 0,6, D) a = 0,75. Relative coordinate units (mkm) and electric field are deferred along the axes (108 V/m). Source: Developed and compiled by the authors.

The following result concerns the dependence of the shape and speed of extremely short pulses on the lattice period of the photon crystal v and is shown in Fig. 3. As the lattice period increases, the extremely short pulse propagates faster. It is obvious that for an infinite lattice period, due to the absence of interference processes, the pulse will propagate at the maximum speed. This was confirmed by numerical calculations. We also note the distortion of the pulse shape.

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Fig. 3. Evolution of a two-dimensional extremely short optical pulse with a variable refractive index from oriented CNTS with a depth of modulation a = 0,45 at time T = 8 ps. with different lattice periods of a photonic crystal: A) v = 2 mkm, D) v = 3 mkm, C) v = 4 mkm, D) v = 5 mkm. Relative units of coordinates (mkm) and electric field are deposited along the axes (108 V/m). Source: Developed and compiled by the authors.

4 Conclusion The following conclusion can be drawn from this work: in a medium of oriented CNTS with a spatially variable refractive index made of carbon nanotubes, a stable propagation of a two-dimensional extremely short optical pulse is possible. The dependences of the propagation of a two-dimensional extremely short optical pulse on the period and depth of the refractive index modulation were also established. When these parameters are changed, the propagation speed and shape of the pulse change. Thus, by changing the parameters of the environment, it is possible to control the properties of the pulse, which is important for practical applications. As described above, these results can be used to create a protective coating to ensure the information security of critical objects, including devices for storing, processing, transmitting information and their connections.

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Acknowledgements. Dvuzhilov I.S., Dvuzhilova Yu.V., Belonenko M.B. thanks the Ministry of Science and Higher Education of the Russian Federation for the numerical modeling support under the government task (no. 0633-2020-0003).

References Espinosa, E., Ionescu, R., Chambon, B., Bedis, G., Sotter, E., Bittencourt, C., Felten, A., Pireaux, J.-J., Correig, X., Llobet, E.: Hybrid metal oxide and multiwall carbon nanotube films for low temperature gas sensing. Sens. Actuators B Chem. 127, 137–142 (2007) Fibich, G., Ilan, B.: Optical light bullets in a pure Kerr medium. Opt. Lett. 29, 887–889 (2004) Dresselhaus, M.S., Dresselhaus, G., Avouris, P.: Carbon nanotubes: synthesis, structure, properties, and application. Springer, Berlin (2000) Eletskii, A.V.: Sorption properties of carbon nanostruktures. Achievements Phys. Sci. 174(11), 1191–1231 (2004) Fedorov, E.G., Konobeeva, N.N., Belonenko, M.B.: Two-dimensional electromagnetic breathers in an array of nanotubes with multilevel impurities. Russ. J. Phys. Chem. B 8, 409–415 (2014) Belonenko, M.B., Nevzorova, Y.V., Galkina, E.N.: Discrete solitons in Bragg environment with carbon nanotubes. Mod. Phys. Lett. B 29, 1550041 (2015) Belonenko, M.B., Dvuzhilov, I.S., Nevzorova, Y.V.: Two-dimensional extremely short optical pulses with a Bessel cross section in inhomogeneous medium of carbon nanotubes. Opt. Spectrosc. 121, 739–743 (2016) Nevzorova, Y.V., Dvuzhilov, I.S., Boroznin, S.V., Zaporotskova, I.V., Belonenko, M.B.: Light bullets in an Bragg environment with carbon nanotubes in the external magnetic field. In: EPJ Web of Conferences, vol. 161, p. 02018 (2017) Dvuzhilov, I.S., Dvuzhilova, Y.V., Belonenko, M.B., Zaporotskova, I.V., Boroznina, N.P.: Three-dimensional few-circle optical pulses in the inhomogeneous environment of carbon nanotubes in an optical resonator. In: EPJ Web of Conferences, vol. 161, p. 02008 (2017) Belonenko, M.B., Dvuzhilov, I.S., Dvuzhilova, Y.V., Boroznin, S.V.: Light bullets in a periodically inhomogeneous medium of oriented carbon nanotubes in an optical cavity. Opt. Spectrosc. 126, 394–399 (2019) Dvuzhilova, Y.V., Dvuzhilov, I.S., Ten, A.V., Boroznina, E.V., Belonenko, M.B.: Threedimensional few-cycle optical pulses of Gaussian and super-Gaussian cross-section inside the Bragg medium based on carbon nanotubes with dissipation. Mod. Phys. Lett. B 33, 1950275 (2019) Slepyan, G.Y., Maksimenko, S.A., Kalosha, V.P., et al.: Highly efficient high-order harmonic generation by metallic carbon nanotubes. Phys. Rev. A 60, 777–780 (1999) Landau, L.D., Lifshitz, E.M.: Theory of Elasticity. Pergamon Press, Oxford (1970) Rafii-Tabar, H.: Computation Physics of Carbon Nanotubes. Cambridge University Press, Cambridge (2008) Zhukov, A.V., Bouffanais, R., Fedorov, E.G., Belonenko M.B.: Three-dimensional electromagnetic breathers in carbon nanotubes with the field inhomogeneity along their axes. J. Appl. Phys. 114, 143106 (2013) Zhukov, A.V., Bouffanais, R., Fedorov, E.G., Belonenko, M.B.: Interaction of a two-dimensional electromagnetic breather with an electron inhomogeneity in an array of carbon nanotubes. J. Appl. Phys. 115, 203109 (2014)

Determination of the Spatial Position of Cars on the Road Using Data from a Camera or DVR Alexey Y. Gordeev(&)

and Vladimir A. Klyachin

Volgograd State University, Volgograd, Russia [email protected], [email protected]

Abstract. Purpose: The purpose of this article is to develop a method for calculating the orientation of a car in a photograph from a DVR. This problem arises when designing autonomous vehicles in an urban environment. Design/Methodology/Approach: The solution to this problem is based on the use of a neural network, the training of which is based on data consisting of 4262 pre-marked photographs provided by the Kaggle community. Originality/Value: For three angle coordinates regression we employ the VGGnet with all fully-connected layers removed and the last MaxPooling2D output inputed to three parallel regression branch group each contained two branches for computing the confidence for each angle bin and fully regressed angular correction. For three angular coordinates regression we utilize VGGnet16 with all FC layers removed, and the last MaxPooling2D output layer is fedded to inputs of the three parallel regressive groups contained two branches for appropriate angle bin confidence estimation (softmax classification branch) and also fully regressive additional cos(Δh) and sin(Δh) angular corrections computing relative to certain bin. Since the current task didn’t require direct 3D car boxes location estimation on the road, the structure of our neural network didn’t have a regression block on spatial dimensions of 3d bounding box for a car, used for similar algorithm testing on such datasets as KITTI и Pascal3D+. Keywords: Neural network


Object detection
3D reconstruction

JEL Code: R41

1 Introduction The position of nearby vehicles is a key issue for autonomous vehicles in urban environments (see [1–10]). Self-driving cars have come a long way in recent years, but they are still not perfect. Consumers and lawmakers remain wary of the adoption of relevant acts, in part because of doubts about the ability of vehicles to accurately perceive objects while driving. Baidu Robotics and Autonomous Driving Laboratory, together with Peking University, has set the task to fill this gap. They provided the Kaggle community (https://www.kaggle.com) with over 60,000 copies of three-dimensional cars with markings of 5,277 real images based on industrial-class CAD models. © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 172–180, 2021. https://doi.org/10.1007/978-3-030-59126-7_20

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The task is to develop an algorithm for assessing the absolute position together with the orientation in the space of vehicles means (6 degrees of freedom) for one image in a real transport environment. This problem belongs to the field of computer vision, and its solution will enable the development of autonomous vehicles.

2 Materials and Method The provided dataset contains street photographs taken from the roof of the car. Some cars in the images are not of interest (for example, too far located, etc.). Binary masks are provided as separate two-color image files so that they are not taken into account when processing. Thus, our task is to predict the position and orientation of all unmasked cars in test images. Information about the position and spatial orientation of the car in the picture is in the train.csv file. Note that rotation values are angles expressed in radians relative to the camera. The information in the above file is formed as lines as follows: Model type ðintegerÞ; yaw angle; pitch angle; roll angle; x; y; z: A specific example with two cars in the photo (Fig. 1):

Fig. 1. Example image from the DVR

5 0; 5 0; 5 0; 5 0; 0 0; 0 0; 0 32 0; 25 0; 25 0; 25 0; 5 0; 4 0; 7

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The essence of the proposed method is to use the extended and slightly modified version of the approach proposed in [2] for the case of determining the value of all 6 parameters (degrees of freedom) that determine the spatial position of cars on the road in the solved Chinese problem. In particular, in the initial work [2], the vehicle location is estimated by the yaw angle, since it is assumed that the observer’s camera is aligned with the roadway and the angle between the camera’s plane and the road’s plane is unchanged and is p/2. This assumption is quite consistent, since for most tasks of autonomous driving, recognition of urban traffic objects, etc. the value of the roll and pitch for cars on the road is not significant, unless, of course, we are talking about the situation of vehicles and special constructions like arrivals/exits from bridges, ramps, junctions, etc. (although the issue of detecting the spatial location of cars in places of exits and arrivals at the interchanges is becoming increasingly relevant). This approach was used in the famous KITTI dataset or in the slightly less well-known Pascal3D+ and Bosch Dataset. In the problem we are solving, in the general case this is not so. However, the technology used to determine the parameters of traffic flow objects in the KITTI dataset can be quite successfully applied to the studied data set for the tasks of Peking University. In particular, the multimodal regression procedure for determining the yaw angle of objects from the KITTI dataset, which was proposed and successfully applied in [2], can be no less efficiently used to find the roll and pitch angles of observed vehicles in the city stream. Moreover, since the range of possible values for these two degrees of freedom is limited significantly more than for the yaw angle, the use of multimodal regression to calculate their values will be even more effective. It should be noted that the mechanism introduced in [2] called regression based on multimodal distribution is a powerful enough mechanism for finding the relative position of a car in space. Relative - because using this method it is possible to determine the turns of the car relative to the coordinate axes in the system associated with the car itself, i.e. in a coordinate system placed in the geometric center of the car. Since the task being solved during the current study involves, like most tasks of this kind, determining the position only from the image of the machine (in this case, we don’t have point clouds from the laser scanner at our disposal, and therefore the depth map is not initially available to us), and even If it’s not a stereo image, it is believed that the center of the coordinate system associated with the analyzed vehicle is somewhere within the 2D box that limits its image in the analyzed image. To simplify the calculations, it is usually assumed that the center of the coordinate system with the geometric center of the box. Thus, we come to the following structure for solving the problem under consideration. 1. Using any of the well-known Object Detection frameworks, select all possible cars on the road for each of the processed images. We do not need some rather distant and poorly displayed machines, because for them, along with a set of pictures in the training and test data files - train_images.zip and test_images.zip, respectively, the corresponding masks in the files train_masks.zip and test_masks.zip are also provided for the task. The latter allow us to exclude from consideration a number of regions in the image that are considered not particularly significant and most likely will give a significant error. In the framework of this work, we opted for the KerasCenternet framework [3], as one of the most effective Object Detection Framework

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at the moment, and also very successfully combined with the rest of the code created using the Keras deep learning library. 2. Having information on the location of the center of each of the cars in the world coordinate system based on the data presented in the train.csv file for each image from train_images.zip, as well as on the basis of the two internal camera parameters - focal length (in meters) and location optical axis (in pixel coordinates) creates a regression SVM model or neural network, which is essentially an estimate of the ^ camera matrix K. 3. Based on the obtained estimate of the camera matrix, as well as the 2d box for the corresponding car, the image shows the location of the 2d box that limits the real physical car in the world coordinate system. 4. Next, the aforementioned multimodal regression is performed for yaw, pitch and roll angles, as well as parameters of a 3d box (parallelepiped shape) that limits the corresponding vehicle, in particular, front/ rear wall sizes and depths based on available 2d box data. Here, nevertheless, regression is used for the box restricting the car in the image, since the camera parameters represented by the neural network can give an additional error for the 2d box restricting the car in a plane parallel to the camera plane in the real world. For this case of angle regression along 3 rotation axes, the estimation error is slightly modified relative to the basic formulation of [2] and takes the following form: Lh;#;u ¼ Lyh þ Lp# þ Lru ¼

 X  j j Lconf þ wj Lloc ;

j2fy;p;rg

where Lh;#;u is a total estimation loss for all three rotation angles and letters y; p; r are noted yaw, pitch and roll accordingly. It should be noted that the weighting coefficients wj in front of the terms describing the contribution of localization errors within the one angle bin are generally different for yaw, pitch and roll, since they describe the degree of regularization of the procedure for calculating the angular position with respect to different axes, taking into account different ranges of the corresponding angles variation. In particular, due to an a priori larger range of variation of the yaw angle h than the pitch # and roll u are, we used wy ¼ 1:0, while wp and wr were taken equal to 0.9. The angular localization loss around the center of angular bin for each axis was calculated as in [2] using the following expression: Lloca ¼ 

  1 X cos a  cai  Dai ; a 2 fh; #; ug; i Na

where Na denoted the number of intersected angular bins covered the ground truth rotation angle a, cai is the angle of the center of bin i, a Dai is the angular correction that needs to be applied to the center of bin i. 5. After finding the corresponding local yaw, pitch and roll angles h, # and u accordingly the angles of rotation of the atomic vehicle are found in the world coordinate system according to expressions hg ¼ h þ hc , #g ¼ # þ #c and ug ¼ u, because roll is rotation angle relative to the axis perpendicular to the plane of the

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camera. The angles hc and #c , which are the angles at which the center of the 2d box is observed from the camera’s location, are found using the following procedure. In our research, we limited ourselves to the task of calculating one parameter of the vehicle’s spatial orientation - yaw angle (yaw). To this end, it was decided to build a neural network, the structure of which is shown in Fig. 4. To prepare the data, it is necessary to perform a series of calculations.

Fig. 2. The geometry of the mutual arrangement of objects of study

Figure 2 shows the location of the camera (observer at point O) and the vehicle. It is assumed that neural network prediction will be occur for the angle h between the directions AB and OC. Directly in the data of the train.csv file, there is an angle value between the directions AB and OD. The direction OD is responsible for the direction orthogonal to the plane of the camera. Since the x, y, z coordinates of the center of the car in the camera coordinate system are given directly in the train.csv file, the angle between the directions AB and OC is 1

h ¼ arccosðz=ðx2 þ y2 þ z2 Þ =2 Þ:

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3 Implementation As already mentioned in Sect. 1, we use Keras-Centernet for cars 2d boxes obtaining on proposed images. Examples of vehicle boxes allocation are shown in Fig. 3.

Fig. 3. Identification of cars in the image at the stage of training the neural network.

For three angle coordinates regression we employ the VGGnet [4] with all fullyconnected layers removed and the last MaxPooling2D output inputed to three parallel regression branch group each contained two branches for computing the confidence for each angle bin and fully regressed angular correction. For three angular coordinates regression we utilize VGGnet16 [4] with all FC layers removed, and the last MaxPooling2D output layer is fedded to inputs of the three parallel regressive groups contained two branches for appropriate angle bin confidence estimation (softmax classification branch) and also fully regressive additional cos(Δh) and sin(Δh) angular corrections computing relative to certain bin. Since the current task didn’t require direct 3d car boxes location estimation on the road, the structure of our neural network didn’t have a regression block on spatial dimensions of 3d bounding box for a car, used for similar algorithm testing on such datasets as KITTI и Pascal3D+ in [2]. In input block of every pair of regression branches for yaw, pitch and roll estimation we used 256, 128 and 128 neurons accordingly due to the fact of apriori larger angular range for yaw.

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Fig. 4. The structure of neural network for multimodal regression on three angle coordinates.

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Another difference of our work from al. [2] and [4] is utilization of Batch Normalization in neural network structure that dedicated to ensure more uniform convergence in the learning process, as well as to prevent saturation of gradients in the older layers. During the training and inference we fed our neural network with the images resized to 224x224 having three colours channels. The network was trained with Adam optimizer using a fixed learning rate of 0.001. The structure of our neural network is presented on Fig. 4.

4 Results and Prospects At present time, we are taking the results and also studying the impact of various hyper parameters on operating quality of the regression neural network and the 2D box detection CNN based on Keras-centernet framework, as well as their mutual influence. As for the prospects of this work, we plan to design a deep generative adversarial network (dGAN) based on current convolutional neural network with regressive output branches. The regressive neural network containing three branches of multimodal regression according to angular coordinates plus an additional regressive branch for car’s 3D bounding box spatial dimensions estimation will act as a generator, moreover the latter will be used as generator output, and the neural network obtaining the coordinates of this 3D box as input and comparing it with reference one for car of appropriate make and model stored in car_models.zip file according to the defined rotation angles around the all axes will serve as a discriminator. For this purpose the discriminator will have additional input receiving car image limited by appropriate 2D box for make and model recognition of this car and selection of 3D bounding box with the appropriate spatial dimensions for further processing. Acknowledgments. The article was prepared with financial support of the Russian Foundation for Basic Research and Volgograd Administration, Grant of the RFBR 19-47-340015 and this work was supported by the Ministry of Education and Science of Russia (the project “Development of Virtual 3D Reconstruction of Historical Objects Technique”, scientific theme code 2019-0920, project number in the research management system FZUU-0633-2020-0004).

References 1. Chen, X., Ma, H., Wan, J., Li, B., Xia, T.: Multi-view 3D object detection network for autonomous driving. In: Proceedings of the 30th IEEE Conference on Computer Vision and Pattern Recognition, CVPR, Honolulu, HI, USA, 22–25 July 2017 2. Mousavian, A., Anguelov, D., Flynn, J., Kosecka, J.: 3D bounding box estimation using deep learning and geometry. In: 2017 IEEE Conference on Computer Vision and Pattern Recognition (CVPR) (2017). https://doi.org/10.1109/cvpr.2017.597 3. Zhou, X., Wang, D., Krähenbühl, P.: Objects as points (2019). arXiv preprint:arXiv:1904. 07850 4. Simonyan, K., Zisserman, A.: Very deep convolutional networks for large-scale image recognition. In: CoRR abs/1409.1556 (2014). http://arxiv.org/abs/1409.1556

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5. Hu, H., Cai, Q., Wang, D., Lin, J., Sun, M., Krhenbhl, P., Darrell, T., Yu, F.: Joint Monocular 3D Vehicle Detection and Tracking (2018). arXiv:1811.10742v3 6. Zarzar, J., Giancola, S., Ghanem, B.: PointRGCN: Graph Convolution Networks for 3D Vehicles Detection Refinement (2019). arXiv:1911.12236v1 7. Li, B., Zhang, T., Xia, T.: Vehicle detection from 3d lidar using fully convolutional network. In: Robotics: Science and Systems (2016) 8. Zia, M.Z., Stark, M., Schindler, K.: Are cars just 3d boxes? Jointly estimating the 3d shape of multiple objects. In: CVPR, pp. 3678–3685 (2014) 9. Geiger, A., Lenz, P., Urtasun, R.: Are we ready for autonomous driving? The kitti vision benchmark suite. In: Proceedings of the IEEE Conference on Computer Vision and Pattern Recognition (CVPR) (2012) 10. Shin, K., Kwon, Y., Tomizuka, M.: Roarnet: A robust 3d object detection based on region approximation refinement (2018). arXiv:1811.03818

Analogical Reasoning and Metaphor in Uncovering the Essence of Smart Technologies Inna V. Skrynnikova(&) Volgograd State University, Volgograd, Russia [email protected]

Abstract. Purpose: The paper substantiates the critical role of analogical reasoning and figurative language in constructing and interpreting the concepts of smart technologies and stresses the importance of metaphor as a linguocognitive mechanism used to interpret contested or ambiguous concepts of ubiquitous computing. The main purpose of the study is to identify the dominant metaphorical models for conceptualizing smart technologies, reveal the explanatory potential of metaphor and outline the consequences of specific metaphors application for further development of smart technologies. Design/Methodology/Approach: Methodologically, the current research relies on the theory of embodied cognition, according to which there is a complex inextricable link between our sensory-motor experience and behavior, emotions and decision-making (Varela et al. 1991; Lakoff and Johnson 1980); the neural theory of language and metaphor (Feldman 2006; Lakoff 2009), which postulates that it is metaphor that enables us to understand complex, abstract concepts (target domains) through establishing cross-domain mappings with more familiar, concrete concepts (source domains); as well as the theory of conceptual integration/blending theory (Fauconnier et al. 2003). Findings: The paper claims that, being complex cognitive mechanisms, metaphors serve to effectively “inspire” new associations regarding the nature of smart technologies, highlighting important aspects of ubiquitous computing. However, one should be strikingly cautious when creating new analogies, since some of them can be extremely deceptive, misleading us and distorting the essence and the long-run objective of applying smart technologies. The importance of analogical reasoning verbalized by metaphors should not be underestimated, since the latter act simultaneously as interpreting tools of complex concepts and as means guiding the further development of information infrastructures of smart technologies. Originality/Value: The novelty of the proposed approach lies in the author’s attempt to apply the major assumptions of the embodied cognition theory in combination with the neural theory of language and simulation semantics to the analysis of the smart technologies concepts, many of which are metaphorical in nature. Keywords: Analogical reasoning
Conceptual metaphor
Cognitive modelling
Mental simulations
Abstract concepts
Smart technologies Interpretative mechanisms

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 181–189, 2021. https://doi.org/10.1007/978-3-030-59126-7_21




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O35
Z1

1 Introduction In recent years, the term “smart technologies” has become a buzzword that keeps coming up in the discussions of both professionals in different fields and laymen. However, its comprehensive and clear definition is still vague due to the ambiguous interpretation of the term by representatives of various professional communities. What should exactly be understood by smart technologies: Internet connection, artificial intelligence, a built-in capability of learning which takes into account the environment without involving humans, or a combination of all these aspects? The term “SMART” was initially an acronym for “Self-Monitoring, Analysis and Reporting Technology”, but it has become widely used as “smart technologies” as it implies something that enables previously inanimate objects – from cars to basketballs to clothes – to “communicate” with us and even guide our behavior. Smart technologies are currently primarily understood as: 1. smart devices that are automated, to some extent, and can be easily programmed through an intuitive user interface (for example, a smart coffee machine that you program to make coffee at a specific time, with no network connection required); 2. smart connected devices, controlled remotely or via Bluetooth, LTE, Wi-Fi, wired or other means of communication (e.g. a smart light bulb, an intelligent security camera, a smart refrigerator or smartphone); 3. Internet of Things (IoT) devices, i.e. software-determined products that are a combination of a product, application, analytics, and the Internet/networks. They create more value than smart or connected devices, because they are more scalable, modernizable, automated and ready for future use (smart cities, smart factories and homes). Such a variety of definitions, caused by the complex nature of high-tech concepts, inevitably gives rise to ambiguous interpretations of smart technologies, the prospects for their further application and the risks associated with human-computer interaction. Therefore, there arises the need to find an adequate interpretative mechanism that can explain the essence and various aspects of smart technologies, predicting the goals and effectiveness of their application. Numerous studies in various fields (Harré 1988; Duit 1991; Clement 1993; Treagust et al. 1992; Lakoff and Johnson 1980; Gentner 1989) have convincingly shown the effectiveness of using analogy as an explanatory tool to facilitate the understanding of complex abstract concepts, and as a tool argumentation. Analogies are a fundamental aspect of human cognition: people spontaneously engage in analogy-based reasoning to understand unfamiliar situations. At the cognitive level, analogies are an essential way of thinking. Note that analogies are a natural way of explaining concepts. For example, when asked “What is ___?” we often say: “it’s like …”, thus, grounding our understanding of new, unfamiliar things on other things that are more available to us, we learn to build correspondences and explain using the mappings between ideas.

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One of the implicit types of analogy is metaphor. Lakoff and Johnson (1980) argue that metaphors are the fundamental mechanism of cognition, and the human conceptual system is largely metaphorical. The semantic analysis of the textual corpus about smart technologies shows that metaphors also form a conceptual basis for understanding numerous concepts of the Internet of Things, making it easier for us to understand its complex abstract concepts by establishing an analogy with more specific and familiar things and simultaneously reflecting the essence of ubiquitous computing. Thus, metaphors guide our ideas about value, desirability, as well as ways of applying smart things and technologies and possible risks associated with it.

2 Methodology The evidence in favour of the hypothesis that metaphor as a linguocognitive mechanism possesses an interpretative potential, explaining the essence and methods of interacting with smart technologies, is based on the assumptions of the theories mentioned above, as well as the corpus of smart technologies metaphors extracted by the author on the basis of deep semantic analysis (Lakoff and Johnson 1980). The latter involves establishing conceptual mappings between the source domain (a familiar concrete concept) and the target domain (a complex abstract concept). According to the notation system generally accepted in cognitive science, conceptual metaphors in this study are capitalized in order to distinguish them from linguistic metaphors. The study into the role of figurative language and metaphor in understanding the abstract concepts of smart technologies is based on the fundamental principles of the embodied cognition theory (Lakoff 2009; Gibbs 2017) and enables us to argue that conceptual metaphor is one of the critical tools that determine the development and use of abstract concepts. Metaphors make it possible for us to rely on specific domains familiar to us from our bodily experience of interacting with the environment in order to get an insight and talk about abstract concepts, resulting in new abstract representations. These abstractions derived from embodied experience can then be flexibly applied to understand new situations. Therefore, metaphors involve mental simulation, attesting their neural nature and enabling us to transfer the actions that we perform with physical objects onto abstract entities.

3 Results The semantic analysis of textual sources describing smart technologies, followed by the extraction of conceptual metaphors, enabled the author to identify the dominant models for explaining various aspects of smart technologies. The list of metaphors below is not exhaustive, but reflects the current ways of conceptualizing the ubicomp user experience and encourages further creative thinking about how people relate to new technologies and how they should be preferably developed. The group of organizational metaphors makes reference to the ideas about the ways the systems of interacting ubiquitous computing technologies are related to each other and to the people who apply them.

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1. SMART HOME is a FACTORY This metaphor reflects our idea that household robotics can be defined as a set of elements that, when installed, connected and automatically controlled, frees its users from routine involvement into everyday activities and simultaneously provides optimized control of comfort, energy consumption, security and communication (Bravo et al. 2006). For example, the area of “home automation” sees the home as a kind of factory, implying that repetitive activities should be automated to maximize leisure time. According to this metaphorical model, people own a factory. Their role is to act as overseers by organizing an efficient instrument assembly line to produce more and more free time. The point is that automation will conquer back time to enjoyable activities (Siio et al. 2004). As shown by Cowan (1983), one of the unintended consequences of such technologies is that they tend to raise expectations rather than eliminate labor costs. This may be due to the fact that smart technologies do not make any attempts to decide how to fill up this time and determine whether repetitive work is a chore. Most “labor-saving” products fall into this category. The basic assumption here is that technology should and will eliminate repetitive actions. 2. INFORMATION PROCESSING is a PUBLIC UTILITY Owing to the computers of the future, computing may someday be organized as a utility service, for example, electricity. Garfinkel and Abelson (1999) argue that ubiquitous computerization has long been characterized as a new form of electrification. This metaphor implies that information processing will be as available and accessible in many places as electricity. From this perspective, the process of computing on personal computers is similar to the electrification of ordinary houses and workplaces since the late 20th century, which will be as common as electric lighting. In this metaphor, the walls and floors of the spaces we inhabit are residential channels filled with information processing that enlivens devices like electric lamps. 3. UBIQUITOUS COMPUTING is NATURAL LANDSCAPE The ubiquitous computing brings us back to pre-industrial life in the sense that now, while walking through the woods, we have more information at hand than in any computer system. But people still find walking in the woods relaxing, and computers depressing. This metaphor implies that technology and nature can coexist in such a way that smart technologies become an integral part of nature. Projects using this metaphor emphasize the “organic” nature of interaction (Rekimoto 1997) and the way computers can free people so that they could leave their offices and lie on the beach. 4. SMART TECHNOLOGIES is STEAM According to this analogy, ubiquitous computing is the cloud that surrounds us. This metaphor “compares” the constant availability of information and information processing to steam covering every person and every object. Like a cloud itself, every one of us is constantly moving in a cloud of digital information. The clouds extend beyond our reach and do not have a specific shape or boundary. Events that occur in the cloud can be beyond the control of any person in it. This model of conceptualization of smart technologies is most common in the implementation of projects of smart and

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environmentally friendly cities, as well as in the promotion of cloud technologies for storing personal data. The terms “ubiquitous computing” and “surrounding intelligence” originate from this metaphor: penetrating into a specific environment, vapors process information, ensphering it. 5. SMART TECHNOLOGIES are PARALLEL UNIVERSES Technology provides us access to a parallel universe with different laws, where a user discovers that virtual and real objects coexist in the same space. The idea of “cyberspace” underlies many concepts of access to information via the Internet, where computers create, discover, or possibly contain a parallel universe. This implies that, although technology can provide access to another universe, it exists independently of technology (Azuma 1997). For example, the term “physical computing” implies that other types of computing are not physical, i.e. they occur elsewhere, possibly in a parallel universe. In this sense, a device creates a window, and behind this window lies a completely different world with its own physics and geography. Augmented reality applications also frequently rely on this metaphor. When a mobile device screen superimposes digital images on a live channel from a camera, it is presented as a window to another world where data and people cohabit, as shown in the picture below. The visual representation of this metaphorical model is shown in Fig. 1 below.

Fig. 1. Pictorial metaphor SMART TECHNOLOGIES are PARALLEL UNIVERSES

6. SMART TECHNOLOGIES are an INESCAPABLE PRISON This metaphorical model implies that the ubiquitous technology makes people bounded in various gadgets. When each action is fixed and recorded seemingly forever, the chances are slim that the consequences of this are fully understood by people (Dodge and Kitchin 2007). Information technology imprisons its users, giving governments, organizations and individuals access to personal data and opening up the possibility for them to create new forms of tracking. As people increase their dependence on information technology and exchange personal information, they minimize their ability to act and think freely. Such a vision promotes the idea of a coercive

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environment that obliges people everywhere to leave the so-called “digital footprint” behind them. For example, Albrecht and MacIntyre (2005) argue that governments and corporations will inevitably use radio frequency identification (RFID) to track devices and individuals, forcing people to behave in a certain way. Others suggest that ubiquitous sensors and recording devices will create a surveillance situation (Mann et al. 2003): a world in which people constantly spy on each other. Another group of metaphors – interaction metaphors – explains how people interact with smart technologies and includes the following models. 1. ANY SURFACE is A DISPLAY This understanding of smart technologies has arisen as a result of the pervasive use of terminals for everyday operations. This metaphor takes a laptop as a starting point, representing the functionality of laptops embedded in various flat surfaces. Generalpurpose displays with network connectivity can expand or contract, become embedded in furniture, architecture, or clothing, but their imaginary functionality remains largely unchanged. This analogy implies that the interaction with these displays may differ in some details, but we will use them in the future for the same purposes as today. Microsoft Surface is an example of a device that follows this metaphor of interaction, presenting the coffee table as a data terminal. 2. SMART TECHNOLOGIES are an INVISIBLE FORCE Norman’s book “The Invisible Computer” (Norman 1999), and the European Disappearing Computer Initiative (Streitz and Nixon 2005) clearly reflect the understanding that computers can disappear from human perception, persisting somehow to exist. This metaphor creates a powerful image: everyday life remains exactly the same as today, but it still changes as a result of ubiquitous invisible computation on our devices. Scientists, engineers and designers have been continuously investing considerable time and effort in implementing the idea of technology invisibility. Although modern cars contain dozens of microprocessors, most drivers are still not fully aware of the presence of many of these tiny computers. They just feel how the brakes react to road conditions, turn on satellite radio and routinely perceive automatic gear adjustment. 3. DIGITAL DEVICES are LIVING BEINGS OR PEOPLE The animistic metaphor reflects a broad understanding of animism as a belief that objects have will, intellect and memory, interacting and influencing our lives intentionally, reasonably and consciously (Kuniavsky 2003). Such metaphors lead us to think of devices as friends, pets, or other living things with whom we can interact and communicate, as M. Weiser points out: “I don’t want to argue with my car about where to go” (Weiser 1993). Almost every project, designed to emphasize how devices respond to people, is in some ways animistic. Examples of such projects include the Nabaztag rabbit, Roomba robots that were designed to mimic insect behavior (Kurt et al. 2006), or the frequently referred to science project called “Knowing House” and “Living Lab” (Kidd et al. 1999).

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4. COMPUTERING is PROSTHETICS The so-called ubicomp has come to be understood as a natural extension of our bodies. According to this analogy, the main motivation for using an information device is simplicity. Design the tool so that it matches the task so precisely that it becomes part of it, feeling like a natural extension of a person (Normann 1999). A similar idea was put forward by McLuhan (1968), who wrote that a computer is a more complex extension of the central nervous system than conventional electrical relays and circuits. Without being biological, the technology attached to human bodies acts as a kind of prosthesis. From this point of view, ubiquitous computing replaces human biological functions with silicone ones or endows people with some kind of superpower, enhancing their natural feelings. Many body-worn computer products are designed to enhance natural feelings and physical capabilities. Given the fact that a wave of aging populations has swept through industrialized countries, the need arises to preserve and enhance cognitive abilities. The Forget-Me-Not device is one of the very early attempts of a computer to help with memory impairment (Lamming and Flynn 1994). One of the effective tactics in developing ubicomp projects is mixing various metaphors, which enables us to deal with the problems of their design holistically (Skrynnikova 2019). For example, Starner et al. (1997) refer to the augmented reality system as a butler/assistant that extends memory by superimposing the results on a video image of the current environment projected through a worn-out video display. After a closer look at the description, it becomes clear that the system is a human-like prosthesis, acting as a parallel universe of personal memory data. Mixed metaphors may not make systems less functional or valuable in practice, but the search for inconsistencies and contradictions in metaphors does reveal potential design problems that need to be addressed.

4 Conclusion/Recommendations The practical value of the results obtained lies in the fact that applying analogical reasoning and metaphor for gaining more insights into smart technologies can improve our understanding of all their aspects, both positive and negative, as well as fuel creative decisions regarding their further implementation in all areas of people’s lives. The metaphors that we use are crucial as they carry with them a whole baggage of inferences and conclusions, around which discussions, decisions and prospects for the application of smart technologies are subsequently built. For example, “data exhaust,” a term that is sometimes used to describe metadata that is created in our online life on the daily basis, supports the idea that, similar to car exhaust, this data is an undesirable by-product of waste. On the other hand, referring to network data and technologies as “new oil”, we mean that the data are expensive and produced mainly for commercial or industrial purposes, but can be of great benefit to those who have the means to extract it. Moreover, metaphors are important since they shape laws and policies regarding the collection and use of data. As technology develops, law also evolves (slowly and somewhat awkwardly), adapting to new technologies and the social norms around them. The most typical way this happens is for judges and regulators to think about

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whether the new unregulated technology is sufficiently similar to an existing thing we already have rules and laws for. And this is where metaphors and analogies arise. Metaphors are important as they can structure the way we think about smart technologies and their benefits, highlighting previously underestimated features of an object and making it possible for us to uncover opportunities that were previously hidden from view. However, incorrectly selected metaphors can distort or obscure those aspects or properties that should be in sight.

References Albrecht, K., McIntyre, L.: Spychips: How Major Corporations and Government Plan to Track Your Every Move with RFID. Thomas Nelson Inc. (2005) Azuma, R.T.: A survey of augmented reality. Presence-Teleoperators Virtual Environ. 6(4), 355– 385 (1997) Bravo, C., Redondo, M, Ortega, M., Verdejo M.F.: Collaborative environments for the learning of design: A model and a case study in Domotics. Comput. Educ. 46, 152–173 (2006) Clement, J.: Using bridging analogies and anchoring intuitions to deal with students’ preconceptions in physics. J. Res. Sci. Teach. 30(10), 1241–1257 (1993) Cowan, R.S.: More Work for Mother: The Ironies of Household Technology from the Open Hearth to the Microwave. Basic Books Inc, New York (1983) Dodge, M., Kitchin, R.: Outlines of a world coming into existence: Pervasive computing and the ethics of forgetting. Environ. Plan. B: Plan. Des. 34(3), 431 (2007) Duit, R.: The role of analogies and metaphors in learning science. Sci. Educ. 75(6), 649–672 (1991) Fauconnier, G., Turner, M.: Metaphor, metonymy, and binding. In: Dirven, R., Pörings, R. (eds.) Metaphor and Metonymy in Comparison and Contrast. Mouton de Gruyter, Berlin; New York (2003) Feldman, J.A.: From Molecule to Metaphor: A Neural Theory of Language. MIT Press, Cambridge (2006) Garfinkel, S., Abelson, H.: Architects of the Information Society. MIT Press, Cambridge (1999) Gentner, D.: The mechanisms of analogical learning. In: Vosniadou, S., Ortony, A. (eds.) Similarity and Analogical Reasoning, pp. 199–241. Cambridge University Press, London (1989) Gibbs, R.: Metaphor Wars: Conceptual Metaphor in Human Life. Cambridge University Press, New York (2017) Harré, R.: Modes of explanation. In: Hilton, D.J. (ed.) ContempIIorary Science and Natural Explanation: Common-Sense Conceptions of Causality. New York University Press, New York (1988) Heywood, D.: The place of analogies in science education. Cambridge J. Educ. 32(2), 233–247 (2002) Kidd, C.D., Orr, R., Abowd, G.D., Atkeson, C.G., Essa, I.A., MacIntyre, B., Mynatt, E., Starner, T.E., Newstetter, W.: The aware home: A living laboratory for ubiquitous computing research. In: Streitz, N.A., Siegel, J., Hartkopf, V., Konomi, S. (eds.) CoBuild 1999. LNCS, vol. 1670, pp. 191–198. Springer, Heidelberg (1999). https://doi.org/10.1007/10705432_17 Kuniavsky, M.: User expectations in a world of smart devices. Essay on adaptivepath.com (2003). http://www.adaptivepath.com/ideas/essays/archives/000272.php Kurt, T.E.: Hacking Roomba. Wiley, New York (2006)

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Lakoff, G.: The neural theory of metaphor. SSRN Electron. J. (2009). https://doi.org/10.2139/ ssrn.1437794 Lakoff, G., Johnson, M.: Metaphors We Live By. University of Chicago Press, Chicago (1980) Lamming, M., Flynn, M.: Forget-me-not: Intimate computing in support of human memory. Proc. FRIEND21 94, 2–4 (1994) Mann, S., Nolan, J., Wellman, B.: Surveillance: Inventing and using wearable computing devices for data collection in surveillance environments. Surveill. Soc. 1(3), 331–355 (2003) McLuhan, M., Fiore, Q., Agel, J.: War and Peace in the Global Village. McGraw-Hill, New York (1968) Norman, D.A.: The Invisible Computer. The MIT Press, Cambridge (1999) Rekimoto, J.: Pick-and-drop: A direct manipulation technique for multiple computer environments. In: Proceedings of the 10th Annual ACM Symposium on User Interface Software and Technology, pp. 31–39. ACM, New York (1997) Siio, I., Mima, N., Frank, I., Ono, T., Weintraub, H.: Making recipes in the kitchen of the future. In: Conference on Human Factors in Computing Systems, p. 1554. ACM, New York (2004) Skrynnikova, I.V.: Figurative framing of big data. The power of metaphor in making sense about big data, chapter 8. In: Nolan, B., Diedrichsen, E. (eds.) Perspectives on the Construction of Meaning and Knowledge: The Linguistic, Pragmatic, Ontological and Computational Dimensions, pp. 176–199. Cambridge Scholars Publishing (2019) Starner, T., Mann, S., Rhodes, B., Levine, J., Healey, J., Kirsch, D., Picard, R.W., Pentland, A.: Augmented reality through wearable computing. Presence: Teleoperators Virtual Environ. 6 (4), 386–398 (1997) Streitz, N., Nixon, P.: The disappearing computer. Commun. ACM 48(3), 33–35 (2005) Treagust, D.F., Duit, R., Joslin, P., Lindauer, I.: Science teachers’ use of analogies: observations from classroom practice. Int. J. Sci. Educ. 14(4), 412–422 (1992) Varela, F.J., Thompson, E., Rosch, E.: The Embodied Mind: Cognitive Science and Human Experience. The MIT Press, Cambridge (1991) Weiser, M.: Some computer science issues in ubiquitous computing. Commun. ACM 36(7), 75– 83 (1993)

Investigation of the Impact of Vulnerability of x86 CPUs on the Performance of Software-Defined Networking Controllers Sergey V. Galich(&), Alexey O. Pasyuk, and Evgeny S. Semenov Volgograd State University, Volgograd, Russia [email protected], [email protected], [email protected]

Abstract. Goal: This article describes the impact of vulnerability of x86 CPUs on the performance of OpenDaylight software-defined networking controllers. Methodology: The authors measured the latency and throughput of processing asynchronous messages. The calculations were performed in accordance with RFC 8456. The Cbench benchmarking tool was used as the loader system. Measurements were performed for several cases: the security fix is installed/not installed and the Hyper-Threading technology is active/inactive. Conclusions: The authors have shown that installing a patch to reduce the probability of exploiting the vulnerabilities CVE-2017-5715 and CVE-20175754 on the SND-controller results in some performance degradation, both in terms of throughput and latency. However, according to the authors, the loss of performance is not critical. The authors claim that the use of Hyper-Threading technology provides a significant performance gain both when using security patches and without them. Originality/Value: The authors have formulated several practical recommendations for administrators of SND-controllers. Keywords: SDN-controller
Latency vulnerability
Spectre
Meltdown JEL Code: L63


Throughput
OpenDaylight
CPU


C40
C90
D79

1 Introduction According to the “road map” in the direction of “information infrastructure” of the program “Digital Economy of the Russian Federation” [1], by 2024 it is planned to widespread commercial use of the fifth-generation (5G) networks. It is expected that implementation in the operation of 5G networks will lead to the emergence of qualitatively new consumer services and will help in the development of unmanned transport, machine-to-machine (M2M), Internet of things (IoT) and telemedicine. The IMT2020 research group in recommendation ITU-R M. 2083-0 [2] determined the requirements for 5G networks, such as a high level of network accessibility and performance, as well as extremely low values of the round-trip time of order 1 ms. Also, there is a need to create a flexible network infrastructure based on software-defined © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 190–201, 2021. https://doi.org/10.1007/978-3-030-59126-7_22

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networking technology (SDN). In [3] researchers from Bonch-Bruevich SaintPetersburg State University of Telecommunications proposed network core architecture for 5G, built using a centralized SD-controller. According to the simulation results in the CloudSIM system, the proposed kernel architecture allows reduction in roundtrip time of 84–88% (up to 0.95 MS–1.22 MS) in comparison with the version of the network kernel built on the basis of 15 3GPP standards. At the same time, the experience of practical testing and approbation of SDN technology by Russian Telecom operators in the period 2017–early 2018. there is a number of serious technical problems shown in [4], some of which are directly related to the underperformance of SDN-controller and high time for rules rewriting in the OpenFlow-tables of switches. The SDN-controller that carries out centralized network management, is a critical node of the entire network, not only in terms of performance, but in terms of ensuring network infrastructure security [5–7]. In January 2018. It was publicly disclosed in January 2018 the existence of hardware vulnerabilities in most modern central processing units (CPUs), which allow an attacker to access the information and results of calculations contained in the processor cache in different ways. In the past 20 years, most released CPUs are hardware vulnerable, including those currently employed as part of the hardware platforms of SDN-controllers. Security updates (patches) that make it difficult to exploit these vulnerabilities can lead to a drop in system performance. Taking into account the above in this work, the authors set a goal of investigating the impact of patches that allow to eliminate meltdown and Spectre vulnerabilities, on the performance of the SDN-controller. In 2017 vulnerability, referenced by CVE-2017-5754 and named as Meltdown, was independently discovered and reported by three teams: Jann Horn (Google Project Zero), Werner Haas, Thomas Prescher (Cyberus Technology), Daniel Gruss, Moritz Lipp, Stefan Mangard, Michael Schwarz (Graz University of Technology). Meltdown is described in detail in [8]. The essence of the vulnerability is the possibility of obtaining information contained in the CPU cache by utilizing side effects due to the out-of-order execution and preemptive loading data into the cache memory. Using Meltdown, an attacker can break the memory isolation between the user (user-space) and system (kernel-space) privilege levels, and using a Trojan program to gain access to a previously blocked area in the cache. According to [8], the rate of reading data from the cache varies depending on the CPU model and the location of data in the cache (levels L1, L2, L3); in particular, the authors in [8] managed to achieve a read rate of 582 KB/s with an error rate of 0.003% on Intel Core i7-8700 K and 491 KB/s with an error rate of 10.7% on Intel Xeon E5-1630. In order to eliminate this vulnerability, researchers from Graz University of Technology proposed a KAISER mechanism [9] implemented on top of the operating-system kernel (OS) to increase the isolation between user-space and kernel-space. The security updates (patches) for the OS is based on KAISER. Spectre is described in [10] by a group of authors consisting of the team that investigated Meltdown and specialists from the Universities of Pennsylvania, Maryland, Adelaide and Rambus Cryptography Research division. The vulnerabilities named as Spectre include CVE-2017-5753 and CVE-2017-5715. Both scenarios for implementation Spectre are also based on obtaining data from the cache memory, only by using the features of branch prediction unit and branch target predictor. Modern

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CPUs use speculative execution of commands: if the pipeline of the CPU has free executive units, and among the instructions is a conditional branch, then CPU based on statistical models can calculate the most likely variant of branching before the actual receipt of the corresponding instruction, and then either substitute the result, or discard it in case of a wrong prediction; in this case, all data that the CPU had to load into the cache memory remains in it regardless of whether or not those predicted version of branching are correct. An attacker can write a malicious program that have a code snippet similar to target code (attacked) from the perspective of conditional transfer, but the required condition will always be true, resulting branch prediction module or CPU address prediction block (depending on attack scenarios) acting under the statistical model, even in the case of false conditions in the dedicated program will begin to perform it as a true and load data into the cache before the branch prediction error is detected. It’s worth to note that Kaiser-based security updates are not suitable to cover a Spectre (security vulnerability) update, which necessitated the development of new ways to address the vulnerability. Both Meltdown and Spectre compromise the confidentiality of information, and as a result of exploiting these vulnerabilities, data such as the login/password of the attacked program or the cryptographic key can be compromised by an attacker. Since Meltdown and Spectre are hardware vulnerabilities, there are two possible scenarios to eliminate them: a) Development of new CPU architectures and revision of the functionality principle of the CPU pipeline - the option is more effective, but requires significant material, intellectual and time costs. In addition, this option does not eliminate vulnerabilities on systems already in use; б) Development of software security updates (patches), release of CPU microcode updates – the option that makes it difficult to exploit the vulnerabilities found in a fairly short time. However, it is a question of difficulties of exploitation, not of the complete elimination of vulnerabilities. The disclosure of information about Meltdown and Spectre led to a large-scale release of security updates for the OS, processor manufacturers also announced their readiness for recycling of architecture and complete elimination of these vulnerabilities in future generations of CPUs. But during 2018 and 2019, security researchers discovered new variations of Meltdown, Spectre [11], and even a new class of vulnerabilities in Intel processors: Microarchitectural Data Sampling (CVE-2018-12126 — Microarchitectural Store Buffer Data Sampling, CVE-2018-12130 — Microarchitectural Fill Buffer Data Sampling, CVE-2018-12127 — Microarchitectural Load Port Data Sampling, CVE-2019-11091 — Microarchitectural Data Sampling Uncacheable Memory), indicating the magnitude of the problem. A new class of vulnerabilities allows you to read data from internal CPU buffers, using the features of the technology of logical multithreading Hyper-Threading (HT). As it turned out during the operation, the installation of various kinds of security patches can lead to a drop in the performance of computing systems [12–14], the amount of losses varies depending on the CPU model, the OS used and the type of computation load. In the case of an SDN-controller, in addition to these factors, it is necessary to take into account under which network operating system (NOS) this

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controller operates. To reduce the likelihood of exploiting vulnerabilities of the class Microarchitectural Data Sampling, some experts recommend disabling HyperThreading technology, which can lead to noticeable loss of performance, which can be critical for SDN-controller. In this paper, OpenDaylight- an open-source software written in the Java language, is used as an NOS SDN-controller, thanks to which It is cross-platform and able to function in any OS environment and on a hardware platform that supports a JAVA virtual machine (JVM). NOS OpenDaylight is developed and supported by the Linux Foundation with the participation of a large number of ICT companies. This NOS is used by some network equipment manufacturers as a basis for developing their commercial versions of NOS for SDN-controllers [15, 16]. OpenDaylight has sufficiently functional southern (for interaction with network nodes) and northern (for interaction with applications) interfaces [17], in particular, it supports integration with the OpenStack open cloud platform [18, 19], which allows organizing distributed management of software-defined data centers [20]. According to the information on the official website [21], such large Telecom operators as AT&T, Orange, China Mobile, Telefonica, KT Corporation (Korea Telecom), Telecom Argentina show interest in this NOS to introduce it into their networks. Among the Russian academic community, NOS OpenDaylight is currently also gaining popularity to the following: – a group from Ryazan State Radio Engineering University (RSREU) [22] is in the process of developing several software components for OpenDaylight that implement adaptive and multipath routing, load balancing, network segmentation, and monitoring; – authors of the Samara University and V.I. Vernadsky Crimean Federal University propose the concept of SDN-infrastructure [23], which allows the exchange of information about security incidents to SDN-controllers of different providers. The development of the network attack detection module is also conducted under OpenDaylight. However, it should be noted that (according to publicly available sources) domestic telecom operators used solutions developed by Russian companies when conducting pilot projects to introduce SDN. In particular, PJSC “Rostelecom” tested SDNcontrollers under the control of NOS RunOS (development of Non-profit partnership “ center for applied research of computer networks”) and Brain4Net Controller (development of LLC “Programmable networks”) [2, 24]. Both solutions are included in the “Unified Register of Russian Programs for Electronic Computers and Databases”, which means that these NOS for SDN-controllers will have priority in procurement by state and municipal institutions of the Russian Federation.

2 Methodology In this article, the methodology of testing, proven by the authors earlier in the works [25, 26] with some adaptation taking into account the specifics of the research task.

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IETF recommendations RFC 8455, 8456 [27, 28] describe eight parameters to evaluate the performance of the SDN-controller. In this article, the authors will investigate two of these parameters: Asynchronous Message Processing Time and Asynchronous Message Processing Rate. It should be noted that the parameter “Asynchronous Message Processing Rate” in Russian-language publications is called “throughput”. The latency and throughput values from the tests are calculated in accordance with RFC 8456. The average of latency based on the results of one test is calculated by using the expression: AMPT ¼

Pn i¼1

Rxi  N

Pn i¼1

Txi

;

ð1Þ

Where Txi – time of sending OpenFlow-request, Rxi – time of receiving response of OpenFlow-messages, N – total number of successfully processed messages. The unit of latency is millisecond. The lower the latency-the higher the performance of the SDN-controller. The average value of throughput of a single test is calculated as: AMPR ¼

Nrx ; T

ð2Þ

Where Nrx – number of OpenFlow response messages received from the controller, T – test duration. Measuring unit of throughput is the number of processed messages (or the established flows) in the second. The higher the number of processed threads per second the better the performance of the SDN-controller. A team of specialists from the University of Toronto, Nicira Networks, Big Switch Networks led by Robert Sherwood developed a Cbench benchmarking tool (the first specialized utility) is used as a loader system (OpenFlow request generator) [29]. This utility is considered to be a “classic” standard software tool for assessing the performance of the SDN-controller. Cbench allows you to specify the duration of a single test, the number of tests per run, the number of endpoints connected to the switch, and the number of switches in the network. This utility has two modes of operation: latency-to measure the processing delay of asynchronous messages, throughput-to measure the processing speed of asynchronous messages. Cbench allows you to specify the duration of a single test, the number of tests per run, the number of endpoints connected to the switch, and the number of switches in the network. A key drawback of Cbench is that it is single-threaded, which means that for efficient use of multi-core processors, it is necessary to run several instances of the utility. A total of four test scenarios were compiled: 1. 2. 3. 4.

The The The The

patch patch patch patch

(security (security (security (security

fix) fix) fix) fix)

is is is is

not installed, Hyper-Threading technology is active; not installed, Hyper-Threading technology is inactive; installed, Hyper-Threading technology is active; installed, Hyper-Threading technology is inactive.

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Enabling/disabling the patch (security fixes) in Ubuntu 16.04.5 LTS environment was carried out by editing GRUB boot loader file (/etc/default/grub) and editing the GRUB_CMDLINE_LINUX_DEFAULT variable by adding the values «pti = off spectre_v2 = off» . Thus, this article investigated the impact on SDN-controller performance of patches from CVE-2017-5715 and CVE-2017-5754 vulnerabilities. After making changes, the bootloader file is saved, the changes are applied by the «sudo update-grub» command and the system is rebooted. Checking the patch on/off was carried out using a special public script spectre-meltdown-checker.sh [30]. An example of the result of the system analysis performed by this script is shown in Fig. 1.

Fig. 1. Result of checking the system in the presence of vulnerabilities of the Spectre and Meltdown class using a script (screen copy).

Enabling/disabling Intel Hyper-Threading logic multithreading technology was performed in the BIOS settings of the server motherboard. In each test scenario, both latency and throughput were measured; the variable parameter was the number of OpenFlow-switches managed by the SDN-controller, which have consistently taken to be equal to 1, 2, 4, 8, 16, 32, 64, 128 pieces. For each fixed number of switches, 10 series of measurements for 10 tests at test duration of 10 s were carried out, the pause between the series of measurements is 60 s (in order to clear the buffers and memory of SDN-controller). To automate testing, we used our own set of scripts in Python [31], which allows us to set the initial test parameters and for the results of each measurement series performed calculations of the average value of measured parameter. The functionality of this set of scripts has been supplemented by the ability to calculate the standard deviation in order to assess the stability of the test results and eliminate accidental releases.

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The scheme of the stand is shown in Fig. 2. Two separate physical servers with different hardware platforms were used as SDN-controller and system-loader Cbench, connected by a channel with a bandwidth of 1 Gbit/s. The SDN-controller hardware platform is equipped with Intel Xeon E3-1241 v3 3.5 GHz CPU (4 cores, 8 logical processors when Hyper-Threading is activated), Supermicro X10SLA-F v3.0 motherboard, 16 GB of RAM. The NOS SDN-controller was OpenDaylight (Beryllium-SR1 release) version Java 8.0, the amount of memory allocated by the JVM is 8 GB.

Fig. 2. Experimental testbed

Table 1. Throughput of SDN-controller in different test scenarios Throughput, flow/sec Hyper-Threading is disabled Without Average value patch Standard deviation With patch Average value Standard deviation Hyper-Threading is enabled Without Average value patch Standard deviation With patch Average value Standard deviation

Number of switches 1 2

4

8

16

32

64

128

23496.43 783.03 27403.01 1078.96

38976.13 473.85 37985.92 227.7

58286.03 419.5 57284.14 1042.38

82184.24 691.66 78576.51 864.37

97009.67 3912.17 93641.24 4501.73

112289.5 4151.81 107740.6 4292.55

118854.7 6264.03 120516.9 6044.84

132895 7907.17 123473.3 10033.68

25488.18 663.54 25240.76 562.34

43180.28 325.84 42168.75 343.97

63273.3 234.49 61933.27 674.91

101529 1916.28 99536.26 872.08

127685.5 2727.7 124874.9 1084.11

137875.1 2887.33 134378.7 2898.6

143595.1 2686.93 140629.1 3520.01

144613.3 2439.87 141586.9 3720.78

Cbench load utility run on the hardware platform Intel Core i5 4590 3.3 GHz (4 cores), 32 GB of RAM in the environment of Ubuntu 16.04.

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3 Experimental Results The average values of throughput obtained during the experiment in each of the four test scenarios are shown in Table 1 and presented in the Fig. 3.

Fig. 3. Dependence of throughput value on the number of switches.

A number of conclusions can be drawn from the presented results: – Enabling patch leads to some reduction in the throughput of the SDN-controller; however, these losses average only about 3% in non-HT mode and about 2% in HT mode. The values of the standard deviation indicate that the activation of the patch slightly increases the spread of the obtained results. – Activating Hyper-Threading allows you to achieve significant gains in performance in terms of bandwidth: up to 31% without patch activation and up to 33% with patch activation. The standard deviation values indicate that Hyper-Threading can increase the density and reduce the dispersion of the measured parameter (throughput), i.e. the use of this technology increases the stability of the SDNcontroller in terms of achieving high throughput values. Table 2 shows the experimental average SDN-controller latency in each of the four test scenarios. Data visualization graph is shown in Fig. 4.

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S. V. Galich et al. Table 2. SDN-controller latency in various test scenarios

Latency in µs

Number of switches 1 2 4 8

Hyper-Threading is disabled Without patch Average value Standard deviation With patch Average value Standard deviation Hyper-Threading is enabled Without patch Average value Standard deviation With patch Average value Standard deviation

16

32

64

128

30.21 30.54 31.08 45.71 64.11 174.73 354.35 550.44 0.02 0.03 0.27 0.38 0.61 0.80 1.18 1.52 31.70 34.30 36.95 51.52 84.26 192.88 345.43 693.82 0.06 0.13 0.24 0.26 1.14 5.22 1.17 11.05 32.42 33.16 30.79 38.09 55.57 109.97 226.83 457.99 0.14 0.08 0.21 0.29 0.64 2.99 7.35 11.72 36.98 36.35 36.14 39.04 49.23 117.98 164.67 459.16 0.01 0.01 0.18 0.20 0.36 3.14 0.28 11.86

Fig. 4. Dependence of latency on the number of switches.

The analysis of the results presented in Table 2 and Fig. 4 leads to a number of conclusions: - In HT- free mode, enabling the patch causes SDN-controller latency to increase by an average of 14%, with a maximum of 31% for 16 switches. In HT mode, enabling the patch leads to minor variations in latency, in most cases does not reach even ten

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microseconds. The standard deviation values indicate that patch activation slightly increases the dispersion of measured values; - Activating Hyper-Threading significantly increases the performance of the SDNcontroller in terms of latency. Without the security patch, HT activation results in an average reduction of latency by 13%, with a maximum of 37% and 36% for 32 and 64 switches, respectively. When using the patch, HT activation reduces latency by an average of 21%; the effect is particularly noticeable when the network size is over 32 switches. The standard deviation values indicate that the average of fluctuated latency is very small during the series of measurements.

4 Conclusion Based on the study, which is quite private in nature, it can be approved that the installation of a security update (patch) to reduce the likelihood of exploitation of vulnerabilities CVE-2017-5715 (Spectre) and CVE-2017-5754 (Meltdown) on the SDN-controller under study leads to some performance degradation in terms of both throughput and latency. However, according to the authors, the drop in performance is not critical. It can definitely be argued that the use of Hyper-Threading technology gives a tangible gain in performance both when using the patch from CVE-2017-5715 (Spectre) and CVE-2017-5754 (Meltdown), and without its use. This could potentially be significant for new vulnerabilities of the class Microarchitectural Data Sampling if the patches eliminate the vulnerability by disabling Hyper-Threading. The above allows us to formulate several practical recommendations for administrators of SDN-controllers: Recommendation 1: when assessing the security level of the SDN-controller, approach the task comprehensively, taking into account not only the vulnerabilities of the software, but also the vulnerabilities of the hardware platform used [32]; Recommendation 2: undertake timely security updates for the SDN-controller to reduce the likelihood of exploiting CPU hardware vulnerabilities that allow an attacker to disclose information that controller or network compromises. An example of such information would be the administrator login/password of an SDNcontroller (taking into account the fact that OpenDaylight has a web interface that has a form for user authorization) or encryption keys when using a secure OpenFlow control channel with switches. According to the authors, there is an open question about the impact of hardware vulnerabilities of the CPU (Meltdown, Spectre and the like) on the level of security of the SDN-controller and the probability of exploitation of these vulnerabilities not only in the laboratory environment, but also in conditions close to reality. This problem may be one of the directions for further research.

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References 1. The program: Digital Economy of the Russian Federation. The order of the Government of the Russian Federation of July 28, 2017 N 1632-r 2. IMT Vision: Framework and overall objectives of the future development of IMT for 2020 and beyond (2015). https://www.itu.int/rec/R-REC-M.2083-0-201509-I. Accessed 16 Aug 2019 3. Athea, A.A., Muthanna, A.S., Kucheryavy, A.E.: Intelligent core for 5G communication networks and tactile internet based on software-configurable networks. J. Telecommun. 3, 34–40 (2019) 4. Efimushkin, V.A., Ledovskikh, T.V., Ivanov, A.B., Shalaginov, V.A.: The role of SDN/ NFV technologies in the infrastructure of the digital economy. Testing and implementation experience. J. Telecommun. 3, 27–36 (2018) 5. Smelyansky, R.L., Pilyugin, P.L.: Current security issues in SDN. J. Telecommun. Dev. Syst. 7(4), 523–526 (2017) 6. Zakharov, A.A., Popov, E.F., Fuchko, M.M.: Aspects of the information security of the SDN architecture. Vestnik SibGUTI 1, 83–92 (2016) 7. Kabanov, A.S., Elk, A.B.: Information security issues of SDN technology. Defense Technol. Series 16: Counter-Terrorism Tech. 7–8(109–110), 144–147 (2017) 8. Lipp, M., Schwarz, M., Gruss, D., Prescher, T., Haas, W., Fogh, A., Horn, J., Mangard, S., Kocher, P., Genkin, D., Yarom, Y., Hamburg, M.: Meltdown: Reading kernel memory from user space. In: 27th USENIX Security Symposium, Baltimore, United States, pp. 973–990 (2018) 9. Gruss, D., Lipp, M., Schwarz, M., Fellner, R., Maurice, C., Mangard, S.: KASLR is dead: Long live KASLR. In: Bodden, E., Payer, M., Athanasopoulos, E. (eds.) ESSoS 2017. LNCS, vol. 10379, pp. 161–176. Springer, Cham (2017). https://doi.org/10.1007/978-3-31962105-0_11 10. Kocher, P., Genkin, D., Gruss, D., Haas, W., Hamburg, M., Lipp, M., Mangard, S., Prescher, T., Schwarz, M., Yarom, Y.: Spectre attacks: Exploiting speculative execution (2018). ArXiv e-prints: arXiv:1801.01203 11. Johnson, A. Davies, R.: Speculative Execution Attack Methodologies (SEAM): An overview and component modelling of Spectre, Meltdown and Foreshadow attack methods. In: 2019 7th International Symposium on Digital Forensics and Security (ISDFS). https:// doi.org/10.1109/isdfs.2019.8757547 12. Mullen, J., Rosa, A., Samsi, S., Yee, C., Reuther, A., Kepner, J.: Measuring the impact of spectre and meltdown. In: 2018 IEEE High Performance extreme Computing Conference (HPEC). IEEE (2018). https://doi.org/10.1109/hpec.2018.8547554 13. Hall, K.: How red hat handles specter and meltdown. Windows IT Pro/RE (3), 18–19 (2108) 14. Bradley, S.: Ways to protect against meltdown and specter. Windows IT Pro/RE 3, 16–17 (2018) 15. Efimushkin, V.A., Ledovskikh, T.V., Korabelnikov, D.M., Yazykov, D.N.: Overview of foreign manufacturers’ SDN/NFV solutions. T-Comm: Telecommun. Transport 9(8), 5–13 (2015) 16. Galich, S.V., Deogenov, M.S., Pasyuk, A.O., Semenov E.S.: Analytical review of commercial OpenDaylight-based sdn controllers (2016). http://journal.mrsu.ru/arts/ analiticheskij-obzor-kommercheskix-pks-kontrollerovna-osnoveopendaylight. Accessed 16 Aug 2019 17. Semenovyh, A.A., Laponina, O.R.: Comparative analysis of SDN controllers. Int. J. Open Inf. Technol. 6(7) (2018)

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18. Wang, L., Ruan, H., Li, H., Liu, Q.: Combining neutron and OpenDaylight for management of networking. In: 2017 IEEE 41st Annual Computer Software and Applications Conference (COMPSAC) (2017). https://doi.org/10.1109/compsac.2017.89 19. Tkachova, O., Salim, M.J., Yahya, A.R.: An analysis of SDN-OpenStack integration. In: 2015 Second International Scientific-Practical Conference Problems of Infocommunications Science and Technology (PIC S&T) (2015). https://doi.org/10.1109/infocommst.2015. 7357269 20. Gavrilov, A.V.: Organization of distributed management of software-defined data centers. J. Syst. Administrator 7–8, 85–89 (2018) 21. Official site OpenDaylight. https://www.opendaylight.org. Accessed 13 Aug 2019 22. Koryachko, V.P., Perepelkin, D.A., Ivanchikova, M.A., Byshov, V.S.: A visual web-based environment for dynamic control of data flows in campus software-configurable networks. Model. Anal. Inf. Syst. 26(1), 63–74 (2019). https://doi.org/10.18255/1818-1015-2019-1-6374 23. Salimov, A.S.: Application of SDN technologies to protect against network intrusions. In: International Scientific and Technical Conference Modern Computer Network Technologies (MoNeTeC), pp. 1–9. IEEE (2018) 24. Rostelecom successfully completed the trial operation of a regional network segment based on the Brain4Net solution. https://brain4net.ru/brain4net-pilot-project-rostelecom/. Accessed 23 Aug 2019 25. Galich, S.V., Deogenov, M.S., Kartashevsky, V.G., Pasyuk, A.O., Semenov, E.S.: OpenDaylight SDN controller: a study of performance scaling on networks of different sizes. J. Izvestia SFU Tech. Sci. 9, 121–133 (2016). https://doi.org/10.18522/2311-31032016-9-121133 26. Kartashevsky, V.G., Galich, S.V., Semenov, E.S., Kiryanova, N.I.: Scalability estimation for SDN controller latency when using parallel computing system. J. Infocommunication Technol. 15(2), 163–170 (2017). https://doi.org/10.18469/ikt.2017.15.2.09 27. RFC 8455. Terminology for Benchmarking Software-Defined Networking (SDN) Controller Performance (2018). https://tools.ietf.org/pdf/rfc8455.pdf. Accessed 28 July 2019 28. RFC 8456. Benchmarking Methodology for Software-Defined Networking (SDN) Controller Performance (2018). https://tools.ietf.org/pdf/rfc8456.pdf . Accessed 28 July 2019 29. Cbench: Github. https://github.com/mininet/oflops/tree/master/cbench. Accessed 28 July 2019 30. Spectre, Meltdown, Foreshadow, Fallout, RIDL, ZombieLoad vulnerability/mitigation checker for Linux & BSD: Github. https://github.com/speed47/spectre-meltdown-checker. Accessed 28 July 2019 31. Galich, S.V.: Certificate of state registration of a computer program No. 2017663192. Program for testing automation of controllers of software-configured networks based on the OpenFlow protocol. copyright holder Galich S.V.; declared 07/26/2017; register 11/27/2017 32. Galich, S.V., Zhuykova, S.A.: Classification of vulnerabilities in software-configured networks. In: Proceedings of the Scientific Conference “XLVII Ogaryov Readings” 2019, pp. 290–296 (2019)

Promising Aspects of the Analysis of Photoplethysmograms Igor B. Isupov(&) , Vladislav Yu. Gribkov and Rimma Sh. Zatrudina

,

Volgograd State University, Volgograd, Russia {isupov,gribkov,rimma.zatrudina}@volsu.ru

Abstract. Purpose: The purpose of the research was to test the method of complex multi-stage analysis of the contour of photoplethysmograms using variational statistics and Fourier analysis of blood filling and arterial tone indicators in conditions of long-term monitoring of the functional state of regional blood circulation. Design/Methodology/Approach: Using a multichannel photoplethysmograph developed by the team of authors, a survey was conducted of healthy young people aged 17–20 years. Photoplethysmograms were recorded for 180 s. Using the technology of neural networks, we determined the special points of each pulse cycle necessary for calculating the indices of blood circulation in the limb. The amplitude indicators of pulse cycles were studied by variational-statistical methods similar to methods for analyzing the duration of cardio intervals used to assess heart rate variability. In conclusion, the Fourier spectrum of the amplitude parameters of photoplethysmograms was calculated to study the frequency characteristics of variability of vascular tone. Findings: The high informativeness of the variational-statistical analysis in combination with the Fourier analysis of the parameters of the contour of the pulse curves for the study of inspiratory-expiratory variability of the reflection index of photoplethysmograms characterizing the tone of the resistive arteries of the human limbs is shown. Originality/Value: A variational-statistical analysis of the parameters of the photoplethysmogram contour in combination with their harmonic analysis can significantly improve the accuracy of studies of respiratory and non-respiratory fluctuations of regional vascular tone and can be used in the functional diagnosis of pathology of the cardiovascular system, accompanied by impaired regulation of peripheral circulation. Keywords: Hemodynamics
Vascular tone
Photoplethysmography Photoplethysmogram
Variation statistics
Fourier analysis JEL Code: C88


C92
C99
I10
I12
I19

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 202–211, 2021. https://doi.org/10.1007/978-3-030-59126-7_23




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1 Introduction One of the most widely available, non-invasive and safe methods for studying peripheral blood flow is photoplethysmography (PPG). The photoplethysmographic curve (photoplethysmogram) reflects the temporal dynamics of the pulse blood filling of the distal phalanx of the finger or auricle. Analysis of the amplitude-frequency characteristics of photoplethysmograms makes it possible to study arterial blood flow into the region under study, the tone of arteries of various diameters and arterioles (Alian and Shelley 2014). From the point of view of informativeness and diagnostic value, PPG is a kind of competitor to peripheral impedance rheography (RG). But, in comparison with RG, PPG allows one to obtain high-quality blood-filling curves of blood vessels for a long time (Moraes et al. 2018). As a rule, PPG or RG is recorded within 5–10 s when holding the breath during the incomplete exhalation phase or during shallow breathing (Zatrudina et al. 2018). The brevity of registration does not allow an objective assessment of the range of regulation of the tone of the arterial vessels of the subject. However, expanding or narrowing this range can be of the greatest value for the diagnosis of neurocirculatory circulatory disorders in people of working age (Isupov 2001). This problem is partially eliminated by the use of single inspiratory-expiratory functional tests, however, limiting the time of registration of PPG during respiratory tests limits information on the variability of vascular blood supply and arterial tone of a particular person. The limited informativeness of short PPGs is due to the presence of long quasiperiodic non-respiratory fluctuations in arterial and arteriolar tone, associated with slow changes in the electrical activity of the subcortical nerve centers that modulate the respiratory period of the heart (Baevsky et al. 1984). In this regard, a longer-term, at least 3–5 min, PPG monitoring is a more promising methodological method for studying regional blood circulation. Quantitative analysis of the PPG contour includes the determination of special points - the amplitude of the pulse cycle, incisura on the catacrotic section of the curve, the maximum diastolic rise of the catacrotic phase or the conditional point of the position of the diastolic rise (if there is no rise). Currently, special attention is paid to the following issues of PPG analysis: 1. The development of reliable search algorithms for special points. 2. Development and improvement of methods for specialized mathematical analysis of PPGs and their single pulse cycles. The first question still remains relevant, since none of the existing algorithms can provide high reliability for determining the special points of the photoplethysmographic curve. As a result, either manual correction of automatically determined special points is required, or the accuracy of calculating the average values of parameters calculated from these special points is reduced. To solve the second question, the following techniques are used: A) harmonic analysis of pulse curves; B) wavelet analysis.

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Both methods of the analysis of pulse curves are widely used in rheography of various regions and are less common in photoplethysmography (Nesterov et al. (2010); Revenko (2012); Avramenko and Andrejev 2018). Until now, a primary rheographic curve consisting of one or more pulse cycles has been subjected to harmonic or wavelet analysis. The extensive thematic work of Revenko (2012) compares the informativeness of monocyclic and multicyclic harmonic analysis of rheograms. The author emphasizes the importance of multicyclic harmonic analysis for determining the power of the respiratory and non-respiratory components of vascular tone. Valuable information on the application of harmonic analysis of rheoencephalograms is contained in Doletsky (2006). The author gives preference to the harmonic analysis of rheograms of the brain compared with the contour analysis. The diagnostic capabilities of the wavelet analysis of rheograms are devoted to a few studies. Velichko et al. (2008) pointed out the advantages of continuous wavelet transform of lung rheograms in comparison with harmonic Fourier analysis. The authors emphasize that wavelet spectrograms make it possible to identify features of lung rheograms in various phases of the respiratory cycle that are invisible on Fourier spectrograms. However, harmonic analysis and, to a lesser extent, the wavelet transform of primary rheograms are sensitive to various kinds of artifacts (Velichko et al. 2008). In our opinion, in monitoring studies of blood circulation regulation, the pulse wave processing technique is more promising, based on the sequential use of contour analysis of photoplethysmograms, the formation of time series of vascular tone indicators and Fourier transform of the obtained physiological parameters (Isupov and Zatrudina 2019). The prototype of the proposed method is a mathematical analysis of heart rhythm, which includes variational-statistical processing of cardio intervals (Baevsky et al. 2001; Baevsky et al. 1984) and their harmonic analysis. It is not an electrocardiogram that is displayed in the spectrum, but a series of time intervals - R-R intervals (Akselrod et al. 1981; Kiselev et al. 2012). Extrapolation of methodical reception of mathematical analysis of heart rhythm according to R.M. Baevsky on the analysis of PPG leads to the following algorithm for a long multicyclic analysis of the pulse curve: 1. The definition of a set of functionally significant indicators of PPG: the height of systolic peak, the height of dicrotic notch, the height of the diastolic rise of the dicrotic limb. The first indicator selectively characterizes the total pulse blood supply of the vascular region; the second - selectively reflects the tone of arteries and arterioles; the third - allows you to selectively assess the conditions of venous outflow. Therefore, each indicator is targeted. 2. Variational-statistical analysis of each indicator of PPG. 3. Harmonic analysis of PPG indicators.

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2 Materials and Method A four-channel photoplethysmograph-pulse oximeter was used to study peripheral blood circulation (Isupov and Zatrudina 2018). The object of research was young, practically healthy people 17–20 years old. The stages of research are displayed on the design diagram of functional diagnostic observations (Fig. 1). Initial registration of photoplethysmogram of a finger hand. (5–10с).

Contour analysis of photoplethysmogram for an interval of 5-10 s

Monitoring regional vascular tone (PPG) for 180-300 s

Preliminary detection of dysregulation of the tone of regional arteries

Extended variational-statistical and harmonic analysis of photoplethysmogram for a time interval of 180-300 s Detection of violations of regulation of natural variability of regional arterial tone in full Fig. 1. The algorithm of monitoring the peripheral vascular tone by the method of PPG.

At the first stage, the primary registration of photoplethysmograms of the distal phalanx of the index finger of the left hand of the subject was performed. A visual assessment of the quality of recorded photoplethysmograms was carried out. Next, an initial contour analysis of a short array of pulse curves was carried out: the calculation of the amplitudes of the pulse waves, the height of dicrotic notch and the height of the diastolic rise of the dicrotic limb. Special points of PPGs were determined using neural network technology. In the entire array of recorded pulse curves, the values of the reflection index (RI), as well as the dicrotic wave index (DWI), were calculated. Both parameters characterize the tone of small arteries. The next stage of the examinations was the registration of photoplethysmograms and control electrocardiograms in the II standard lead for 3–5 min. In conclusion, the main arrays of indicators of DWI and RI were subjected to variational-statistical and harmonic analysis, on the basis of which a conclusion was formed on the functional state of regulation of the regional vascular tone of the subject.

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3 Results Primary PPG of the examined person M. (17 years) is presented in Fig. 2.

Fig. 2. Fragment of primary PPG of examined person M.

Contour analysis of PPG presented in Fig. 2, suggests a high lability of the tone of small arteries. The PPG contour has a sufficient amplitude, well-defined local maxima and minima that can reliably determine the special points of the pulse curves for calculating the DWI and RI (Fig. 3).

Fig. 3. A single PPG cycle of the examined M.: B1 - the beginning of the anacrotic rise, B2 - the systolic peak, B3 - the dicrotic notch, B4 - the maximum of the diastolic wave.

A fragment of recording a photoplethysmogram lasting about 10 s (two inspirationexpiration cycles) is shown in Fig. 4.

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Fig. 4. Fragment of the PPG of examined person M. Changes in the PPG contour are clearly noticeable depending on the phases of respiration.

Visual assessment of the contour of the arterial pulse curves in Fig. 4 allows us to draw a preliminary conclusion about the significant effect of the phases of the respiratory cycle on the position of points B3 (the dicrotic notch) and B4 (the maximum of the diastolic wave) and a slightly lesser effect of breathing excursions on the height of the systolic peak (point B2) (see Fig. 3). Thus, the examined M. showed signs of high respiratory variability of the tone of small arteries and arterioles of the hand and noticeably less variability of the total pulse blood filling of the studied region. Objective confirmation of the high variability of regional arterial tone is possible only by quantitative variational-statistical analysis. A variational-statistical analysis of the values of the DWI and RI revealed a significant variability in the values of both photoplethysmographic parameters characterizing the tone of the small arteries of the index finger. The histograms show the occurrence of the ranges of values of the DWI and RI in arrays grouped with a step of 5.0% (Fig. 5).

Fig. 5. Distribution of the DWI and RI.

The results of variational and statistical analysis of both indices of the photoplethysmogram of the subject are presented in Table 1.

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Table 1. The results of the variational-statistical analysis of the values of the DWI and RI of the examined person M. Index (parameter)

Photoplethysmogram data of the variation-statistical analysis of the DWI and RI values of the subject M Average, M

Standard deviation, r

Sampling error, m

Excess, Ex

Minimum value, DWImin;RImin

Maximum value, DWImax;RImax

Range DWImax – DWImin; RImax– RImin

Coefficient of variation CV

Skewness, As

DWI, %

32,3

11,8

2,1

310,7

10,9

68,8

57,9

36,5

−90,2

RI, %

36,8

14,0

2,2

120,5

8,9

68,5

59,6

38,0

−25,0

The average values of DWI and RI show that these indicators, which are equivalent to the tone of the small arteries of the hand, were below the limits of the statistical norm, although the subject is healthy. However, the standard deviation, sampling error, variation, and asymmetry of the PPG parameter arrays are very large. The minimum values for both parameters (DWImin = 12%, RImin = 14%) was significantly lower boundaries of the normal range of values DWI (50–70%) and RI (40–70%). Consequently, there is an instability of the mechanisms of regulation of regional vascular tone, which is manifested by excessive dilation of the resistance arteries during the examination time. The quasiperiodic variability of both parameters of the PPG can be investigated by analogy with the frequency analysis of heart rate variability. For this, the power spectra of the oscillations of the indicated parameters were calculated. The results of the spectral analysis of the DWI and RI of the examined person M. are presented in Fig. 6. An analysis of the spectrum structure of both indicators (see Fig. 6) revealed that the powers of the respiratory waves (W = 0.25 Hz) and, probably, the Mayer waves (W = 0.1 Hz) are large. It is known that in the spectra of R-R intervals of the ECG this is observed with emotional stress, accompanied by significant autonomic reactions of the predominantly parasympathetic link in the regulation of heart rhythm. An increase in the power of respiratory waves and Mayer waves may be due to a change in the activity of the thermoregulation system, as well as an increase in the activity of the parasympathetic nervous system (Baevsky et al. 1984). If an increase in the power of slow waves in the spectrum of the cardiac rhythm is observed in a situation of emotional stress, this may be accompanied by a corresponding instability in the regulation of the tone of the small arteries of the hand. Thus, the results obtained by various methods of analysis (variational-statistical and Fourier analysis), in general, coincide with each other. This suggests that the proposed method of variational-statistical and harmonic analysis of PPG can be used to study the mechanisms of regulation of the tone of resistive arteries and the final results of the regulation of peripheral blood flow.

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a

b

Fig. 6. Fourier power spectrum of the DWI (a) and RI (b) of the PPG of index finger of subject M.

4 Conclusion Improving the quality of life, maintaining the viability of the adaptive reserves of the cardiovascular system, and, as a result, maintaining a high level of health of a modern person of working age is the main task of medical science. A kind of “key” for solving the problems of early diagnosis of cardiovascular diseases is monitoring of the main indicators of systemic and regional blood circulation. The instrumental, “arsenal” of methods for long-term non-invasive hemodynamic studies has been known for a long time. Rheography, photoplethysmography, and pulse oximetry are firmly established in the daily activities of functionalists. At the same time, a paradoxical situation has emerged where the perfection of diagnostic equipment is combined with routine biological information processing algorithms known from the “digital era”. Partly, traditional approaches to the analysis of pulse blood supply and vascular tone are successfully overcome by some researchers who offer multicyclic harmonic analysis and pulse wavelet transform, introducing neural network technologies to assess the viability of human blood circulation. However, the laboriousness of “complete” decomposition into the spectra of primary digitized graphs of photoplethysmograms and rheograms recorded over a long time limits these undoubtedly promising

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methodological innovations and makes it difficult for non-mathematicians to interpret biological information. The technology we developed for a multi-stage study of photoplethysmograms, including the use of neural networks to determine significant indicators of photoplethysmograms, a variational-statistical analysis of their variability and, in conclusion, a harmonic analysis of the time series of these indicators, allows us to come close to solving a number of urgent problems: 1. to investigate the correspondence of human blood circulation to normal values for a long time of natural life; 2. to study the final results and the effectiveness of the mechanisms of regulation of the tone of small arteries, providing functional plasticity of capillary blood flow and, as a result, the viability of tissue metabolism; 3. to identify the prevailing mechanisms of vasoconstriction and vasodilation in a particular person, which opens up new prospects for preclinical diagnosis of neurocirculatory hemodynamic disorders.

References Avramenko, D.V., Andreev, V.G.: Analiz spectra photopletizmografitcheskikh signalov modifitsirovannym metodom Proni. Vestnik RGRTU 65, 130–135 (2018) Akselrod, S., Gordon, D., Ubel, F.A. et al.: Power spectrum analysis of heart rate fluctuation: A Quantitative probe of beat-to-beat cardiovascular control. Science 213, 220–222 (1981) Alian, A.A., Shelley, K.H.: Photoplethysmography. Best Practice Res. Clin. Anaesthesiol. 28(4), 395–406 (2014) Baevsky, R.M., Ivanov, G.G., Chireykin, L.V. et al.: Analysis of variability of cardiac rhythm using different electrocardiographic systems. Bull. Arrhythmol. 24, 69–85 (2001) Baevsky, R.M., Kirillov, O.I., Kletskin, S.Z.: Mathematical Analysis of Heart Rhythm and Stress. Nauka, Moskva (1984) Doletskiy, A.N.: Ispol’zovaniye garmonicheskogo analiza dlya otsenki formy reoentsefalogramm. Sovr. Naukoyemkiye Tekhnologii 1, 73–74 (2006) Isupov, I.B.: Sistemnyiy Analiz Tserebralnogo Krovoobrascheniya Cheloveka. Peremena, Volgograd (2001) Isupov, I.B., Zatrudina, R.S.: Elektronnyy modul’ dlya fotopletizmografii i pul’soksimetrii. Prirodnyye sistemy i resursy 8(3), 15–21 (2018) Isupov, I.B., Zatrudina, R.S.: Variational-statistical and spectral analysis of photoplethysmograms. Proc. of SPIE 11067(110670Q), 7 (2019) Kiselev, A.R., Khorev, V.S., Gridnev, V.I., Prokhorov, M.D., et al.: Interaction of 0.1-Hz oscillations in heart rate variability and distal blood flow variability. Hum. Physiol. 38(3), 303–309 (2012) Moraes, J.L., Rocha, M.X., Vasconcelos, G.G., Vasconcelos Filho, J.E., de Albuquerque, V.H. C., Alexandria, A.R.: Advances in photopletysmography signal analysis for biomedical applications. Sensors 18(6), 88–94 (2018) Nesterov, A.V., Gavrilov I.Y., Selektor, L.Y., Mudraya, I.S., Revenko, S.V.: Fur’ye-analiz variatsiy bioimpedansa pal’tsa cheloveka. Byulleten’ Eksperimental’noy Biologii i Meditsiny 150(7), 31–37 (2010)

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Revenko, S.V.: Rheography: Harmonic perspectives. Nervno-myshechnye Bolezni 4, 8–18 (2012) Velichko, O.N., Karpenko, S.A., Paschenko, A.A., Popov, A.V.: Method of delivery the rheogram of lungs, based on wavelet analysis. Herald of the National State University “KhPI” 24, 11–18 (2008) Zatrudina, R.S., Isupov, I.B., Gribkov, V.Y.: Automated analysis of plethysmograms for functional studies of hemodynamics. Proc. SPIE 10717, 1071727 (2018)

Intelligent System for Diagnostics of Venous Diseases Based on the Microwave Radiothermometry Data V. V. Levshinskii(&) Volgograd State University, Volgograd, Russia [email protected]

Abstract. Purpose: The work is devoted to the development of an intelligent system for the diagnosis of venous diseases based on the microwave radiothermometry data, namely, to the stage of knowledge extraction. Design/Methodology/Approach: Basics of the approach for knowledge extraction were formed in the analysis of the thermometric data of mammary glands. This approach allows semi-automatic construction of interpretable features to solve the classification problem of thermometric data and is based on a system of hypotheses about the behavior of temperature fields. Findings: Quite effective and interpretable features were revealed in the thermometric data of the lower extremities. Such features can be used to build classification models. Originality/Value: The feature construction approach presented in the work has not previously been applied in the problem of diagnosing venous diseases. The constructed classification model allows to justify a solution and seems promising for application as part of an intelligent system after improvements. Keywords: Microwave radiothermometry
Intelligent systems
Data mining
Feature construction JEL Code: C89

1 Introduction Currently, a development of intelligent systems based on artificial intelligence methods is extremely urgent (Ministry of Digital Development, Telecommunications and Mass Media of the Russian Federation 2019). Such technologies can significantly improve the quality of life in various fields, for example, in medicine – the development of an intelligent diagnostic system can increase the efficiency of diagnostics by one method or another, reduce experience requirements to a specialist in diagnostics, identify important and difficult to notice details in the examination data and provide detailed report to the user. One of such methods is microwave radiothermometry, which is currently quite successfully applied in combination with other methods for early diagnosis and detection of breast cancer, diagnosis of venous and some other diseases (Vesnin et al. 2008; Zamechnik et al. 2015). An important characteristic of the method is complete © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 212–219, 2021. https://doi.org/10.1007/978-3-030-59126-7_24

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harmlessness for a patient: the examination consists in sequentially measuring surface and internal temperatures at certain points in accordance with the examination scheme, recording temperatures in the form of numerical data and then searching for temperature anomalies in the examination data, which is an extremely difficult task and requires a long training and many years of experience. This undoubtedly emphasizes the relevance of developing an intelligent system. Complexity of diagnosis is illustrated by Fig. 1 and Fig. 2, there are noticeable areas of elevated temperatures of the left lower extremity in the first case and almost symmetrical temperature fields in the second case.

Fig. 1. Map of internal temperature fields of a patient with venous disease in the left lower extremity.

The purpose of the system is to increase the efficiency of diagnosis of venous diseases of the lower extremities, which are classified as diseases of civilization, since the number of people suffering from them amounts to billions. The method of microwave radiothermometry allows to perform early diagnosis and dynamic monitoring of venous diseases. The intelligent system will analyze the examination data and provide a detailed report on the presence of certain temperature anomalies. The most important components of an intelligent system are the knowledge base and the logical engine (Kobrinskii 2008) – methods and tools for representing and interpreting expert knowledge or various patterns identified in the data. The development of these components is one of the longest and crucial stages of creating an intelligent system.

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Fig. 2. Map of internal temperature fields of a patient with postthrombotic syndrome of the left lower extremity.

2 Materials and Method Actually, there is an existing intelligent system for the diagnosis of venous diseases according to microwave radiothermometry data, based on neural networks and statistical models (Anisimova et al. 2012; Vedenyapin and Losev 2012). Application of neural networks in the diagnosis of venous diseases of the lower extremities based on microwave radiothermometry while having high efficiency still has a significant drawback: the lack of justification and interpretation of the diagnostic result. Moreover, in the data mining process of thermometric data of mammary glands, a significant number of features of breast cancer were revealed. Such features formed a basis for system of hypotheses on the behavior of temperature fields (Losev and Levshinskii 2017; Levshinskii 2019). This system can also be applied in the diagnosis of venous diseases (Mazepa et al. 2017). However, it is possible that new patterns can be found in thermometric data of lower extremities, which can later be applied for diagnosing diseases of mammary glands. Thus, the simultaneous development of patient’s condition models for various thermometric data is carried out, as well as its unification: the development of a universal technique for constructing an effective feature space for thermometric data. It should be noted that a similar approach has not yet been applied in the diagnosis of venous diseases of the lower extremities. We describe the approach in more detail. We will consider a data set containing temperature measurements of the lower extremities of 147 patients, including 18 healthy and 129 with various venous diseases. For each patient, the values of internal and surface temperatures were measured at certain points, which are indicated in Fig. 3, in two positions: standing and lying.

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Fig. 3. Scheme for thermometric examination of the lower extremities.

In a formal form the data set can be represented as a matrix 2

x11 6 . X ¼ 4 .. xm 1




.. .




3 2 3 x1n y1 .. 7 4 ; y ¼ :: 5; Y ¼ f1; 2; . . .; Cg; . 5 y m m x n

where m is a number  of objects  in the data set, n is a number of features, Y is a set of class labels, xi ¼ xi1 ; . . .; xin is a feature vector of an object i, and yi 2 Y is a class label. In a feature vector of objects, «groups» of temperatures are distinguished as follows: • Internal temperatures of the right lower extremity measured in a standing position i;mw;st i;mw;st ; . . .; T12;r ; T1;r • Surface temperatures of the left lower extremity measured in a laying position i;ir;lay i;ir;lay T1;l ; . . .; T12;l ; • And so forth. In the above notation, the superscript mw or ir indicates the type of temperature (internal or surface), the superscript st or lay indicates the measurement position (standing or lying), and the subscript r or l indicates the side that was measured (right or left). This stage is necessary for the further construction of features, which consists in calculating various characteristics for each of the temperature groups, as well as their various ratios (Losev and Levshinskii 2017; Levshinskii 2019). A set of such characteristics can be represented in the form of hypotheses about the behavior of temperature fields and a set of recommendations for constructing features: 1. The hypothesis of a slight temperature difference, which states that healthy organs or parts of the body are characterized by low temperature differences relative to means, special points or subareas (for example, such subareas for the data of the lower extremities can be formed from points 1, 2, 3 and 10, 11, 12; the difference

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between the average temperatures in those subareas is called the axial «gradient»), the low values of the so-called internal gradients which are the differences of internal and surface temperatures. For example, the following features are proposed: F1 ðT Þ ¼ maxjtj; t2T

sffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi 2ffi P  t  T t2T ; F2 ðT Þ ¼ jT j  1 where T are temperatures, T is an average temperature value in T, jT j is a number of temperature values in T, or more concretely     f1 xi ¼ F1 Tri;mw;st ;     f2 xi ¼ F1 Tli;g;st ;     f3 xi ¼ F2 Tli;g;st ; where Tli;g;st ¼ Tli;mw;st  Tli;ir;st are the internal temperature gradients at the points of the left lower extremity, measured in a standing position. Similar features are intended to detect the «hottest» or «coldest» areas. The next example is the «axial gradient», which is also an important feature:   f 4 xi ¼

  i;ir;st i;ir;st i;ir;st T0;l þ T1;l þ T2;l 3



  i;ir;st i;ir;st i;ir;st T9;l þ T10;l þ T11;l 3

:

2. The hypothesis about the symmetry of temperature fields, which states that healthy paired organs or parts of the body are characterized by insignificant temperature differences at the corresponding points (subareas), an insignificant difference between various statistical characteristics: average values, dispersions, etc. As a general «symmetry coefficient», several features of the following form are proposed: F ðTr ; Tl Þ ¼ kTr  Tl k; where Tr and Tl are temperatures of the right and left paired organs respectively, kzk is a norm (or seminorm) of z. For example: F3 ðTr ; Tl Þ ¼ F1 ðTr  Tl Þ;     f5 xi ¼ F3 Tri;mw;st ; Tli;mw;st ;

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    f5 xi ¼ F3 Tri;g;st ; Tli;g;st ; F4 ðTr ; Tl Þ ¼ F2 ðTr  Tl Þ;   f6 xi ¼ F4 ðTr ; Tl Þ: In addition, we can consider the temperature differences at the corresponding points measured in different positions:     f6 xi ¼ F3 Tri;g;st ; Tli;g;lay : Thus, at the first step the construction of 140 features is being performed. The next step consists of binarization of the feature space (Vorontsov 2007) and the construction of thermometric features, or triples uðf ; W; I Þ, where f is a certain temperature function (characteristic), W is an informativeness (Vorontsov 2007), I is an interval. A thermometric feature is fulfilled if f ðxi Þ 2 I. Each thermometric feature can be interpreted, because it belongs to one of the above hypotheses. The condition of each patient can be represented by a variety of thermometric features. For testing, the weighted voting model (Vorontsov 2007) was built based on thermometric features. Weighing was performed by logistic regression with L1-regularization to select the most effective features (Ng 2004). Model evaluation was carried out by the method of nested cross-validation (Raschka 2017) while maintaining the balance of classes with the following number of blocks: 9 at the external level and 8 at the internal. This method is preferred for a small data set. As the efficiency criterion the G-measure was chosen, which is a geometric mean of sensitivity and specificity (Bekkar et al. 2013), where sensitivity and specificity are the ratios of correctly classified patients of «Sick» and «Healthy» classes respectively.

3 Results The application of a weighted voting classifier based on thermometric features allows to achieve a diagnostic efficiency of 78%. The four most effective thermometric features obtained after retraining an algorithm with optimal parameters are presented in Table 1, where the efficiency of feature is determined by the absolute value of its contribution to the vote. Many of features can distinguish a sufficiently large number of patients of a specific class, which emphasizes their effectiveness. The feature construction is carried out semi-automatically. Comparison of this algorithm with algorithms from the existing intelligent system is not quite correct, because methods for checking an efficiency of algorithms differ significantly; moreover, the final performance of diagnostics can only be evaluated by users of the system while working with it: how efficiently the system is able to detect temperature anomalies; how useful is the information provided by the system. It should be noted that thermometric features have a significant advantage – interpretability, and, thus, form the basis for decision-making mechanisms. Based on

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Thermometric feature  i;ir;st  T  Tli;ir;st 2 2 ð1:957; 1Þ  r   i;ir;lay   Tli;ir;lay  2 ð1:581; 1Þ Tr 2   i;mw;st i;mw;st i;mw;st T0;l þ T1;l þ T2;l  3   i;mw;st i;mw;st i;mw;st T9;l þ T10;l þ T11;l 2 ð1:183; 1:317Þ 3 sffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi  2 P i;g;st i;g;st tTr t2Tr i;g;st Tr 1

j

j

Weight 1.21

Sensitivity 0.69

Specificity 1

1.19

0.81

0.89

−0.73

0.02

0.67

0.56

0.94

0.43

2 ð0:508; 1Þ

thermometric features, it is possible to build various classification models and justify the result: in the algorithm presented in the work, justification can be done by choosing the most effective thermometric features, each of which will have a certain contribution to the overall result.

4 Conclusion We constructed thermometric features and built a classification model to solve the classification problem of thermometric data of the lower extremities. The revealed knowledge will be the «basic» blocks for the mechanisms for searching of temperature anomalies and justifying the solution in an intelligent system in the diagnostics of venous diseases of the lower extremities based on the microwave radiothermometry data. The main feature of the considered approach is the possibility of constructing interpretable features in a semi-automatic mode. In further research it is planned to do an improvement of the classification algorithm. Firstly, it is necessary to search for an optimal algorithm that allows to justify solution, which achieves the highest classification efficiency. Secondly, it is necessary to consider in detail the problem of differential diagnosis of venous diseases – a multiclass classification. The hypothesis system which is underlying the approach does not remain unchanged – when new knowledge is discovered, it is supplemented and modified, which can also improve the quality of diagnostics. Acknowledgements. The reported study was funded by RFBR, project number 19-31-90153.

References Ministry of Digital Development, Communications and Mass Media of the Russian Federation: Roadmap for the development of «Pass-through» digital technology «Neurotechnologies and Artificial Intelligence» (2019). https://digital.gov.ru/uploaded/files/07102019ii.pdf. Accessed 14 Feb 2020

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Vesnin, S.G., Kaplan, M.A., Avakyan, R.S.: Modern microwave radiothermometry of the mammary glands. Tumors Female Reprod. Syst. 3, 28–35 (2008) Zamechnik, T.V., Larin, S.I., Losev, A.G.: Combined radiothermometry as a method for studying venous circulation of the lower extremities: a monograph. Volgograd State Medical University, Volgograd (2015) Kobrinskii, B.A.: Diagnosis-advisory intelligent systems: classification, principles of development, effectiveness. Inf. Technol. Phys. 2, 38–47 (2008) Anisimova, E.V., Zamechnik, T.V., Losev, A.G.: About one mathematical model of diagnostics of venous diseases according to the combined thermometry. J. New Med. Technol. XIX(2), 239–241 (2012) Vedenyapin, D.A., Losev, A.G.: Neural networks in vascular diseases diagnosis. Large-Scale Syst. Control Collect. Papers 39, 219–229 (2012) Losev, A.G., Levshinskii, V.V.: The thermometry data mining in the diagnostics of mammary glands. Large-Scale Syst. Control Collect. Papers 70, 113–135 (2017) Levshinskii, V.V.: Mathematical model for interpreting and analyzing thermometric data in medical diagnostics. In: XXIII Regional Conference of Young Researchers of the Volgograd Region: Theses, Volgograd State University, Volgograd, pp. 21–22 (2019) Mazepa, E.A., Grishina, O.V., Levshinsky, V.V., Suleymanova, K.M.: The unification of microwave radiothermometry method. Math. Phys. Comput. Simul. Volgograd State Univ. Volgograd 20(6), 38–50 (2017) Vorontsov, K.V.: Lectures on logical classification algorithms (2007). http://www.ccas.ru/voron/ download/LogicAlgs.pdf. Accessed 14 Feb 2020 Ng, A.Y.: Feature selection, L1 vs. L2 regularization, and rotational invariance. In: Proceedings of the Twenty-First International Conference on Machine Learning (ICML 2004), Banff, Alberta, Canada, p. 78. ACM (2004) Raschka, S.: Python Machine Learning. DMK Press, Moscow (2017) Bekkar, M., Djema, H., Alitouche, T.A.: Evaluation measures for models assessment over imbalanced data sets. J. Inf. Eng. Appl. 3(10), 27–38 (2013)

Neural Networks in Diagnosis of Breast Cancer Alexander G. Losev(&) , Denis A. Medevedev, and Andrey V. Svetlov Volgograd State University, Volgograd, Russia {alexander.losev,andrew.svetlov}@volsu.ru, [email protected]

Abstract. Purpose: The paper is devoted to a creation of mathematical model of an artificial neural network for detection of breast cancer based on microwave radiothermometry and anamnesis. Design/Methodology/Approach: One of the most complex and urgent challenges of modern medicine is arranging of effective mammological screening. The solution to this problem will significantly reduce the mortality from breast cancer by detecting a tumor before clinical manifestation, as well as cut the costs of treating patients. Currently, the main trend in increasing the effectiveness of screening is the transition to modern digital technologies, including the use of methods and algorithms of artificial intelligence. One of the newest methods for early diagnosis of breast cancer is the method of microwave radiothermometry. Over the past two decades, it has already proved itself in some areas of medicine. In addition, it is one of a few methods recommended for use in mammological screening of women under the age of 40. One of the problems for implementation of this method is a complexity of analysis and interpretation of thermometric data. Findings: The solution to this problem involves the development of advisory intelligent diagnostic systems. Such systems use the effective classification algorithms, including ones based on artificial neural networks. Originality/Value: A distinctive feature of the neural network proposed in this study is the use of a specific attribute space as an input layer. This space built on the basis of mathematical functions that simulate the nuances of the behavior of temperature fields in patients of various diagnostic classes. Keywords: Data mining cancer
Diagnosis JEL Code: C880


Microwave radiometry
Neural networks
Breast


I120

1 Introduction Recently, there are a lot of discussion in scientific publications on the problems of using artificial intelligence in various fields of economics, technology, and medicine (Pisano 2020). The preamble of “Roadmap for Development of End-to-End Digital Technology “Neurotechnologies and Artificial Intelligence” states that “the use of artificial intelligence is necessary in all economic and social relations to improve the © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 220–227, 2021. https://doi.org/10.1007/978-3-030-59126-7_25

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quality of life and improve the welfare of society (artificial intelligence is the “new electricity”)”. Specific attention in this industry is paid to the development of recommendation systems and intelligent decision support systems, as well as medical diagnostic systems. At the same time, we note one of the most complex and urgent challenges of modern medicine, which is the problem of early differential diagnosis of breast diseases (“Strategy for Development of Medical Science in the Russian Federation for the Period until 2025” (approved by Decree of the Government of the Russian Federation on December 28, 2012, No. 2580-r)). According to modern statistics, breast cancer is the most common cancer among women. According to expert estimates, more than half a million people in the world die from it every year. Survival rates range is 80% in North America, 65% in Europe, 50% in Russia, and lower in low-income countries. The incidence of breast cancer over the past 20 years has increased by 60%. In addition, breast cancer is rapidly becoming younger. Over the past 10 years, in women aged 19 to 40, their incidence increased by 34%, and in the age group from 30 to 39 it increased by 41% (Kaprin et al. 2015). However, despite the significant achievements of modern medical science in understanding the clinic of this disease, the problem does not fade away. It seems quite obvious that we can increase the survival through early detection of this disease. But the real results of solving this problem do not yet meet expectations. Next, we note some classes of problems, the solution of which will provide a highquality diagnosis of diseases at an early stage, and not only oncological ones. The first one is creation of a new generation of medical equipment. In particular, we mean modern equipment necessary for functional diagnostics. Traditionally, the objective of this type of diagnosis is an appropriate assessment, detection of deviations and determination of dysfunction degree in various organs and physiological systems of the body based on instrumental or laboratory measurements of physical, chemical or other objective indicators of their activity. As a second class of problems, we note the development of the latest versions of functional diagnostic techniques based on dynamic measurement, description and interpretation of the parameters of physical fields and radiation of human body. Undoubtedly, this class of problems directly depends on the capabilities of medical equipment. But solving the above problems creates a new problem, no less significant and no less difficult. Difficulties in the formation of a diagnostic solution in most cases arise not because of a lack of information, but because of the insufficient efficiency of the methods for processing it. The solution to this problem is possible by creating effective systems for interpreting and analyzing medical data. The most interesting is the development of advisory intelligent systems, that is, “expert systems containing a mechanism for explaining and justifying the proposed solutions in a language that a user understands” (Kobrinsky et al. 2008). Such systems, using methods and algorithms of artificial intelligence, are able to help specialists in the tasks of making diagnoses, predicting the development of diseases, etc. Now we back to the problem of early diagnosis of breast cancer. The data of most researchers indicate that almost half (30–50%) of patients with breast cancer for the first time seek medical help with stage III disease. Obviously, screening needs to be improved, i.e. preventive examination of healthy women should allow to identify early

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forms of tumors. Specialists associate some successes in solving this problem with the method of X-ray mammography (Kaprin et al. 2015). However, in Russia, during the initial screening, the maximum number of identified patients with breast cancer is 30–42%. Dynamic screening for 12 years leads to the detection of 68% of patients with malignant neoplasms of the mammary gland (Rozhkova and Bozhenko 2009). At the same time, there is known a number of drawbacks of mammographic screening (Rasskazova and Rozhkova 2014). In particular, lower sensitivity of screening mammography was revealed in women aged 40 to 49 compared with women aged 50 and older. Also noted (Rasskazova and Rozhkova 2014) that “according to the WHO and IARC oncology department, the use of methods such as computed tomography, magnetic resonance imaging, and ultrasound examination of mammary glands for mammological diseases screening is meaningless in women younger than 50 and older than 70”. In fact, for women aged 20 to 40, it is recommended to use dose-free screening technologies (electrical impedance tomammograph and radiothermometer device) (Kaprin et al. 2015). At the same time, according to experts of the World Health Organization, medical tests for mass examinations should be informative (up to 80%), with a low percentage of false negative results, technically simple, quickly executed, and cost effective (Kharchenko and Rozhkova 2009). Thus, one of the most promising methods for increasing the effectiveness of mammological screening and early differential diagnosis is the method of microwave radiothermometry (Vesnin et al. 2017). Over the past two decades, this method has gained popularity in various fields of medicine (mammology, oncology, phlebology, surgery, etc.). At the same time, a number of problems arose. One is related to the task of constructing an adequate three-dimensional image of the corresponding internal organ and, therefore, the development of adequate mathematical models of heat transfer processes in the mammary gland, which take into account the influence of thermophysical parameters of internal tissues (Polyakov et al. 2017; Polyakov et al. 2019; Sedankin et al. 2018). The second one is associated with the development of appropriate methods of medical diagnostics, which take into account the rather complex internal spatial structure of the organ, the strongest heterogeneity of physico-chemical characteristics and individual variations. The third problem is the development of methods, algorithms and software for processing, qualitative and quantitative analysis of the obtained three-dimensional image and other medical information about the patient (Vedenyapin and Losev 2012; Zenovich et al. 2017; Losev and Levshinsky 2017; Losev and Medvedev 2019; Galazis et al. 2019). This study is devoted to solving these problems. Specifically, here we are discussing the possibilities of using neural networks in the diagnosis of breast cancer based on microwave radiometry and anamnesis. It should be pointed out that the use of artificial neural networks has already shown quite good results in medical diagnostics (Pisano 2020; Yasnitsky et al. 2015). In addition, the experience of using neural networks for the analysis of microwave radiothermometry data showed this approach perspectiveness (Vedenyapin and Losev 2012; Zenovich et al. 2017; Losev and Medvedev 2019; Galazis et al. 2019).

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2 Materials and Method The basis of this study is the results of medical examinations with the method of microwave radiothermometry carried out in recent years in cancer centers and clinics in Russia and Slovenia. The study is based on the results of examinations of 741 patients. To confirm the diagnosis of breast cancer, medical personnel performed an additional mammogram, ultrasound and histological examinations. As the result we’ve got the database with data on 377 healthy patients and 364 patients with a diagnosis of breast cancer. Now we describe in detail the diagnostic technique with microwave radiothermometry tools. We use an RTM-01-RES radio thermometer. It allows to evaluate the functional state of biological tissues by measuring internal temperature (RTM) at a depth of 5 cm and skin temperature (IR). The examination of a patient begins with measuring the temperatures at the reference points T1 and T2. The first one is located in the center of the chest immediately below and between the mammary glands. The second one is directly below the xiphoid process (Galazis et al. 2019). Further measurements are carried out at 10 points on each gland, and in the axillary region (see Fig. 1).

Fig. 1. Temperature measuring points

Thus, the thermometric data of patients can be represented in the form of a matrix (Losev and Levshinsky 2017; Losev and Medvedev 2019) 0

t10 .. .

B B B B tk 0 S¼B B tk þ 1 B 0 B . @ .. tn0




t143 . .. . ..


tk43


tk43þ 1 .. .. . .


tn43

1 C C C C C; C C C A

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where tji , i = 0, …, 9 are temperatures of the i-th point of j-th patient right breast in RTM range; tji , i = 10, …, 19 are temperatures of the [i–10]-th point of j-th patient right breast in IR range; tji , i = 20, …, 29 are temperatures of the [i–20]-th point of j-th patient left breast in RTM range; tji , i = 30, …, 39 are temperatures of the [i–30]-th point of j-th patient right breast in IR range; tj40 ¼ T1, tj41 ¼ T2 are deep temperatures in reference points of the j-th patient; tj42 ¼ T1, tj43 ¼ T2 are skin temperatures in reference points of the j-th patient. Each number j is linked to the patient diagnosis. We marked it as “cancer” for patients with breast cancer and “healthy” for patients with no breast pathologies. In addition to the results of thermometric measurements for each patient, the database contains the following information: age, breast size, complaints of pain, weight, height, bodily constitution, number of pregnancies and number of births, hormonal dependence, family history, age at the time of the first birth, etc. To assess the quality of classification algorithms in machine learning, we use several traditional characteristics. In medicine, that is sensitivity and specificity values. Sensitivity is calculated by the formula Sens ¼

TP ; TP þ FN

where TP is the number of patients marked as “cancer”, which were classified by the classifier as “cancer” too; FN is the number of patients marked as “cancer”, which were not classified by the classifier as “cancer”. Specificity is calculated by the formula Spec ¼

TN ; TN þ FP

where TN is the number of patients marked as “healthy”, which were classified by the classifier as “healthy” too; FP is the number of patients marked as “healthy”, which were classified by the classifier as “cancer”. For choosing a classification efficiency metric, the analysis of similar studies results and computational experiments plays a dominant role. Taking into account the results of the work (Losev and Levshinsky 2017), we use as a measure of the classifier pffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi efficiency the value G ¼ Spec
Sens. In this work, we choose a multilayer network of direct distribution as the architecture of the neural network. The last layer of the network consists of two neurons: the first neuron marks the patient as “healthy”, the second one marks it as “cancer”. As the last layer activation function, we take the function expðxi Þ  : softmaxðxÞi ¼ Pn j¼1 exp xj As the error function Lðy; ^yÞ we used cross entropy. To minimize the effect of retraining, we used two methods: dropout and early stop of training (Goodfellow et al.

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2016). Dropout is applied to a hidden layer and consists in disabling a random part of neurons at the training stage. So, at a current step their weights will not change. Then disconnected neurons are inserted into the network with their original weights. To apply the early stop method, one should separate a validation part from a training sample. If during training the network shows good efficiency on the training set, but not on the validation set, then one should interrupt the training. The validation part was 20% of the training sample. To build the classifier, we used the open source Python library of neural networks named Keras. It is used to build and train deep learning models and it is meant to working on top of low-level libraries such as TensorFlow by Google, CNTK (Microsoft Cognitive Toolkit) and others. For training neural networks, we used gradient optimization methods from the Keras library. These are SGD (Stochastic gradient descent), RMSprop, Adam. The best result was shown by the Adam method. One of the most significant aspects of constructing a neural network is the choice of input layer parameters. In previous works (Losev and Levshinsky 2017), we developed a method for the creation of information feature spaces for classification algorithms to obtain a diagnostic solution, and for a block of an advisory intelligent system to proposed diagnostic solution justification. At its first stage, one should construct a system of descriptive axioms to outline the main features of the organ temperature fields behavior that are inherent in each diagnostic class. The construction of this system is based on the analysis of qualitative properties of the solutions of initial equations of the physical and mathematical models of temperature fields in biological tissues, as well as the anatomical structure and physiology of the organ. At the second stage, one should perform a mathematical formalization of descriptive hypotheses. Here we used quite extensive sets of functions and functionals. Further, on the basis of data mining, we find a set of functions and subdomains of their domains that allow one to most effectively separate one diagnostic class from another. In this process we used the existing medical knowledge, a new system of cognitive hypotheses, statistical processing of the expert database and the results of computational experiments. In particular, we used mathematical functionals that reflect the degree of thermo-asymmetry of a mammary gland, the influence of geometric shape of a mammary gland, age-related changes, etc. The elements of the created feature space were used at the input of the neural network.

3 Results As we mentioned, the input of the neural network is sets of functions for modeling a patient’s diagnosis. We will call them modeling functions. Let’s present them briefly. 1. Functions that describe the degree of asymmetry of the right and left mammary glands temperature fields: maxfjti  ti þ 20 jg; i ¼ 0; . . .; 8 and maxfjti  ti þ 20 jg; i ¼ 10; . . .; 18: 2. Functions that describe the degree of radial asymmetry of temperature fields inside mammary gland (radial gradient): tj  tj þ i ; where j ¼ 0; 10; 20; 30; and i ¼ 1; . . .; 8:

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3. Functions that describe the degree of variation in temperature fields in the internal direction of mammary gland (internal gradient): maxfjti  ti þ 10 jg; i ¼ 1; . . .; 8; and maxfjti  ti þ 10 jg; i ¼ 20; . . .; 28: Also we use the internal gradient values in the nipple. 4. Functions that describe the variation in the internal gradient in the radial   direction. In this study, we use functions tj  tj þ 10  ðtj þ i tj þ i þ 10 Þ þ ðtj þ i þ 1 tj þ i þ 11 Þ þ ðtj þ i þ 2 tj þ i þ 12 Þ ; where j ¼ 0; 20; and i ¼ 1; . . .; 8: 3 5. To assess the temperature spread in mammary glands, we use functions    P8     t iþj max  i¼09  ti þ j  ; i ¼ 0; . . .; 8; j ¼ 0; 10; 20; 30; max ti þ j  min ti þ j ; i ¼ 1; . . .; 8; t0 þ t31 þ t2  t3 þ t4 þ t5 þ6 t6 þ t7 þ t8 , etc. In the first version of the classifier, we used as input vectors the values of mentioned modeling functions of the temperature vector. The parameters of the neural network were selected by random search. The process was as follows. First, with a fixed number of neurons in the hidden layer, we tried a number of hidden layers, an optimization method, and an error function. Then, for the obtained parameters, we refined the number of neurons in the hidden layers. The depth of the neural network was 4 layers. The classifier was evaluated by stratified K-fold cross-validation. More precisely, the initial sample was divided into K blocks. Of the K blocks, one was left to test the model, and the remaining K-1 blocks were used as a training kit. The process was repeated K times, and each of the blocks was used once as a test set. For K = 5, the efficiency of the classifier is 88.10%. In the second version of the classifier, we added the following anamnesis results: age, height, weight, diameter of mammary gland, number of pain points, having of a surgical intervention on mammary glands. The number of hidden layers is 6. The classification results are shown in Table 1. Table 1. The classification results Input vector Sens Spec G Functions values 88.84% 87.37% 88.10% Functions values and anamnesis results 90.70% 89.57% 90.13%

4 Conclusion Neural networks based on microwave radiometry data have previously been used to diagnose breast diseases (Losev and Medvedev 2019; Galazis 2019). The input parameters proposed in this study, as well as the combined use of modeling functions and anamnesis results, allowed us to increase the efficiency of the classifier by 10 percent compared with the results of (Galazis 2019), and by 6% compared with (Losev and Medvedev 2019).

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Acknowledgments. The study was financially supported by the Russian Foundation for Basic Research, the project “Mathematical Models of Radiation Fields and Analysis of Microwave Radiometry Data in the Early Diagnosis of Breast Cancer” No. 19-01-00358.

References Vedenyapin, D.A., Losev, A.G.: On a neural network model for diagnosis of venous diseases. In: Large Systems Control: Proceedings, no. 39, pp. 219–229 (2012) Goodfellow, I., Bengio, Y., Courville, A.: Deep Learning. The MIT Press, Cambridge (2016) Zenovich, A.V., Grebnev, V.I., Primachenko, F.G.: Algorithms for the classification of diseases of paired organs on the basis of neural networks and fuzzy sets. Math. Phys. Comput. Simul. 20(6), 26–37 (2017) Kaprin, A.D., Rozhkova, N.I., Mikushin, S.Y.: The state of the park of X-ray and ultrasound devices for breast examination in the Russian Federation for 2011–2012. Bull. Radiol. Radiogr. (5), 49–52 (2015) Kobrinsky, B.A.: Advisory intelligent medical systems: classification, construction principles, efficiency. Phys. Inf. Technol. (2), 38–47 (2008) Losev, A.G., Levshinskiy, V.V.: Data mining of microwave radiometry data in the diagnosis of breast cancer. Math. Phys. Comput. Simul. 20(5), 49–62 (2017) Losev, A.G., Medvedev, D.A.: Implication of neural networks in diagnosing breast cancer. Mod. Sci. Innov. 4(28), 22–28 (2019) Rasskazova, E.A., Rozhkova, N.I.: Screening for early diagnosis of breast cancer. Res. Pract. Med. 1(1), 45–51 (2014) Rozhkova, N.I., Bozhenko, V.K.: Modern technologies for breast cancer screening. Oncol. Issues 55(4), 495–500 (2009) Kharchenko, V.P., Rozhkova, N.I.: Mammology. National guidance. GEOTAR-Media Press, Moscow (2009) Galazis, C., Vesnin S., Goryanin I.: Application of artificial intelligence in microwave radiometry (MWR). In: Proceedings of the 12th International Joint Conference on Biomedical Engineering Systems and Technologies, vol. 3, pp. 112–122 (2019) Pisano, Etta D.: AI shows promise for breast cancer screening. Nature 577, 35–36 (2020) Polyakov, M.V., Khoperskov, A.V., Zamichnik, T.V.: Numerical modeling of the internal temperature in the mammary gland. In: Lecture Notes in Computer Science LNCS, vol. 10594, pp. 128–135 (2017) Polyakov, M., Levshinskii, V., Khoperskov, A.: Modeling of brightness temperature in biological tissue. In: Journal of Physics: Conference Series. ITNT, vol. 1368, pp. 042057 (2019) Sedankin, M.K., Leushin, V.Yu., Gudkov, A.G., Vesnin, S.G., Sidorov, I.A., Agasieva, S.V., Markin, A.V.: Mathematical simulation of heat transfer processes in a breast with a malignant tumor. Biomed. Eng. 52(3), 190–194 (2018) Vesnin, S., Turnbull, A.K., Dixon, J.M., Goryanin, I.: Modern microwave thermometry for breast cancer. J. Mol. Imaging Dyn. 7(2), 1000136 (2017) Yasnitsky, L.N., Dumler, A.A., Poleshuk, A.N., Bogdanov, C.V., Cherepanov, F.M.: Artificial neural networks for obtaining new medical knowledge: diagnostics and prediction of cardiovascular disease progression. Biol. Med. (Aligarh) 7(2), BM-095-15 (2015)

SMART Technologies in Translation: Globalization as a Factor of Progress Anna A. Novozhilova(&) , Svetlana A. Korolkova Vera A. Mityagina , and Anna P. Naumova

,

Volgograd State University, Volgograd Oblast, Russia {novozilova,korolkova,mityagina,anaumova9}@volsu.ru

Abstract. Purpose: The purpose of the article is to explain the increase in translation services market in the current era of technological breakthrough, where the progress of “smart technologies” in all areas of the global economy can be described as a survival factor. Design/methodology/approach: Analysis of research in the field of theory and history of automated translation, as well as the statistical data provided, allow to describe the history of formation and the current state of machine translation and TM systems. The authors substantiate the importance of computer assisted translation tools for the economic policies of translation agencies and independent translators. Findings: The paper defines automated translation performed by a translator using machine translation and TM systems as tools for performing routine work, saving time for translation, ensuring terminological consistency and improving the quality of the translation text. A detailed description of one of the most popular and successfully developing SMART programs in Russia - the cloud TM system SmartCAT is offered. Originality/value: The authors convincingly demonstrate the advantages of SmartCAT by the example of translating an excerpt from a commercial contract from Russian into German and English and state that the development of smart technologies stimulates the development of the translation services market as a whole, increases the need for a translator at the stage of pre- and post-editing and diversifies the profile of the profession. The future, as studies show, lies in modern powerful TM systems with integrated MT. The use of “smart technologies” gives the translator a chance to better focus on the creative aspects of the profession. Keywords: Translation services in the era of globalization
Smart technologies in translation
Machine translation
TM systems
CAT tools (computer assisted translation) JEL Code: L84


Z13

1 Introduction In the era of globalization, the need for translation services is constantly growing, and the following factors can be considered as the main one determining this process: © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 228–237, 2021. https://doi.org/10.1007/978-3-030-59126-7_26

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1) entering the international market becomes an existential factor for the development of business, and the volume of text translations relating to various fields - economic, marketing, technical, legal, etc. increases exponentially; 2) company websites are one of the most popular translation objects, since their content is created and maintained in several languages; 3) outsourcing of linguistic services in general and translation services in particular characterizes the current development trend, because companies have to concentrate on their core business and transfer support services to relevant business structures; 4) the rapid progress of smart technologies and their implementation in all spheres of human activity positively affects the sphere of translation: the 21st century makes a technological breakthrough in all areas of human activity, and the use and development of smart technologies becomes a survival factor in the market.

2 Materials and Method The digital revolution and the expansion of information technology in the field of translation services after the introduction of neural translation led to the fact that in 2018, according to the study of the European language industry (Study of the European language 2018), the share of European enterprises in the field of linguistic services using machine translation in professional activities, exceeded for the first time 50%. Analysis of the 2019 translation market, prepared by the Nimdzi research company (The Nimdzi 100 2019), demonstrates the stable growth of the industry and estimates its volume at 53.5 billion dollars. The main services of the translation industry include specialized translation, primarily technical, localization of websites, software and multimedia, including audio and video materials (films, TV series, etc.), interpretation and a number of multilingual services (multilingual marketing, multilingual computerized publications, eDiscovery, etc.). It is interesting to note that the aggregate growth rate of interpretation and translation amounted to 7%, which indicates that basic translation services remain in high demand. According to this study, by 2023, the market will reach 70 billion dollars, both through basic translation and interpretation, and thanks to the emergence of new translation services that were not there a decade ago. These processes occur and will occur due to the active informatization of the profession, which began at the end of the last century, as well as to the increasingly active implementation of artificial intelligence. CAT tools (computer assisted translation) are various computer programs and technologies that help optimize translation activities and provide for their full or partial automation, these tools became an integral part of the professional translator work environment (Cocci 2007). According to French researchers C. Frérot and L. Karagouch, the increase in the number and diversification of translator information tools, both paid and free, including online tools - specialized dictionaries and glossaries, terminology databases, concordances, machine translation systems (MP), and also TM systems and specialized utilities, such as IntelliWebSearch or the Terminotix toolbar for Word and others, indicate that the profession is ‘informatized’, i.e. becoming more and more technological (Frérot and Karagouch 2016). The data of the

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European study in the field of translation business show that “the use of translation programs by translators has become so wide that they are no longer limited to one, but use several. Among professional translators, 39% work with 1 program, 23% - with two, 15% - with four, and 15% use at least 6 programs. These studies prove that today we are observing not only the progress of CAT tools, but also the absolute need for the translator to work with at least one program in order to be at the level of customer requirements” (Consultation 2016). However, contrary to predictions made over the past 50 years after the Georgetown Experiment (Farukshin 2017), in the foreseeable future, computer and artificial intelligence will not crowd out a man in this industry. For professionals in this field, the problem of “machine translation will replace the translator” or “artificial intelligence will replace the translator” does not exist, because for many years translators have been actively coexisting with artificial intelligence and have learned to use the technological solutions for their benefit. As Rudy Loock notes in his study of the relationship between human translation and computer, correctly formulated questions in this area “will allow for considering such important points as: What can a machine do? What it cannot do? What are the risks? When should you use this tool? What are the deontological problems in this area? What is the profitability of the application?” (Loock 2019). The most famous and widely used are two tools that allow you to optimize the translation process: these are the machine translation (MT) we have already mentioned and TM systems that provide automated translation. TM systems are translation memory storage programs (Translation Memory systems), they are used by translators to save and replenish their own translation databases, which can be used in further work. In fact, as Rudy Loock notes, “the omnipresent TM tools are corpora of parallel texts. (…) However, the market that obliges us to use them prefers to use less terminological and more understandable name of ‘memory’, referring to the notion that something has already been done and can be reused in a new translation project” (Loock 2016). The most well-known in the professional market are SDL TRADOS, Déjà Vu, STAR Transit NXT, Wordfast, SmartCat, MemoQ. For a non-specialist, namely the customer who first contacted a translation agency, the term ‘machine translation’ causes two reactions: either simply horror, or complete delight and the assertion that machine translation can quite replace human translation. For a professional working in the field of translation, MT is just a tool that must be used correctly, since it allows you to get time benefits and, consequently, to reduce financial costs, but be ready to receive an ‘acceptable quality’ translation (International Standard 2017). Since 2018, all MT systems offered by leading IT players in the translation services market, for example, the Russian companies of Yandex and Promt, are hybrid, i.e. they combine the basic SMT translation module and the NMT module which perform the translation, and the third module, in the Yandex system, CatBoost, which evaluates what translation is better. And then on the basis of a dozen factors - the length of the sentence (the statistical model translates short phrases better), terminology, and so on up to the syntax, the best variant is selected and presented to the user. In addition, in commercial versions it is possible to connect already accumulated Client translation memory for system training. This provides a better translation, since “the quality of the

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MT tools directly depends on the quality of texts corpora with which it works” (Loock 2016). Therefore, modern MT systems are excellent tools for facilitating the work of a translator, on the one hand, since it is possible to transfer routine and uninteresting work to them, leaving the professional with all the creative component of the profession, and to reduce costs (time and financial) for the customer, on the other hand. Today there are still some translation agencies positioning themselves as principled opponents of the MT, but every serious participant in the market of translation services cannot refuse to use automated translation, i.e. TM systems: almost all translation agencies have already integrated TM systems in their activities, the first commercial desktop versions of which began to appear in the early 90 s of the last century. The fundamental difference between automated translation and MT is the constant presence of the translator at all stages of work, special programs integrated into the TM system are only tools that can reduce time costs, ensure harmonization of terms and improve the overall quality of the translated text, i.e. the entire translation process is controlled by a man. TM systems, like MT, are a kind of text corpus, a database where original texts and completed translations are stored, split by the system into so-called translation segments. The machine performs segmentation of the source text in accordance with the specified parameters. If no special settings are set, then a sentence is accepted for one segment, and the split is carried out automatically with orientation to the point. In very long and complex sentences, the program can focus on a semicolon, but you can also specify both a word and a paragraph as a translation segment. Then the program compares the segments in the translation memory with the segments from the text to be translated, and if it detects matches, it offers the translator the translation variant found (Nazarchuk 2017). Almost all developers of TM systems offer their product in different versions - from the simplest for freelance translators with the minimum necessary set of functions to powerful tools with advanced options and collective work on projects; the target group of users of the latter are large translation agencies and companies. In versions for collective work, you can manage translation projects, make editorial corrections in an already translated fragment while translators work on other parts of the project, etc. Many developers also have free versions with limited functionality that allow you to create projects and perform translations, which are often used by freelance translators both for educational purposes and for permanent individual work. Many TM systems also have a number of very useful and facilitating functions for translators and project managers. One of the drawbacks of TM systems at the initial stage was the inability to connect machine translators, which was resolved in the early 10th of the 21st century. In modern TM systems, it is possible to connect machine translation when working on text and, in addition to substituting the proposed variants from the system databases, use translations made by machine translators (Hauptfleisch 2015). Terminological vocabularies or glossaries can be created or downloaded and replenished independently. The presence of various TM systems in the market of translation services is an undoubted advantage, because, despite the fundamental similarities, this diversity allows both translation agencies and freelance translators to choose the optimal pricequality ratio in accordance with their own requirements.

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Until recently, all TM systems and most machine translation systems (we are talking about commercial versions, and not about free online translation services by Google or Yandex, which allow any user to quickly get the information they need) were desktop, i.e. installed on a computer, which represented a certain problem, given that the 21st century is a century of increased mobility. Meeting the needs of the market, developers have created cloud-based TM systems.

3 Results Nowadays, one of the most popular and successfully developing SMART programs in Russia used in the translation process is the cloud-based SmartCAT TM system. Appeared relatively recently - in 2014, this program has long gone beyond the scope of the conventional TM system and is not only a translation SMART tool that optimizes the work of the translator from a technical point of view, but also represents an extensive platform for the interaction of freelance translators and customers. Translation orders are placed here and translation services are offered, the translation process itself is carried out and payment is made for it. Many users note that this TM system has simple and intuitive interface, available in five language versions, and it is easy for beginners to learn. In SmartCAT, all the basic functions that are available in most modern TM systems are available. The program can work with almost 200 languages and supports various document formats, ranging from text files, Excel documents and PowerPoint presentations to graphic file formats. In addition to the function of creating translation memory and user glossaries for managing terminology within one project and the possibility of connecting them to other projects of similar thematic focus, SmartCAT offers translators an extensive vocabulary for searching and checking unfamiliar lexis. You can also download reference materials or requirements for the translation of certain segments into the translation project, which the customer can often provide to the translator along with the order. Another very useful option of this TM system is the quality control function, which means that the program informs users about a number of errors made in the translation, for example, such as the absence of tags - commands responsible for formatting the text of the translation identical to the original text, spelling errors, extra spaces, etc. The developers claim that this program is free for freelance translators as well as for companies providing linguistic services. Registration as a corporate client allows you to create translation projects with multi-disciplinary access, which means the possibility of collective translations and editorial changes. However, the use of this cloud system can still be called shareware, since some functions become available only after payment, which is calculated in conditional pages. For example, recognition of documents in graphic formats and the connection of a number of machine translation engines have to be paid. When translating, users can also connect a free machine translation service – Yandex. Translator with feedback. This means that Yandex further will be able to use the translated document to improve its translation databases. This often raises the important issue of ethics and confidentiality, as not all customers are ready to accept the fact that their documents, and all the data contained there, are sent to Yandex cloud

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storage and may be available to third parties. In this regard, when translating confidential documents, it is preferable for translators to use paid machine translation services, despite the fact that Yandex. Translator has demonstrated quite good translation quality over the past few years, which is enhanced not least due to feedback from the SmartCAT platform, when professional translators work on the translation. This machine engine can be used, firstly, when teaching students to work with SmartCAT, and secondly, when discussing all the conditions with the customer, for example, when translating texts that were originally ordered as a “machine translation” service with post-editing, whose popularity has recently been growing more and more, since this reduces the cost of the translation process. The combined use of various SmartCAT functions and the resources of third-party companies connected to this platform allows you to optimize and significantly speed up the translation. According to various experts in the field of translation, the use of CAT systems in the translation process saves from 50 to 80% of the time spent on translation and significantly improves the quality of translations. Let us consider the example of translating an excerpt from a commercial agreement from Russian into German and English in the SmartCAT program using a number of functions: a glossary, machine translation of the Yandex. Translator service (as an example, we took the text from a textbook with a CD application (Korolkova et al. 2018), therefore, privacy issues are not affected), quality control. The document is presented in power point presentation format. Spelling and punctuation of the text of the original are not changed, because in real conditions, translators often encounter misprints, errors, and poor quality of the source text. After creating a new translation project and loading a document into it, we open the window for performing the translation. The program divided the text into segments, focusing on points, i.e. one sentence - one segment. The first segment consists of the numbers 1.1. - numbering of contract clauses. The program automatically transferred the numbers to the translation window and confirmed the segment. Thus, the translator does not need to spend effort and time transferring numerical values. This is especially valuable when long lines of numbers are present in the original text. Let’s go to the next segment with the original text in Russian: «B cooтвeтcтвии c дaнным Дoгoвopoм Пpoдaвeц дoлжeн пepeдaть в coбcтвeннocть Пoкyпaтeлю тoвap, a Пoкyпaтeль дoлжeн пpинять этoт тoвap и yплaтить зa нeгo oпpeдeлeннyю Дoгoвopoм дeнeжнyю cyммy.» In the machine translation window, the following translation is offered by the Yandex. Translate service: “Gemäß diesem Vertrag muss der Verkäufer die Ware an den Käufer übergeben, und der Käufer muss diese Ware annehmen und dafür einen Vertraglich festgelegten Geldbetrag bezahlen”. From the point of view of meaning, the translation is quite adequate and can be adopted without modifications. In terms of spelling, you should correct the capital letter to lowercase in the word ‘Vertraglich’. The program wrote this adverb capitalized, since the original equivalent to it (“Agreement”) is a noun assigned to terminological units, fixed and defined in the agreement, which are often capitalized in variants in Russian to introduce legal certainty. The meaning of the original is fully transferred

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into German by this adverb, but it should not be capitalized because it will not refer to such terminological units. When translating this segment into English, the machine translator proposed the following variant: “In accordance with this Agreement, the Seller must transfer the property of the goods to the Buyer, and the Buyer must accept this product and pay the amount of money specified in the Agreement for it”. A number of corrections should be made to the translation of this sentence at the lexical level. First, it is necessary to replace “Agreement” (Russian “coглaшeниe”) with a more suitable “Contract” (Russian “дoгoвop”). Secondly, in order to maintain the unity of terminology, instead of “this product” it is better to use “the goods” (and, correspondingly, to replace “it” with “them”). Moreover, the double use of this nomination within the framework of one sentence is correct, as it is used in the legal text - the contract, and serves one purpose - the most transparent explication of actions performed within the framework of the document. Thirdly, the nomination “property” is subject to replacement as a lexeme describing the totality of physical objects belonging to someone, by the nomination “ownership”, which contains the lexical meaning of the right to own any object, the state of ownership of it. The translation of some segments, the syntax of which is more complex, needed a little more correction. So, the next segment in Russian required more work on the German version than the previous one: «Кoмплeктaция, кoличecтвo, цeнa eдиницы тoвapa и oбщaя cyммa дoгoвopa oпpeдeляютcя в Пpилoжeнии №. 1, являющимcя нeoтъeмлeмoй чacтью нacтoящeгo Дoгoвopa» . “Komplettierung, Menge, Stückpreis und Gesamtbetrag des Vertrages werden in der Anlage Nr. festgelegt. 1, die ein integraler Bestandteil dieses Vertrages ist”. In this variant, the equivalent for the term “кoмплeктaция” is not quite correctly selected, and the word order is also violated due to the fact that the original has a point after the “№” icon. The system considered it the end of the sentence and, according to the grammar rules of the German language, put the past participle before the point. The program used the correct gender of the relative pronoun ‘die’, which is anaphorically related to the feminine noun ‘Anlage’. But this apparently happened only because in the variant proposed by the program, the pronoun “die” corresponds with the number 1, since the numbers in German when they switch to the category of nouns take the feminine gender. The translation into English did not require any corrections, with the exception of one thing: replacing the first lowercase letter in the word “contract” with an uppercase letter in order to comply with unified spelling throughout the text: “The complete set, quantity, unit price and total amount of the contract are defined in Appendix no. 1, which is an integral part of this Agreement”. The program translated most of the short segments consisting of nominative enumerations correctly and without the need for any post-editing by the translator. For instance: Original text in Russian: 2. ЦEHA И КAЧECTBO TOBAPA Translation text in German: 2. PREIS UND QUALITÄT DER WARE

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Translation text in English: 2. PRICE AND QUALITY OF GOODS Minimum editing was also required for a number of other segments with simple syntax. Original text in Russian: «Кaчecтвo тoвapa дoлжнo cooтвeтcтвoвaть oбpaзцaм и oпиcaниям, пpилaгaeмым к нacтoящeмy Дoгoвopy» . Translation text in German: “Die Qualität der Ware muss den Proben und Beschreibungen entsprechen, die diesem Vertrag beigefügt sind”. Translation text in English: “The quality of the product must comply with the samples and descriptions attached to this Agreement”. In the translation into German, only the equivalent for the term in Russian “oбpaзeц” was replaced. At the same time, this terminological unit was entered into the glossary, and later, when translating other segments, the question of choosing the equivalent for the word in Russian “oбpaзeц” was solved with two clicks of the mouse. The translation into English is correct. Here, the equivalent of the variant “Agreement” was also corrected for the term “Contract” previously entered in the glossary, as well as the variant “the product” was replaced by “the goods”. Similarly, in other segments, if the machine translator offered the equivalent of “Agreement”, editing was carried out very quickly and consistent terminology was observed, which is a very important point in the translation of contracts, technical documentation and other boilerplate texts. Creating new glossaries or connecting ready-made ones also greatly facilitates the work of the translator and he does not need to remember how the terminological unit was translated or look for it in the translation text, which is especially useful when working with large text volumes full of all kinds of terminology. It is worth noting that with long segments with complex and cumbersome syntactic constructions, which are often abundant in legal and commercial contracts, a machine translator does worse, but even in this case, post-editing takes less time than it would have cost to translate without using automation tools. Upon completion of the translation, we have two presentations - in German and English, preserving the original formatting and all graphic objects of the original text. Thus, when translating with the help of specialized programs and functions, the work of the translator not only noticeably accelerates, but also its quality is improved, because the program responds to spelling, technical and - subject to the availability of a term in the glossary - terminological errors and inaccuracies. If there is a sufficient volume of translation databases within the framework of one subject matter, the translation databases themselves perform the functions of automatic translation and offer translation in case of complete or partial coincidence of the translated segments and segments stored in the database.

4 Conclusion It can be stated that the assertion that “smart technologies” will crowd out a human translator from the market of translation services is greatly exaggerated. In reality, everything happens exactly the opposite: the development of smart technologies

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stimulates the development of the translation services market as a whole, increasing the need for a translator and diversifying the profile of the profession: the emergence of hybrid MT systems allowed them to be more actively introduced into the work of translation agencies and contributed to the creation of two new specializations associated with it - “Specialist in pre-editing” and “Specialist in post-editing”. Studies show that the future lies in modern powerful TM systems with integrated machine translation (Devyatov and Ugarov 2014). Further implementation of “smart technologies” will solve problems beyond the control of the human mind - to analyze a large amount of text and make abstracts of it, process the corpus of texts according to the given parameters and highlight certain statistical data, etc. However, there will always be texts that, due to their basic parameter - variability of interpretation, will require human translation. Moreover, a modern translator needs to think about the other side of introducing “smart technologies” into the profession: how a human translator can benefit from the use of CAT tools, since the ability to use these technological solutions will allow him to focus on the creative aspects of this profession (Loock 2019). As noted by the famous futurologist Ray Kurzweil, technology does not replace entire spheres of human activity, on the contrary, in most cases they stimulate their development and make the world a better and more interesting place (Thompson 2017).

References Study of the European language (2018). https://www.euatc.org/industry-surveys/item/468-2018european-language-survey-results-announced. Accessed 28 Jan 2020 The Nimdzi 100. The 2019 ranking of the largest language services providers in the world (2019). https://www.nimdzi.com/2019-nimdzi-100/. Accessed 23 Jan 2020 Frérot, C., Karagouch, L.: CAT tools and training of translators: towards an adequacy of educational content with the technological reality for translators (2016). ILCEA, 27. http:// journals.openedition.org/ilcea/3849. Accessed 28 Jan 2020 Loock, R.: The added value of biotranslation facing the machine. Traduire, 241 (2019). http:// journals.openedition.org/traduire/1848. https://doi.org/10.4000/traduire.1848. Accessed 31 Jan 2020 Loock, R.: Using electronic corpora by professional translators: When? How? What for? ILCEA, 27 (2016). http://journals.openedition.org/ilcea/3835. Accessed 29 Jan 2020 International Standard on Translation Services ISO 18587: (2017). https://standartgost.ru/g/ISO_ 18587:2017. Accessed 31 Jan 2020 Devyatov, M.A., Ugarov, P.A.: Hybrid technology of machine translation: practical assessment of the current state on the example of PROMT DeePHybrid (2014). https://www.primavista. ru/rus/articles/gibridnye-tehnologii-mashinnogo-perevoda-prakticheskaya-ocenkasovremennogo-sostoyaniya-na-primere-prompt-deephybrid. Accessed 30 Jan 2020 Farukshin, N.: Translation from a machine: system which shortened life of hermann goering/mathematics and computer science, January 2017. https://indicator.ru/mathematics/ istoriya-nauki-perevod-iz-mashiny.htm. Accessed 23 Jan 2020 Nazarchuk, U.I., Comparative characteristic of the automated cat and trados systems used in translation activity. Sci. J. Mod. Linguist. Methodical-and-Didactic Res. 2(34), 180–189 (2017)

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Cocci, L.: CAT tools: Istruzioni per l’uso. Daf Werkstatt. J. Center German Stud. Univ. SienaArezzo 9(10), 133–147 (2007) Korolkova, S.A., Novozhilova, A.A., Sheyko, A.M., Shovgenina, Ye.A.: Internet resources and CAT systems in Translation. (Study Guide with CD) (English, German, French), 124 p. ‘RValent’ Publishing House, Moscow (2018) Hauptfleisch, K.: Translation software: what the free tools are good for (2015). Computerwoche, 17 Sep 2015. http://www.cowo.de/a/3215547. Accessed 05 Feb 2020 Public consultation on CAT tools. https://www.culture.gouv.fr/Sites-thematiques/Languefrancaise-et-langues-de-France/Politiques-de-la-langue/Multilinguisme/Traduction. Accessed 05 Feb 2020 Thompson, N.: Ray Kurzweil on turing tests, brain extenders, and AI ethics (2017). https://www. wired.com/story/ray-kurzweil-on-turing-tests-brain-extenders-and-ai-ethics/. Accessed 04 Feb 2020)

Educational Robotics in Practice of Modern School Elena A. Chelnokova1(&) , Lyubov Y. Shobonova1 , Sergey N. Yashin2 , Elena V. Romanovskaya1 , and Nataliya S. Andryashina1 1

Minin Nizhny Novgorod State Pedagogical University, Nizhny Novgorod, Russia [email protected], [email protected], [email protected], [email protected] 2 Lobachevsky State University of Nizhny Novgorod, Nizhny Novgorod, Russia [email protected]

Abstract. The aim of the work is to consider an urgent problem - the introduction of educational robotics in the practice of a modern school. The inclusion of educational robotics schools in educational practice is determined by the current situation and the factors indicated by the authors in the article. The main aspects of the organization of classes in robotics are indicated. The positive aspects of studying robotics for students are considered: the acquisition of independent labor skills, the formation of a holistic view of modern technologies, the development of social, communication skills. Pointing to the principles of teaching robotics, the authors highlight the positive educational effects: the formation of educational motivation, the growth of cognitive activity, the formation of objective criteria for self-esteem, a positive emotional background, and health-saving activity. Based on the principle of educational robotics learning through the game - the authors identify the methods of activity of the teacher. According to the authors, educational robotics is an integrative subject area and this circumstance allows us to consider educational robotics as a stimulator of the educational activity of schoolchildren, motivating them to study disciplines related to robotics. Based on a study among schoolchildren engaged in a circle of robotics, the authors conclude that studying the basics of robotics creates the prerequisites for socializing students and continuing technical education, and opens up opportunities for promising professions in the modern labor market. Keywords: Robots
Robotics
Student
Technical creativity
Design
Training principles
Methods
Teacher
Professional self-determination
Educational result JEL Code: I230

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 238–246, 2021. https://doi.org/10.1007/978-3-030-59126-7_27

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1 Introduction The life of modern society is inseparable from robots: many processes have already been replaced by them. The robots have found their application in healthcare, construction, agriculture, animal husbandry, and space. All human life today is replete with a variety of high-tech equipment, associated with robotics devices: toy robots for children, a nurse robot, a nanny robot, a robot housekeeper, etc. Therefore, the modern labor market urgently needs specialists in this area. In this regard, the relevance and importance of the issue of introducing educational robotics into the practice of modern school is not in doubt. Knowledge of robotics opens up many opportunities for the younger generation and makes the further development of technology more rapid. The existing shortage of engineering specialists dictates an urgent need to awaken the cognitive interest of students in the study of the exact sciences and the mass popularization of engineering professions. It is important that this activity be carried out on the early development of schoolchildren. We see educational robotics as the most promising movement in this direction, which allows us to introduce students to the exact sciences in the form of a game. Robotics, as an effective method of studying such important areas of science as technology, engineering, mathematics, has been introduced into the new international paradigm: STEM education (Science, Technology, Engineering, Mathematics).

2 Materials and Method Robotics is the most important area of scientific and technological progress, where the problems of mechanics and innovative technologies come into contact with artificial intelligence. The 21st century is making its own adjustments to the educational process. Today’s schoolchildren in the future will occupy other positions, communicate differently and be able to do many things differently from the way we are, better and more competent. Our task - the task of teachers - to help them with this. As previously considered in our works, the inclusion of educational robotics schools in educational practice is determined by the current situation and factors: – a high level of automation and robotization of modern production, requiring trained personnel; – requirements of the system-activity approach of GEF; – a low level of motivation of students in the process of studying algorithmization and programming as a result of poor practical orientation. The didactic potential of educational robotics is reflected in the works of domestic researchers: Bers (2002); Buzhinskaya et al. (2017); Carberry and McKenna (2014); Chelnokova and Hraban (2016); Chelnokova et al. (2019); Chelnokova and Nabiev (2015); Chetina (2017); Filippov (2016); Gavrilyeva (2017); Gruzdeva et al. (2018); Halamov (2012); Hermit (2017); Jonassen (2006); Kuzmina (2017); Paraskevov and Levchenko (2014); Polushkin (2017); Skorokhodova ( 2014); Sofronova (2015); Sorokin (2017)

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Educational robotics is seen as a didactic model of robotic science. In this model, the elements do not act as scientific and engineering knowledge in the field of robotics and can be applied in the propaedeutic training of schoolchildren in the basics of engineering, which contributes to the development of cognitive interest in engineering specialties. A number of aspects can be distinguished when organizing educational robotics classes. The activity aspect related to mastering during the course those types of activities that are inherent in the subjects of the natural science cycle: semantic observation, hypothesizing, forecasting, collecting and interpreting data, analyzing the results, the ability to formulate conclusions. As a leading method in robotics classes, the project method is used, which is focused on the independent activity of students. This can be an individual, paired, group activity, the implementation of which is given a certain period of time. The connection of the educational aspect of educational robotics with the vocational guidance component is represented by examples of engineering activity, while the cultural component allows, depending on the degree of mastering the discipline, to consider robotics knowledge as significant forms of human sociocultural experience. This is reflected in the fact that the study of the basic level of robotics is based not only on the fundamental knowledge of classical disciplines, but also on orientation skills in the realities of today, where robots and controlled embedded systems are ubiquitous. The developing aspect of educational robotics is based on the fact that design and programming in one course is able to develop mental cognitive processes in students: perception, thinking and speech, memory, imagination; develop forms of thinking: analysis, synthesis, comparison, etc.; to develop personality traits: behavior and actions, intellectual, features, organizational and volitional qualities, creativity, etc. Students get acquainted with the world of engineering sciences and high technologies, instill interest in technical creativity through games and project activities in robotics classes. The task of the teacher is to teach you how to freely use the acquired knowledge to implement independent projects. It is important to note that children by nature are very curious. Classes in robotics can satisfy their thirst for knowledge by studying not only digital technologies and programming, but also the world around us, and ourselves. Robotics at school is the path to the development and perfection of technology, according to which the teacher will lead students to the technologies of the future. In the classroom, you get acquainted with the basics of design, mechanics, modeling, electronics and programming. Individual and group tasks are performed. The teacher does not give the right solution, each student comes to him through a unique way of solving the problem. The student acquires the skills of independent work, bringing work to completion, the search for original solutions without fear of complex tasks. The formation of a holistic view of modern real-world technologies is noted. The student realizes that the robot is not necessarily a humanoid living creature, it can be a vacuum cleaner, smart watch, slow cooker. He knows how they work, and can create and implement his own ideas, build his devices now. It is only necessary to master the basic knowledge needed to create robots.

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Implementation of joint projects in the group contributes to the development of social skills, communication and tolerance, and compromise. Developing a project and preparing it for completion, students share their experiences with each other, effectively developing cognitive, creative skills and independence. It is important that students develop the ability to coordinate their own actions with others, that is, to work in a team. The acquired skills of teamwork and the concept of personal responsibility as a result of the division of responsibilities that students acquire in the robotics classes will be useful to them in further professional activities, no matter in what area they work. Classes in robotics provide an opportunity to practice professional skills simultaneously in the following areas: mechanics, programming and control theory. It is also important that students recognize the possibility of solving real practical problems. Robotics is a technical field related to the development and use of robots, computer systems with the aim of controlling them, sensory feedback and information processing. Robotics is an area that requires complex skills, knowledge from a variety of subject areas (physics, mathematics, computer science, biology, etc.). Therefore, you can use robotics not only in the classroom as illustrative support, additional opportunities for practical work, but also in extracurricular activities, in additional education. A well-designed robotics program allows you to: – the teacher to implement an individual approach to the student; – to develop several competencies of students at once and put them into practice; – contributes to the development of leadership skills in students and the ability to work in a team; – train students to work on various technological and information platforms; – promotes learning motivation. Pupils gain the opportunity to develop their own learning path, since robotics is an open platform for creativity. We can outline the principles of teaching robotics: – accessibility: students get the opportunity to learn complex things by the example of simple and accessible to them understanding patterns in a process similar to gaming activities; – applicability: students acquire knowledge that can be applied in the future in professional activities: – interest: the availability of interesting and fascinating information; – systematic: from lesson to lesson there is an increment and formation of knowledge; – performance: the focus of each lesson on practical material; – learning through activities: effective learning is achieved through a clear understanding of their application. Classes in robotics are based on a number of approaches: – training takes place in small groups, which allows you to implement an individual approach;

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– Pupils work on the project in small teams, which contributes to the development of new generation skills - empathy, the ability to collaborate, achieve their goals, both personal and team, planning. Classes in robotics fulfill the task of modern education: creating an environment that can make it easier for a student to unlock their personal potential. This contributes to the free action in the knowledge of the world through this environment. In this case, the teacher plays the role of organizer and creator of this new educational environment, encourages the student to learn and act. The basic principle of robotics - learning through the game - is the basis for organizing classes in which teachers use methods: – explanatory and illustrative: information can be presented in various ways: by means of explanation, story, conversation, briefing, demonstration, work with technological maps; – heuristic: methods of creative activity (creation of models, mechanisms); – problematic: from the statement of the problem to the students’ independent search for a solution; – reproductive: through the reproduction of knowledge and various methods of activity (the performance of tasks by analogy, the installation of the layout and design according to the model); – partially search: problem problems are solved with the support of the teacher; – search: the problem is solved independently; – by the method of problem presentation: the teacher voices the problem, he solves it, the schoolchildren as accomplices in solving the problem by the teacher. Robotics contributes to positive learning effects: – a motivational attitude is being formed to study school subjects, on which the process of constructing robotic devices can be based; – the overall picture of intersubject communications is built; – the cognitive activity of students based on the activity approach in the process of technical creativity is growing; – objective criteria for self-assessment of knowledge are formed; – unlimited immersion in the studied discipline, various alternatives for creative activity, considerable variation (updated principles of activity, updated variations of the effective solution, manifestation of individuality, etc.); – the presence of a continuous positive emotional background (lack of stress, increased productivity and efficiency, knowledge, reinforced by the emotional component, are better absorbed); – the implementation of a health-saving approach is due to a variety of activities: observation, construction, the thought process, programming, testing, comprehension, etc.). Educational robotics allows us to solve a fairly wide range of problems, due to the fact that the robot is not only an object of study for students, but also a means by which it is possible to carry out educational modeling and construction. This fact opens up a number of opportunities for the integration of robotics and other school subjects.

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Game technology is the basis of educational robotics, this determines the interest of students in this type of activity. At the same time, educational robotics reflects the current level of development of science and technology, being an integrative subject area, uniting a number of educational subjects. This circumstance allows us to consider educational robotics as a stimulator of the educational activity of schoolchildren, motivating them to study disciplines related to robotics. Consequently, educational robotics as an integrative course has significant potential in school educational practice; In connection with the requirements of the production market, it contributes to the accumulation and streamlining of students’ knowledge in the main subjects of the school course, and it makes it possible to determine the choice of future professional activity. Being engaged in robotics, students acquire mobility skills and become more prepared, more technically literate, which in the future will help them to be ready to introduce innovations in their professional activities. Theoretical training is based on the knowledge of school disciplines: mathematics, physics, computer science, biology. In this case, robotics is a synthesizer of these sciences, capable of developing a technical level of literacy among schoolchildren by conducting scientific and practical research and creative projects. Studying the basics of robotics creates the prerequisites for the socialization of students and continuing technical education, and opens up opportunities for promising professions in the modern labor market. The orientation of the modern school curriculum both to studying the achievements of the past and the technologies that humanity needs to develop, involves the integration of the knowledge component with the activity component. Classes in robotics contribute to the involvement of students in the creative process, the motivation of educational activities, the use of group teaching methods, and the establishment of intersubject communications. The advantage of these classes is the practical component of the discipline and career guidance.

3 Results We conducted a study whose purpose was to clarify the impact of robotics classes on the professional self-determination of schoolchildren and educational results. The study was carried out during the period of schoolchildren’s education in grades 10–11 of the secondary school and included two diagnostic stages: before the start of the study, that is, before the start of classes for students in the robotics circle, and at the final stage, after the end of classes. The study involved 25 students. At the first stage, we offered the students a questionnaire, which allowed us to identify professional interest. Of the 25 participants in the experiment, 16 students showed interest in engineering and expressed a desire to engage in a robotics club. Further, among these 16 schoolchildren, a questionnaire was conducted with the aim of identifying professional self-determination and educational results. At the second (final) stage, we conducted a second survey, aimed at identifying professional self-determination and the results of educational activities.

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Our task was to identify the dynamics of educational results and professional selfdetermination of schoolchildren before starting classes in the robotics club and after completing these classes. We reduced the obtained research data to the final Tables 1 and 2.

Table 1. Educational Activity Monitoring % performance on “4” and “5” by the end of the quarter Humanities disciplines Technical cycle disciplines Physical education

Before the start of the experiment 40% 30% 60%

After the end of the experiment 70% 85% 95%

Table 2. Results of a survey of professional self-determination Questionnaire questions Decided on the choice of profession I chose an educational institution for admission When choosing a profession, I consult with my parents I choose my profession on my own I find it difficult to choose a profession I will go where my friends go

Before the experiment begins 3 2

After the experiment is completed 13 16

12

10

8 15 7

15 1 2

Thus, these studies have confirmed the educational effectiveness of robotics classes. The positive dynamics of the educational results of schoolchildren was noted: the number of good and excellent grades in the quarter increased and the number of absenteeism without a valid reason decreased. Certainty in professional self-determination is noted: the choice of a professional direction and educational institution for obtaining a vocational education, independence in choosing a profession, and lack of dependence on the opinion of the environment. Modern education is faced with the task of creating an environment that will make it easier for a student to unleash his own potential, which will lead to free action in understanding the environment and the world around him. The teacher is given the role of organizers and organizer of the appropriate educational environment, prompting the student to an active knowledge. Therefore, pedagogical universities are faced with the task of high-quality training of specialists in educational robotics who have a knowledge system in this field, have modern techniques and teaching methods, are able to combine traditional with innovative, algorithmic prescriptions with creative methods and teaching aids. On the basis of the Kozma Minin Nizhny Novgorod State Pedagogical University, teachers are being trained under the master’s program in the direction of preparation

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“Pedagogical Education” profile “Mechatronics and Robotics”. This direction has as its goal the training of highly qualified graduates in pedagogy as theoretical science and mechatronics and robotics as engineering and technical sciences. Features of the educational program 1. The program is built on the basis of network interaction NGPU them. K. Minin and the training center of the Concern East Kazakhstan Almaz-Antey. 2. Engineering preparation is carried out using the laboratory base of the Concern East Kazakhstan Almaz-Antey, which includes more than 40 laboratories for designing, prototyping and working with CNC machines. 3. Pedagogical training is based on modular training, which provides for the variability of training, adaptation of the educational process to the individual capabilities and needs of students. The master’s program is aimed at training highly qualified specialists who possess both modern information and pedagogical technologies for teaching, educating and developing schoolchildren, and are able to develop and apply mechatronic and robotic systems in their professional activities, as well as solve non-trivial tasks for various areas of human activity in the new modern economic conditions.

4 Conclusion Creating an educational environment that has an engineering direction, we can get real positive educational results: – to provide equal access for students to the study of innovative technologies, to gain practical skills in their use; – to attract schoolchildren to scientific and technical creativity, to form and develop the need for technical creativity, to focus on further professional self-determination; – identify gifted children and provide conditions for their further creative development; – organize highly motivated educational activities of schoolchildren in the process of spatial design, modeling, programming and automated control; – increase motivation for knowledge of the sciences of the natural science cycle, including mathematics, physics, computer science; – create a system of intersubject interaction and intersubject communications of such subjects as computer science, technology, mathematics, physics; – To popularize engineering education from an early age; – contribute to the socialization of students. Thus, classes in robotics ensure the achievement of the main goals of the educational process: to educate a creative, technically competent and harmoniously developed personality with logical thinking, the ability to analyze and solve problems in programming and algorithmization of activities.

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References Bers, M.: Teachers as designers: integrating robotics in early childhood education. In: Information Technology in Childhood Education Annual, vol. 1, pp. 123–145. Association for the Advancement of Computing in Education (AACE) (2002) Buzhinskaya, N.V., Grebneva, D.M., Makarov, I.B.: Designing an electronic training course in robotics for students of the specialty 09.02.05. Applied informatics (in economics). Modern problems of science and education, vol. 2, pp. 28–34 (2017) Carberry, A.R., McKenna, A.F.: Exploring students’conceptions of modeling and modeling uses in engineering design. J. Eng. Educ. 103(1), 77–91 (2014) Chelnokova, E.A., Hraban, G.S.: Tutoring Activities of the Teacher to Individualize the Independent Work of Students, vol. 1(15), p. 28. Vestnik of Minin University, Russian Federation (2016) Chelnokova, E.A., Khizhnaya, A.V., Kaznacheev, D.A.: Robotics in the educational practice of the school. Probl. Mod. Teach. Educ. 65(1), 297–300 (2019) Chelnokova, E.A., Nabiev, R.B.: Tutoring Activities of a Teacher in the Conditions of Professional Self-determination of Schoolchildren, vol. 1(9), p. 23. Vestnik of Minin University, Russian Federation (2015) Chetina, V.V.: Features of the introduction of robotics in the educational process. Sci. Prospects. 2, 49–51 (2017) Filippov, V.I.: Organization of classes in robotics in extracurricular activities in a primary school. Inf. Educ. 6, 20–27 (2016) Gavrilyeva, I.M.: Robotics in the educational environment of the school. Sci. Methodol. Electron. J. Concept. 1, 61–63 (2017) Gruzdeva, M.L., Prokhorova, O.N., Chanchina, A.V., Chelnokova, E.A., Khanzhina, E.V.: Postgraduate information support for graduates of pedagogical universities. Adv. Intell. Syst. Comput. 622, 143–151 (2018) Halamov, V.N.: Educational Robotics in Elementary School. A look, Chelyabinsk (2012) Hermit, P.N.: Improving the methodology of teaching bachelors of technological education under the influence of the development of educational robotics. Vestnik TSPU 4(181), 16–21 (2017) Jonassen, D.H.: Computers as Mindtools for Schools. Prentice Hall, London (2006) Kuzmina, M.V.: Robotics at school as a resource for training engineering personnel of the future Russia: a collection of methodological materials for educators in the context of the implementation of the Federal state educational standards (based on the results of regional seminars and continuing education courses in educational robotics). Kirov (Russia), IRO of the Kirov region (2017) Sukhomlina, V.A. (ed.): Modern information technology and IT education: Collection of selected works of the VI International Scientific and Practical Conference: educational-methodical manual. Intuit., Moscow (2011) Paraskevov, A.V., Levchenko, A.V.: Modern robotics in Russia: realities and prospects (review). Sci. J. KubGAU 104, 1680–1701 (2014) Polushkin, D.P.: The relevance of introducing elective courses in robotics in high school. Questions Pedagogy 11, 65–67 (2017) Skorokhodova, G.G.: Robotics and LEGO-designю Concept, vol. 12, pp. 196–200 (2014) Sofronova, N.V.: Current state and prospects in teaching robotics to schoolchildren, pp. 93–102. Saratov, Russia (2015). Sat. Trudov Conference Information Technology in Education Sorokin, S.S.: The development of technical and logical abilities of students through educational robotics. Educ. Exp. Educ. 4(84), 45–50 (2017)

Laser Diagnostics of Biological Objects by Plasmon Resonance Spectroscopy Valeriy V. Yatsyshen(&) Volgograd State University, Volgograd, Russia [email protected]

Abstract. Purpose: Extension of the method of surface plasmon resonance spectroscopy to the case of polarized laser radiation. Design/Methodology/Approach: The author considers the ellipsometry method as applied to the diagnosis of parameters of biological objects under conditions of surface plasmon resonance. The high sensitivity of the method allows obtaining reliable data on these parameters, and taking into account the polarization introduces additional diagnostic capabilities into the method. Ellipsometry allows you to take into account not only the energy characteristics of the reflected light, but also the phase patterns in reflection. Findings: The angular spectra of the ellipsometric parameters of the reflected light, as well as the main characteristics of the polarization ellipse under conditions of surface plasmon resonance, are analyzed. The case of the elliptically polarized incident radiation is examined in detail and it is shown that the polarization pattern of the reflected laser radiation varies depending on the angle of incidence on the layered structure - from the initial light, elliptically - rightpolarized incident to elliptically left-polarized with a negative angle of inclination in the reflected the light. Originality/Value: The method of polarization surface plasmon resonance polarization spectroscopy developed in this work is original. A feature of the developed method is the use of elliptically polarized light for spectral analysis of the characteristics of the studied object. The use of this method for the diagnosis of biological objects opens up new possibilities for identifying information on processes that affect the optical parameters of such objects. Keywords: Surface plasmon
Plasmon resonance spectroscopy
Ellipsometry
Elliptically polarized light
Polarization ellipse parameters JEL Code: О3 - innovation
Research and development change
Intellectual property rights


Technological

1 Introduction The method of spectroscopy of surface plasmon resonance has recently attracted many more researchers in various fields of physics, chemistry and biology. The advantage of such a method is the presence of narrow resonances in angular spectra of light reflection, one of which acts as a reference for others representing the response from the studied objects. © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 247–257, 2021. https://doi.org/10.1007/978-3-030-59126-7_28

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In the work Rheinberger et al. (2019) it is noted that the surface plasmon resonance spectroscopy is a sensitive tool for analyzing the optical characteristics of thin films and for monitoring chemical and electrochemical reactions. In the paper Kajiura et al. (2009) the use of localized surface plasmon resonance of gold nanoparticles is disclosed for detection of biotin-streptavidin binding. In the article Lu et al. (2020) the authors propose a high-performance biosensor which provides a connection between the mode of the surface plasmon polaroton in the metal-insulator-metal mode and the mode of the flat waveguide In the work Thomas et al. (2017) the dispersive characteristics of the main surface plasmon polaritonic modes supported by the band and plate waves of ZnO (zinc oxide) are studied. The authors Abramov et al. (2019) have found a spectral region where the dispersive waves, the phase and group velocities of the surface waves are most sensitive to the change of the chemical potential of the graphene layers. In the article Hassan et al. (2018) the coupling of propagating surface plasmon polaritons on silver films and excitons in quantum points CdS is studied. In publication Igarashi et al. (2006) the swelling of films polymerized in plasma of allylamine using surface plasmon resonance spectroscopy was investigated. In the work Lin et al. (2019) there is proposed a compact sensor with high sensitivity for changing the refractive index, based on the surface plasmon resonance method. In the study Ji et al. (2019) near-infrared meta-material sensors composed of a single-dimensional (1D) periodic array of nano-weights drilled in the Ag substrate are numerically investigated. In the paper Gandhi et al. (2019) it is considered gold as a plasmon material for excitation of surface plasmon for determination of refractive index. In the work Zhou et al. (2018) numerical simulation of the incidence of a TM-polarized gaussian beam with an oblique angle of incidence from a homogeneous isotropic medium to a multilayer nanostructure is carried out. In the article Oates et al. (2011) spectroscopic studies of ellipsometry of plasmon resonances at the boundaries of metal-dielectric interface of thin films are considered. In the works Aleksandrov and Yatsishen (2017), Aleksandrov and Yatsishen (2016) involving the author, there is considered the possibility of existence of surface polaritones with negative group speed.

2 Materials and Method The above-mentioned works apply a standard method of spectroscopy of surface plasmon resonance for various applications. In the present work we propose an extension of the method for the case of polarization spectroscopy of surface plasmon resonance. Formulation of the Problem Laser radiation of an elliptical polarization with a wavelength of k = 0.633 µ falls at an angle to the interface of the layered system shown in Fig. 1 at an angle hin . Under conditions of excitation of a surface plasmon at the medium boundary n4 - n3 (metal air), we analyze the angular reflection spectra for ellipsometric parameters and the characteristic parameters of the ellipse, which determine its orientation - eccentricity, the angle of inclination of the major axis of the ellipse to the abscissa axis.

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Surface Plasmons Surface plasmons are collective excitations that arise at the insulator-metal interface and have both electromagnetic and mechanical components. The component of the magnetic field of a surface Plasmon (SP) in vacuum is represented as H1y = H0 expðk1 zÞ  expiðk11 x  wtÞ;

ð1Þ

where k1 is the SP attenuation constant in vacuum (z < 0), x is the frequency, kjj is the SP propagation constant along the interface z = 0. In a conductor, the magnetic field has the form H2y = H0 expðk2 zÞ  expiðk11 x  wtÞ;

ð2Þ

k2 - constant attenuation of SP in the metal (z > 0). The recorded fields satisfy the Helmholtz equation DH þ ek20 H ¼ 0

ð3Þ

If we substitute the required fields (1) and (2) into this equation, we find the value of the damping constant k2 = k112 x  k20 e

ð4Þ

here k0 = w/c. Therefore, the constant attenuation of surface plasmons in each medium is given by the following formulas k1 ¼

pffiffiffi 2 k11 x  k20 e1

ð5Þ

k2 ¼

pffiffiffi 2 k11 x  k20 e2

ð6Þ

We apply the continuity conditions for the tangential components of the vectors of electric and magnetic fields, which in our case have the form ð2Þ Hð1Þ y ðz = 0Þ = Hy ðz = 0Þ = H

ð7Þ

ð2Þ Eð1Þ x ðz = 0Þ = Ex ðz = 0Þ

ð8Þ

From (7–8), an important relationship follows between the damping parameters and the permittivities of contacting media in a surface plasmon k1 =e1 þ k2 =e2 ¼ 0

ð9Þ

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It follows from this relation that a surface plasmon can exist only in the frequency region where one of the dielectric constants is negative, since the attenuation constants are positive values. Taking into account formulas (5) and (6) for the attenuation constants, the dispersion equation for the surface plasmon follows from (9) k211 ¼ k20 =  ðe1 e2 =e1 þ e2 Þ ¼ 0

ð10Þ

From (10) it follows that, in addition to the negative dielectric constant (e.g., e2 < 0), the inequality j e2 j [ e1

ð11Þ

is to be satisfied. Only in this case, the propagation constant of the surface plasmon will be a real quantity, thereby ensuring the transfer of the electromagnetic field along the x axis. The Kretschman scheme shown in Fig. 1 is one of the main methods for exciting a surface plasmon. Here we consider the option that underlies our consideration - in addition to the standard scheme, the biological object under study is presented here. As the last one, biological fluid was chosen - blood plasma, for which the refractive index at a certain concentration of proteins has the value n4 = 1.35. Ellipsometry Ellipsometry is a more sensitive method for analyzing the properties of a substance than conventional reflection and transmission coefficients, since it uses the phase characteristics of reflected fields. The parameters of the ellipsometry of the reflected light q and D are determined through the ratio of the amplitude reflection coefficients p - polarized light Rp to the reflection coefficient s - polarized Rs p0 ¼ Rp/Rs ; p0 = p expðiDÞ

ð12Þ

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n1 n2 n4 n3 Fig. 1. The Kretschman scheme for laser diagnostics of a biological object by plasmon resonance.

Solution Method The problem is solved by the method of characteristic matrices Yatsyshen (2013), Khoruzhiy and Yatsyshen (2009), Yatsyshen and Slyusarev (2011). The advantage of the method over others is the use of continuous projection components as field vector columns, which allows us to obtain the resulting matrix of the system M by multiplying the corresponding matrices of each layer. If the system has a large number of layers, the general formula for a multilayer system consisting of n layers can be written as: M ¼ M1 ðd1 Þ M2 ðd2 Þ . . . Mn ðdn Þ;

ð13Þ

Where d1, d2, … dn are the thicknesses of the layers. The amplitude reflection and transmission coefficients are expressed through the elements of the resulting characteristic matrix Mij using the following formulas: R ¼ ½ðM11 + M12 ns ÞnL  (M21 + M22 ns Þ=½ðM11 + M12 ns ÞnL + (M21 + M22 ns Þ ð14Þ T ¼ 2nL = ½ðM11 + M12 ns ÞnL þ ðM21 + M22 ns Þ

ð15Þ

Here ns and nL are the refractive indices of media that are boundary with the structure.

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3 Results We have calculated the ellipsometric parameters and the characteristic parameters of the ellipse - eccentricity, the angle of inclination of the major axis of the ellipse, the ratio of the length of the smaller axis of the ellipse to the larger. The behavior of such parameters, depending on the angle of incidence of the incident radiation, carries unique information about the object under study, supplementing the traditional method of plasmon resonance spectroscopy for circularly polarized light, which is a more subtle research tool. Figures 2 and 3 show the angular spectra of ellipsometric parameters, and Figs. 3, 4, 5 and 6 show the angular spectra of the parameters u and h describing the orientation and type of polarization ellipse of the reflected laser radiation. From the above results, the main feature of the proposed method of surface plasmon spectroscopy is visible - the resonance peaks on the red curves are separated at fixed distances from the corresponding peaks of the blue curves. The first curves correspond to the Kretschmann scheme only with a layer of metal - in this case silver. They serve as a benchmark for red curves corresponding to reflection from layers, taking into account the subject. Figures 6, 7 and 8 show how the orientation of the polarization ellipse and its type (right-left) change for some angles of incidence. Figure 6 shows the polarization ellipse of the incident radiation.

Fig. 2. Ellipsometric parameter q as a function of the angle of incidence hin .

Laser Diagnostics of Biological Objects

Fig. 3. Ellipsometric parameter D as a function of the angle of incidence hin .

Fig. 4. The ellipse parameter u as a function of the angle of incidence hin .

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Fig. 5. The ellipse parameter h as a function of the angle of incidence hin .

Fig. 6. Orientation of the ellipse of polarization of the incident laser radiation. The polarization is elliptical, right.

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Fig. 7. Orientation of the polarization ellipse of reflected laser radiation for the angle of incidence = 52.81º. For this angle, u = − 6.658º, h = − 7.209º. The polarization is elliptical, left.

Fig. 8. Orientation of the polarization ellipse of reflected laser radiation for the angle of incidence hin = 53.9º. For this angle, u = − 23.103º, h = 7.587º. The polarization is elliptical, right.

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4 Conclusion From the above results, the main feature of the proposed method of surface plasmon spectroscopy is visible - the resonance peaks on the metal curves are separated at fixed distances from the corresponding peaks of the object curves. The first curves serve as a reference for the corresponding curves for the test sample. It follows from the analysis carried out that, in addition to the energy characteristics - energy reflection coefficients, which are not considered here - the polarization characteristics in the plasmon resonance spectroscopy method turn out to be very sensitive to changes in the angle of incidence and form a separate direction in this method plasmon resonance polarization spectroscopy.

References Rheinberger, T., Ohm, D., Zhumaev, U.E., Domke, K.F.: Extending surface plasmon resonance spectroscopy to platinum surfaces. Electrochim. Acta 314, 96–101 (2019) Kajiura, M., Nakanishi, T., Iida, H., Takada, H., Osaka, T.: Biosensing by optical waveguide spectroscopy based on localized surface plasmon resonance of gold nanoparticles used as a probe or as a label. J. Colloid Interface Sci. 335, 140–145 (2009) Lu, D.-Y., Li, W., Zhou, H., Cao, X., Wang, K.-J., et al.: Coupling between surface plasmon polariton and planar waveguide modes in the biosensor based on metal–insulator– metal/planar wave guide structure. Optics Commun. 459, 124928 (2020) Thomas, D., Ajith, R., Bhagyaraj, C., Mathew, V., Augustine, S.: Characteristics of surface plasmon polaritons in ZnO based nanowaveguides. Optik 144, 561–564 (2017) Abramov, A.S., Evseev, D.A., Sementsov, D.I.: Dispersion of a surface plasmon polaritons in a thin dielectric films surrounded by a two graphene layers. Optik – Int. J. Light Electron Optics. 195, 163105 (2019) Hassan, H., Abdallah, T., Negm, S., Talaat, H.: Rabi like angular splitting in surface plasmon polariton – exciton interaction in ATR configuration. Appl. Surf. Sci. 441, 341–346 (2018) Igarashi, S., Itakura, A.N., Toda, M., Kitajima, M. et al.: Swelling signals of polymer films measured by a combination of micromechanical cantilever sensor and surface plasmon resonance spectroscopy. Sens. Actuators B 117, 43–49 (2006) Lin, Ch.-E., Chen, Ch.-Ch., Liu, J.-H., Chang, Y.-R. et al.: Pulley-type metallic microring surface plasmon polariton sensor based on Otto-configuration. Results Phys. 12, 1980–1983 (2019) Ji, Y., Tang, Ch., Xie, N., Chen, J., et al.: High-performance metamaterial sensors based on strong coupling between surface plasmon polaritons and magnetic plasmon resonances. Results Phys. 14, 102397 (2019) Gandhi, M.S.A., Senthilnathan, K., Babu, P.R., Li, Q.: Visible to near infrared highly sensitive microbiosensor based on surface plasmon polariton with external sensing approach. Results Phys. 15, 102590 (2019) Zhou, Z., Xin, J., Zhang, X., Wang, Y., Song, Y.: Electromagnetic modes in different topology regimes modulated by layer thickness of metal–dielectric multilayered structures based on exact transfer-matrix method. Optics Commun. 423, 145–151 (2018) Oates, T.W.H., Wormeester, H., Arwin, H.: Characterization of plasmonic effects in thin films and metamaterials using spectroscopic ellipsometry. Prog. Surf. Sci. 86, 328–376 (2011) Aleksandrov, Y.M., Yatsishen, V.V.: Negative group velocity of surface polaritons in metal foil nanostructure. J. Nano Electron. Phys. 9(3), 03039 (2017)

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Aleksandrov, Y.M., Yatsishen, V.V.: Surface polaritons with negative group velocity in structure with transition layer. J. Nano-Electron. Phys. 8(1), 01013 (2016) Yatsyshen, V.V.: Svidetel’stvo o gosudarstvennoy registratsii programm dlya EVM No. 2013614782. Komp’yuternaya programma dlya lazernoy polyarizatsionnoy termometrii s ispol’zovaniyem sloya nematicheskogo zhidkogo kristalla. Data gosudarstvennoy registratsii v Reyestre programm dlya EVM 21 maya 2013 g (2013) Khoruzhiy, D.N., Yatsyshen, V.V.: Usovershenstvovannyye metodiki interferentsionnoy lazernoy termometrii. Fizika volnovykh protsessov i radiotekhnicheskiye sistemy 12(3), 38–42 (2009) Yatsyshen, V.V., Slyusarev, M.V.: Ul’trazvukovaya diagnostika defektov zony splavleniya v sloistykh kompozitsionnykh materialakh. Fizika volnovykh protsessov i radiotekhnicheskiye sistemy 14(4), 103–105 (2011)

Ellipsometry of Nanocomposite Layered Materials Valeriy V. Yatsyshen(&) , Irina I. Potapova and Kseniya Yu. Verevkina

,

Volgograd State University, Volgograd, Russia [email protected], [email protected], [email protected]

Abstract. Purpose: to develop an ellipsometric method for analyzing the optical characteristics of nanocomposite materials and to show the possibility of using the polarization features of reflected light to create laser polarization converters. Design/methodology/approach: The authors proposed a method of characteristic matrices for studying reflected light of elliptical polarization from a nanocomposite material formed by nanoparticles of noble metals uniformly distributed in a dielectric matrix. Of particular interest was the analysis of the angular spectra of the ellipsometric parameters of the reflected light, as well as the influence of the incident radiation frequency on these spectra. The dielectric constant of the nanocomposite was calculated on the basis of the MaxwellGarnet model, which takes into account both the dielectric constant of the nanoparticles and the dielectric matrix, as well as the concentration of the nanoparticles. Findings: The work demonstrates the high sensitivity of the ellipsometry method to the parameters of the nanocomposite material. The ellipsometric parameters change especially noticeably in the region of the longitudinal frequency of the nanocomposite, which is located in the vicinity of the transition of the real part of the dielectric constant of the nanocomposite through zero. Originality/value: The results obtained on the nature of the change in ellipsometric parameters upon reflection of elliptically polarized light from the nanocomposite are original. Considering the pronounced dependences of the ellipsometry parameters in the vicinity of the longitudinal frequency of the nanocomposite, it is possible to use these patterns to create nanocomposites as controlled elements of polarization optics, as well as to create nanocomposites with the given optical characteristics. Keywords: Nanocomposites
Dielectric constant
Polaritons
Ellipsometry
Noble metal nanoparticles
Circularly polarized waves JEL Code:: O3 - Innovation
Research and Development Change
Intellectual Property Rights


Technological

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 258–268, 2021. https://doi.org/10.1007/978-3-030-59126-7_29

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1 Introduction Nanocomposite materials are currently attracting attention as researchers in the fields of physics, chemistry and biology, as well as engineers. The reason is their exceptional optical, mechanical, physicochemical properties. In the work Vishnoi et al. (2019a, b), a Cu-C 70 nanocomposite thin film was synthesized by the method of co-thermal evaporation. In the paper Vishnoi et al. (2019a, b) a nanocomposite thin film containing Au nanoparticles in a carbon matrix was developed by co-sputtering in a high-vacuum chamber. In the study Pugazhendhi et al. (2018) the synthesis of a nanocomposite based on titanium oxide/zinc oxide (TiO 2/ZnO) and the improvisation of its optical properties by impregnating aluminum (Al) with plasmon in ZnO using a sol-gel technique was reported. The authors of George et al. (2017) introduced silver nanoparticles into polymeric styrene-maleic anhydride (SMA), a synthetic copolymer to enhance nonlinear absorption. In the article Wang et al. (2009) a surface plasmon resonance biosensor with wavelength modulation based on ZnO - Au nanocomposites was developed to detect human IgM (immunoglobulins). In the publication Soliman et al. (2019) the effect of Fe nanoparticles on the structural and optical properties of PVA nanocomposite films was studied using X-ray diffraction, scanning electron microscope, and UV-visible spectroscopy. In the work Arun et al. (2020) the biogenic synthesis of nanostructured nanocomposites CuO and CuO/NiO was studied using the extract of the leaves of Azardica Indica as a reducing agent. In the article Jung et al. (2012) in order to study the effect of metal nanostructures on the photoluminescence of CdS nanoparticles, Au/SiO2 nanocomposites with back reflection geometry were prepared. In the work Abed et al. (2019) ZnO – ZnMgO – MgO nanocomposites were successfully synthesized by the sol – gel method. In the paper Al-Rekabi et al. (2019) it was demonstrated that a surface plasmon resonance sensor coated with a nanocomposite graphene oxide film with aqueous iron oxide and reduced magnetite detects two toxic heavy metals. In the publication Xu et al. (2017) photoluminescence spectra showed that the UV radiation of a thin film of an Ag/ZnO nanocomposite improves with increasing film thickness. In the work Sánchez et al. (2019) an investigation was conducted to study the physical and thermal properties of nanocomposites to improve their characteristics for possible applications in prosthetic parts, 3D printing. In the paper Muswareen et al. (2019) pure and doped TiO2 nanostructured CdOFePO4 nanocomposites obtained using the sol – gel method were analyzed using various characterization methods, such as FT-IR spectroscopy and UV-visible absorption spectroscopy. The optical absorption of the nanocomposite film was analyzed in the publication Karthikeyan (2012) using the Mie theory. The properties of surface polaritons at the interface of a nanocomposite of nanoparticles in a dielectric matrix are considered in the paper Yatsyshen (2018).

2 Materials and Method Nanocomposite materials based on noble metal nanoparticles have recently attracted interest to researchers as well as engineers. The reason is the unique optical properties of such materials. Due to nanoparticles with brightness-expressed frequency

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dependence of dielectric constant, nanocomposite of such particles in dielectric matrix acquires properties of resonance medium. In this medium, collective excitation of volume and surface polarotone type is possible. Formulation of the problem. For a model of a nanocomposite consisting of nanoparticles of noble metals uniformly distributed in a dielectric matrix, construct the dielectric constant. An analysis of ellipsometric parameters at reflection from the nanocomposite of a circularly polarized wave from a nanocomposite is performed. Dielectric permeability of a nanocomposite of noble metal nanoparticles. We obtain an expression for the dielectric permeability of a nanocomposite consisting of metal nanoparticles distributed randomly in a dielectric. For metal particles, the Drude formula is used, which describes the optical properties of particles of noble metals quite well:
 x2 em ðxÞ ¼ e0 1  xL2 ;

x2L ¼

x2p e0

ð1Þ

Here xL is the longitudinal frequency, xp is the plasma frequency, e0 is the dielectric permeability at x ! 1. For composite material, the dielectric permeability emix is calculated using the Maxwell-Garnett’s model emix  ed eðx Þ  ed ¼f emix þ 2ed eðxÞ þ 2ed

ð2Þ

Here f is the relative volume occupied by the nanoparticles, ed = 2.56 is the dielectric permeability of the dielectric, and em is the dielectric permeability of the nanoparticle. For the calculation, the parameter values f = 0.8, ed = 2.56 were used. Denote the right-hand part y¼f

eðxÞ  ed eðxÞ þ 2ed

After the conversion we get: e2 ¼ ed C ðxÞ;

C ðx Þ ¼

1 þ 2y 1y

ð3Þ

We introduce the relative frequency u¼

x xp

Then the dielectric permeability of the nanoparticle in the nanocomposite takes the form

Ellipsometry of Nanocomposite Layered Materials

em ðuÞ ¼ e0 

1 uðu  iCÞ

261

ð4Þ

where C ¼ xcp .

3 Results Figures 1 and 2 show the frequency dependence of real and imaginary parts of dielectric permeability of silver nanoparticles.

Fig. 1. Frequency dependence of real and imaginary parts of dielectric permeability of silver nanoparticles.

Reflection of a light wave from a layered nanocomposite. Figure 3 shows the geometry of the reflection of a light wave from the boundary of a nanocomposite. For media with a resonant frequency, the most interesting is the frequency range where the real part of the dielectric permeability passes through zero and then becomes negative. In the latter case, surface polaritons can be excited at the nanocomposite boundary. We find the relative frequency u0 at which e2 = 0. In the case of resonant media, such a frequency is called longitudinal. To estimate this value, we neglect the attenuation parameter in formula (4). Putting in (3)

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Fig. 2. Frequency dependence of real and imaginary parts of dielectric permeability of nanocomposite at f = 0.5.

Fig. 3. Frequency dependence of real and imaginary parts of dielectric permeability of nanocomposite at f = 0.2.

Ellipsometry of Nanocomposite Layered Materials

e2 ¼ ed Cðu0 Þ ¼ 0;

263

ð5Þ

It is possible to obtain the following expression sffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi b1 u0 ¼ b1 e0 þ 2b0 ed

ð6Þ

Here b0 ¼ 1  f ; b1 ¼ 1 þ 2f

ð7Þ

Figure 4 shows the dependence of the parameter u0 on the volume concentration of the nanoparticles f (Fig. 5).

Fig. 4. Geometry of light reflection from a nanocomposite layer

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Fig. 5. The dependence of the relative longitudinal frequency u0 of the nanocomposite on the concentration of nanoparticles f.

Fig. 6. The angular spectrum of the ellipsometry parameter q at f = 0.8 for relative frequencies u = 0.42; 0.43.

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Fig. 7. The angular spectrum of the parameter of the ellipsometry q at f = 0.8 for the relative frequency u = 0.44

Figures 6 and 7 show the results of calculating the angular spectra of an ellipsometric parameter q for the value of the relative volume f = 0.8 at the values of the relative frequencies u = 0.42; 0.43; 0.44, respectively.

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Fig. 8. The angular spectrum of the parameter of the ellipsometry q at f = 0.5 for the relative frequency 0,44; 0,41.

Figures 8 and 9 show the results of calculating the angular spectra of the ellipsometric parameters q and D for the relative volume f = 0.5 at the relative frequencies u = 0.4; 0.41; 0.42 respectively.

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Fig. 9. The angular spectrum of the parameter of the ellipsometry q at f = 0.5 for the relative frequency u = 0,41; 0,42.

4 Conclusion The above study shows the high sensitivity of the ellipsometry method to the parameters of the nanocomposite material. The ellipsometric parameters in the region of the longitudinal frequency of the nanocomposite, which is in the region of transition of the real part of the dielectric constant of the nanocomposite through zero, are particularly considerably changed. In view of this dependence, it is possible to use data of law for creating nanocomposites as controlled elements of polarization optics, as well as for creation of nanocomposites with given optical characteristics.

References Vishnoi, R., Sharma, K., Yogita, Yadav, Sh., Singhal, R.: Investigation of sequential thermal annealing effect on Cu-C 70 nanocomposite thin film. Thin Solid Films 680, 75–80 (2019) Vishnoi, R., Sharma, K., Sharma, G.D., Singhal, R.: Temperature induced surface plasmon resonance in Au/a-C nanocomposite thin film. Vacuum 167, 40–46 (2019) Pugazhendhi, K., D’Almeida, S., Tenkyong, T., Praveen, B., Sharmila, D.J., Shyla, J.M.: Enhancement of light harvesting capabilities of Titania/Zinc Oxide nanocomposite photoanode through aluminium plasmon impregnation. Mater. Lett. 222, 29–32 (2018)

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George, N., Subha, R., Thomas, A.R., Mary, N.L.: Plasmon enhanced two-photon absorption in modified styrene-maleic anhydride silver nanocomposites. Nano-Struct. Nano-Objects 11, 32–38 (2017) Wang, L., Wang, J., Zhang, S., Sun, Y. et al.: Surface plasmon resonance biosensor based on water-soluble ZnO–Au nanocomposites. Analytica Chimica Acta 653, 109–115 (2009) Soliman, T.S., Vshivkov, S.A.: Effect of Fe nanoparticles on the structure and optical properties of polyvinyl alcohol nanocomposite films. J. Non-Cryst. Solids, 519, 119452 (2019) Arun, L., Karthikeyan, Ch., Philip, D., Unni, C.: Optical, magnetic, electrical, and chemocatalytic properties of biosynthesized CuO/NiO nanocomposites. J. Phys. Chem. Solids 136, 109155 (2020) Jung, D.-R., Kim, J., Nahm, Ch., Nam, S., Kim, J.I., Park, B.: Surface-plasmon-enhanced photoluminescence of CdS nanoparticles with Au/SiO 2 nanocomposites. Mater. Res. Bull. 47, 453–457 (2012) Abed, Ch., Ali, M.B., Addad, A., Elhouichet, H.: Growth, structural and optical properties of ZnO-ZnMgO-MgO nanocomposites and their photocatalytic activity under sunlight irradiation. Mater. Res. Bull. 110, 230–238 (2019) Al-Rekabi, S.H., Kamil, Y.M., Bakar, M.H.A., Fen, Y.W., et al.: Hydrous ferric oxidemagnetite-reduced graphene oxide nanocomposite for optical detection of arsenic using surface plasmon resonance. Optics Laser Technol. 111, 417–423 (2019) Xu, L., Zheng, G., Liu, Y., Su, J. et al.: The optical properties of Ag/ZnO nanocomposite thin films with different thickness. Optik 147, 6–13 (2017) Sánchez, J.L.L., Pérez, J.L.J, Valdez, R. C., Gamboa, G.L., et al.: Green synthesis of silver nanoparticles using Jalapeño Chili extract and thermal lens study of acrylic resin nanocomposites. Thermochim. Acta 678, 178314 (2019) Muswareen, S.K., Rao, M.S., Sridevi, G., Cole, S.: Sol-gel synthesis of pure and TiO2 doped CdOFePO4 nanocomposites and investigation of their structural and optical properties. Mater. Sci. Semicond. Process. 102, 104588 (2019) Karthikeyan, B.: Optical studies on thermally surface plasmon tuned Au, Ag and Au: Ag nanocomposite polymer films. Spectrochim. Acta Part A Mol. Biomol. Spectrosc. 96, 456– 460 (2012) Yatsyshen, V.V.: Poverkhnostnyye polyaritony na granitse nanokompozita. Fizika volnovykh protsessov i radiotekhnicheskiye sistemy 21(3), 32–35 (2018)

Analysis of Calculation Models of kPrice Coefficient in Electricity and Capacity Markets Valentin Y. Afanasiev1(&) , Sergey V. Mischeryakov2 and Maxim S. Nasurdinov3 1

,

State University of Management, Moscow, Russian Federation [email protected] 2 NP “CTSCenter UES”, Moscow, Russian Federation [email protected] 3 PJSC “Inter RAO”, Moscow, Russian Federation [email protected]

Abstract. Two goods are traded on the modern wholesale electricity and capacity market in Russia: electricity and capacity. More than 80% of the electricity market consists of free (unregulated) sales, the price of which is not determined by the decision of the regulator, but as a result of the operation of a certain market mechanism. Under these conditions, the ability to predict the price of electricity becomes significant for market participants, as evidenced by the presence of publications that develop this topic. In order to build this forecast, it is useful to take into account the opinion of other market participants about the future behavior of the price of electricity, to be able to understand and interpret their forecast and analytical models. In the presented work, an analysis of the coefficient kPrice is carried out - an indicator that is used in forecasts of the free (unregulated) electricity price compiled by NP “Market Council”. Understanding of this indicator is necessary for the correct reading of the forecasts presented, their use as information for analysis. The coefficient kPrice measures the share of the satisfied price offer of “generators” in the total volume of the price offer, is a necessary element of the forecast regression models of NP “Market Council”. At the same time, the kPrice coefficient in the current formulation has a number of disadvantages, including the complexity of the calculation and the complexity of interpretation. The article contains mathematical transformations of the coefficient using the method of substitutions and reduction of the same factors. As a result of transformations, the coefficient kPrice is reduced to a form that is simpler for calculation and perception. It is interpreted as the relationship of the non-producing core (NPP and TPP/SDPP) selected as a result of competitive selection to the maximum possible non-receiving product (TPP/SDPP). Keywords: Market analysis
Generating companies
Competitive selection of applications
Mathematical model of the market
Wholesale electricity market
Forecast
Day-ahead market
Price
Electric power industry JEL Code: L16

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 269–276, 2021. https://doi.org/10.1007/978-3-030-59126-7_30

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1 Introduction At present, in Russia, economic relations in the electric power industry are determined by the wholesale and retail electricity and capacity markets. Including, two goods are sold in the wholesale market: power and electricity. Structurally, the electricity market 82–90% (depending on the price zone) consists of free (unregulated) electricity sales: on the day-ahead market, a balancing market and under free bilateral agreements (NP “Market Council” 2019a, b, c, d, e). The peculiarity of such sales is that their prices are not formed as a result of the decision of the regulator, but as a result of the operation of a market mechanism that ensures interaction between sellers and buyers of electricity. Accordingly, for participants in the wholesale electricity market (generating and distribution companies, as well as large consumers of electricity), the ability to predict the free (unregulated) price of electricity is essential. The relevance of the topic necessitates research in this area. In recent years, a number of works have appeared on the problems of forecasting irreducible electricity prices (Afanasiev 2017; Zolotova and Dvorkin 2017; Neklyudov et al. 2018).

2 Methodology It is advisable to use available information on the opinion of market participants on the future behavior of the free (unregulated) electricity price as initial data for the forecast. First of all, these are “Forecasts of free (unregulated) prices for electric energy (capacity) for the year by subjects of the Russian Federation with the selection of scenarios and initial data for building forecasts with an indication of the expected scenario conditions”, regularly published by NP “Market Council”. NP “Market Council” is an organization uniting based on membership of electric power industry entities and large consumers of electric and thermal energy (Federal Law 2003). The functions of organizing daily activities in the markets were assigned to the ATS Nonprofit Partnership by the Federal Law of November 4, 2007 No. 250-FZ from April 1, 2008 (NP “Market Council” 2019a, b, c, d, e, Federal Law 2007). For the correct use of forecasts of free (unregulated) electricity (capacity) prices drawn up by NP “Market Council”, it is necessary to understand the methodology for compiling them. This technique is published on the NP “Market Council” website, and is available for free download (NP “Market Council” 2019a, b, c, d, e). In this work, we analyze the indicator kPrice, which is used in the methodology for constructing forecasts of free (unregulated) electricity prices by NP “Market Council” (hereinafter referred to as the Methodology). The kPrice indicator characterizes the share of the satisfied price offer of TPPs/SDPPs in the total volume of the price offer. To calculate the predicted values of kPrice, the following formula is used (NP “Market Council” 2019a, b, c, d, e): kPrice ¼

avg gen

gen min

 kP1

kPmax min

max

 kPCENOPRINIM kP max

 kPCENOPRINIM kPmax

ð1Þ

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271

where avg_gen is the average value of the total trading chart (hereinafter referred to as TG) for all TPPs and NPPs of the central locking center for the period from Saturday to Friday (hereinafter referred to as the week). The monthly values of the above parameters are calculated as the weighted average of the values of these parameters for all weeks whose days are included in the month in question. As weights, the number of days of the week that belong to this month is used; gen_min - the minimum value of the total TG for all TPPs and NPPs of the central heating plant for a week. The monthly values of the above parameters are calculated as the weighted average of the values of these parameters for all weeks whose days are included in the given month. As weights, the number of days of the week that belong to this month is used. In addition to the listed values, three coefficients are involved in formula (1): Firstly, the coefficient in which the technical maximum of the operating generating unit is involved: kPmax ¼

Pmax gen max

ð2Þ

where Pmax is the total value of the technical maximum for all included TPPs/SDPPs at all hours of the month, divided by the number of hours in a given month; gen_max - the maximum value of the total TG for all TPPs and NPPs in the price zone. Secondly, the coefficient in which the value of the price-taking proposal is involved: kPCENOPRINIM ¼

PCENOPRINIM gen min

ð3Þ

where PCENOPRINIM is determined for the month as the ratio of the sum of the prices of the price-taking proposal for all included TPPs/TPPs for all hours of the month (taking into account the predicted change in the heat load of the TPPs) to the number of hours in this month. Thirdly, the coefficient that is a quotient of dividing the maximum value of the total TG for all TPPs and nuclear power plants of the price zone and the minimum value of the total TG for all TPPs and nuclear power plants of the price zone: kPmax min ¼

gen max gen min

ð4Þ

So, we see that the kPrice coefficient contains many components, some of which require intermediate calculation. For practical purposes, it seems possible to simplify it without violating the equality of values according to the original formula. To this end, we perform a series of transformations of this coefficient, remaining strictly within the limits specified by the original formulas. First of all, we substitute the values of formulas (2), (3) and (4) into formula (1). By definition, this does not violate the equality with the original formula:

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avg gen kPrice ¼

PCENOPRINIM gen min  P1  P max max gen max gen max PCENOPRINIM gen max gen min  gen min Pmax gen max gen min

ð5Þ

In formula (5) we see that the values of gen_min, gen_max и Pmax are not equal to zero, because they are present in the denominators of certain fractions (it is impossible to divide by zero). We will need this information in the future. Next, on the left side of the numerator of formula (5), we perform the following transformations: 1 1  gen max gen max ¼ ¼ Pmax Pmax  gen max Pmax gen max gen max

ð6Þ

we multiplied the numerator and denominator of formula (6) by gen_max. Because this is the same number, and not equal to zero (as we established earlier), then the equality is not violated. On the right side of the numerator of formula (5), we perform the following transformation: PCENOPRINIM PCENOPRINIM  gen min  gen max gen min gen min ¼ Pmax Pmax gen max gen max  gen min  gen max ¼

PCENOPRINIM  gen max Pmax  gen min

ð7Þ

we also multiplied the numerator and denominator of formula (7) by (gen_max * gen_min). Because this is the same number, and not equal to zero (as we established earlier), then the equality is not violated. We rewrite formula (5) taking into account transformations (6) and (7):

kPrice ¼

avg gen

gen min

gen max PCENOPRINIM gen max Pmax  Pmax gen min PCENOPRINIM gen max gen min  gen min Pmax gen max



ð8Þ

Now let’s move on to the denominator transformation. We multiply the right side of the denominator by the expression (gen_max * gen_min):

Analysis of Calculation Models of kPrice

PCENOPRINIM PCENOPRINIM  gen min  gen max gen min gen min ¼ Pmax Pmax gen max gen max  gen min  gen max PCENOPRINIM  gen max ¼ Pmax  gen min

273

ð9Þ

As we see, the transformation performed is completely identical to formula (7), with the same result. We substitute the value of formula (9) in the right side of the denominator of formula (8), we write out the resulting formula:

kPrice ¼

avg gen

gen max PCENOPRINIM gen max Pmax  Pmax gen min gen max PCENOPRINIM gen max gen min  Pmax gen min gen min



ð10Þ

Now we see that in all the constituent parts of the numerator and denominator of gen max formula (10), the expression gen min . This allows us to perform the reduction: multiply the numerator and denominator of formula (10) by gen_min and at the same time divide by gen_max. Because these are the same numbers, and not equal to zero (as we established earlier), then the equality with the original formula is not violated. However, this will allow us to significantly reduce the formula as a whole: avg gen

gen max PCENOPRINIM gen max Pmax  Pmax gen min kPrice ¼ gen max PCENOPRINIM gen max gen min  Pmax gen min     avg gen gen max PCENOPRINIM gen max gen min    gen min gen max Pmax Pmax gen min     ¼ gen max PCENOPRINIM gen max gen min  gen max gen min  Pmax gen min ¼

avg gen

gen min



gen max gen min PCENOPRINIM gen max gen Pmax  gen max  Pmax gen min  gen gen max gen min PCENOPRINIM gen max gen min gen min  gen max  Pmax gen min  gen max gen min



avg gen PCENOPRINIM  P max ¼ Pmax P 1  CENOPRINIM P

min max

ð11Þ

max

Finally, in the resulting expression (11) we multiply the numerator and denominator of the formula by P_max. As we have repeatedly noted, the equality of this expression with the original formula (1) will not be violated:

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kPrice ¼

avg gen PCENOPRINIM Pmax  Pmax 1  PCENOPRINIM P max

  avg gen PCENOPRINIM   Pmax Pmax Pmax ¼ 1  PCENOPRINIM  P max P max

avg gen PCENOPRINIM Pmax  Pmax  Pmax  Pmax ¼ Pmax  PCENOPRINIM  Pmax P max

avg gen  PCENOPRINIM Pmax  PCENOPRINIM

ð12Þ

The resulting expression (12) will be the result of our transformations. We write it in the form of a separate formula: kPrice ¼

avg gen  PCENOPRINIM Pmax  PCENOPRINIM

ð13Þ

It is easy to see that all the transformations that we carried out from formula (1) to formula (13) did not violate the equality with the original formula. Thus, the calculated values of the coefficient kPrice by the formula (1) and by the formula (13) are identical, i.e. are the kPrice coefficient, which is used in the forecasts of NP “Market Council”. Consider the properties of the resulting expression (13): 1) First, as already mentioned, formula (13) is completely identical to formula (1). 2) Secondly, we see that the calculation of formula (13) requires less action than (1). In addition, formula (13) does not require the use of intermediate coefficients. In contrast to (1), which for its definition requires formulas (2), (3) and (4). 3) Third, now we see that in order to calculate the kPrice coefficient, we actually do not need the gen_max and gen_min values, because they all shrank in the process of transformation. Thus, to calculate kPrice by formula (13), less action and initial information are needed than by formula (1), i.e. the resulting formula is really simpler. Consider the physical meaning of the resulting formula (13). The numerator of the formula contains the expression avg gen  PCENOPRINIM

ð14Þ

from the definitions given in the Methodology (NP “Market Council” 2019), we see that this is the average value of the total trading schedule for all TPPs and NPPs price bids for a week, from which the average hourly volume of price-accepting offers for all included TPPs/SDPPs is subtracted.

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A trading schedule, or planned hourly production, is determined as a result of competitive selection a day in advance (NP “Market Council” 2019a, b, c, d, e). A pricing proposal is an application from an electricity producer that reflects its intention to sell electricity at the price that will prevail on the market; it corresponds to the minimum output per unit of equipment (for technical and technological reasons) (Shiryaeva 2009, NP “Market Council” 2019a, b, c, d, e).

3 Results Thus, in the numerator of the formula, we have an excess of planned hourly production over the minimum required output (for technical and technological reasons), i.e. sold non-accepting output. In other words, the numerator shows the sold volume of production actually involved in trade (the price of which was above zero), i.e. this is the part of the possible generation for which electricity producers give price bids (above zero), and which was selected as a result of competitive selection of price bids. An interesting feature of the formula is that if we read the explanations to the indicators of the Methodology literally, it turns out that on the left side of the formula are taken into account TPPs and NPPs, and on the right side - only TPPs/SDPPs. The formula denominator contains the expression Pmax  PCENOPRINIM

ð15Þ

from the definitions given in the Methodology (NP “Market Council” 2019a, b, c, d, e), we see that the average hourly value of the technical maximum for all included TPPs/SDPPs, from which the average hourly volume of price-accepting offers for all included TPPs/SDPPs is subtracted. Technical maximum is the technical limitation of the maximum generation of active power. Thus, in the denominator of the formula, we have an excess of the technical maximum of generation of generating equipment over the price-taking proposal. In other words, this is that part of the possible output for which electricity producers give real price bids (with a price above zero). In other words, the kPrice coefficient can be interpreted as the ratio of the nonaccepting generation (NPPs and TPPs/SDPPs) selected as a result of competitive selection to the maximum possible non-accepting generation (TPPs/SDPPs).

4 Conclusions It is important for participants in the wholesale electricity market to have the ability to predict the free (unregulated) electricity prices. When constructing forecast models, it is advisable to use, as input, information on the opinion of market participants on the behavior of electricity prices. Such an opinion is the forecast of free (unregulated) electricity prices compiled by NP “Market Council”. In the NP “Market Council” forecasting methodology, an important place is taken by the kPrice indicator, which characterizes the share of the satisfied price offer of TPPs/SDPPs in the total supply, as

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defined in the NP “Market Council” Free (Unregulated) Electricity Price (Capacity) Forecasting Methodology. This paper presents the conclusion of a simplified procedure for calculating this indicator, which gives the same result as the original formula. The interpretation of this indicator as the ratio of the non-prone production (NPP and TPP/SDPP) selected as a result of competitive selection to the maximum possible nonpricing production (TPP/SDPP) is substantiated. The presented calculation formula kPrice is used in practice to assess market risks during the work of traders in the Group “Inter RAO”.

References Afanasyev, D.: The price of electricity: what determines its dynamics at different time scales? Financ. Anal. Probl. Solutions 10(9), 1032–1047 (2017) NP “Market Council”: Annual report on the activities of the NP “Market Council” for 2018 (2019a). https://www.np-sr.ru/sites/default/files/go_2018_god_.pdf. Accessed 21 Nov 2019 Zolotova, I., Dvorkin, V.: Short-term forecasting of prices in the Russian wholesale electricity market based on neural networks: problems of forecasting. FGBUN Inst. Econ. Forecast. 6 (165), 47–57 (2017) NP “Market Council”: The methodology for constructing forecasts of free (unregulated) prices for electric energy in the constituent entities of the Russian Federation (2019b). https://www. np-sr.com/sites/default/files/metodika_postroeniya_prognoza_snc_elektroenergiya.pdf. Accessed 21 Nov 2019 Neklyudov, A.: Forecasting electricity sales prices on the market a day in advance. Manage. Dev. Large-scale Syst. 2(1), 472–475 (2018) NP “Market Council” (2019c), Official site. https://www.np-sr.ru/ru/partnership/index.htm. Accessed 21 Nov 2019 Shiryaeva, L.: The basics of the functioning of electricity markets: a teaching tool, Moscow, CJSC “UK KEU”, p. 404 (2009) NP “Market Council”: Appendix No. 5 to the Agreement on accession to the trading system of the wholesale market. Rules for filing price bids by wholesale market participants (2019d). https://www.np-sr.ru/sites/default/files/sr_regulation/reglaments/r5_01082019_24072019. docx. Accessed 21 Nov 2019 NP “Market Council”: Appendix No. 7 to the Agreement on accession to the trading system of the wholesale market. Rules for competitive selection of price bids for the day ahead (2019). https://www.np-sr.ru/sites/default/files/sr_regulation/reglaments/r7_15112019_24102019. docx. Accessed 21 Nov 2019 NP “Market Council”. “Appendix No. 17 to the Agreement on accession to the trading system of the wholesale market. List of definitions and accepted abbreviations (2019e). https://www.npsr.ru/sites/default/files/sr_regulation/reglaments/r17_01072019_20052019.docx. Accessed 21 Nov 2019 Federal Law of 04.11.2007 No. 250-FL “On Amending Certain Legislative Acts of the Russian Federation in Connection with the Reform of the Unified Energy System of Russia”: adopted by the State Duma on 18 October 2007, approved by the Federation Council on 26 October 2007. Moscow, Federation Council Federal Law of March 26, 2003 No. 35-FL “On the Electric Power Industry”: adopted by the State Duma on February 21, 2003; approved by the Federation Council on 12 March 2003. Moscow, Federation Council

About the Creation of Sensor of New Firefighting, Devices Based on Nanostructures for Determination of Carbon Monoxide and Carbon Dioxide Components Sergei V. Boroznin(&), Olesya A. Kakorina, Igor A. Kakorin, and Evgeny S. Dryuchkov Volgograd State University, Volgograd, Russia {boroznin,davletova.olesya,NMTb-191_966997, dryuchkov}@volsu.ru

Abstract. Purpose: The article is devoted to the study of methods of trapping CO and CO2 molecules on the monolayer of pyrolysed polyacrylonitrile (PPAN), as well as their internal filling of the interlayer space of the nanostructure through the lateral cavity and the defect of its surface. Design/Methodology/Approach: The main method used in the work is the semi-periodic calculation scheme MNDO. Findings: The study conducted a multiple addition assay to estimate the minimum and maximum concentration of the attached substances. Originality/Value: As a result of the work, recommendations on the use of new units of smart devices for detection and retention of carbon monoxide and carbon dioxide molecules based on nanostructure - PPAN have been developed. Keywords: Pyrolized polyacrylonitrile
Carbon monoxide
Carbon dioxide
Adsorption
Quantum chemical calculations
Clever technologies JEL Code: O3 - innovation
Research and development change
Intellectual property rights


Technological

1 Introduction The interaction of the two substances with each other is usually associated with a change in their electronic structure and, accordingly, their conductive properties. Scientists use this principle to design innovative smart nanodetectors based on various nanostructured materials. In 2000, Kuhn et al. (Kong et al. 2000) described an experiment in which a single layer carbon nanotub exhibited a change in conductivity upon contact with nitrogen oxide and ammonia. The system showed the possibility of instant response to attached atoms and molecules. The main advantage of this development is the ability to detect microcolies of matter at room temperature. Metal oxide sensors required a temperature of about 200 °C for normal operation (Shimizu and Egashira 2013). The work (Kong et al. 2000) describes a sensor operating at room

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temperature. And this device is restored in the following conditions: in one hour after annealing in 200 °C or in 12 h at the room temperature under a stream of pure argon. The disadvantage of nanodetectors is their complex recovery. One reason for this may be the large specific surface area of the nanotubes. Therefore, a number of works are devoted to alternative annealing methods of cleaning nanosensors. For example, in (Li 2003), it is proposed to use UV radiation instead of annealing to purify impurity atoms and molecules. Collins et al. 2000, described in their work that single-layer carbon nanotubes are susceptible to oxygen presence. They measured electrical resistance and thermal EMF when the oxygen partial pressure in the medium varied from 10−8 to 10−10 Torr. The authors also experimentally determined a change in the state of electron density of carbon nanotubes placed on a gold substrate under the influence of oxygen or pure argon by scanning electron spectroscopy. The study showed that not all single-wall carbon nanotubes are sensitive to oxygen, and no special effects are found when argon, helium, and nitrogen interact with them. In 2005, Huang et al. 2005, showed that a three-component device based on multilayer carbon nanotubes could detect molecular nitrogen. In the described operation, two metal electrodes were placed on a film of multilayer vertically oriented carbon nanotubes arranged on a silicon and silicon oxide substrate, silicon acting as a lower gate. We have found that sensitivity to molecular nitrogen increases when a high bias voltage is applied to the drain and source. Moreover, since the sensitivity of the instrument increased using negative gate voltage, it was concluded that the change in the concentration of free holes in the carbon nanotubes film was a major factor affecting the detection of molecular nitrogen. With respect to other gases, such as hydrogen, palladium-modified carbon nanotubes have been found to exhibit concentrations of less than 100 ppm (Ding et al. 2007). Thus, carbon nanotubes with metals are more sensitive than pure nanotubulenes for a wide range of gases and vapors. Combining carbon nanotubes with other substances to create a sensory composite instrument can increase both their sensitivity and other properties. Separately, it is worth noting the low selectivity of carbon nanotubes sensors for specific gases and vapors. In the case of simultaneous detection by a sensor based on carbon nanotubes of water and nitrogen oxide, the detection signals thereof may hide each other. While adsorption of nitrogen oxide onto the surface of carbon nanotubes leads to increased electrical conductivity, water has the opposite effect (i.e., leads to reduced electrical conductivity). To overcome this disadvantage, Evans et al. 2016 mixed nanotubes with zeolite. While pure nanotubes are unable to detect nitric oxide in a wet environment due to the above features, nanotubes bound to a hydrophilic zeolite successfully detect it. The reason for this is that the zeolite “catches” water molecules before they can reach the surface of carbon nanotubes, which in turn only sense nitric oxide. Instead of creating carbon nanotubes-based sensors in which their properties (e.g. sensitivity or selectivity) are improved by reacting with other materials (metal nanoparticles, zeolite as shown above, etc.), there is a concept of improving modern metal oxide-based sensors by combining them with nanotubes. As noted earlier, metal oxide sensors need temperatures of at least 200 °C to function properly. This means

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that the operation of such instruments requires enormous energy consumption. However, studies have emerged in recent decades describing the mechanism for combining metal oxides with carbon nanotubes, after which they could successfully function at lower temperatures, up to room temperatures. For example, in 2004, Wei et al. (Wei et al. 2004) produced a hybrid SnO2/CNT sensor by centrifugation coating followed by heat treatment with an organometallic solution with single wall CNT dispersed therein. The authors then demonstrated a comparison of the results of the hybrid device with the SnO2-only device, and this comparison showed that the hybrid device at room temperature is almost two orders of magnitude more sensitive than the “clean” device. Espinosa and colleagues (Espinosa et al. 2007) reported that adding metal oxide to a multi-walled carbon nanotubes (MWCNT) sensor resulted in a marked improvement in its sensitivity. In particular, they considered MWCNTs functionalized by three different types of metal oxides, namely SnO2, WO3 or TiO2. The researchers found that these sensors become more sensitive to NO2 up to the ppb (parts per billion) range at room temperature and can fully regenerate after exposure to gas. Their results also show that it is necessary to select the optimal amount of CNT to be added to each particular metal oxide material to increase sensitivity. The latter two examples clearly indicate how standard metal oxides taken as a sensor can improve their sensitive performance by simply adding carbon nanotubes to the device. Nguyet et al. (Nguyet et al. 2018) found that when creating a hybrid CNT sensor with nanowires, instead of a SnO2 film, or SnO2 powder, its detection limit could SnO2 by about 0.68 ppt. The sensors consisted of a MWCNT film connecting an uncoated platinum electrode and a platinum electrode to pre-grown SnO2 nanofibers. Modulation of the actuated device in reverse displacement mode with the main gas-sensitive mechanism was detected. Due to tunneling in the nanowires of the SnO2 during adsorption of the gas molecule, leakage current NO2 appeared. It is most likely that the ultra-high detection limit of this hybrid sensor can be based on a combination of the high surface area of the CNT and the SnO2. Thus, nanoelectronics has a huge undisclosed potential in the field of instrumentation, namely the creation of sensors having increased selectivity and response to specific gases. Pyrolized polyacrylonitrile is widely known in domestic nanomaterials, the possibilities of modification of which are not fully disclosed to date. This nanostructure was chosen by us to investigate the possibility of creating a sensor for fire-fighting devices based on PPAN, which could at the molecular level detect the presence and concentration of toxic gases harmful to the human body, such as carbon monoxide and carbon dioxide.

2 Methodology In order to study the sensitivity of nanostructures to carbon monoxide and carbon dioxide molecules, the process of their interaction with pyrolized polyacrylonitrile was simulated. Structure of the tested material: 1/5 part of nitrogen atoms and 4/5 parts of carbon atoms of the surface. The interatomic distance was chosen to be 1.4 Ǻ. In the

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first stage, the attachment of molecules to the surface of the nanopolymer was simulated. The molecules were oriented perpendicular to the surface of the nanostructure. The CO2 molecule was attached to the PPAN layer at various sites: 1) 2) 3) 4)

to to to to

atom C; atom N; the center of the carbon bond; the center of the hexagonal cell of the surface nanolayer.

To avoid the effect of edge effects, CO and CO2 molecules approached surface atoms located in the center of the cluster. The molecule approached the monolayer in 0.1 increments along perpendicular to the plane of the monolayer surface. Calculations made it possible to determine the energy of the interaction process, the changes of which are shown in Figs. 1 and 2. The next step was to consider attachment at the longitudinal orientation of molecules above the surface of the nanopolymer. The following positions of the molecule relative to the PPAN layer were selected: 1. 2. 3. 4. 5.

To carbon atom. To the center of the carbon bond. To the center of the carbon bond with parallel arrangement of the molecule. Above atom C is parallel to the monolayer. Over the center of hexagon.

Calculations were made using the MNDO calculation scheme (Sigal 1980, Pople and Beveridge 1970, Stewart 1989, Dewar 1977a, b Fuchs and Scheffler 1999) Data obtained using such calculation methods are shown in graphs showing the change in adsorption energy for each of the molecular orientation variants. The schedules for all five cases are qualitatively similar. As in the case of the perpendicular orientation of the carbon dioxide molecule, adsorption of the CO2 in the parallel orientation is not possible

3 Results After computer modeling of the adsorption process and obtaining data on the change of adsorption energy when the tested molecules approach the surface of the monolayer, it can be said that the carbon monoxide molecule is adsorbed on the surface of PPAN, this is confirmed by the presence of a minimum on the energy curves. Similarly, adsorption energy was calculated for the carbon dioxide molecule orientation variants 3 and 4 relative to the surface of the pyrolized polyacrylonitrile. Under similar conditions and a method of calculation of adsorption of a molecule of carbon dioxide on a surface of PPAN does not occur - on power curves are absent energy minimums.

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Fig. 1. Energy adsorption curves of carbon monoxide molecule: a) parallel to PPAN surface; b) PPAN is perpendicular.

Table 1. Energy characteristics of two-layer PPAN, with and without CO molecule. EHOMO, eV ELUMO, eV ΔEg, eV Pure PPAN −6,61 −3,74 2,87 PPAN with CO molecule −7,18 −3,75 3,43

The results of calculations of the energies of the boundary orbitals EHOMO and ELUMO, the width of the band gap are given in Table 1. The width of the forbidden zone increased when the CO interacts with the surface.

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Fig. 2. Energy curves of CO2 molecule adsorption processes: a) above carbon; b) over nitrogen; c) above the C-C bond centre; d) vertically above the hexagon

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Fig. 3. Surface profile of potential energy of carbon dioxide molecule adsorption process above two-layer PPAN

After considering the process of adsorption of the carbon dioxide molecule for the case of parallel orientation of the molecule with respect to the polymer layer, it has been suggested that the two-layer structure of PPAN is a more effective adsorbent for the CO2 molecule (Fig. 3). Options for parallel and perpendicular orientation of the molecule over the polymer were considered. Quantum-chemical calculations have found that adsorption of this molecule, as in the case of the PPAN monolayer, is impossible. Next, a mechanism for introducing carbon monoxide and carbon dioxide molecules through the lateral surface of the PPAN structure was investigated. The structure of the pyrolized polyacrylonitrile was selected as the subject of the study, each of the layers containing 20% nitrogen atoms and the layers were parallel to each other. The implementation process was modeled by step-by-step approximation (step 0.1 A) of CO molecules and CO2 to a fictitious atom located between layers. The results obtained made it possible to build the dependence of the total energy of the system on the distance between the fictitious atom and the incipient molecules of carbon monoxide and carbon dioxide. Calculations of the introduction of the CO molecule, as in the case of CO2, have found the presence of a potential barrier of 0.74 eV height, which overcomes the molecules when penetrating the interlayer space. The barrier peak is at the boundary of the layer. After entering the interplane space at a distance of 1.9 A from the cluster boundary, the carbon monoxide molecule is adsorbed on two surfaces of the PPAN monolayer and the carbon dioxide molecule is adsorbed on one of the two. In order to penetrate CO and CO2 molecules into the interlayer space of PPAN in its perpendicular orientation, it is necessary to overcome a potential barrier of 0.79 eV. The peak of the barrier is shifted from the edge of the layer by 0.7 Ǻ. At a distance of 1.4 Ǻ from the cluster boundary there is an energy minimum, which corresponds to the complete introduction of the molecule into the interlayer space. A complete optimization of the structure at this position shows that CO and CO2 molecules are adsorbed on the surface of PPAN. Atom C of CO molecules are adsorbed on two layers. And atom C of CO2 molecules are adsorbed on one layer, and oxygen molecule on the other layer.

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Comparison of the results of the PPAN-CO2 adsorption complex shown in Table 2 with the characteristics of the “pure” polymer showed that the energy values of the lower vacant orbital were virtually independent of the presence of the adsorbed molecule in the interplane space. Note a slight increase in the energy value of the higher filled molecular orbital when carbon dioxide is present in the structure, resulting in an increase in the forbidden gap. Thus, the presence of carbon dioxide atoms allows the physical properties of the test material to be changed. This property allows us to consider PPAN as a sensor for detecting carbon dioxide in the atmosphere (Fig. 4).

Fig. 4. Surface profiles of potential energy of process of CO2 molecule introduction through side surface of PPAN in orientation: a) parallel; b) perpendicular.

Table 2. Energy characteristics of two-layer PPAN PPAN structure чиcтый пoлимep Implementing CO2 parallel to the layer Implementing CO2 perpendicular to the layer

EHOMO, eV ELUMO, eV DEg, eV −6.32 −4.26 2.06 −6.76 −4.3 2.46 −6.77 −4.25 2.52

To study the process of adsorption of the carbon monoxide molecule to PPAN vacancies, a single layer structure of pyrolized polyacrylonitrile was considered. Quantum-chemical calculations of these processes allowed to build surface profiles of potential energies (Fig. 5).

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Fig. 5. Surface profile of potential energy when adsorption of carbon monoxide molecule to vacancies in PPAN.

As part of the study of the mechanism for introducing carbon monoxide and carbon dioxide molecules through the surface defect of the PPAN structure, a two-layer structure of pyrolized polyacrylonitrile was considered, with one of the layers containing a vacancy (the so-called V defect). When investigating the penetration of carbon monoxide and carbon dioxide molecules between pyrolized polyacrylonitrile layers, calculations of this process were performed within the framework of the MNDO design scheme. It should be noted that two versions of interlayer introduction of the molecule are considered with respect to the carbon dioxide molecule: at the first, the molecule is introduced through a vacancy containing only carbon atoms, and at the second - the molecule is introduced through a vacancy containing one nitrogen atom. The process of introducing molecules was modeled by step-by-step approximation of the molecule to the lower monolayer of the polymer with a step of 0.1 Ǻ. Quantumchemical calculations of these processes allowed to build surface profiles of potential energies. Their analysis showed that a potential barrier of 0.19 eV and a carbon dioxide molecule of 0.19 eV for case 1 and 0.26 eV for case 2 must be overcome to penetrate the polymer cavity. Analysis of the structure geometry of the simulated adsorption complex showed that when the molecule passed through the top PPAN layer, there was no degradation of the CO molecules, CO2, and the PPAN layer, through which penetration took place. When the analysed complex is stabilized, PPAN layers are pushed away from each other by a distance of 10.9 Ǻ in the case of carbon monoxide, and 6.4 Ǻ - with carbon dioxide when introduced through a vacancy containing only carbon atoms.

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The analysis of the geometry of the structure of the simulated adsorption complex “PPAN-CO2” when it is introduced into the interlayer space through a vacancy containing one nitrogen atom showed that when the molecule passes through the upper layer of PPAN, it is destroyed to form a chemical bond between the atoms of the layer and the CO2 molecule (Fig. 6).

Fig. 6. Surface profile of potential energy when introducing a carbon dioxide molecule into the interlayer space of PPAN through a surface defect: a) through the vacancy of option 1; b) through the vacancy of option 2.

Next, a study of multiple adsorption of carbon monoxide onto the surface of the PPAN structure was initiated, the process of which was modeled by step-by-step approximation (step 0.1 Ǻ) of 25 CO molecules of the PPAN monolayer, after which a complete optimization of the complex was carried out. Of the 25 carbon monoxide molecules, 21 adsorbed, which is a very good result of adsorption. The bond energy for each of the experiments was then calculated to determine how stable the complexes could be (Table 3). Table 3. Bond energies for pure PPAN and with adsorbed CO molecules. Bond energy (eV) Pure PPAN 7,5543 PPAN+CO 7,5521 PPAN+5CO 7,5497 PPAN+25CO 7,3619

Based on the data presented in the table, it can be assumed that these complexes are sufficiently stable and can retain carbon monoxide molecules long enough before desorption occurs.

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4 Conclusion Quantum-chemical calculations of the addition of CO and CO2 molecules to the surface of PPAN made it possible to establish that adsorption of carbon monoxide molecule on the surface of PPAN is possible, and carbon dioxide is impossible. The interlayer introduction of carbon monoxide and carbon dioxide molecules into the polymer matrix showed the possibility of producing the “PPAN-CO” and “PPANCO2” adsorption complex. Pyrolized polyacrylonitrile can be used as a sensor to indicate carbon monoxide and carbon dioxide in the atmosphere as the band gap is increased after CO adsorption and CO2 to PPAN. The study found that PPAN is a very good adsorbent for carbon monoxide, so it can be used not only as a sensor, but also as a filter base for new gas masks. The process of adsorption of the CO2 molecule in the interlayer space depends on the composition of the polymer, namely, the decrease in the concentration of nitrogen atoms near the location of the vacancy leads to a more stable process, but it pushes the PPAN layers away from each other. Acknowledgements. The reported research was funded by Russian Foundation for Basic Research and the government of Volgograd region, grant № 19-43-340005 r_a. The reported research was funded by Russian President’s grant №798.2019.1. The reported research was funded by Russian President’s grant № MK-1758.2020.8.

References Kong, J., Franklin, N.R., Zhou, C., Chapline, M.G., Peng, S., Cho, K., Dai, H.: Nanotube molecular wires as chemical sensors. Science 287, 622–625 (2000) Shimizu, Y., Egashira, M.: Basic aspects and challenges of semiconductor gas sensors. MRS Bull. 24, 18–24 (2013) Evans, G.P., Buckley, D.J., Adedigba, A.-L., Sankar, G., Skipper, N.T., Parkin, I.P.: Controlling the cross-sensitivity of carbon nanotube-based gas sensors to water using zeolites. ACS Appl. Mater. Interfaces. 8, 28096–28104 (2016) Li, J., Lu, Y., Ye, Q., Cinke, M., Han, J., Meyyappan, M.: Carbon nanotube sensors for gas and organic vapor detection. Nano Lett. 3, 929–933 (2003) Collins, P.G., Bradley, K., Ishigami, M., Zettl, D.A.: Extreme oxygen sensitivity of electronic properties of carbon nanotubes. Science 287, 1801–1804 (2000) Huang, C., Huang, B., Jang, Y., Tsai, M., Yeh, C.: Three-terminal CNTs gas sensor for N2 detection. Diam. Relat. Mater. 14, 872–1875 (2005) Ding, D., Chen, Z., Rajaputra, S., Singh, V.: Hydrogen sensors based on aligned carbon nanotubes in an anodic aluminum oxide template with palladium as a top electrode. Sens. Actuators B Chem. 124, 12–17 (2007) Wei, B.-Y., Hsu, M.-C., Su, P.-G., Lin, H.-M., Wu, R.-J., Lai, H.-J.: A novel SnO2 gas sensor doped with carbon nanotubes operating at room temperature. Sens. Actuators B Chem. 101, 81–89 (2004)

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Espinosa, E., Ionescu, R., Chambon, B., Bedis, G., Sotter, E., Bittencourt, C., Felten, A., Pireaux, J.-J., Correig, X., Llobet, E.: Hybrid metal oxide and multiwall carbon nanotube films for low temperature gas sensing. Sens. Actuators B Chem. 127, 137–142 (2007) Nguyet, Q.T.M., Duy, N.V., Hung, C.M., Hoa, N.D., Hieu, N.V.: Ultrasensitive NO2 gas sensors using hybrid heterojunctions of multi-walled carbon nanotubes and on-chip grown SnO2 nanowires. 112, Appl. Phys. Lett., 153110 (2018) Sigal, G.: Semi-pragmatic methods of calculating the electronic structure. M. Miry. 1, 2 (1980) Pople, J.A., Beveridge, D.L.: Approximate Molecular Orbital Theory. McGraw-Hill Book Company, New York (1970) Stewart, J.J.P.: Optimization of parameters for semiempirical methods, I. Method. J. Comput. Chem. 10(2), 209–220 (1989) Dewar, M.J.S., Thiel, W.: Ground states of molecules. The MNDO method. Aproximations and parameters. J. Amer. Chem. Soc. 99, 4899–4906 (1977a) Dewar, M.J.S., Thiel, W.: A semiempirical model for the two-center repulsion integrals in the NDDO approximation. Theoret. Chem. Acta. 46, 89–104 (1977b) Fuchs, M., Scheffler, M.: Ab initio pseoudopotentials for electronic structure calculations of polyatomic systems using density-functional theory. Comput. Phys. Commun. 119, 67–98 (1999)

Comparative Analysis of the Effectiveness of the Sensory Properties of Carbon Nanotubes When Modifying Their Surface with Boron Atoms Natalia P. Boroznina(&) , Sergei V. Boroznin, Irina V. Zaporotskova, and Pavel A. Zaporotskov Volgograd State University, Volgograd, Russia {boroznina.natalya,boroznin}@volsu.ru, [email protected]

Abstract. Purpose: This article discusses the use of carbon nanotubes as elements of smart sensor devices to detect ultra-small quantities of materials. Calculations of interaction of modified amine functional group of carbon and boron-carbon nanotubes with alkali metal atoms were carried out. A comparative evaluation of sensory activity of tubular nanomaterials with different types of modifications was also carried out. Design/Methodology/Approach: Calculations were made using the DFT method. Findings: The obtained results proved the possibility to create and reuse sensor devices based on the tested modified nanomaterials. Originality/Value: These instruments can be used to detect and identify substances in various environments. They can be used to provide environmental monitoring, to control water and air pollution, to identify sources of industrial emissions and the like. In addition, such high-tech equipment will not consume a large amount of electricity through the use of new materials, which will reduce energy consumption. Keywords: Boron carbon nanotubes
Nanosensors
Quantum-chemical calculations
Density Functional Theory
Boundary modification
Functional group JEL Code: O3 - innovation
Research and development change
Intellectual property rights


Technological

1 Introduction In recent decades, a promising science such as nanotechnologies has been actively developing, in which the main element is nanomaterials whose dimensions lie in the range of 1 to 100 nm (Saito 1999; Harris 1999; Dresselhaus and Dresselhaus 2000). The properties of solids change when their dimensions are reduced to nanometer limits. Nanomaterials have unique properties due to their dimensional characteristics. © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 288–296, 2021. https://doi.org/10.1007/978-3-030-59126-7_32

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One of the most famous and sought nanomaterial is carbon nanotube. Nanotubes have an abnormally high specific surface area in which the entire mass is concentrated, so they have extremely high sorption properties and characteristics (Eletskii 2004; Ghosh 2003). Nanotubular materials are therefore a promising material for the creation of super-sensitive and miniature sensors (chemical and biological) (Kim et al. 2007; Cao and Rogers 2009). The principle of operation of such sensors is based on change of volt-ampere characteristics of nanotubes at sorption of molecules of certain grade on the surface of tubes. Such sensor systems refer to devices of so-called “smart technologies,” as they allow to identify (determine) different substances and even individual molecules and atoms included in substances in different aggregate state. More recently, research has been under way to explore the possibilities of modifying carbon nanotubes, leading to a predicted change in their properties. Structural modification is expected to affect their sorption and sensory activity involving sensitivity to various elements One way to modify carbon nanotubes is by a method of substituting carbon atoms for other elements. Among them, nanotubes obtained in 2004 by substituting the carbon atoms of the surface of UNT for boron atoms in the BCl3 gas stream are particularly attractive (Fuentes et al. 2004). Such nanotubes are stable semiconductors and have shown better sorption properties compared to pure carbon ones (Zaporotskova 2014), which also makes them promising for use, among other things, as sensors of sensor devices. Studies concerning boundary modification of carbon nanomaterials have been carried out (Zaporotskova 2013). However, there has been no previous comparative analysis of the ability to react structural and boundary modified by individual atoms and functional groups of the nanotubular material with respect to alkali metal atoms. This indicates the relevance of this study. The scientific results obtained and the recommendations proposed on their basis will create the prerequisites for determining the fields of application of this technology.

2 Methods According to Density Functional Theory, the properties of a many-electron system including energy, can be defined by using an electron density functional. The system is described by electronic density as q(r): Z qðr Þ ¼

Z ...

2

jUe j dr1 dr2 . . .drN

ð1Þ

Function is defined in all space. The integral from electronic density on all space gives full number of electrons. Kinetic energy of electrons is described obviously in approach of independent particles; a classical part of potential energy is described on Coulomb’s law. Exchange and electronic correlation are considered approximately.

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Electronic correlation – the effect caused by instant Coulomb repulsion between electrons. Its account results in lower value of total energy of a system. The specified effect is not considered in Hartree-Fock’s method. The energy change caused by these instant Coulomb interactions is called energy of correlation: E cor ¼ E exE ðHFÞ\0

ð2Þ

Accounting of electronic correlation is especially important at a research of the effects depending on the excited states or which are not clear described in onedeterminant approach. Practical application of DFT resulted in two theorems proved by Hoenberg and Kohn in 1964 and generalized then several authors. The first theorem claims that any property of the main condition of this system is described only by electronic density q(r). It is important to emphasize that this theorem is proved only for the main condition of a molecule and, strictly speaking, DFT is not the exact theory for the excited states. The second theorem establishes the variation principle in DFT: if E0 is exact energy of the main state, then for any other electronic density q, which can be also approach to the true electronic density of the main state, the ratio of E[q]  E0. This statement, as well as in the methods based on wave function gives a method of stay E0 and the corresponding density. In general, DFT has an excellent ratio of accuracy and computing expenses that does this method by exclusively useful means of a quantum-chemical research (Willson 1987; Curtiss et al. 1998; Rassolov et al. 2001; Chen et al. 2004).

3 Results At the stage of the study, the interaction of the functional amine (-NH2) group with the open boundary of the semi-pointed carbon nanotube was calculated. In work of Tran (Tran et al. 2008) the sensitivity of CNT modified by NH2 group to availability of NO2 gas is studied. The authors explained the sensitivity of such a nanosystem established as a result of the experiments in that the amino group acts as a charge carrier therein, which accordingly increases the number of electrons transferred from the nanotubes to NO2. Computer modeling of the attachment process consisted in step-by-step approximation of the functional group, the approach step was 0.1

Ǻ,

the movement was

perpendicular to the open boundary of the carbon nanotubes of type (6, 0) to the arbitrary carbon atom on the open boundary of tubulene. Optimization carried out in the course of modeling such a process allowed to establish geometric parameters of the feature of spatial orientation of the amine group relative to the boron-carbon nanotubulene. An image of a carbon nanotube modified with an amine group is shown in Fig. 1. Also, the calculations determined the charge distribution on the functional group atoms on the carbon atom to which the amine group was attached.

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Fig. 1. Molecular cluster of CNT (6, 0) modified with amino group.

Calculations showed that the amino group is focused at an angle 122° to the nanotube. The group forms a chemical bond with the CNT at a distance of 1.3 Å. The nitrogen atom of the group acquires a negative charge on the order of −0.25, which ensures the appearance of an additional carrier in the system, in this case positive. The mechanism of interaction of boundary-modified amino-group carbon nanotube (6, 0) with lithium, potassium and sodium atoms is studied by modeling their step-bystep approach to hydrogen atom of functional group attached to carbon atom of open boundary of CNT. Energy curves of such model processes are given in Fig. 2, and some main characteristics of the interaction are shown in Table 1. The obtained results indicate that VdV interaction is realized between the modified nanosystem “CNT NH2” and selected metal atoms (ions), as illustrated by distance values. This proves the resistance of the sensor probe based on the amino-modified carbon nanotubes to failure during repeated use. In addition, in order to recover such a sensor when it is used, no additional effects are required that would be necessary when chemical interaction between the metal atoms and the system occurs. In this way, this can ensure that the sensor can operate smoothly without long-term recovery.

-1.8 1

2

3

rǺ

-5.46 -5.48 0

1

2

3

E,

-5.5

E,

-1.9

0

-2

-5.52

-2.1

-5.54

-2.2

-5.56

a)

b)

Fig. 2. Energy curves of interaction between metal atoms and CNT, boundary-modified amine group: a) Na, Li, b) K.

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Table 1. Characteristics of process of accession of atoms and ions of metals to atom H of an amino group, the boundary modifying CNT: rint - interaction distance, Eint - energy of interaction Metal Na К Li

rint, Å Eint, eV (MNDO) 1,6 −1,90 1,6 −3,60 1,8 −1,17

The sensitivity of the sensor probe system to the presence on an arbitrary surface of alkali metal atoms with which interaction has been previously discussed has been further studied. For this purpose, the simulated process of scanning the imaginary surface was calculated. The presence of sensory interaction was determined by the presence of the system response to the presence of metals. Computer simulations of the scanning process consisted of moving the atom parallel to the modified nanotube boundary. As a result, energy curves were constructed that clearly describe the process (Fig. 3). Their analysis demonstrated that the carbon nanotube, a boundary-modified NH2, shows sensitivity to selected metals. The characteristics of the sensory interaction are shown in Table 3, which is a summary table for comparing the scan results of a pure carbon nanotube and a nanotube whose surface is modified with boron atoms.

0

r, Å 0

E,э В

-2 -4

1

2

3

4 Na K Li

-6 Fig. 3. Energy curves of interaction between metal atoms and CNT, a boundary-modified amine group, in surface scanning, containing Na, K, Li atoms.

These results suggest that CNT probes with an edge group NH2 have selectivity and can identify alkali metals. The energies of the sensory interaction of the nanostructure with different particles are different, accordingly, will differ and the response of the system to their presence. Further, theoretical studies were carried out on the interaction of the amine group with a carbon nanotube, the surface of which was structurally modified with substitutive boron atoms to form a BC3-type structure (Fig. 4).

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Fig. 4. Model of interaction of Na atom with edge hydrogen atom of amine group attached to boron-carbon nanotube.

The determination of the geometry of the system showed that the functional group joined the nanotube at an angle of 109°. The nitrogen-hydrogen bond lengths were 1,23 Å and 1.36 A. Charges on atoms of functional group made: on qN nitrogen atom = 0.9 and on H hydrogen atoms = 0.2. The charge on the nitrogen atom of the -NH2 group indicates that when the selected functional groups are attached to the nanotubulene boundary, electron density is transferred from the nitrogen atom of the functional group to the surface of the boron-carbon nanotubes. Accordingly, such a system may be a sensor probe model. In such a system, the single nanotubes field effect transistor sensor mechanism described in (20) may be implemented, resulting in an additional charge carrier providing conductivity in the obtained nanosystem, which in turn will be a sensor. Computer simulations were then performed on the interaction of potassium, lithium and sodium with the hydrogen atom of the amine group of the resulting “BCNT-NH2” system (Fig. 5). Computer modeling of the process was carried out in a similar way to modeling the process of reacting a functional amine group with a carbon nanotube. The power curves describing interactions of a system were as a result constructed: “2 and BCNT with atom of alkaline metal” which are presented in Fig. 6. Analysis of the obtained curves, taking into account the distance between the metal atoms and the edge atoms of the functional group, as well as the values of the interaction energy, suggests that there is also a weak VdV interaction. The main characteristics of the alkali metal atom addition process are shown in Table 2.

Fig. 5. Surface profiles of potential energy of interaction processes between modification functional group BCNT and alkali metal atoms (Na, Li, K).

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Table 2. Main characteristics of interaction (accession) of Na, K, Li to atoms of hydrogen of amino group of the BCNT (6.0) — Functional Group system: rint - distance of interaction between atom of metal and atom H of functional group, Evz - the corresponding energy of interaction Type of interacted atoms rint, Å Eint, eV Na – H 2,3 −1,6 К–H 1,3 −1,7 Li – H 2,0 −1,4

Charge on metal atoms +0,9 +0,9 +0,6

In the final stage of the study, the scanning process of an arbitrary surface containing the atom to be determined was simulated and the activity of the borocarbon nanotube with the functional group (−NH2) with respect to the selected alkali metal atom was determined. The process was modeled similarly to the scanning process described previously. The analysis of the built interaction curves resulting from the energy calculation is shown in Fig. 7.

Fig. 6. Surface profiles of potential energy of the scanning process of the “BCNT-amine group” system of an arbitrary surface containing potassium, lithium and sodium atoms.

Table 3. Basic scanning characteristics of an arbitrary surface containing alkali metal atoms modified with an amine group of the carbon nanotube and a boron-carbon nanotube. rSint distance of sensory interaction, ESint - energy of interaction. Atom+CNT K Li Na Atom+BCNT Na К Li

rSint, Å ESint, eV (DFT) 2,0 −5,21 2,0 −2,00 1,9 −3,48 rSint, Å ESint, eV (DFT) 2,6 −4,42 2,89 −3,21 2,3 −2,96

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In the course of the research, a comparative table of the characteristics of the scanning process of an imaginary surface containing alkali metal atoms was compiled. The analysis of the results was carried out, which consisted in comparing the energy of interaction of the system with alkali metal atoms. It showed that a carbon nanotube borderline modified amine group is more effective. This conclusion was because the value of the energy of interaction of the “CNT amine group” system with metal atoms in the sensory sensitivity study is slightly less than in the scanning of an arbitrary surface containing alkali metal atoms by the “BCNT amine group” system.

4 Conclusion Thus, theoretical studies, which were obtained through computer simulations and calculations performed using the DFT calculation scheme, showed the possibility of creating super-sensitive reactive probes. They are semiconductor sensor systems with boundary and structural modification. These systems can enter as the cantilever of an atomic force microscope. The charge carrier in such a nanotubular system is an electron supplied by the attached functional groups. Such systems prove to be sensorally active for alkali metals (lithium, sodium, potassium). Modified nanosystems and metals interact with each other through small Van der Waals forces. Due to this type of interaction between the probe tube system and the metals to be identified, the probe can be reused because having a chemical bond would cause the sensor to break down during its operation. This fact proves the possibility of creating a reusable sensor based on a boroncarbon nanotubes. Such a sensor will have high selectivity: the energies of interaction of the sensor semiconductor nanostructure with different atoms are different, so the response of the system to the presence of atoms or their ions will vary. These studies predict that such a sensor will respond to the presence of ultra-small amounts of substances, which makes it possible to judge the prospects of its use in the field of chemistry, biology, medicine, etc. The use of chemically modified nanotubes, including in atomic force microscopy, is the way to create probes with clearly expressed chemical characteristics. Acknowledgements. The reported research was funded by Russian Foundation for Basic Research and the government of Volgograd region, grant № 19-43-340005 r_a. The reported research was funded by Russian President’s grant №798.2019.1. The reported research was funded by Russian President’s grant № MK-1758.2020.8.

References Saito, R., Dresselhaus, M.S., Dresselhaus, G.: Physical Properties of Carbon Nanotubes. Imperial College Press, London (1999) Harris, P.J.F.: Carbon Nanotubes and Relative Structures. New Materials of Twenty-First Century. Cambridge University Press, New York (1999)

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Dresselhaus, M.S., Dresselhaus, G., Avouris, P.: Carbon nanotubes: synthesis, structure, properties, and application. Springer, Berlin (2000) Eletskii, A.V.: Sorption properties of carbon nanostruktures. Achievements Phys. Sci. 174(11), 1191–1231 (2004) Ghosh, S., Sood, A.K., Kumar, N.: Carbon nanotube flow sensors. Science 299(5609), 1042– 1044 (2003) Kim, S.N., Rusling, J.F., Papadimitraopoulos, F.: Carbon nanotubes for electronic and electrochemical detection of biomolecules. Adv. Mater. 19(20), 3214–3228 (2007) Cao, Q., Rogers, J.A.: Ultrathin films of single−walled carbon nanotubes for electronics and sensors: a review of fundamental and applied aspects. Adv. Mater. 21(1), 29–53 (2009) Fuentes, G.G., Borowiak-Palen, E., Knupfer, M., et al.: Formation and electronic properties of BC3 single-wall nanotubes upon boron substitution of carbon nanotubes. Phys. Rev. B. 69 (24), 249–253 (2004) Zaporotskova, I.V.: Structure and Properties of Composite Carbon- and Boron-Containing Nanomaterials. Izdatelstvo VolGU, Volgograd (2014) Zaporotskova, I.V., Polikarpova (Boroznina), N.P., Vil’keeva, D.E.: Sensor activity of carbon nanotubes with a boundary functional group. Nanoscience and Nanotechnology Letters 5(11), 1169–1173 (2013) Willson, S.: Electronic Correlations in Molecules. World, Moscow, pp. 269–304 (1987) Tran, T.H., Lee, J.-W., Lee, K., Lee, Y.D., Ju, B.-K.: The gas sensing properties of single-walled carbon nanotubes deposited on an aminosilane monolayer. Sens. Actuators B Chem. 129(1), 67–71 (2008) Rassolov, V.A., Ratner, M.A., Pople, J.A., Redfern, P.C., Curtiss, L.A.J.: 6-31G* basis set for third-row atoms. Comp. Chem. 22, 976–984 (2001) Curtiss, L.A., Raghavachari, K., Redfern, P.C., Rassolov, V., Pople, J.A.: Gaussian-3 (G3) theory for molecules containing first and second-row atoms. J. Chem. Phys. 109, 7764–7776 (1998) Chen, Z., Nagase, S., Hirsch, A., Haddon, R.C., Thiel, W., Schleyer, P.R.: Side-wall opening of single-walled carbon nanotubes (SWCNTs) by chemical modification: a critical theoretical study. Angew. Chem. 116, 1578–1580 (2004)

Nanofilters Based on Carbon Nanomaterials for Cleaning Liquids Natalia P. Boroznina(&) , Irina V. Zaporotskova, and Pavel A. Zaporotskov Volgograd State University, Volgograd, Russia [email protected], [email protected], [email protected]

Abstract. Purpose: The aim of the article is to study the use of carbon nanomaterials, in particular carbon nanotubes, as the material that form the basis of the filter for fine purification of alcohol-containing liquids from special alcohols, in particular, from propanol isomers. Design/Methodology/Approach: As part of the study, theoretical calculations of single-center adsorption of organic molecules on the surface of carbon nanotubes were carried out using a molecular cluster model and calculated MNDO and DFT. Findings: The main characteristics of the obtained interacting systems are defined. Experiments were also carried out confirming theoretical calculations and proving the possibility of purifying the water-ethanol mixture from normal and isopropanol. Originality/Value: It should be noted that due to the sorption mechanism it is possible to use carbon nanotubes and to clean drinking water from organic impurities (Boroznina 2015, Boroznina 2016, Zaporotskova 2016), which is extremely important for improving the quality of life of the population in modern conditions. Keywords: Carbon nanotubes
Sorption properties calculations
Alcohol-containing liquids


Quantum-chemical

JEL Code: O3 - innovation
Research and development change
Intellectual property rights


Technological

1 Introduction In today’s world, ethanol is widely used in many fields. However, despite the manufacturer’s statements about the high quality of their pure ethanol, it almost always contains impurities that change the organoleptic and toxic characteristics of the alcohol. The ethyl alcohol used in the food industry contains, for example, impurities of propyl alcohol isomers. Carbon-based systems, such as activated carbon (Krestinin 2007), are among the most commonly used means for purifying water-ethanol mixtures. However, modern filters used to free water-ethanol mixtures from impurities of so-called dry oils, which include isopropyl alcohols, do not solve the task of complete and effective © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 297–306, 2021. https://doi.org/10.1007/978-3-030-59126-7_33

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purification. Therefore, the search for new highly efficient and inexpensive methods and materials for cleaning alcohol-containing liquids remains relevant. One of the most well-known and modern materials today is carbon nanomaterials carbon nanotubes, whose sorbic properties and activity are many times higher than the efficiency of coal adsorbents, as proved experimentally (Grazhulene 2010). Russian Federation Patent No. 2359918 (Usanov 2009) discloses a method of purifying waterethanol mixtures from isopropyl alcohol by passing the mixture through an adsorbent of heat activated carbon nanotubes at 120–150 °C. However, no detailed study of the mechanisms of this cleaning process has been provided. All this determines the relevance of the presented scientific study of the mechanisms of purification of waterethanol mixtures from undesirable impurities using carbon nanotubes, which are the main filler of the filter through which the liquid passes. It should be noted that the presented innovative study is rightly related to “smart technologies,” as the selectivity of the purification process of alcohol-containing liquid has been proved, as a result of which the main component of the water-ethanol mixture - ethyl alcohol - is not sorbed by nanotubes, and impurities are filtered off (Zaporotskova 2012).

2 Methods Semi-empirical methods (Sigal 1980) include a number of parameters obtained experimentally for some known systems, e.g. from spectroscopy data. The main design time in solving problems of determining the structure or properties of the studied system by semi-intermediate methods is spent on calculation of integrals of interelectron interaction. The number of such integrals increases exponentially as the size of the system increases, which leads to an increase in the calculation time. This difficulty is overcome by replacing some integrals with constant values taken from the experiment. The development of semi-empirical methods occurred between 1950 and 1990 (Pople 1970, Stewart 1989). The development of semi-empirical methods leads to the method proposed by Dewar (1977a), the essence of which is to neglect the diatomic overlap. It was named the MNDO Method (Dewar 1977b). In 1989, J. Stewart improved the parameterization method by using compounds with reliably measured experimental properties, and the method was called PM3. The matrix elements of the Hamiltonian in the MNDO approximation are:

ð1Þ

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1XX Pmr
hlmjkri; 2 m r

299

ðAÞ ðBÞ

FAB lk ¼ blk 

ð2Þ

where l, l′, m, m′ – Atomic orbitals (AO) on atom A; k, r – AO on atom B, differs from atom A; ZB – charge of the core of atom B; dlm – Kronecker delta; sB – AO s-type on atom B; Plm –density matrix: X Plm ¼ ni
Cli
Cvi ; ð3Þ i

ni – settlement of the i-th molecular occupied orbital. Ull Is equal to sum of kinetic energy of electron on l- Atomic orbital of atom A and potential energy of attraction to the core of atom A and is selected based on atomic spectroscopy data. blk - Single-electron two-center resonance integral: blk ¼

 1  ðAÞ ðBÞ bl þ bk
SAB lk ; 2

ð4Þ ðBÞ

Slk – Overlap integrals between AO atoms A and B, bðAÞ and bk – one-center l parameters. Among integrals and only Kulonic and exchange integrals are not zero and , but –these are two-center electronic repulsion integrals: ZZ 1 \lmjkr [ ¼ vl ð1Þvm ð1Þ vk ð2Þvr ð2Þdr1 dr2 ; ð5Þ r12 (r1 and r2 – set of spatial coordinates of the first and second electrons). More stringent methods for calculating the electron-energy structure and various parameters (geometric and physicochemical) are non-empyric methods, or ab initio methods (Pople 1970), which take into account electron correlation. At the end of the 20th century, density functionality theory (DFT) was created (Kohn 1965, Beckstedte 1997, Perdew 1981, Becke 1988, Perdew 1986, Fuchs 1999), which made it possible to simplify ab initio calculation approaches. It reduced the calculations to considering and accounting only for external valence electrons. The electrons of the inner shells of the atomic core are replaced by a common potential. This approximation made it possible to reduce the calculation time when using non-emotional methods. However, there are no disadvantages associated with the impossibility of a general approach to the selection of functionality and basis, as different combinations of them can lead to results other than experimental ones. Therefore, it is necessary to find coordination of theoretical and experimental results and parameters for known compounds, which are also included in the studied complexes.

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3 Results In order to study sorption activity of carbon nanotubes to isomers of propanol, simulation of process of interaction of alcohol molecules with surface of nanotubes of type (6, 6) with high curvature is performed. This could lead to greater sorption efficiency of large organic molecules by single-center normal interaction (Zaporotskova 2004, Zaporotskova 2005). The most common propanol and isopropanol are selected from a number of heavy alcohols. Interaction with CNT can occur using some active centers in the structure of molecules with radical formula R-OH. Because of the weak coupling of the H atom to the O atom, molecules can easily dissociate across it. This explains the choice as one of the active centers of the alcohol molecule of the oxygen atom of the hydroxyl group, and the remaining centers - radical hydrogen atoms. We will further denote the center - oxygen atom - with the number 1, and the centers - hydrogen atoms - with the numbers 2 and 3. The mechanism of interaction of propanol and isopropanol molecules with singlewalled CNT is studied by modeling step-by-step approach of alcohol molecule to carbon atom located in the center of molecular cluster of nanotubes (Fig. 1). This allowed to construct energy curves of adsorption process (Fig. 2, 3). The presence of physical adsorption is established, which is realized when selecting both sorption centers of molecules. The adsorption distances and energies of the processes discussed are shown in Table 1. Analysis of these parameters showed that normal propanol center 1 (Ead = −2.62 eV) and isopropanol center 3 (Ead = −3.51 eV) were the most preferred in terms of sorption activity.

Fig. 1. Models of interacting nanotubes (8, 8) and molecules of normal propanol using: a) center 1, b) center 2.

The adsorbed molecule causes deformation of the surface of the nanotube, in which the cylindrical shape of its surface is disturbed, namely, the length of the CNT bonds in the sorption region is increased by about 5%. The results of the theoretical calculations, which proved the sorption activity of the carbon nanotube with respect to heavy alcohols, were tested by performing the following experiment: the alcohol-containing liquid passed through a filter with carbon nanotubes, after which its composition was examined and compared with the

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Fig. 2. Energy curves of interaction of normal propanol with UNT using: a) active center 1, b) active center 2, c) active center 3.

Fig. 3. Energy curves of isopropanol interaction with UNT using: a) active center 1, b) active center 2, c) active center 3 (DFT). Table 1. Some parameters of adsorption of normal propanol and isopropanol on the outer surface of CNT: rad - adsorption distance; Ead is adsorption energy. Variants

Ead, eV raд, Ǻ (MNDO) (MNDO) (DFT) Propanol, center 1 3,4 −2,62 2,8 Propanol, center 2 3,5 −1,71 2,6 Propanol, center 3 – – 2,3 Isopropanol, center 1 3,2 −1,56 −0,82 Isopropanol, center 2 3,1 −1,58 −0,53 Isopropanol, center 3 3,2 −2,51 −0,20 rad,

Ǻ

Ead, eV (DFT) −0,89 −0,38 −0,26 2,4 3,0 3,2

composition before filtration. Carbon nanotubes used as filter filler were synthesized by catalytic pyrolysis. The flow chart of such a process for obtaining the NT is shown in Fig. 4.

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Fig. 4. Diagram of the installation of synthesis of carbon nanotubes by chemical deposition method on the catalyst.

Next, an alcohol-containing liquid, an aqueous solution of ethanol, propanol, butanol and isomers thereof, was created. This solution was investigated before and after passing through a filter consisting of carbon nanotubes. Prior to use, the nanotubes were exposed to ultrasound in an ultrasonic stirrer to ensure uniform dispersion of the nanotubes mixture and break down the resulting CNT conglomerate formed by their high surface activity. This procedure increases the sorption efficiency of carbon nanotubes. The alcohol-containing liquid was passed through a filtering system, which is a polymer cylinder, bounded on both sides by a porous glass with a pore size of 40 lm, between which there were carbon nanotubes (Fig. 5). When passing through the filter, 0.001 g of carbon nanotubes were used to filter 50 ml of alcohol-containing solution.

Fig. 5. Carbon nanotubes filter.

By titrimetry, the alkalinity of the alcohol-containing solution before and after passing through the filter was determined. 100 ml of the test liquid was titrated with 0.1 N hydrochloric acid in the presence of two drops of the indicator (methyl red) before the color was changed from yellow to pink. Filtration was determined to reduce the cleavage index by 98% (2.45 ml) (Table 2). Table 2. Results of titration of alcohol-containing liquid before and after filtration through CNT layer. Before After Volume of HCl solution used for titration, ml 2,5 0,05

The alcohol-containing liquid was then analyzed by molecular spectroscopy on a Fourier IR spectrometer FSM 1202. Examination of the solution spectra before and

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Skipping, %

after passing through the filter, the layout of which is shown in Fig. 6, revealed that the absorption bands 1273, 1328, 1455, 2981 cm−1 disappear after filtration in the solution spectrum. This indicates that there are no deformation oscillations of the CH3, CH2, valence oscillations of the CH group present in the propanol structure. The intensity of the strips in the range of 2900–2980 cm−1 decreases, indicating a decrease for alcohols in the solution. The absorption band is widened in the area of 3600–3200 cm−1, which indicates the presence of polyassociates in the alcohol-containing solution, the amount of which increases as the amount of heavy alcohols decreases.

Wave number, sm-1 Fig. 6. IR spectra of alcohol-containing liquid before interaction with CNT in filter (red spectrum) and after (violet spectrum).

The next experimental study was an analysis of an alcohol-containing liquid before and after passing the filter using a high performance Stayer liquid chromatograph (Fig. 7). It has been found that in the solution after filtration the content of higher alcohols decreases: thus, on the chromatogram there is no peak corresponding to the impurity of isopropyl alcohol (Fig. 7, b).

Fig. 7. Alcohol-containing liquid chromatograms obtained by HQLC: a) prior to filtration through carbon nanotubes; B) after filtration through carbon nanotubes.

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Further, the alcohol-containing mixture was analyzed before and after filtration by gas chromatography using the CRYSTAL 4000 M chromatograph. The chromatograms obtained are shown in Fig. 8. It is clearly seen that after reacting with carbon nanotubes in the filtration process, the aldehyde peaks that exit to ethyl alcohol have disappeared. This confirms the high efficiency of cleaning the alcohol-containing liquid from heavy alcohols because of their precipitation on the surface of the CNT during filtration.

Fig. 8. Chromatograms of alcohol-containing liquid obtained by gas chromatography before filtration through carbon nanotubes (blue line) and after filtration (red line).

Experimental studies have proved that after interaction with CNT in alcoholcontaining liquid, the amount of heavy alcohols is significantly reduced. This shows the high sorption activity of nanotubes with respect to alcohols. These results can be used in predicting the development of sensory devices sensitive to the presence of organic molecules in liquid and gas media.

4 Conclusion Because of the theoretical studies performed, interaction between molecules of alcohols and UNT of small diameter was found. Adsorption takes place by a single-center interaction mechanism. Theoretical studies have been confirmed by experiments to purify alcohol-containing liquids made by filtration through a layer of carbon nanotubes. Purification of propanol and isopropanol from impurities was confirmed by chromatographic and spectroscopic analysis. Due to the sorption mechanism, carbon nanotubes can also be used to purify drinking water from organic impurities, which is extremely important for improving the quality of life of the population in modern conditions. Acknowledgements. The reported research was funded by Russian Foundation for Basic Research and the government of Volgograd region, grant No. 19-43-340005 r_a. The reported research was funded by Russian President’s grant No.798.2019.1. The reported research was funded by Russian President’s grant No. MK-1758.2020.8.

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References Boroznina, N.P., Zaporotskova, I.V., Dobrinin, A.Y., Serova, M.V., Ermakova, T.A., Davletova, O.A.: Use of carbon nanomaterials for drinking water purification. In: The Book “At the Junction of Sciences,” a Physical and Chemical Series, pp. 94–95 (2015) Boroznina, N.P., Zaporotskova, I.V., Dobrinin, A.Y., Serova, M.V., Ermakova, T.A., Davletova, O.A.: Study of sorption interaction of carbon nanomaterials with drinking water impurities. In: 10 Mendeleevsky Congress on General and Applied Chemistry. Thesymes of the Reports in 5 volumes. Ural Merging of RAS, p. 269 (2016) Boroznina, N.P., Zaporotskova, I.V.: Nanotechnologies and nanoengineering: current state and development prospects. Training Manual for Students in Nanoengineering Training, Volgograd, Izdatelstvo VolGU (2016) Krestinin, A.V.: Problems and prospects of development of the industry of carbon nanotubes in Russia. Russian Nanotechnologies 2(5), 18–23 (2007) Grajulene, S.S., Redkin, A.N., Telegin, G.F., Bajenov, A.V., Fursova, T.N.: Sorption properties of carbon nanotubes depending on temperature of their synthesis and subsequent treatment. J. Anal. Chem. 65(7), 699–703 (2010) Zaporotskova, I.V., Polikarpova (Boroznina), N.P., Ermakova, T.A., Polikarpov, D.I.: Carbon nanotubes as a new material for the purification of alcohol-containing liquids. Nanosci. Nanotechnol. Lett. 4(11), 1044–1049 (2012) Usanov, D.A., Suchkov, S.G., Zaporotskova, I.V., Skripal, A.V., Kuzmina, R.I., Panina, T.G.: Method of purifying water-ethanol mixtures from isopropyl alcohol. Patent for an invention No. 2359918 (2009) Sigal, G.: Semi-pragmatic methods of calculating the electronic structure 1, 2 (1980). M. Miry Pople, J.A., Beveridge, D.L.: Approximate Molecular Orbital Theory. McGraw-Hill Book Company, New York (1970) Stewart, J.J.P.: Optimization of parameters for semiempirical methods, I. Method. J. Comput. Chem. 10(2), 209–220 (1989) Dewar, M.J.S., Thiel, W.: Ground states of molecules. The MNDO method. Aproximations Parameters. J. Amer. Chem. Soc. 99, 4899–4906 (1977) Dewar, M.J.S., Thiel, W.: A semiempirical model for the two-center repulsion integrals in the NDDO approximation. Theoret. Chem. Acta. 46, 89–104 (1977) Kohn, W., Sham, J.L.: Self-consistent equations including exchange and correlation effects. Phys. Rev. 140, A1133–A1138 (1965) Beckstedte, M., Kley, A., Neugebauer, J., Scheffler, M., Beckstedte, M.: Density functional theory calculations for poly-atomic systems: electronic structure, static and elastic properties and ab initio molecular dynamics. Comp. Phys. Commun. 107, 187–205 (1997) Perdew, J.P., Zunger, A.: Self-interaction correction to density functional approximation for many-electron systems. Phys. Rev. B 23, 5048–5079 (1981) Becke, A.D.: Density-functional exchange-energy approximation with correct asymptotic behavior. Phys. Rev. A. 38, 3098 –3100 (1988) Perdew, J.P.: Erratum: density-functional approximation for the correlation energy of the inhomogeneous electron gas. Phys. Rev. B. 34, 7406–7406 (1986) Fuchs, M., Scheffler, M.: Ab initio pseoudopotentials for electronic structure calculations of polyatomic systems using density-functional theory. Comput. Phys. Commun. 119, pp. 67–98

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Boroznina, N.P., Boroznin, S.V., Boroznina, E.V., Zaporotskova, I.V.: Promising technologies, equipment and analytical systems for materials science and nanomaterials. In: Proceedings of the XI International Scientific Conference? Russia, Kursk, pp. 277–279 (2014) Polikarpova (Boroznina), N.P., Boroznin, S.V., Boroznina, E.V., Zaporotskova, I.V.: Boroncarbon Nanotube Modification Using Alkaline Metal Atoms. J. Nano- Electron. Phys. 6(3), 03006-1–03006-2 (2014)

System of Ornithological Protection of Airfields Alexander F. Vasilyev(&) , Igor V. Neginsky , Alexander G. Protopopov , and Andrey L. Yakimets Volgograd State University, Volgograd, Russia [email protected], [email protected], [email protected], [email protected]

Abstract. Purpose: The problem of uncontrolled intervention of birds and animals in the operation of various devices, mechanisms or technological processes, as well as protection of personnel from dangerous animals is currently acute. Such intervention can lead to disruption of organizations or industrial enterprises in various sectors of the economy, such as energy enterprises, resulting in serious losses. The results of uncontrolled exposure to animals and birds are not limited to economic damage, in the field of transport this can lead to tragic consequences, in particular, it should be noted that aviation accidents involving birds often lead to irreparable consequences, loss of life. Design/Methodology/Approach: For air safety, there are flight safety ornithological structures (OSS) using different methods of protection with their advantages and disadvantages. The methods used have a significant disadvantage, which is that when they are used for a long time, efficiency is reduced. Findings: At the same time, using a combination of several technologies, it is possible to significantly increase the safety of industrial facilities. Originality/Value: This publication addresses the issue of creating a combined technology to provide protection against uncontrolled interference in technological processes by animals and birds. The structure of the device and its structure are described. Keywords: Protection JEL code:: O14


Airfield
Aircraft
Sound
System


O32
O44
Q51
Q55
Q57
R41

1 Introduction At present, the task of protecting production facilities from natural biological factors is relevant. Problems of uncontrolled interference of animals and birds in various technological processes are evident both in the sphere of production (for example, penetration of bears and wolves on the territory of oil and gas production facilities (Interfax 2018), in aviation - birds ingress into engines and aircraft structures (Kochegarov 2018), and in the sphere of energy (failures in the operation of power lines in case of short circuits from bird death (RosEnergy Resource 2017). According to official statistics, the number of aviation accidents involving feathers has increased significantly in recent years (Industry Group of Aviation Ornithology 2018). One of the tasks of ornithological ensuring the safety of OBP flights is the © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 307–314, 2021. https://doi.org/10.1007/978-3-030-59126-7_34

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organization of a system of scaring animals and birds in the territories of airports. Several basic methods of such protection can be identified: • • • • •

Live predator birds (Safonov 2017); Visual repellers (dynamic or static murals of predator birds) (Fyodorov 2018); Propane gun (Propane bird repellers 2019); Laser repellers (Bird Control Group 2019); Bioacoustic repellers (Sheremetyevo International Airport Public Relations Center 2010);

The main producers of electronic devices for protection of runways of airfields (runway) are the American Bird Gard (Bird Gard Super Pro Amp 2019) and a number of the Russian producers (Scaring away of birds a bioacoustic method 2019), (Dome Biot 2019). However, the positive dynamics in the statistics of aviation accidents with birds shows insufficient efficiency of the proposed methods (Federal Air Transport Agency 2018). Structure of Ornithological Protection System Module Analysis of tasks applied to equipment of this class allows to form the following requirements for equipment: • Equipment signals shall not interfere with radio electronic equipment of airfields (primarily radio beacons); • It is necessary to repel by various methods of non-lethal character; • Scaring methods should be alternated at a large interval to eliminate the addictive effect of feathers; • The sounds of known bird hazards should be chosen adaptively, taking into account the species of birds inhabited in a particular area; • The equipment should produce various sounds physically uncomfortable for the hearing aid of birds and animals; • Possibility of remote suspension of system operation shall be provided for carrying out frequent technological works on runway; • The unit must have a stand-alone power supply system; • Mechanical design of the device should have good aerodynamic properties. The question of the types of signals used to deter animals and birds remains ambiguous. The similarity of bird and human auditory systems suggests that both nearfrequency beat signals and ultrasound on birds should have an oppressive effect. However, the use of ultrasound 15–30 kHz in the open area is not feasible given the strong attenuation of signals of this range in the atmosphere - on the order of 1 Db/m (Kolilnikov 1960). The use of sound oscillations of the audio range (0.3–6 kHz) allows both the use of commercially developed amplifiers and speakers of considerable power (more than 100 watts), which significantly reduces the cost of the system and improves its repairability. Disadvantages in this range include the potential discomfort of people in range of the system. However, this factor is offset by the ban on the presence of random people on the runway and the possibility of remote suspension of the system.

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Redundant Off-line Power Supply

Source Source of of aa sound sound 11 (monoharmonious (monoharmonious signal signal of of f1) f1)

Аудио 1

Power Power amplifier amplifier (Channel (Channel 1) 1)

Source Source of of aa sound sound 22 (monoharmonious signal of f2)

Ruporny loudspeaker (Channel 1)

Аудио 2

Operated audio switchboard converter

Source of a sound 3 (sounds of birds of prey)

Source of a sound 4 (Online broadcast of the operator audio signal)

r1

Аудио 3

Power amplifier (Channel 2)

Аудио 4

Ruporny loudspeaker (Channel 2)

r2

P

teams managements

online speech

System System remote remote control control operator operator

Fig. 1. Structural diagram of ornithological protection module.

Structural diagram of implementation of similar equipment can be in the form of Fig. 1. It is assumed that it is possible to create high-power audio signals on the protected area of the object (not less than 50 dB): • Beating of two monogarmonic signals in the range of 300 Hz–6 kHz; • Hazard sounds for birds living in the area; • Voices of the system operator. Sound signals from two horn loudspeakers with close frequencies are propagated in atmosphere and interference oscillations A1 sin(2pf1 t k1 r1 ) + A2 sin(2pf2 t k2 r2 ) are formed in point P, where f1, f2 are frequencies of sound oscillations, k1, k2 are wave numbers, r1, r2 are distances from horn loudspeakers to observation point. When using close frequencies (f, f + 2D) in a point of observation will form fluctuations with f frequency from D which is bending around, slowly changing with a frequency. In addition to the oppressive sounds of beats with different frequencies it is possible to reproduce the sounds of danger - it is both audio recordings of screams of predatory birds, and screams of danger of various feathers. For this purpose the equipment includes a source of reproduction of arbitrary audio recordings (Sound source 3). It is obvious that the use of these acoustic messages is not feasible during the process work on the runway. Therefore, by the command of the system operator from the control and dispatching station of the airfield KDP, the system operation should be able to be suspended. Application of acoustic systems with playback range of 0.3– 6 kHz complete with wide channel of telemetry information exchange inside the system additionally allows to use this system for online translation of operator ‘s speech by output loudspeakers in case of emergency situation on runway.

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Fig. 2. Structural arrangement of ornithological protection system modules.

Various wireless communication channels are used for emergency control of the system, telemetry collection and freelance broadcasting of voice information of the system operator (Sound source 4). For example, GSM communication channels may be used. They can transmit control commands, module timing signals in the system, and voice information. In order to create the required effect, it is necessary to correctly position the autonomous ornithological protection modules (Fig. 2). In order to ensure effective bird scaring, it is necessary to ensure that special audio signals are simultaneously generated on different modules, creating a “three-dimensional” discomfort effective sound front. Design of Ornithological Protection System Module The hardware of this system is shown in Fig. 3. To play back arbitrary “alarm” messages, a MP3 player controller is used which, at the command of the control controller, reads the SD card and plays the audio file. The signal output from the player MP3 unit (Audio) is supplied to the input of the multi-channel Switch.

Fig. 3. Structural control boards of the CCD system module.

Fig. 4. Electrical schematic diagram of the control board of the CCU module.

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A DDS synthesizer can be used to obtain monogarmonic signals of a given frequency (with accuracy better than 1 Hz). The use of arbitrary frequencies from the range of 300 Hz–6 kHz allows both to form and hold with high accuracy the constant frequency of beat signals from several generators, and to reduce the probability of addictive effect in birds. Signals from DDS synthesizers (f1 and f2) are connected to two inputs of the Switch. The fourth input of the switch is connected to the audio output of the GSM module, which performs remote control of the system and translation of the operator ‘s speech. The switch is a 4-in-1, low-resistance, dual-channel, dual-polar analog switch. It connects the following by commands of the control controller: • To two output lines Out1 and Out2 the same signal from the In1 - Audio input; • Signals from DDS synthesizers f1 and f2 - from In1 input to Out1 line and from In2 input to Out2 output; • To two output lines Out1 and Out2 the same signal from input In4 - Voice. The generated audio streams are supplied to respective power amplifiers with a 150 W galvanic isolation and further to horn speakers. Schematic diagram of the device is given in Fig. 4. The player unit MP3 is based on the GPD2856A chip, from which the DACOL and DACOR signals are processed and the result is fed to the Audio line. The ADC input is used to control the player, which receives the voltage output from the control controller’s DAC, which determines the command code. Two identical DDS synthesizer modules based on the AD9831 chip are used to generate monogarmonic signals. Signals from current outputs of IOUT with connected load resistance 300 Ohm after filtration with cut-off frequency 25 kHz are supplied to lines f1 and f2. Synthesizers are controlled via parallel interface. The control microcontroller hardware UART interface is used to communicate with GSM module SIM900R. The signals from the SPK_P and SPK_N outputs are processed and the result is sent to the Voice line at the Switch input. A 74HC_HCT4052 chip is used to switch the audio sources in the Switch unit. The chip comprises two independent switching channels with common address control lines. Each channel is used as multiplexer 4 in 1, i.e. tension from one of four entrances of Y0–Y3 is switched to output line Z. In this scheme of inclusion on line 1Y0 and 2Y0 output signals of synthesizers of DDS, on entrances 1Y1 and 2Y1 Audio signal from a MP3 player, on entrances 1Y2 and 2Y2 - a signal the Voice from the GSM module are connected. The 1Y3 and 2Y3 inputs are clogged and used to turn on the “silence mode” - zero voltages are generated at the switch output. To select the signal source, commands from the control controller are sent to the S0 and S1 lines. The system control program is recorded in the RMP of the control controller ATmega 164. Based on the functional purpose of the system, the time diagram of the equipment states should be as follows (Fig. 5). The entire system state cyclogram is divided into intervals of 10 min. The main time of 8 min the system should be in “silence mode” when there is no audible signal at the output of the horn speakers. At the same time the main elements of the system are in low power consumption mode, and the power supply system - in battery charging mode.

System of Ornithological Protection of Airfields silence 8 min.

sound 1 2 min. DDS 1,0 + 1,126 кГц

silence

sound 2

silence

sound 3

silence

sound 4

silence

8 min.

2 min. MP3 player message 1

8 min.

2 min. DDS 4 + 4,126 кГц

8 min.

2 min. MP3 player message 2

8 min.

313

t

Fig. 5. Timing diagram of the operation modes of the CCF module.

At the end of the 8-min interval, the system exits the power-saving mode and plays audio information for 2 min. The type of message changes - various danger sounds (sound from the audio player) and sound beats (two-frequency generation) are alternated. Both player MP3 and generator frequencies vary. The use of audio messages recorded on the SD card (about 120 files) and generators with arbitrary frequencies in the range of 300 Hz to 6 kHz allow even in continuous mode to achieve a repetition interval of more than a day. Alternations with a long period of repetition of records of screams of predatory birds, signals of dangers for different groups of feathered and uncomfortable sounds of beats allow to significantly reduce the probability of addiction. It is also possible to account for the uneven activity of birds during the day. As the conducted studies show, the probability of accidents with birds at night is very small (Avdyushina and Zvyagintseva 2014). This allows to reduce the frequency of system start-up at night (interval 15–20 min) or to suspend the repellency altogether. This is especially true when airports are located in the area of settlements. It is also possible to take into account the distribution of frequency of emergency situations with feathers depending on the time of year - in winter the frequency of bird appearance on the runway is much less. For this purpose, the control controller has the possibility to select several “activation scenarios” - uniform, daily and seasonal. At the operator’s command, the system can exit the “silence” mode asynchronous and broadcast voice information from the operator to the runway. In order to implement this mode, in the case of GSM channel use, the controller, polling the GSM module, receives information about the number of the incoming call, checks its belonging to the authorized numbers and, in case of number matching, waits for the DTMF code of the command. The following commands are reserved in the system: • broadcasting inclusions; • Suspension of operation and resumption of operation mode; • “Activation scenario” changes. Installation of a 50–60 W stand-alone power supply module complete with a solar cell charge control module for charging a 55 Ah lead-acid (car) battery allows to use this module in a fully autonomous mode with a remote location (more than 500 m) of modules along the runway.

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2 Conclusion Thus, the developed software and hardware solution of bioacoustic repellent implements both known and adequately effective technologies of ornithological protection of industrial objects, and quite relevant in recent years developments in the sulphonic field.

References Interfax: Gazprom hired hunters to protect Sakhalin workers from bears (2018). https://www. interfax.ru/russia/613082 Kochegarov, P.: Winged taran. Why bird collisions with aircraft are on the rise (2018). https:// life.ru/t/paccлeдoвaния/1111058/krylatyi_taran_pochiemu_rastiet_chislo_stolknovienii_ ptits_s_samoliotami RosEnergoResource: How to protect birds from electricity, and power lines - from closure? (2017). https://rernsk.ru/articles/kak-zashitit-ptic-ot-elektrichestva-a-lep-ot-zamikaniya Industry Group of Aviation Ornithology: Level of collisions between russian armed forces and birds (2018). http://www.otpugivanie.narod.ru/bird-strike-rate.html Safonov, K.: With hawk Silva we have been five years: how aviation ornithologists work (2017). https://daily.afisha.ru/cities/6113-s-yastrebom-silvoy-my-uzhe-pyat-let-kak-rabotayutaviacionnye-ornitologi/ Fyodorov, A.: “How does the dynamic bird repeller” KRUK “protect against pests?” (2018). http://blog.sir-richard.ru/dinamicheskij-otpugivatel-kruk Propane otpugivatel of birds (2019). http://www.kurtbomsan.ru/?yclid=191731653416877896 Bird Control Group: Laser Repeller. For the airports. Aerolaser Helipad (2019). https:// birdcontrolgroup.com/automated-laser-bird-repellent/ Sheremetyevo International Airport Public Relations Center: Birds away from Sheremetyevo Airport! (2010). http://www.rbcu.ru/news/15366/ Bird Gard Super Pro Amp (2019). https://www.birdgard.com/bird-gard-super-pro-amp/ Repelling birds by bioacoustic method: Universal-Acoustic project (2019). http://www. otpugivanie.narod.ru/means-control/Universal-Acoustic.html Dome-Bio: Family of bioacoustic repellers - KwaZar LLC (2019). http://birdrepeller.ru/ oborudovanie/17-bioakusticheskie-otpugivateli/27-kupol-bio Federal Air Transport Agencies: Statistics of Collisions with Birds and Other Animals 2018 (2018). https://www.favt.ru/dejatelnost-bezopasnost-poletov-stolknoveniya-ptici-stat/ Kolilnikov, V.A.: Sound and Ultrasonic Waves. Publishing House of Physical and Mathematical Literature, Moscow (1960) Avdyushina, A.E., Zvyagintseva, A.V.: Analysis of statistics of aircraft collisions with birds for 2002-2012 and modern means of ensuring ornithological safety of flights, p. 9. Heliogeophysical Res., Release (2014)

Modeling Weighted Graphs with Given Parameters of the Minimum Route Between the Vertices Nikolay Gdanskiy1(&) 1

and Maria Belousova2

MIREA — Russian Technological University, Moscow, Russia [email protected] 2 State University of Management, Moscow, Russia [email protected]

Abstract. A number of typical problems that arise during the automatic generation of weighted graphs using conventional methods are considered. Based on their analysis, formal rules have been proposed that can eliminate these shortcomings in the process of constructing such graphs. A set of basic initial parameters of the simulated graph is proposed, which allow setting its structure at the initial stage. According to them, the calculation of the derived numerical parameters of the projected graph is first given, as well as the description of three additionally used auxiliary characteristic arrays. The algorithm for modeling a graph that satisfies given requirements is described in detail. The construction of its matrix of weights is divided into three successive stages: initialization of the full matrix of weights of the edges at the initial ordered definition of the vertices, modeling of the initial block of the matrix, modeling of the full matrix for the full set of vertices. After constructing the complete matrix of weights, the removal of part of the edges of the graph that have the maximum values of the weights is modeled, and the numbers of the vertices of the graph are rearranged. As a result, the final matrix of weights and other characteristics of the graph are finally formed. The proposed algorithm allows guaranteed modeling of meaningful random graphs for which not only the minimum cost of the path, but also the path itself is known for one pair of vertices at the construction stage. The shortest path generation incorporated in the algorithm eliminates the subsequent solution of this problem, which is especially important when modeling graphs with a large number of vertices. By controlling the input parameters, the algorithm allows you to significantly vary the properties of the resulting graph structures. Keywords: Vertices
Edges
Weighted graph
Weight matrix path
Minimum path cost
Modeling graph structures JEL Code: C8


Shortest


C6

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 315–326, 2021. https://doi.org/10.1007/978-3-030-59126-7_35

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1 Introduction Graphs, as one of the special data structures, are now widely used in modeling a wide variety of systems in transport, in engineering, economics, information technology, in particular, in the development and maintenance of Internet networks. Studying the basics of graph theory is an integral part of preparing future IT professionals. In modern educational literature (Kolobov et al. 2008; Gubko 2006; Orlov 2009) we can distinguish the following elements of the practical application of graph theory: – review and implementation of classical algorithms: – search in breadth and search in depth, search for shortest paths and maximum flows and the like; – solving typical tasks of a practical nature (about telecommunications, optimal allocation of resources, some logical tasks that can be solved using graphical interpretations); – search for connected components in graph models (for example, communication networks); – search for the maximum flow for the transport network, in which the sources, drains and bandwidths of the edges are determined; – coloring of graphs (vertex, edge and total coloring, coloring of a special kind, etc.). The listed applications can be attributed to typical or classical examples. Often, to understand their relevance in the educational process, there are not enough specific modern applications of these tasks. This would undoubtedly have a positive effect on the perception by future specialists of the role of graph theory methodology in solving the general problems of analysis and synthesis of structures in the field of information technology.

2 Methodology The research methodology is widely represented by Russian and foreign authors. The issues of constructing routes for weighted graphs were dealt with by Dijkstra E., Bellman – Ford L., Box – Müller G., Kulikova N., Karpov A. When modeling many systems, especially those operating in real time, it is often necessary to use such informative graph models, for which the minimum route between given vertices is already a priori known. Since the search for such a path in a graph with a complex structure requires a significant amount of computation, this approach is often the only possible one under severe time constraints.

3 Results At the initial stages of analysis and synthesis, many systems are often simplified in the form of a set of separate objects interconnected by some connections. The general properties of such structures are studied by graph theory. In it, the objects Vi (i = 1, …, n) are called vertices. The binary bonds Xij = {(Vi, Vj)} between them are called:

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1) edges - for undirected graphs in which the connections are symmetric or 2) arcs - for directed graphs in which these relations are ordered. If the edges (arcs) Xij of the graph G = (V, X) are assigned some numerical values dij (1  i, j  n), called the weights of the edges (arcs), then the graph is called weighted. In the absence of an edge, we put dij = 0. The set of all weights is defined by a matrix D of size n  n, and the entire weighted pseudograph is denoted as G = (V, X, D). The sequence of vertices and edges connecting them is called a route (path). The number of edges in a route is called its length. The sum of the weights of the edges in the route is called its value. The construction of optimal (minimum or maximum) value routes is one of the main tasks in the analysis of graph systems (Abraham et al. 2010; Abraham et al. 2011). For weighted graphs with non-negative edge weights, Dijkstra’s algorithm is most preferable (Dijkstra 1959). It is intended both to determine the length of the shortest distance from the selected initial vertex vs to all other vertices of the weighted graph G = (V, X, D), and to efficiently construct the shortest path from the initial vertex to the given final one. However, the Dijkstra algorithm cannot be used if the graph has edges of negative weight. The main problem they have is negative cycles in which the sum of the weights of the edges is negative. Such models are characteristic, in particular, for problems of an economic nature. To solve the problem in this case, the Bellman – Ford algorithm is usually recommended (Ford and Fulkerson 1962). However, in (Gdanskiy et al. 2018a, b) it was strictly proved that even the most profound modifications of the Bellman – Ford algorithm in the general case do not give an exact solution to the problem in the presence of edges of negative weight, but only an approximate one. The application of the branch and bound method for guaranteed obtaining the optimal solution on such graphs is given in (Gdanskiy et al. 2018a, b). A special class is represented by the task of generating graphs with given properties. One of the most common requirements is the presence in the graph between the given vertices of a sufficiently long path that has the minimum cost in the entire graph. Such problems arise in simulation models. Usually, the simplest algorithms for generating graphs use an independent or weakly coupled random determination: 1) the number of vertices n, 2) the number and location of the edges m, 3) the weights of the edges dij in the symmetric matrix D. In the random way to specify the parameters of the graph, either directly pseudorandom number generators are used uniformly distributed on the interval [0,1] [7], or according to them using the Box – Muller transformation (Box 1958) and the subsequent transition, normally distributed pseudorandom quantities with given distribution parameters are generated tions. Let us consider the shortcomings of such methods for generating weighted graphs, which appear during their further use, in particular, when constructing paths of minimum cost in them.

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1. The optimal path is usually too short and most of the vertices of the generated graph do not participate in it. 2. The length of the optimal path is significantly shorter than the lengths of the alternative paths, which makes its search too obvious. 3. The optimal path is not unique, which substantially complicates the practical use of such a graph in the modeling and subsequent evaluation of user actions or the analyzing algorithm. 4. In some cases, it is necessary to introduce prohibitions on the passage of part of the vertices in the graph. Conventional methods for constructing an optimal path do not allow for this requirement. These shortcomings significantly complicate the use of independent random assignment of graph characteristics in training or simulation systems or make it extremely inefficient. The simplest way out of this situation is to re-generate graphs. However, practice shows that to obtain sufficiently meaningful examples, even with the number of vertices of the order of 8–10, dozens of test constructions are required to be performed with the subsequent determination of the required shortest path. This worsens the time performance of programs, especially in those cases where they should work in real time. An analysis of the identified shortcomings of the standard methods of randomly generated weighted graphs shows that increasing the efficiency of this procedure for the needs of training and simulation systems requires the development of a special algorithm that would satisfy the following requirements. 1. The optimal path should be long enough in length, so that the task of finding it is quite meaningful. 2. The optimal path should be the only one. 3. There must be non-optimal paths with a length close enough to optimal—otherwise there is one trivial solution to the problem. 4. In the simulated graph, in the general case, part of the vertices must be closed for passage. As a rule, in real systems, one more thing is added to these requirements. 5. The total number of vertices in the graph should be set at several (lev) levels, most often at three, which are conventionally referred to as Low, Normal, Hight. For each level number nl (1  nl  lev), it is necessary to specify the segment [anl, bnl] for the possible values of the number n of vertices in the graph to be traversed. To fulfill conditions 1–5, it is proposed first to model a complete graph that satisfies it and contains all possible edges, and then remove some of the edges in it.

4 Calculation of Graph Parameters. Auxiliary Arrays For brevity, we denote by r(a, b) the random variable generated on the interval [anl, bnl] according to a given distribution law.

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It is proposed to accept the following as the main initial parameters of the simulated graph that allow sufficiently flexible control of its properties. 1. Level number - integer parameter nl (1  nl  lev), which sets the general scale of the graph. 2. The average fraction of the length of the minimum route of the total number of vertices allowed to go around is the real number d (0 < d< 1). 3. The average proportion of vertices forbidden for passage from the total number of vertices allowed for traversal dz (0  dz < 1). 4. The segment of the values [w0,w1] of the weights of the edges included in the optimal path, w0  1, w1 > w0. 5. The fraction of edges to be removed d (0.1  d  0.25). The start point of the path route is START, the end point is FINISH. The structural parameters of the graph, derived of nl, d, dz, d, are: 1) n is the number of vertices in the graph allowed for traversal, 2) p - the total number of vertices in the optimal path between the selected initial START and final FINISH vertices, 3) nz - the number of all vertices forbidden to traverse, 4) nv is the total number of all vertices in the graph (both working and forbidden), 5) the approximate number of edges to be removed. 4.1

Calculation of the Derived Numerical Parameters of the Designed Graph

They are proposed to be produced according to the following formulas. 1) n = [r (anl, bnl)]; 2–3) the dependences par (d) of integer parameters par on averaged shares d are proposed to be calculated as follows: If d > 0,5, then: par = [n(2d − 1) + r (0, 2n (1 − d))]; otherwise (at d  0,5): p = [r (0, 2n d)]; according to these formulas, the dependences p(d) and nz (dz)are calculated 4) nv = n + nz, 5) N = [d nv(nv−1)/2]. At the beginning of the construction, we set the following values: START = 0, FINISH = p. Moreover, the numbers of all vertices of the optimal traversal, respectively, increase from 0 to p. To construct the graph, the following three auxiliary characteristic arrays are additionally used: – M[0:p]is the weight of the edges in the optimal path, M[i] = d(i−1)i, – R1[0:p] - the minimum distance from the current vertex in the optimal path to the start of the traversal (vertices START),

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– Rp[0:p] - the minimum distance from the current vertex in the optimal path to the end of the tour (FINISH vertices). Consider the formation of auxiliary arrays. We will present the necessary actions on a C-like code [9]. 4.2

Modeling Auxiliary Arrays in the Optimal Way Along the Vertices with Numbers from 0 to p and Calculating Its Length LOP

The usual random filling with values that can take random values from a segment [w0, w1] is proposed. LOP = 0; M[0] = 0; R1[0] = 0; for (i = 1; i  p; i++){M[i] = r[w0,w1]; LOP += M[i]; R1[i] = R1[i−1] + M[i −1]; }; Rp[p] = 0; for(i = p−1; i >= 0;i –)Rp[i] = Rp[i + 1] − M[i];

5 Initialization of the Full Matrix D of Edge Weights. Modeling Its Initial Block of Size (p + 1)  (p + 1) for the Allowed Vertices Included in the Optimal Path 5.1

Initialization of the Full Matrix D of the Weights of the Edges at the Initial Ordered Specification of the Vertices

for(i = 0; i < nv; i++) for(j = 0; j < nv; j++) D[i][j] = 0 When specifying the weights of edges that are not included in the optimal bypass, two conditions must be satisfied: 1) the LOP length of the optimal path should not be reduced, 2) the length of the new received paths should not significantly exceed LOP. 5.2

Modeling the Initial Block of Size (p + 1)  (p + 1) of the Matrix D

6 Modeling a Complete Matrix D of Size nv  nv for a Complete Set of Vertices When specifying the weights of the edges connecting forbidden vertices to each other and with allowed ones, arbitrary weights can be used, taking into account the symmetry of D. The boundaries of the segment are slightly increased so that these edges are removed from the complete graph in the first place. 6.1

Addition of the Initial Rows of Submatrix D with Numbers 0 − (n − 1) (in Columns with Numbers n − (nv − 1))

for(i = 0; i < n; i++)for(j = n; j < nv; j++) D[i][j] = r(1.2w0, 1.2w1));

Modeling Weighted Graphs with Given Parameters of the Minimum Route

6.2

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Filling the Rows of Submatrix D with Numbers n − (nv − 1)

for(i = n; i < nv; i++){//iterating over lines from p to (n − 1) for(j = 0; j < n; j++) D[i][j] = D[j][i]; //elements in front of the main diagonal D[i] [i] = 0; //diagonal element for(j = i+1; j < nv; j++) D[i][j] = r(1.2w0, 1.2w1)); //calculation of the remaining elements}; Thus, as a result of the simulation, the matrix of weights of the weighted complete graph is obtained (for which all possible edges are drawn between the vertices), and the optimal bypass is formed by a sequence of vertices from 0 to (p − 1).

7 Calculation of the Permutation of the Vertices of the Graph. Formation of the Final Matrix of Weights and Final Characteristics of the Graph In the constructed graph model, the initial and final vertices are START = 0 and FINISH = (p − 1), and the optimal traversal is formed by ordered vertices with numbers from 0 to (p − 1). Since the optimal traversal should be hidden from the user or the algorithm processing the graph, then it is necessary to apply random permutation of vertices in it. For this, one can use, for example, the random permutation generation method based on the Fisher-Yates algorithm (Knut 2007). Denote the array specifying the resulting random permutation of the vertices of the graph by PER [nv]. After calculating the permutation, you can determine the results of the algorithm. An Example of Modeling a Weighted Graph with Predefined Minimum Route Parameters Let’s consider, for example, modeling a weighted graph with integer edge weights, for the sizes of which there are three levels Low, Normal, Hight (nl = 1, 2, 3). The segments for choosing the possible values of the numbers n of vertices in the graph that are allowed for traversal at given levels are of the form: [4,6], [7,10], [11,15]. The following initial graph parameters are specified: 1. Level number nl = 2. 2. The average fraction of the length of the minimum route of the total number of vertices allowed to go around is a real number d = 0.7. 3. The average proportion of vertices forbidden for passage from the total number of vertices allowed for traversing dz = 0.4. 4. A segment of the weights of the edges included in the optimal path [w0, w1] = [1,15]. 5. The proportion of deleted edges d = 0.2.

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Calculation of the Derived Numerical Parameters of the Designed Graph

1) n = r [7,10] = [8.3] = 8; 2) as d = 0,7 > 0.5, то p = [n(2d − 1) + r (0, 2n (1 − d))] = [8 (0,4) + r (0, 4,8)] = [3.2 + 2.2] = 5; 3) as dz = 0,4  0,5, то nz = [n dz + r (0, 2n dz)] = [r (0, 6.4)] = [2.7] = 2; 4) nv= n + nz = 8 + 2 = 10. 7.2

Modeling Auxiliary Arrays in the Optimal Way Along the Vertices with Numbers from 0 to p and Calculating Its Length LOP

Random transfer of values from the segment [w0, w1] = [1.15] to elements 1–5 of the array M: M[0] = 0; M[1] = 9; M[2] = 2; M[3] = 5; M[4] = 12; M[5] = 14; And LOP = 42; R1[0] = 0; R1[1] = 9; R1[2] = 11; R1[3] = 16; R1[4] = 28; R1[5] = 42; Rp[0] = 42; Rp[1] = 33; Rp[2] = 31; Rp[3] = 26; Rp[4] = 14; Rp[5] = 0. 7.3

Initialization of the Full Matrix D of Edge Weights

Matrix D of size 10  10 is filled with the 0 values. 7.4

Modeling the Initial Block Size 6  6 Matrix D

On the main diagonal D, the values remain 0. The elements of the main diagonal of the upper and lower triangular matrices are sent the elements of the array M with numbers from 1 to 5. The values calculated by the formula are sent symmetrically to all the others D[i][j] = LOP – R1[i] − Rp[j] + r[1, 0.2 ∙ (w0 + w1)]. D[0][2] = D[2][0] = 42 – 0 − 31 + [r(1, 3.2)] = 11 + [1,7] = 12, D[0][3] = D[3][0] = 42 – 0 − 26 + [r(1, 3.2)] = 16 + [3,1] = 19, D[0][4] = D[4][0] = 42 – 0 − 14 + [r(1, 3.2)] = 28 + [1,2] = 29, D[0][5] = D[5][0] = 42 – 0 − 0 + [r(1, 3.2)] = 42 + [2,5] = 44, D[1][3] = D[3][1] = 42 – 9 − 26 + [r(1, 3.2)] = 7 + [1,6] = 8, D[1][4] = D[4][1] = 42 – 9 − 14 + [r(1, 3.2)] = 19 + [3,0] = 22, D[1][5] = D[5][1] = 42 – 9 − 0 + [r(1, 3.2)] = 33 + [1,1] = 34, D[2][4] = D[4][2] = 42 – 11 − 14 + [r(1, 3.2)] = 17 + [2,3] = 19, D[2][5] = D[5][2] = 42 – 11 − 0 + [r(1, 3.2)] = 31 + [2,7] = 33, D[3][5] = D[5][3] = 42 – 16 − 0 + [r(1, 3.2)] = 16 + [1,8] = 17. The resulting matrix is given in Fig. 1. In the constructed subgraph, the minimum path from vertex 0 to vertex 5 of cost 42 passes through intermediate vertices 1, 2, 3, 4. At the same time, there are paths from 0 to 5 with costs close to 42, for example, path 0–5 worth 44, path 0–2–5 worth 12 + 33 = 45, etc. Then block 6  6 for vertices participating in the minimum path is supplemented to block 8  8 for all vertices allowed for passage.

Modeling Weighted Graphs with Given Parameters of the Minimum Route

Fig. 1. The resulting matrix

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Fig. 2. View of the matrix

8 Additional Determination of the Weights of all Edges in the Submatrix D of Size n  n Calculation example for j = 1: k = 6; D[1][6] = abs(9 – 3) = 6; X = abs(33−40) = 7; (7 > 6), cлeдoвaтeльнo, D [1][6] = 7; D[1][6] = D[6][1] + r(1, 3.2) = 7 + 2 = 9; k = 7; D[1][7] = abs(9 – 11) = 2; X = abs(33−33) = 0; D[1][7] = D[7][1] + r(1, 3.2) = 2 + 1 = 3; The remaining elements in the block are calculated in the same way. The matrix is shown in Fig. 2.

9 Modeling a Complete Matrix D of Size nv  nv for a Complete Set of Vertices A random symmetric random filling of the remaining off-diagonal matrix elements with random values from the interval [1.2w0, 1.2w1] = [1, 18] is performed.

10 Calculation of the Permutation of the Vertices of the Graph. Formation of the Final Matrix of Weights and Final Characteristics of the Graph Generating a random permutation from numbers 0–9 gave the following array of values: PER [10] = {5, 2, 6, 0, 9, 7, 1, 8, 4, 3}. Applying it, we obtain the following characteristics of the model: 1. Numbers of the first and last vertices of the constructed minimal path 2. START = PER [0] = 5; FINISH = PER [5] = 7. 3. The vector of numbers of vertices of the optimal path

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4. for(i = 0; i < p; i ++) OPT[i] = {5,2,6,0,9,7}. 5. An array of vertices forbidden to bypass: Z = {4,3}. 6. The final matrix of weights DF with rearranged vertices is given in Fig. 3.

Fig. 3. The resulting matrix of weights DF with rearranged vertices

The graph defined by this matrix is given in Fig. 4. Vertices that are not allowed to be traversed are highlighted in gray.

Fig. 4. Graph

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11 Conclusion Improving the quality of software applications should be based on the use of proven algorithms that satisfy all the necessary conditions. Typical shortcomings are considered in determining the minimum paths that arise in weighted graphs that are automatically generated using conventional methods. Based on their analysis, formal rules have been proposed that can eliminate these shortcomings in the process of constructing such graphs. The algorithm for generating weighted graphs is described, which allows you to practically implement these rules. It allows you to guarantee the construction of meaningful random graphs for which, after building for a given pair of vertices, not only the minimum path cost, but also the path itself is known. This frees up from solving this problem, which is especially important when generating graphs containing hundreds and thousands of vertices. By changing the input parameters of the problem, the proposed algorithm allows one to significantly vary the properties of the resulting graph structures. The complexity of the algorithm is linear in the number of edges in a complete graph containing nv vertices, and, accordingly, quadratic in the number nv. With the development and integration of Internet networks in various fields of activity of individuals and society, it is advisable to use the proposed algorithm for generating weighted graphs to analyze their impact on society. The application of this algorithm is also possible in the modeling of organization management processes.

References Ittai, A., Fiat, A., Goldberg, A.V.; Werneck, R.F.: Highway dimension, shortest paths, and provably efficient algorithms. In: ACM-SIAM Symposium on Discrete Algorithms, pp. 782– 793. Science, Moscow (2010) Ittai, A., Delling, D., Goldberg, A.V., Werneck, R.F.: A hub-based labeling algorithm for shortest paths on road networks. In: Symposium on Experimental Algorithms, pp. 230–241. Science, Moscow (2011) Dijkstra, E.W.: A note on two problems in connexion with graphs. Numer. Math. 1(1), 269–271 (1959) Ford, L.R., Fulkerson, D.R.: Flows in Networks. Princeton University Press, Princeton (1962) Gdańskiy, N.I., Karpov, A.V., Grigoreva, S.V., Dmitrieva, T.V.: Modification of the BellmanFord method for searching minimal acyclic paths in graphs containing edges of negative weight. IJPAM-AP – Int. J. Pure Appl. Math. 119, 3815–3819 (2018a) Gdanskiy, N.I., Kulikova, N.L., Chumakova, E.V.: Tochnoe reshenie zadachi poiska minimal’nogo aciklicheskogo puti vo vzveshennyh grafah, soderzhashhih rebra otricatel’nogo vesa” [Exact solution to the problem of finding the minimum acyclic path in weighted graphs containing edges of negative weight]. Programmirovanie i programmnye sistemy 2(1), 34–49 (2018b) StatMath: Pseudo-Random Number Generator (2020). http://statmath.wu.ac.at/prng. Accessed 8 Feb 2020 Box, G.E.P.: A note on the generation of random normal deviates. Ann. Math. Stat. 2(1), 610– 611 (1958)

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McConnell, J.: Foundations of Modern Algorithms. Technosphere, Moscow (2004) Sedgewick, R., Wayne, K.: Algorithms, 4th edn. Addison-Wesley Professional, New York (2011) Kormen, T.H., Lejzerson, Ch.I., Rivest, R.L., Shtajn, K.: “Algoritmy: postroenie i analiz” [Algorithms: construction and analysis], Introduction to Algorithms, 3rd edn. «Vil’jams», Moscow(2013) Knut, D.J.: Iskusstvo programmirovanija. Poluchislennye metody [The art of programming. Received Methods], 3-e izd. tom 2. «Vil’jams», Moscow (2007) Kolobov, A.A., Omel’chenko, I.N., Orlov, A.I.: Menedzhment vysokih tehnologij. Integrirovannye proizvodstvenno-korporativnye struktury: organizacija, jekonomika, upravlenie, proektirovanie, jeffektivnost’, ustojchivost’ [High tech management. Integrated production and corporate structures: organization, economics, management, design, efficiency, sustainability], Jekzamen, Moscow (2008) Gubko, M.V.: Matematicheskie modeli optimizacii ierarhicheskih struktur [Mathematical models for optimizing hierarchical structures]. LENAND, Moscow (2006) Orlov, A.I.: “Organizacionno-jekonomicheskie metody i modeli i ih primenenie v sociologicheskih issledovanijah” [Organizational and economic methods and models and their application in sociological research], Matematicheskoe modelirovanie social’nyh processov, vol. 10, pp. 248–263. KDU, Moscow (2009)

Overview of Foreign and Domestic Experience in the Formation and Development of the Waste Management Industry Yana S. Ignatova(&)

, Viktor S. Gorin

, and Galina V. Mohova

The State University of Management, Moscow, Russian Federation [email protected], [email protected], [email protected]

Abstract. The article presents industry statistics on waste management provides an analysis of the formation and development of the waste management system in Europe, including the example of Germany. The issues of legal regulation of the waste management industry in the Russian Federation are affected. Aspects of creating a market for regional operators in Russia are also highlighted. The results of the first steps of implementing the reform of the waste management industry in the country are presented in this article. The purpose of the study is: rationale of the need for separate collection of waste, its sorting, further secondary processing, incineration of residues and reduction of landfills in order to improve environmental safety and preserve natural resources. Keywords: Waste management
Waste management system
Separate collection of waste
Waste sorting
Waste transportation
Waste recycling Waste reform JEL Code: Q53





R40

1 Introduction Currently, the reform of the waste management industry is in full swing on the territory of the Russian Federation, which main goal is fundamentally changing the attitude towards waste in all categories involved in the creation, collection and disposal of waste. In Russia, problems with the formation of garbage were solved simply until the present time: garbage was taken to landfills, landfills grew, which ultimately led to pollution of the environment, water, air, food and, as a result, a huge spectrum of allergic reactions in both adults and children. According to statistics, one person produces 500 kg of garbage per year, in Russia an average of about 70 million tons of garbage is collected per the same period of time, the landfill area in Russia is about 4 million hectares, and this is compared to the area of the Netherlands or Switzerland. In addition, the volume of garbage is growing annually and their growth is 3% per year. © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 327–335, 2021. https://doi.org/10.1007/978-3-030-59126-7_36

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As a result, Russia currently accumulates 38 billion tons of waste; it’s 10 times more than the weight of the Cheops pyramid. The increase in the volume of garbage is a global problem that has an explanation. The life cycle of any product is defined by the next scheme: producer - seller - buyer (user) - landfill, reduced several times over. In an era when the mass consumption of goods by the population reaches its zenith, when people buy new products, they expect that it will be something new, interesting and technologically simple in a different format. This is very profitable for the manufacturer to realize as much as possible and not create a long-lived product. In this regard, landfills, mountains of garbage are growing exponentially. In addition, food products are packaged mostly in cheap materials (plastics), the processing time of which is quite long. People often use the joke: «Two things are sold in supermarkets - garbage for bags and garbage bags» . It should also be mentioned that the population density of certain areas of the earth is completely growing and the average life expectancy of people is increasing. So, the population of the earth should think about reducing consumption, but it is extremely difficult to stop the mechanism, which has been launched a long time ago and has been lobbied by a large number of interested parties. At the same time, humanity has another opportunity - using this garbage for the benefit of nature and human life through the use of a waste management system that includes separate collection, sorting, recycling and burning of residues.

2 Background and Methodology The study used materials from the regulatory framework of the Russian Federation in the field of solid municipal waste management, statistics and also the results of official studies conducted by domestic and foreign research centers, dedicated to the collection, sorting, recycling, incineration and transportation garbage. The following research methods were used: • collection of secondary information on the problem of organizing a waste management system based on the principles of preserving the environment, saving natural resources, reducing landfills and recycling waste in the media and publications of official sources; • analysis of regulatory documents in the area of regulation of the waste management system operating in the territory of the Russian Federation and the EU; • analysis of the experience of the leading countries of the world in creating conditions on their territories for separate collection of waste, its sorting, recycling and burning of residues; • analysis of the current situation in the Russian Federation in the area of waste management, prospects for its further development, taking into account the ongoing garbage reform.

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3 Results The continuous growth of municipal solid waste has become a serious problem worldwide. In Russia, only 3% of the waste is recycled, while in Europe half of the waste is recycled. From 110 plastic bottles, 1 plastic chair can be made, and one ton of waste paper can save one tree, according to Aleshkovskaya (2019), Ryzhova and Turkina (2019), Germantech (2019), Main, et al. (2016), Miliute-Plepiene and Plepys (2015), BoFan and Yang (2019), Luab and Sidortsova (2019), Bucciol et al. (2011), Miliūte and Staniškis (2009), Mishanina et al. (2017), Tretyakov (2020), Ignatova (2019), Ignatova (2020), Sarkisov (2019) (Table 1). Table 1. What you can do with garbage № 1 2 3 4

Garbage categories Rubber tires Organic waste Glass bottle Waste paper Aluminum can

5

Plastic bottles

6 7

Batteries Tetra pak package

Second life of garbage Covering for playgrounds and gyms Fertilizers Glass wool Toilet paper, paper towels Aluminum can (aluminum processing requires only 5% of the amount of energy) Heater for sportswear and polyester Filler for furniture and toys Building materials roofing materials, additives to concrete and asphalt Manganese, zinc, graph Ballpoint pens, cardboard, paper

One of the first European countries of developing, implementing and actively using a waste management system is Germany. The first incinerator in this country was built in 1892, the first urn was invented in 1895, and the first law on waste disposal was issued in 1972. The modern waste management system in the country includes the separation, sorting and processing of waste. There are more than 1,100 sorting and processing plants in Germany. Waste paper (75%) and glass (85%) are almost completely recycled, and metals, plastics and biological waste are also subject to processing. There are also more than 800 composting plants producing compost and peat for agriculture from 7.5 million tons of biological waste in Germany. There are 68 waste incineration plants with a capacity of 20 million tons in the country. In addition, coal-fired power plants and industrial enterprises burn waste with a total capacity of 25 million tons. Energy is generated that is used to produce heat and electricity while burning garbage. Germany imports garbage from Switzerland, burns it in its incinerators and receives additional energy.

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There are more than 1000 landfills at the same time in Germany. The decomposition of organic substances produces landfill gas containing a large amount of methane and carbon dioxide. This methane gas has been collected nationwide since 2005 in accordance with the Waste Management Ordinance and is currently also used for energy production. Such an element of the waste management system reduces greenhouse gas emissions by 18 million tons of gas per year, which is comparable to emissions from almost 8 million cars. According to statistics, 1.548 companies were registered in the industry, which has a turnover of 35.9 billion euros, employing about 155,000 employees at the beginning of 2019. About 1/3 of this revenue came from waste collection, recycling and waste disposal. In addition, since 1991, the Dual System of Germany (abbreviated DSG) has been operating in Germany, which obliges food and packaging manufacturers to dispose of packaging waste and recycle it. Since then, the manufacturer must either pick up the packaging used by the consumer, or, through centralized segregation, collection and sorting, arrange for its subsequent reuse. The experience of the leading world powers suggests that at least 60% of MSW should be used in the recycling program. Moreover, landfills are used all over the world. The difference in the proportions of use. For example, in Germany, 62% of waste is used as recyclable materials and another 37% is used for energy reproduction. Thus, it can be argued that the management of MSW is an important component of the production process of developed countries. One of the important elements of the transition to a new sorting system is convenience and accessibility for the end customer (citizen). This is achieved by eliminating barriers by informing, increasing the literacy of the population, creating comfortable conditions that stimulate the voluntary sorting of garbage (incentive rather than prohibitive measures). The need for a series of educational measures is confirmed by an international study. So, the Swedish colleagues analyzed the behavior of households and their reaction to changes in the waste management system. The case study is based on official statistics on MSW management and survey of 117 municipal residents with a focus on perception, attitude and self-reflecting changes in household behavior with respect to waste sorting. Among the main reasons for the alleged changes in the procedures for sorting personal waste, respondents named increased environmental awareness and the convenience of sorting food waste. The study also tested the significance of other variables such as income, employment, economic activity, socio-demographic indicators, infrastructure, waste tariffs, illegal waste dumping, and awareness-raising campaigns. The experience of Sweden found a response in China, which implements the model of «motivation-intention-behavior». The study found that the adoption of an informed decision on sorting is influenced by humanitarian, environmental motives. The experience of the PRC in this regard is especially indicative of Russia, because both states are classified as «developing». Thus, the «Celestial Empire» also faced significant problems in the field of MSW management. To combat these problems, the Chinese authorities implemented a pilot program for sorting solid waste in eight Chinese cities, including Shanghai in 2000. It’s worth noting that institutional transformations still haven’t produced the expected effect. The

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strategy implies voluntary involvement of citizens in the program, as an alternative to the traditional top-down approach. Using educational methods, don’t forget about economic leverage. From the point of view of tariff setting, the experience of the Italian Treviso is effective because its economic incentives are actively used to increase the amount of sorting of MSW. As experience has shown, the pay as you throw (PAYT) system proves its viability. In particular, it was found that its use allows increasing the ratio of sorted waste to total volume by 12.2%. In terms of «infrastructure» solutions, Austria is a good example. In the city of Vienna, when you buy products for a week or a pack of nurofen or anything else, they are always packed in paper bags, which are subsequently processed in every shop. The experience of the former union republic - Lithuania is also interesting. Colleagues proposed a life cycle assessment methodology for building a model and testing various waste management scenarios. The model can be used as an integrated waste management solution. As an analysis of foreign experience has shown, the universal policy of MSW management includes the following series of measures: 1. 2. 3. 4. 5.

Separate waste collection and sorting, leading to the reduction of waste as such; Useful use of MSW (Recycling, energy recovery) «Proper» from an environmental point of view, landfill Conducting educational programs aimed at voluntary waste sorting Monitoring tariff policy

The experience of developed countries of the world has shown that a modern waste management system aimed at separate collection of waste, sorting, recycling, incineration and single transportation to landfills has a lot of advantages. At the same time, there are a few restrictions that are more associated with the need for time spent on educational work with the population, the costs of separate sorting, while life and human health, nature and the environment are at the forefront. The wealth of practical experience accumulated abroad can be used by Russia, realizing a catch-up development model. Based on Western experience, the domestic authorities are steadily taking the right measures to bring the domestic waste management system to Western European standards. In Russia, the legal framework in the production area and consumption waste management is reduced to two key legislative acts: federal law-89 dated 06.24.1998 «On production and consumption wastes» and federal law-7 dated 10.01.2002 «On environmental protection». Federal law-89 in recent years has been subject to a large number of changes and additions, so paragraph 2 of Art. 10 Federal Law «On Amendments to the Federal Law «On Production and Consumption Wastes» and Certain Legislative Acts of the Russian Federation» dated December 31, 2017 No. 503 launched the garbage reform in Russia. The main directions of the reform are: separating collection of garbage, its obligatory sorting at special centers and exporting by a strictly licensed regional operator. The first stage of the reform began on January 1, 2019: some regions of the country have already switched to separate garbage collection. St. Petersburg and Sevastopol will switch to separate waste collection from 2022. From the beginning, it was planned

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that Moscow would also postpone the transition to separate waste collection for three years. But in June 2019 Moscow Mayor Sergei Sobyanin signed a decree «On the implementation of measures for the separate collection (accumulation) of municipal solid waste in Moscow», according to which Moscow switched to separate collection of garbage from January 1, 2020. According to the data of the Active Citizen portal, more than 46 thousand «active citizens» are already sorting garbage, and more than 93 thousand users are ready to start sharing waste after the containers are installed. The garbage movement chain from the tank to the landfill has now been assigned to a single regional operator. In order for an organization to become a regional operator, it must undergo competitive selection, the procedure of which is fully regulated by legislative acts and regulatory documents at the federal level (Decree of the Government of the Russian Federation PP-881 of 09.09.2016 on the competitive selection of ROs). The regional operator may engage in garbage collection, or conclude agreements with subcontractors. Depending on the region or territorial scheme, either municipal authorities or the regional operator are responsible for the installation of garbage containers. At each container site, two types of containers should be installed: for mixed waste (human waste) and for recyclable waste (cardboard, paper, plastic, glass). The companies involved in the transportation of waste will need to incur additional costs for the purchase of equipment - for the disposal of secondary waste. Since mixed wastes and wastes which must be recycled must be transported by different vehicles, even the color of cars transporting different types of waste varies in many regions. It was done in order to the population sees that the waste is not mixed in one vehicle, but is taken out separately and thereby encourages the population to separate collection. The advantages and disadvantages of such a chain are obvious. The disadvantages include: • the regional operator or local authorities will have to buy two types of containers, • the regional operator will have to buy two types of garbage trucks, • the regional operator will still have to bring everything that was collected by two types of garbage trucks to the sorting stations, since all waste is subject to sorting The advantages include: • sorting becomes much easier, the amount of sorted waste to be recycled is growing • a regional operator sells sorted to factories engaged in plastic products, factories producing paper, etc., • reduced volumes of waste transported to landfills. To smooth out the «sharp corners», No.-8 dated January 14, 2019, which was signed by President of the Russian Federation, created the Russian Environmental Operator (REO), a public-law company whose goal will be forming a unified integrated system for handling MSW and to creating a mechanism for managing this system, ensuring control and evaluation of its work, elimination of illegal landfills and the withdrawal of the garbage sector from the shadow economy. REA will be required to coordinate waste management with state, regional and municipal authorities, analyze the needs of the industry and calculate all the risks

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ahead. In this connection, REO can develop new bills for the industry and create a scientific and technical basis for the modernization of waste processing. Another important function that the state has allocated to REA is participation and assistance to projects for the processing and disposal of municipal waste. An environmental operator can issue bonds, provide guarantees for strategically important projects or provide loans and compensate up to 25% of capital investments in the creation of processing and recycling facilities. So, a number of regions have switched to separate garbage collection since January 2019, and already have a positive result. A striking example is Saratov, in which the first million cubic meters of MSW passed through a garbage transfer station in the first half of 2019. Another record holder in the waste management area is Nizhny Novgorod that operates an automated waste sorting complex, which is one of the largest enterprises in Russia, processing 60 tons of MSW per hour, or 470 thousand tons per year. The waste sorting line is precisely tuned to the morphological composition of Russian debris. Eight optical sorts provide 13 useful fractions. In the near future, such waste sorting complexes will appear throughout Siberia. In addition, regional operators began to actively engage in educational activities among the population, so in Cheboksary regional operators conduct open lessons at the waste sorting plant for everyone, all ages - from preschool children to senior citizens. People are shown how the plant works, what sorting stages waste goes through, and they are also explained how garbage should be sorted in residential buildings. In Saransk, for the separate collection of used packaging, more than 850 Euro containers (1.1 m3 in volume) were installed. The local regional operator specially purchased two garbage trucks that are only involved in the collection and removal of this type of waste. In the Rostov Region, regional ecological parks are being designed and built by the Clean City group of companies, similar to Germany’s ecological parks, which will held a full cycle of waste movement: sorting, processing of secondary raw materials, a biocomposting area and a landfill for residues will be constructed. In addition to Russia, it is mastering a new experience in terms of waste transit on the basis of the Arkhangelsk region. The reform should end by 2024 and change the ratio between recycled and buried garbage, in the direction of increasing the first and decreasing the second. There are now 14 thousand official landfills and 16 thousand unofficial landfills in the country. By 2024, it’s planned to reduce their number to 200 landfills within cities and 75 landfills, classified as particularly harmful to health. This project will require investments in the amount of 1.7 billion euros. Currently, only 7% is recyclable and 3% of waste is recycled. By 2024, an increase in these indicators is forecasted: they will recycle 60% of the waste and reuse 36%. Such a comprehensive program will require a little more than 4 billion euros. According to the head of the Clean Country Association Ruslan Gubaidullin, the following actions should be carried out to accelerate the reform of the waste management industry:

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• It’s necessary to adopt new sanitary rules and norms, because the old ones, which have developed back in the Soviet Union, don’t correspond to modern realities; • it is necessary to planned and systematically engage in increasing the level of environmental literacy of the population, explain to them the mandatory measures taken by the state in the field of waste management, tell what advantages there are separate collection and sorting of garbage for each person and the environment, to share information on what is happening with the industry, which events are planned to be carried out, because ignorance and secrecy of information frightens and causes rejection among the population; • it is necessary to work out the issue of exporting MSW for hard-to-reach settlements, including paying attention to areas of the Far North, especially in the absence of year-round ground transportation; • it is necessary to provide for the possibility of the removal of separately accumulated waste as they accumulate, and also to exclude the rule on the daily collection of mixed waste, providing only for collection when the containers are full. In addition to the fact that garbage reform is beneficial to nature, environmentalists mustn’t forget about the economic aspect. One person working in the waste collection and collection system pulls another ten who are engaged in the processing, sorting, sampling of useful fractions, incineration, and production of new products from secondary raw materials. And we shouldn’t forget about those organizations that produce special equipment (including garbage trucks), carry out its implementation and maintenance. All these people, carrying out their professional activities, receive wages for it and pay taxes.

4 Conclusion An increase in the amount of waste is common to all countries of the world, while each state has the right to choose how to solve such a problem. Most developed countries were puzzled by this issue more than 20 years ago. The creation and control at the state level of waste management systems, which includes the separate collection, sorting, recycling and incineration of residues, has become a serious mechanism to minimize waste and reduce the number of landfills. Using foreign experience, Russia began to actively carry out a reform of the waste management industry, whose main task is changing the ratio between recycled and buried garbage, in the direction of increasing the first and decreasing the second. In many cities, incineration plants have started working, garbage is sorted at special centers before being taken to landfills and eco-parks are being built. All over the territory of the Russian Federation, regional operators are licensed and fully responsible for the entire waste cycle, using two types of garbage trucks in their work: for mixed and secondary waste. Many useful things can be made from recycled waste, and natural resources can be saved. Separate collection of waste, its further sorting and recycling is one of the most promising and environmentally friendly ways of waste management.

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The main task of the state in order to carry out the reform in a quality manner is to monitor the compliance of regulatory documents with modern realities, engage in educational work for the population, motivate separate collection and disposal of waste, and increase environmental literacy.

References Aleshkovskaya, T.: Separate waste collection - my choice (2019). http://xn–80aidgmlqahkckn3q. xn–p1ai/. Accessed 03 Feb 2020 Ryzhova, A., Turkina, K.: The head of the Clean Country: 2019 will check the durability of the waste management system for strength interview dated 02/18/2019 (2019). https://tass.ru/ interviews/6128023. Accessed 03Feb 2020 Germantech Eco-technology - made in Germany (2019). https://germantech.ru/. Accessed 05 Feb 2020 Mian, M.M., Zeng, X., Nasry, AaNB, Al-Hamadani, S.M.Z.F.: Municipal solid waste management in China: a comparative analysis. J. Mater. Cycles Waste Manag. 19(3), 1127–1135 (2016). Science, Moscow Miliute-Plepiene, J., Plepys, A.: Does food sorting prevent and improve sorting of household waste? a case in Sweden. J. Cleaner Prod. 101, 182–192 (2015). Science, Moscow BoFan, W., Yang, X.S.: A comparison study of ‘motivation – intention – behavior’ model on household solid waste sorting in China and Singapore. J. Cleaner Prod. 211, 442–454 (2019). Science, Moscow Luab, H., Sidortsova, R.: Sorting out a problem: a co-production approach to household waste management in Shanghai, China. Waste Manag 95, 271–277 (2019). Science, Moscow Bucciol, A., Montinari, N., Piovesan, M.: Do not trash the incentive! monetary incentives and waste sorting. Scand. J. Econ. 117, 1204–1229 (2011). Science, Moscow Miliūte, J., Staniškis, J.K.: Application of life-cycle assessment in optimization of municipal waste management systems: the case of Lithuania. Waste Management Research 28, 298–308 (2009) Mishanina T., Nikitina, O., Fedorova, M.: Dirt of a big city (2017). https://www.kommersant.ru/ doc/3449313?from=doc_vrez. Accessed 03 Feb 2020 Tretyakov, V.M.: On certain issues of organizing activities for the management of MSW. MSW Waste Manag. (2020). Science, Moscow Ignatova, Y.: The sales market of special waste disposal equipment as an actual type of transport business. In: All-Russian Institute of Scientific and Technical Information (VINITI) TRANSPORT: Science teChnology Management, vol. 11 (2019). Science, Moscow Ignatova, Y.: Overview of the formation and development of the market of regional operators for solid municipal waste management. In: All-Russian Institute of Scientific and Technical Information (VINITI) TRANSPORT: Science and Technology Management, vol. 3 (2020). Science, Moscow Sarkisov, D.: In the 90 s, huge dumps appeared that were controlled by bandits (2019). https:// lenta.ru/articles/2019/02/26/musor/

Smart Technologies in Foreign Language Training Tatiana N. Astafurova1,2(&) , Olga P. Kozlova2, Natalia A. Vishnevezkaya2, and Olga N. Romanova2 1

Volgograd State University, Volgograd, Russia [email protected] 2 Volgograd State Technical University, Volgograd, Russia [email protected], [email protected], [email protected]

Abstract. The relevance of the topic is determined by the social significance of smart technologies in the innovative paradigm of education under the impact of integration and globalization processes which entailed transition from industrial to information society and deeper insight into new forms and content of education in the context of rapid social changes. Contextual, content-based and comparative analysis of distance, electronic and mobile education in foreign language training is used, as well as the specificity of computer linguodidactics as a separate area of foreign language teaching based on smart technologies is represented. The article analyzes the multi-level smart learning technologies used in training of MBA students, the additional web servers aimed at better awareness of the socio-cultural features of the country of the target language (quests, language game) and methodological tools for interaction between students and teacher, and among themselves. Practice-oriented online textbooks with hyperlinks to video lectures by world-famous scholars in specialized fields that intensify traditional educational process are illustrated. Basic levels of analysis of foreign language information in the world network resources are defined and exercises aimed at acquiring language competence on the basis of these training actions are indicated. Keywords: Information society
Smart technologies
Computer linguodidactics
Innovative paradigm of education
Multimedia educational complexes
Online textbooks

1 Introduction In the near future, humanity will have to resolve increasing contradictions between the ever growing needs of the global community and the inability of the biosphere to provide them without collapsing, which implies a transition from an industrial society to an information society. The information society is characterized by the transfer and storage of information mainly in electronic rather than printed forms, the use of information strategies and “smart” technologies in various fields of activity, including © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 336–343, 2021. https://doi.org/10.1007/978-3-030-59126-7_37

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education, which is the basis of innovative development of Russia and the formation of its smart society. Caused by globalization, integration processes are increasing and exerting a great deal of impact on the social, political and economic structure of the world of the new Millennium, which is closely connected with global computerization of communication and innovative technologies. This process required new approaches to extracting and processing huge amounts of knowledge, as well as to education as a tool for transferring new knowledge. The global information environment, its Internetization, visualization and virtualization have led to a total change in the educational space and the need to develop in students self-education skills (including foreign language ones), based on smart technologies and smart devices (smart screen, smart board). Unfortunately, traditional education is not yet able to fully meet the growing social demand for its quality and volume, since education is basically a conservative mechanism for transferring the established knowledge, skills and abilities. Moreover, the specificity of modern Russian education is determined not only by the global crisis of education, but also by the crisis of Russian society and the state of its science and education. Traditional forms and content of education in Russian universities, as the most important social institutions, often do not meet the growing requirements of students in terms of their quality, availability, cost and relevance. But the social task of modern educational institutions is to prepare young people for their future life in society and professional activities in accordance with the level of culture, moral values and advanced ideas of their time. Therefore, rapid social changes have required corresponding changes in the higher education system and the replacement of the traditional (reproductive) educational paradigm with innovative and creative teaching methods aimed at increasing motivation of students, their individual learning trajectory, mobility and accessibility of education due to various sources of information freely available on the web. The innovative paradigm of education strengthens the importance of smart learning technologies, as it actively uses the achievements of domestic and foreign science, intensifies the educational process, contributing to the formation of a new type of personality, capable of intercultural adaptation in situations associated with high rates of change in different spheres of society and requiring reassessment of established approaches in the educational process. The common info-educational space allows its participants to interact virtually in different forms, contributing to the development of distance, electronic and mobile education. In the new Millennium, distance education, being a worldwide innovative educational technology, along with its accessibility, significantly internationalized the content of multi-level training programs, changed the culture of its participants and became a mechanism for universalizing knowledge and international standards of its quality throughout the world.

2 Materials and Methods To implement distance education, state and non-state educational institutions have been established to provide services in this area:

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1) at the international level: – UNESCO programs (Life Long Learning, Education for all and Education without Borders; – programs and projects of academic mobility (Erasmus Mundus) which significantly increase students’ interest in European higher schooling through introductory, scientific and inclusive training; – open universities (University of California, Davis, US; The Open University Business School, UK; Canada’s Online University; SKOLKOVO Open University, Russia; University of the world; International e-University, Global lecture hall, etc.) 2) at the national level: – retraining and professional development programs; training courses which include various types of institutional, non-formal and parallel education; 3) at the local level: – various types and forms of additional education in universities and self-education. E-education is a rather capacious concept that implies various forms and types of elearning, which involves equipping educational institutions with electronic equipment with Internet access, audio and video installations, interactive whiteboards, computer programs, online textbooks, e-books, etc. E-education allows one to make the learning process more intensive and effective for students, since the intensification of training in any subject is facilitated by implementation of multi-channel smart technologies (text, audio-visual, graphic, animation, game), which activate the creative and cognitive activity of students. In addition, e-education expands the possibilities of inclusive education, engaging work with specialized equipment for students with disabilities: deaf and hearing-impaired, blind and visually impaired in the framework of correctional pedagogy. Mobile education intersects with distance learning and e-learning, but differs in the use of portable technologies and mobile devices/gadgets: net books, smart phones, tablets, laptops. Electronic diaries, social networks, and open access documents contribute to the effective use of gadgets in learning. Education through mobile devices is a real opportunity to choose your own time, place, pace and means of learning, making it more flexible, ergonomic, personalized and focused on lifelong learning. Mobile learning is actively integrated into traditional education, intensifying and improving it due to distribution of educational material through wireless technologies (WAP, GPRS, Bluetooth, Wi-Fi), multimedia form of its submission and implementation of rapid online individual/frontal survey, testing and questionnaire methods. Growing popularity of smart learning technologies, the virtual Internet environment and access to the world wide web, dictated by the needs of time, lead not only to the globalization of the world order, but also to the globalization of participants’ consciousness in the educational process, expanding boundaries of their socio-cultural space, awareness of the diversity of cultural parameters, traditions, and lifestyles of other ethnic groups. In this case, virtual Internet environment acts as an informational training resource. An even greater degree of globalization of consciousness is

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facilitated by the English-speaking virtual environment of the Internet, since English acts as a lingua franca (language of international cooperation) of the third Millennium, and its global character is confirmed by its status in non-English-speaking countries. Thus, English is currently the leader among target languages, being a mandatory subject at all stages of learning, including higher education, in more than 100 countries (Russia, Germany, China, Spain, Brazil, Egypt, etc.). The theoretical basis of the research is formed by the works of Ursul (2011), Vashchekin and Ursul (2000), Knight (2003), Tretyakov and Kuzmina (2001), Bovtenko (2005), Sarana (2005), Astafurova and Myakisheva (2013), Astafurova and Dudina (2014), Astafurova et al. (2014),

3 Results In the 90 s of the last century, computer linguodidactics began to actively develop in the domestic and foreign methodology of teaching languages, which formed in a separate direction, within which: – an algorithm for target language acquisition in a virtual environment, compensating for the lack of real language environment, was worked out; – the specificity of organizing group communication in the class and within independent students’ activities through interactive Internet technologies (webinars, forums, chats, blogs, etc.) was studied; – the efficiency of developing language competence through the use of the Internet, online training courses, forms of control and criteria for evaluating foreign language activities of students through smart technologies was analyzed; – the typology of multimedia learning material and its integration into the process of teaching a target language in secondary and higher education were thoroughly investigated. Multimedia as a basic multichannel parameter of modern smart-learning technologies, significantly affects students, compensating for the lack of a real virtual language environment, and provides “all kinds of visualization - linguistic (verbal) and non-linguistic (visual signs)”. As one of the first English smart technologies implemented in language teaching at Volgograd State University we can consider multimedia complex English Discoveries, used for MBA (Master of Business Administration) students. Out of 120 h within the program “English for MBA students”, 90 h were planed for independent study of English, as the expected level of students’ competence varied in the range from Basic to Intermediate or Advanced/This technology was used as an adaptive resource for bridging lexical and grammatical gaps and developing the missing skills in reading, listening and speaking in students with a lower level of target language communicative competence. Multimedia complex “English Discoveries” offered authentic material for acquiring communicative competence at five levels (from the beginners’ level to advanced business English/Executive English); in all types of speech activity and language aspects: Grammar, Vocabulary, Reading, Listening, Speaking, Writing. Isomorphic

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level structure implied gradual complication of the learning content both in terms of topical, lexical and grammatical material. In the Grammar section, the most significant and frequent grammatical phenomena of English are activated and commented in Russian. The dictionary offers exercises for mastering lexemes assigned to topics studied at every level. English reading skills are formed on the basis of multi-genre texts: announcements, short stories, private and business letters, scientific articles, publications of official and colloquial style. Exercises include tasks related to guessing words in a context, defining the main idea of the text, structuring texts from shuffled paragraphs, identifying basic categories of the text, etc. Speaking skills are formed in monologue and dialogue utterances thematically related to the texts studied in the Reading section. The development of writing skills is carried out according to specified patterns (letters, filling out forms, reports) that students print themselves on computers. For developing listening skills authentic short fabulous texts are used both of monologue and dialogue character, as well as various test genres (conversations, telephone talk, fragments of radio programs or television commercials) that students can listen to as many times as they need. Group forms of learning English are presented on the site “The English Web Connection” with additional services: 1. “The Quizzes and Games” service offers students crosswords, language games, and quizzes on topics that correspond to the thematic specificity of the main sections of the English Discoveries multimedia complex. The service determines the program level of the connection and gives students game tasks of the appropriate level. 2. The “City links” service establishes contact with sites that contain information about cities and their accommodation features, which students get acquainted with in a language game focused on learning socio-cultural characteristics of the countries of the target language. 3. The “Web pals club” website connects students with native English speakers and partners who study English all over the world. Relevant participants in virtual communication can be selected by the server on the basis of age, gender, and range of interests. This site is particularly important because it makes students use English for real purposes in the process of communication. Technological resources of “English Discoveries”, their professional orientation and flexible individual trajectory of developing common and professional competencies have made this smart technology particularly popular in business environment, as MBA program involves subsequent internships of students abroad to establish professional contacts with partners from different countries where English is used as the language of international communication, as Latin of the 21st century. Methodological tools for students’ interaction with their teacher include: 1) Record book, which reflects the lesson control and the results of each lesson provided for in the appropriate section or individually planned by the teacher for the listener, based on his needs. 2) Self-control of listeners, realized due to the opportunity of comparing their grammar results with the keys or their text reading with the pronunciation of native speakers.

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3) Reference material for students, which includes: a) Placement and Exit tests for each section, which help the teacher adequately assess the degree of mastering of the training material by students and identify typical errors in the sections of each level; b) Tests for better acquaintance with the most significant socio-cultural realities in the form of interactive quests and adventure games (search for a hidden object), to solve which integrative language and communication skills are needed, namely: – to extract information from English encyclopedias, various reference materials, museum catalogues, train routes, etc. in oral or written form; – to discuss with partners and analyze true and false information in English at a set time limit; – to prove one’s own point of view by making clear and convincing arguments in English. The socio-cultural significance of quests in English is undeniable and implies mastering cognitive activity of students while studying the most important events, phenomena and realities in the history and culture of the target language culture. No less effective is integration of World Wide Web (www) resources and profile online textbooks into the process of learning a foreign language, which significantly intensifies the training of students in any field of study. In particular, in the Math department of Volgograd State University, English video lectures delivered by worldfamous scholars from leading English and American universities are actively used in teaching graduate mathematicians. Electronic links and questions to these lectures are presented in each lesson along with traditional profile texts and exercises for developing reading, speaking, translation and writing skills, as well as skills of presentation and discussion of current problems in mathematics and computer science at the present stage of their development. Integration of electronic textbooks, information technologies and Internet resources into the learning process provides students with additional opportunities to choose a strategy for mastering teaching material (independent or classroom work on the deeper study of intersubject connections) in accordance with their own cognitive styles (“visuals”, “audials”, “kinesthetics”) and subsequent comparison of English mathematical concepts and their Russian equivalents, discussion of the terminological apparatus of science and methods for solving mathematical problems. Online textbooks compare favorably with traditional ones because they use: – friendly user and flexible system for managing course sections and presenting training information in any sequence; – the most complete set of training tools for individual study of the course, which modular structure allows student to choose the appropriate module based on the level of knowledge, skills and abilities and evaluate the results of module mastering; – open access to virtual space of English-speaking community and a developed hypertext structure of the course conceptual content.

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Acquisition of language competence based on information provided in the global network includes three levels of information analysis: pretext, intertext, and hypertext. The pre-text analysis of the Internet resource is associated with the study of the site structure and its lexical, grammatical and stylistic functions; development of lexical and grammatical abilities with the help of exercises on substitution of lexemes in grammatical structures, filling in gaps with correct grammar forms, as well as information gaps in the text with relevant pieces of information and text reconstruction. The intertext analysis involves obtaining information from various sources of virtual content (thematically related texts and comments) to form a versatile understanding of the object of study. The hypertext analysis allows comprehensive exploring of the “vertical” context in which the object exists due to direct and indirect information connected with the object, and draw conclusions based on information extracted from hypertexts of virtual environment. This language activity helps students use language competence of profile virtual communication, which is necessary to compensate for the lack of a real foreign language environment.

4 Conclusion Thus, the innovative paradigm of education, designed to effectively solve socioeconomic problems of the Russian society, created prerequisites for changing its structure and determined development of “high” learning technologies. First of all, smart technologies (social networks, webinars, blogs, online textbooks, multimedia training complexes) and smart devices (smart screen, smart Board) based on the reasonable use of electronic resources, digital ways of storing and transmitting knowledge, working with a large amount of information and virtual interaction of participants in the global information and intellectual educational space, including English-speaking virtual space.

References Ursul, A.D.: The transition to sustainable development: problems and prospects. Philos. Stud. 6, 77–88 (2011) Vashchekin, N.P., Ursul, A.D.: Landmarks of advanced education. Sociol. Res. 5, 90–97 (2000) Knight, J.: Updating the definition of internationalization. J. Int. High. Educ. 33, 2–4 (2003). The Boston college center for international higher education, Boston Tretyakov, V.Y., Kuzmina, I.A.: Web technologies in structuring system of distance education at university (2001). http://ncdo.levsha.ru/Pub/002D.htm. Accessed 10 Dec 2019 Bovtenko, M.A.: Computer Linguodidactic: Leaning Manual. Nauka, Moscow (2005) Sarana, T.P.: Computer consulting in self-learning foreign languages. Science, Pyatigorsk (2005) Astafurova, T.N., Myakisheva, T.S.: Foreign Language Training of Learners in the Program of Business Administration. VolSU, Volgograd (2013)

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Astafurova, T.N., Dudina, I.A.: English for students of mathematics and computer science (Master’s degree). VolSU, Volgograd (2014). http://217.149.179.70/object/books/In00017. pdf. Accessed 12 Dec 2019 Astafurova, T.N., Alexandrova, E.S, Malushko E.Y.: “English for students of mathematics and computer science (Bachelor’s Degree)”. VolSU, Volgograd (2014). http://217.149.179.70/ object/books/In00018.pdf. Accessed 16 Dec 2019

Digital Technologies in Russia: Trends, Place and Role in Economy Elena V. Romanovskaya(&) , Natalia S. Andryashina Svetlana N. Kuznetsova , Zhanna V. Smirnova , and Oksana G. Ivonina

,

Minin Nizhny Novgorod State Pedagogical University, Nizhny Novgorod, Russia [email protected], [email protected], [email protected], [email protected], [email protected]

Abstract. Purpose: The purpose of the research is to identify trends in development and place in the economy of digital technologies in Russia. Design/methodology/approach: In the research process, theoretical and practical research methods were used, such as analysis, synthesis, generalization of experience, experimental method, quantitative and qualitative processing of results, observation, static methods. Findings: The novelty of this article lies in the fact that the processes of information conversion in the world are irreversible, and Russia is approaching the information and technological progress of the economy due to the large number of developed objective programs and regulations. The authors determined that information technologies are being actively implemented in all areas of Russian business. In this regard, domestic enterprises have to restructure their structure, efforts, communications, resources in order to increase the efficiency of all forms of production to ensure a new quality of economic growth. Originality/value: The authors showed that the IT industry will be able to withdraw Russia from the list of technological leaders and contribute to the elimination of the raw material dependence of the Russian economy. The article defines the role of IT-technologies in Russian business and highlights the main advantages of using information and communication technologies for the sustainable development of the domestic economy. Keywords: Information and communication technologies
Global information system
Digitalization of the economy JEL Code: M20


M21

1 Introduction The world has entered a new digital era: the era of electronic economic activity, network communities and organizations without borders. The arrival of new digital technologies will radically change the economic and social spheres of society. In its latest research, McKinsey shows that information technology is considered one of the © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 344–351, 2021. https://doi.org/10.1007/978-3-030-59126-7_38

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four leading departments of the economy due to its impact on modern society along with healthcare, agriculture and infrastructure (Aptekman et al. 2017). It is the IT industry that will be able to withdraw Russia from the list of technological leaders and help to eliminate the raw material dependence of the Russian economy. It is impossible to solve problems of development of intellectual potential in the sphere of high technologies, only through the means of using the market mechanism (Chelnokova et al. 2017). Especially, when government needs to increase investment attractiveness of various branches of economy and support Russian high-technology products and services, primarily in the area of their promotion in the world market. There is a need for mechanisms of state regulation and attracting public investment in the development of ICT infrastructure, as well as creation of detailed, and reviewed legal documents (Solozhentsev 2016).

2 Materials and Method Over the past 10 years, Russia has developed and adopted documents that are very important for the information and technological development of the economy: “The concept of the use of information technologies in activities of state structures, state power for the period up to 2010”, “Concept of regional informatization up to 2010”, “Concept of development of the information market The long-term strategy for the development of the information society in Russia and many others has been developed. In general, they create the basis for the formation and development of the information society (Maksimova 2015). Table 1 presents the main program documents and normative acts created by the Ministry of Information Technologies and Communications of the Russian Federation and other interested ministries and departments of the Russian Federation. By 2008, it became obvious that the federal target program “Electronic Russia” (2002–2010) was not so effective, and the development of the information society in Russia is behind other countries. There are no noticeable changes in the existing conditions. The government decided to revise its approach to domestic information technology policy. It is time to understand that this is not the highest value of accepted technologies and developed information systems, their benefits for citizens, business and the whole society, therefore, government agreement No. 1815 was adopted (October 20, 2010). The new government program is called the Information Society. This program, designed to create an integrated and effective system of using information technologies with maximum benefits for citizens, includes these courses: creating electronic government, overcoming the digital separation, and finally, developing new communication technologies (Garina et al. 2017), (Smirnova et al. 2017).

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Year 2000 2000 2000 2002 2004 2006 2008 2009

2010 2011

Formation of the institutional base of the information economy in Russia Creation of an official state structure responsible for the functioning of the IT sector in Russia - Ministry of Communications and Informatization; Fund of the State Duma Committee on Information Policy, Information Technologies and Communications Adopted the doctrine of information security of the Russian Federation; The federal target program is adopted “Electronic Russia” (2002–2010); “The concept of the use of information technologies in the activities of state authorities for the period up to 2010”; Federal Law of the Russian Federation “On Information, Information Technologies and Information Protection”; A long-term strategy for the development of the information society in Russia has been developed; Federal Laws No. 121-FL “On Amending Certain Legislative Acts of the Russian Federation Regarding the Regulation of the Activities of Non-Profit Organizations Acting as a Foreign Agent” and No. 103-FL “On Activities for the Acceptance of Payments by Individuals Carried out by Payment Agents”; Russian cabinet announced state program of information development of society in 2011–2020 A new version of the law “Electronic digital signature” was adopted

3 Results The Economist Intelligence Unit Research Center, with the support of the International Business Software Alliance, published the results of the 2017 Global IT Industry Competitivity Index study. In the new ranking of global competitiveness of ITtechnologies, Russia took 46th place. Among the strongest aspects in Russia, the authors allocate “human capital for the IT sector”. What are the main reasons for Russia’s low position in the ranking of global competitiveness of IT technologies? In our opinion, the Russian mentality is in the first place, because the majority of people over 35 have difficulty perceiving innovations in the use of information technology. The next reason, in our opinion, is that access to the Internet in different regions of Russia is not the same. And if to pay attention to small settlements, it becomes obvious that in some places there is not even mobile communication, not to mention access to the worldwide Internet. Other reasons are the inefficiency of legal security of business in disputes with the State and the low rates of implementation of state programs in the field of information technologies, as well as the lack of IT professionals (Kuznetsova et al. 2017). Based on the foregoing, we come to the following conclusion: a low level of economic development is a consequence of the underdevelopment of the information sector, which leads to an insufficient level of education and development ability in general. As can be seen from world experience, high technologies, including information and telecommunications, have become the “locomotive” of the socio-economic

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development of many countries of the world. Otherwise, despite the lag in the ranking of the global competitiveness of IT technologies, the Russian Internet economy is showing high growth rates. According to the combined studies of the Higher School of Economics and the Russian Association of Electronic Communications, they account for only 1% of Russian GDP, and it is expected to increase. Advertising is the fastest growing part of the Internet economy and increases by 50% per year. E-commerce, which includes retail and electronic payment system, is also growing at a rate of 25– 30% per year, the country’s current GDP is less than 1%, part of online retail trade in the entire retail trade is close to 2%. And if the number of Internet users in Russia last year became more than in Germany, and now ranks first in Europe (68 million - 48%), the number of Internet clients is much less – 23 million (34%) against the German 41 million (61%). Thus, the growth of Internet users will depend, as is the case in China, on the growth in the share of customers and regularity of purchase. E-commerce transparency will show some growth, which is penetrating the most remote areas of the Russian economy. According to statistics, in Russia there are more Internet users than in Germany. But only a small part of them are interested in online shopping. At the same time, the rate of commercial development of this type is growing rapidly, so this trend should remain unchanged (Kuznetsov et al. 2018). According to the authors, Russian companies have great potential in the development and use of IT in all economic areas. The phenomenon of international recognition of the IT industry in the world market is very important for the Russian economy. It will demonstrate the presence of Russian potential competitiveness in the field of modern technologies and will help to create the prerequisites for the global competitiveness of each industry. Globalization and the integrated development of an industrial economy significantly increases business opportunities. Information technology and information systems (IT/IS) provide mobile access and analytical power that meets the needs of trade and enterprise management on a national and continental scale. Leading organizations in virtually every industry—including retail, financial services, manufacturing, life sciences and telecommunications—recognize the benefits of information, sometimes even higher than some traditional assets, in generating revenue. Economic activity involves decision making (Arapova 2016). Agents need information to make decisions. If in the past, at the end of the 20th century, the traditional management style, which differs from others in a high level of hierarchy, strict centralization and proximity, could be traced, at the beginning of the 21st century this management style in enterprises changed for the more liberal, distinctive with maneuverability, globalization and openness. Information technologies have not only changed the way they work—they have changed the way owners and top managers think strategically. The first high-speed computers were used by the business class to automate processes that were manually provided by a large number of low-quality employees; a typical example is data processing. In Russia, according to the authors, among medium-sized enterprises, the most popular form of organizational change with IT is the automation of business processes. The first applications developed using IT influenced financial transactions and distribution of documents, since this is the most formalized part of the enterprise’s business processes. Calculation and formation of payments, transaction control and document movement, open source code for clients on their deposits are standard

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examples of early automation. The risk of introducing these technologies is minimal, but the profit is high. A deeper form of organizational changes related to the production structure is to implement work procedures and improve business processes, but they are used less frequently at a Russian enterprise than previously mentioned (Gorodetsky 2015). New IT is designed to change the nature of the whole organization, transform its goals and paradigm shifts, for example, to master the main new market niche, open branches in other countries, acquire another company, merge with partner companies, etc. Other organizational changes have the greatest risk, but they give the maximum return. Company leaders must deliberately make changes of this type, understanding all responsibility for global decisions. Information about enterprises is processed under different schemes, usually not related to each other. Providing them with great accessibility for all employees and external partners and simplification by making creative decisions can be a decisive factor for success for many companies today. Information has always been a valuable asset to those who have it. Orientation to the maximum approximation with the client forced enterprises to move into horizontal structures. Decision-making under decentralized conditions has caused an unexpected increase in the need for information related to the process of production of goods and services. There was a need for a third party to become more familiar with the state of affairs in the requested business areas and the system for implementing product quality. In the new conditions, the provision of information in all areas should work flawlessly. It is clear that the use of new information technologies improves productivity, which helps to achieve the best results in business. The main changes in the activities of enterprises after the introduction of IT are shown in Table 2. As can be seen from the table, after the introduction of IT in a modern Russian enterprise, the following occurs: – IT changes unstructured processes to partially and completely structured, acceptable for automation of solution preparation; – IT replaces and reduces the role of the contractor in the implementation of standard routine functions and operations; – IT provides the specialist with all the necessary information and powerful analytical tools; – IT provides all the necessary information in an administrative order; – IT allows to organize processes in the required sequence with the possibility of parallel implementation of stereotypical operations and simultaneous access of many devices and performers; – IT organizes the collection, processing, systematization of data; the formation and dissemination of knowledge, expert and audit activities to improve processes; – IT provides detailed monitoring of the implementation of processes and monitors administrative influence; – IT directly links the various parts of the activity in interconnected processes that were carried out with the participation of intermediaries and intermediate administrative relations;

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Table 2. The main changes in the activities of Russian enterprises after the introduction of IT Before IT implementation Information can arise only in one place and at a time, it is not equally accessible; Hard work to assess the situation can be provided only by experts; All decisions are made only by administrators and responsible managers; A necessary specially equipped place for searching, querying, analyzing, posting and transmitting information; The best way to communicate with the client is a personal meeting; The original plans are not revised; correction occurs only after the end of the entire period;

The necessary appearance of employees in the workplace, a large number of different sectors;

Dependence on the supplier, limited choice;

High transaction price, costs of concluding an agreement, negotiations, data transfer, business trips of employees

After IT implementation Information may arise and may be requested anywhere and anytime - when necessary; Distributed databases and hosts, search engines, input search technologies; Thanks to expert systems, the work of a specialist can be provided by a general specialist; Decision-making is part of the work of each employee responsible for his or her part; Means of support, access to databases and hosts, data systems; Specialists can receive and send information from the places where they are indicated due to the use of the Internet and Internet technologies, fiber-optic communication and satellite communication systems, mobile communication systems; The best way to communicate with a potential client is an effective study of the characteristics of a person; Interaction, databases, system of interrogation and revealing of preferences; Plans are reviewed and adjusted promptly, as necessary and in accordance with customer requirements; Expert systems, flexible planning and risk management systems, high-performance computers; Independence from the supplier, free choice; Decrease in transaction prices due to information marketing, online contract, email, fax, electronic signature

– IT quickly transmits information for the implementation of processes, regardless of where they are implemented. Thus, the main role of IT in modern Russian business is to help management adequately respond to market dynamics, create, maintain and deepen competitive advantages in order to maximize profits (Fetisov and Garin 2016). Currently, technologies need to be massively implemented in modern Russian enterprises with the aim of wider application of modern information technologies, cardinal improvement of product quality, operational efficiency and competitiveness. There is no doubt that it is necessary to more carefully study legal issues in the field of

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doing business in the Internet sphere. In order, to expand the use of electronic channels not only by introducing them into various spheres of human activity, but also territorially. This means that the use of electronic channels should be equally accessible to all territories.

4 Conclusion The role of information technology in Russian business depends on the sector, the history of the enterprise, its size and territorial location, the personality of the leader and members of his team, the existing relationships and the chosen development strategy. External factors, such as the policy of federal and local authorities, the customs and tax system, and sharp market spikes also have an impact on the market in general (Khmeleva 2012). It is necessary to talk about the regular introduction and development of information technologies for all organizations, but to describe the “right steps” of their introduction and use. It is necessary to consider each enterprise separately. The Authors would also like to note the introduction of information technologies at every Russian enterprise at present, because in the modern digital economy, entrepreneurial activity mainly takes into account the production and application of information technologies. It collects information to make all other forms of production more efficient in order to ensure a new quality of economic growth and, forming a huge wealth of information.

References Arapova, E.Y. (ed.): Economic Integration in the East Asian Region: Retrospective Analysis and Future Opportunities, p. 208. Scientific publication, Moscow (2016). Prospect Chelnokova, E.A., Kuznetsova, S.N., Nabiev, R.D.: Possibilities of using information and communication technologies in teaching economic disciplines in the university. Vestn. Minin Univ. 3(20), 8 (2017) Aptekman, A., Kalabin, V., Klintsov, V.: Digital Russia: A New Reality, p. 133. Litres, Moscow (2017) Maximova, E.F. (ed.): Economic theory. Conceptual framework and practice = Economic Theory. Concepts, Paradigms and Practice: Scientific Publication. Under edition of Moscow State University of Economics, Statistics and Informatics, Institute of Economics and Finance, p. 751. Unity-Dana, Moscow (2015) Fetisov A.O., Garin A.P.: Improving the process of managing working capital of an industrial enterprise. In: Vinnikova, I.S., Kuznetsova, E.A. (eds.) In the Collection: Modern Issues of Financial and Insurance Relations in the World Community, A Collection of Articles Based on the Materials of the II International Scientific and Practical Conference of University Teachers, Scientists, Specialists, Graduate Students, Students, Department of Insurance, pp. 148–153. Finance and Credit, Moscow (2016) Garina, E.P., Kuznetsova, S.N., Romanovskaya, E.V., Garin, A.P., Kozlova, E.P., Suchodoev, D. V.: Forming of conditions for development of innovative activity of enterprises in high-tech industries of economy: a case of industrial parks. Int. J. Entrepreneurship 21(3), 6 (2017)

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Khmeleva, G.A.: Human Capital as a Condition for the Formation of an Innovative Economy in a Region: A Monograph. SAGMU, Samara (2012) Kuznetsov, V.P., Garina, E.P., Romanovskaya, E.V., Kuznetsova, S.N., Andryashina, N.S.: Organizational design and rationalization of production systems of a machine-building enterprise (by the example of the contract assembly workshop). Espacios 39(1), 25 (2018) Kuznetsova, S.N., Garina, E.P., Kuznetsov, V.P., Romanovskaya, E.V., Andryashina, N.S.: Industrial parks formation as a tool for development of long-range manufacturing sectors. J. Appl. Econ. Sci. 12(2(48)), 391–401 (2017) Smirnova, Z.V., Gruzdeva, M.L., Krasikova, O.G.: Open electronic courses in the educational activity of the university. Vestn. Minin Univ. 4(21), 3 (2017) Solozhentsev, E.D.: Top economics: management of economic security: monograph. In: Solozhencev, E.D. (ed.) St. Petersburg State University of Aerospace Instrumentation, 2nd ed., Revised and supplemented. Trinity Bridge, St. Petersburg (2016) Gorodetsky, A.E. (ed.): Urbietorbi: in 4 volumes. Russian Academy of Sciences, Institute of Economics, vol. 4. Institutes of modern economics. Aletheia, St. Petersburg (2015)

Innovative Technologies in the Training of University Specialists Zhanna V. Smirnova(&) , Olga V. Katkova , Olga V. Golubeva , Elena V. Romanovskaya , and Natalia S. Andryashina Minin Nizhny Novgorod State Pedagogical University, Nizhny Novgorod, Russia [email protected], {katkova.ov,gololga}@yandex.ru, [email protected], [email protected]

Abstract. Purpose of work: Rationale for the use of innovative technologies in preparation of specialists at a university. The purpose of applying innovative technologies is determined. It is formation of a creative, active personality of a future specialist who can independently design and organize their educational and cognitive activities. Methodology: Today, the principle of variability is popular in Russian education. It allows for pedagogical collectives of educational institutions to construct a model of the pedagogical process for a certain stage of educational activity. The principle of variability allows to increase the effectiveness of the educational structure, development of new ideas and technologies in professional activities. Relevance of modern education is due to the problems of development and implementation of the educational process in the preparation of highly qualified specialists in innovative educational technologies. Results and conclusions: Based on the results of research on the effectiveness of innovative technologies, the positive results of applying EUMK in the educational process of students in the field of preparation 43.03.01” Service” are analyzed. Students were questioned to identify the effectiveness of innovative technologies in educational activities. Keywords: Innovative technologies Electronic training complex JEL Code: I20


Educational activities
Specialist



I21
I26

1 Introduction Today, the training of specialists in the system of vocational education brings significant changes, which are caused by social and economic transformations in society. There are more and more needs for implementation of new specialties that successfully realize themselves in a market economy. New materials, machines and mechanisms appear in the use of industrial activities of industry. © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 352–359, 2021. https://doi.org/10.1007/978-3-030-59126-7_39

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In this regard, there is a need to change the training of future specialists in various industries of the country. The raised question of changing the process of training in higher educational institutions is put in accordance with tasks that determine the labor market at the present stage of economy development in our country (Kazakova 2011). Therefore, the updated content of the educational process is understood in this case as a model that differs from the standard model. A new training model is filled with a complicated, deep and fairly holistic content of training, taking into account integrated processes in various fields of human knowledge (Lagunova 2011). As a result, the above contributes to the search and development of new content of learning technologies. At present, Russia is developing the application of a new education system aimed at a new educational space. Such a process substantially brings changes in the pedagogical theory and practice of the educational process (Leskova 2014). Training of specialists in the professional activity of educational institutions should be equipped with the formation of new skills, abilities to quickly receive information, solve problems of science and market practices. Traditionally used means of information transfer in the process of pedagogical activity are not sufficient for the formation of new knowledge and require an innovative approach in the professional activity of a teacher (Gerasimov 2014). For this reason, the psychological and pedagogical basis for improving educational technology is characterized as a function of memorizing learning (Sinyakova 2015). Today, the principle of variability is popular in Russian education. It allows for pedagogical collectives of educational institutions to construct a model of the pedagogical process for a certain stage of educational activity. So, it increases the effectiveness of the educational structure, development of new ideas and technologies in professional activities (Stenina 2011). Relevance of modern education is due to the problems of development and implementation of the educational process in the preparation of highly qualified specialists in innovative educational technologies. (Fedorov et al. 2015). In pedagogical practice, there is a variety of educational technologies used in the educational process. The different level of implementation of such technologies in the educational process poses the problem of choosing more innovative and effective teaching technologies that will depend on the purpose and content of the educational process (Freyssin 2016). However, the choice of applying effective technologies in the process of training specialists has not been sufficiently studied to date and requires theoretical and practical justification. And the problem of introducing innovative pedagogical technologies into the educational process needs scientific justification (Voropaev 2017).

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2 Materials and Method Currently, new research is being carried out in the field of innovative technologies in the educational process of vocational education (Belyaeva et al. 2020) (Myalkina 2018). The main problems of vocational education are reflected in the works (Batyshev et al. 2020). The study of development problems with the use of new innovative technologies is reflected and investigated in the work of (Burda 2018). In the works of Smirnova and Vaganova (2019) revealed the problems and principles of training specialists in the field of service activities. Thus, the study of the problem in the training of specialists in a university will be relevant in resolving the contradictions of professional educational institutions in theoretical developments and experimental methods for the application of innovative technologies in the educational process at a university.

3 Results Innovative conditions for the training of service providers require the adjustment of their content. This study examines the changes of technological processes of service activities, except the latest materials management programs, and organization methods of service activities, used in the course of work (Sedykh 2019). Such a state should certainly be taken into account during the professional training of the employee in order to improve the training quality so that the graduate is fully prepared to independently perform labor operations in the new conditions. The Law of the Russian Federation “On Education” stipulates that professional educational institutions independently design, approve and implement professional educational programs. A working curriculum and a set of working curricula for academic disciplines and types of practice together comprise a professional educational program in accordance with a specific specialty for a given secondary special educational institution. Innovative technologies are the organization of the educational process, built on qualitatively different principles, means, methods and technologies and allowing to achieve educational effects, characterized by: – maximizing knowledge; – maximum creative activity; – a wide range of practical skills. The main goal of innovative educational technologies is to prepare a person for life in an ever-changing world (Vershinina 2019). Finally, the defining purpose of the application of innovative technologies is formation of a creative, active personality of a future specialist who can independently design and organize their own educational cognitive activity (Shentsova 2019).

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In the process of learning with the use of innovative technologies, a student must learn to develop modern skills: – – – – –

development of an action plan; the use of the necessary resources to complete tasks; effective result of their work; use of a computer in any situation; orientation in unfamiliar professional activity.

The main task of the teacher in organizing practical training of students using innovative technologies is as follows: – – – –

increasing the level of motivation to work in the process of study; increasing student development; creating a favorable atmosphere and attitude towards each student; ability to solve problems.

As a result, listed tasks in an educational institution can be solved by introducing innovative technologies into the practical training of students in the field of preparation 43.03.01 “Service” of the Minin University. We single out the main innovative technologies in the process of training specialists in service activities: – use of information and communication technologies in the content of the educational process (electronic training courses, simulators, presentations, ability to work with the Internet); – personal oriented technologies (creation of favorable conditions for students’ own educational activity); – practice-oriented training (the need to link technical and vocational training) (Markova 2019) The main functions of developing technology are: formation of critical thinking skills of students; formation of ability of active speech communication; organization of activity of the teacher on construction dialogue and its implementation in the learning process (Smirnova 2019). Therefore, the use of such functions of developing technologies is possible with the following forms of training: – research, comments, brainstorming, interviews, and reviews; – conferences and discussions; – classes based on imitation of service activities. Application of such educational activity forms in essence already are innovations. Technologies used in the learning process make learning more complete, rich and interesting. Also, the study of innovative technologies in the training of service activity specialists was based on a survey and a control section of student learning outcomes. It was attended by 25 correspondence students in the direction of preparation 43.03.01 Service, who is studying at different courses. Students passed a questionnaire

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to identify the effectiveness of innovative technologies in educational activities Diagram 1. 1. Do you have an interest in classes conducted through innovative technologies? 2. Are you ready to work in such conditions? 3. Do you consider it necessary to use innovative technologies in the process of preparing for professional activities? 4. All conditions have been created at the university for conducting classes on new technologies.

All conditions have been created at the university for conducting classes on new technologies

Do you consider it necessary to use innovative technologies in the process of preparing for professional activities?

Are you ready to work in such conditions?

Do you have an interest in classes conducted using innovative technologies?

0% нет

10% 20% 30% 40% 50% 60% 70% 80% 90% 100% да

According to a student survey, we see that 79% of respondents are interested in teaching teachers using innovative technologies, 83% are ready to work in such training conditions, 92% consider the need for innovative technologies to form knowledge in preparation for professional activities, 83% are sure that the university has created all the conditions for organizing and conducting classes with new technologies. Considering the importance of the main forms of innovative technologies in the learning process of service specialists. We can select the basic, most used technology in the educational process in correspondence courses of training 43.03.01 “Service”. Also, considering the specifics of the educational process of correspondence education, namely the number of hours devoted to theoretical and practical training is rather small compared to full-time education, most of the educational information is devoted to independent learning. At Minin University, students learn about 70% of the material on their own. Students do not attend college every day, but come to sessions 1–2 times every six months. There are examination sessions. Their duration is 2–3 weeks. The summer session lasts longer than the winter session. At the initial sessions, teachers conduct face-to-face classes on profile subjects, practical work, answer questions of students, and give

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materials for self-study at home. During examination sessions, students pass tests, exams, term papers and diplomas. The educational portal at the Minin University creates conditions for supporting the main professional educational programs and implementation of continuing education programs using exclusively or partially e-learning. Service provides access (closed or open) to various electronic educational and information resources hosted on the university’s EIOS systems or on the Internet. On the basis of the Moodle e-learning platform, courses have been created in all disciplines of the curriculum of distance learning in the training direction 43.03.01 Service. The purpose of the development and implementation of EUMK: – providing the educational process with educational and methodological documentation presented in the electronic information and educational environment of the University; – formation of a unified educational and methodological base of the University through the system and the totality of all educational, teaching and other materials, copyright developments of teachers and employees of the University. Main goals: – organization of support of the educational process with educational, teaching, reference, and other materials in electronic form that improve the quality of training of students, their systematization and cataloging; – creation of conditions for the formation of a library of electronic modules for educational programs; – improving the efficiency of management of students’ independent work; – implementation of the rating system for evaluating the results of training. Taking into account the tasks of the EUMK, which are justified by the effectiveness of the application of the EUMK in the training of specialists. We analyzed the quality of training according to results of the control testing. The study on quality control of training students was conducted in two groups one group experimental (E) was tested, which studied the discipline “Organization and planning service activity” with the use of EUMK, another control group (K) studied the discipline in a traditional classroom. Students passed testing developed at Moodle. According to the results of testing, we see that the quality of knowledge development in the experimental group is higher than in Table 1. Table 1. Assessment of the quality of the level of knowledge using EUMK Mastering level Experimental group Control group High 46 16 Average 54 76 Low 0 8

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Therefore, the data of knowledge quality with EUMK indicators show that in the experimental group level of knowledge assimilation is high, and in control group groups level is average. Obtained data allow us to conclude that the use of innovative technologies in the educational process is effective, namely, the use of EUMK in the learning process.

4 Conclusions According to the results, we can conclude that the use of innovative technologies in the educational process is effective. In the process of the study were identified: 1. the main innovative technologies in the process of training service specialists. 2. a survey of students was conducted in the direction of training 43.03.01 Service. 3. a study was conducted on the quality control of student training, which was carried out in two groups. One experimental group (E) was tested, which studied the discipline “Organization and planning of service activities” using EUMK. 4. as a result, the level of co-knowledge and skills in the groups in which the experiment was conducted is estimated. Thus, formation of the professional orientation of specialists largely depends on the introduction of innovative teaching technologies in the educational process.

References Fedorov, A.A. (ed.): Modernization of Teacher Education in the Context of the Global Educational Agenda: Pedagogy and Psychology of Potential Opportunities: Collective Monograph. Science, Moscow (2015) Tolsteneva, A.A., Lagunova, M.V., Vinnik, V.K., Voronkova, A.A., Zhilina, N.D.: Informationproject technology for the formation of general competencies of students by means of electronic information and educational environment. In: The 21st Century from the Positions of Modern Science: Intellectual, Digital and Innovative Aspects. Lecture Notes in Networks and Systems, pp. 468–476. Science, Moscow (2020) Burda, A.G., Burda, G.P.: Prospects for the study of economic cybernetics and the digital economy. In: Higher Education in an Agricultural University: Problems and Prospects: Collection of Articles on Materials of the Educational-Methodical Conference, pp. 234–237. Science, Moscow (2018) Frayssinhes, J.: Les pratiques d’apprentissage des adultes en FOAD: Effet des styles et de l’autoapprentissage. Thèse de doctorat. Université de Toulouse II Le Mirail (2011). Thèse en ligne: http://halshs.archives-ouvertes.fr/tel-00636549 Freyssin, J.: Training in digital networks: cooperative learning, collaborative learning and pedagogical innovations. Contin. Educ. XXI Century 4(16) (2016). https://doi.org/10.15393/ j5.art.2016.3346 Gerasimov, G.I.: The educational landscape of a cognitively developing paradigm. Soc. Humanitarian Knowl. 12(1), 264–268 (2014)

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Ilyashenko, L.K., Markova, S.M., Mironov, A.G., Vaganova, O.I., Smirnova, Z.V.: Educational environment as a development resource for the learning process. Amazonia Investiga 8(18), 303–312 (2019) Karapulina, O.N.: Pedagogical possibilities of the space of the complex “lyceum-university”: theoretical aspect. Mod. Sci. Res. Innov. 3 (2014). http://web.snauka.ru/issues/2014/03/33130. Accessed 25 Mar 2019 Kazakova, K.S.: Educational environment: basic research approaches. Trans. Kola Sci. Center Russ. Acad. Sci. 6(1), 65–71 (2011) Lagunova, M.V. (ed.): Management of Cognitive Activity of Students in the Educational Information Environment of a University: Monograph. NNGASU, Nizhny Novgorod (2011) Leskova, I.A.: Pedagogical space as a space of possibilities for the realization of the subjective activity of a student in the process of learning at a university. Fundam. Res. 11(9), 2055–2060 (2014). http://www.fundamental-research.ru/ru/article/view?id=35895. Accessed 29 Jan 2020 Myalkina, E.V., Sedykh, E.P., Zhitkova, V.A., Vaskina, A.V., Isaikov, O.I.: University Resource Center as an element of social development of the region. Vestn. Minin Univ. 6/3(24), 1 (2018) Sedykh, E.P.: System of normative legal support for project management in education. Vestn. Minin Univ. 7/1(26), 1 (2019) Shentsova, O.M.: Functionalism of the subject-spatial environment as a way to optimize the learning areas of higher educational institutions. In: New Ideas of the New Century: Materials of the International Scientific Conference FAD TSU, vol. 3, no. 1, pp. 207–214 (2019) Sinyakova, M.G.: Psychological and pedagogical support of professional and psychological characteristics of a teacher in multicultural educational space of a metropolis. In: Psychological Support in Education System: Scientific Works. International Interdisciplinary Scientific-Practical Conference Psychology and Psychological Practice in the Modern World, pp. 225–239. Publishing House Ural, Ekaterinburg (2015) Smirnova, Z.V., Kamenez, N.V., Vaganova, O.I., Kutepova, L.I., Vezetiu, E.V.: The experience of using the webinar in the preparation of engineering specialists. Amazonia Investiga 8(18), 279–287 (2019) Stenina, T.L.: The socio-pedagogical space of the university as a predictor of the development of the design culture of students. Mod. Prob. Sci. Educ. (4) (2011). http://www.scienceeducation.ru/ru/article/view?id=4752. Accessed 30 Jan 2020 Stepanov, O.A.: On important aspects of training for the development of the digital economy. J. Russ. Law 11(1), 107–111 (2018) Vershinina, A.V., Koshkina, E.N., Orlova, E.R., Koshkin, M.V.: Analysis of the training system for the digital economy in Russia. In: Trends in the Development of the Internet and Digital Economy: II All-Russian Scientific-Practical Conference with International Participation, pp. 13–15. Science, Moscow (2019) Voropaev, M.V., Tolkacheva, N.V.: The problem of structural and functional analysis of the educational space of a regional higher educational institution. News of higher educational institutions. Volga region. Humanitarian Sci. 4(44), 180–192 (2017). https://doi.org/10. 21685/2072-3024-2017-4-19

Software Suite for the Analysis of Financial Instruments with the Use of Neural Networks Bakhtiiar T. Allakhverdiev(&)

and Alexander A. Polkovnikov

Volgograd State University, Volgograd, Russia [email protected], [email protected]

Abstract. Purpose: The paper is aimed at developing a software suite for forecasting the changes in prices for various assets in financial markets using neural networks. Methodology: Two program modules (indicator calculation module and forecasting module) are being developed. Mathematical tools are used in the indicator calculation module to calculate the indicators of technical analysis, statistical values and numerical characteristics (return, deferred income, etc.) and to form samples. Then the samples obtained are processed using the forecasting module, and the result is produced – predicted changes in asset prices. Results: The efficiency of the software suite in terms of forecasting the asset price changes in financial markets is shown. It is particularly important to note that this idea can be applied to markets such as Russian market, American market, time market, currency market, etc. The software suite performs strongly not only in the stock market, but also in the currency and time markets. Conclusion: The forecasting technique presented is promising because it uses classical mathematical indicators together with neural networks. As a result, a multipurpose tool is obtained that can be applied to different markets. Keywords: Forecasting
Increase in profits
Finance
Stock market
Neural networks
Software suite
Analysis JEL Code: C45


C53
C65
C88

1 Introduction Stock markets are prone to constant price changes and volatility bursts, which in turn increase the risks to persons engaged in stock market trading. Given the complexity of decision-making, the use of software tools is necessary. Today, two approaches to the study of financial assets are utilized: fundamental analysis and technical analysis. The fundamental analysis is based on the study of the financial indicators and business performance indicators of the company. Technical analysis helps to make a forecast of price changes based on historical data using different tools. Technical analysis will be used in the developed software suite. There are various software programs at the moment that use technical analysis techniques such as Xtick, Metastock, Omega and others. These products present many conventional techniques, but this doesn’t clean up the situation much. Machine © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 360–369, 2021. https://doi.org/10.1007/978-3-030-59126-7_40

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learning has become in demand as well. However, all attempts are aimed at forecasting future price movements using such input data as price and volume. It is necessary to use several techniques combined. In our software suite, we employ the idea of using a whole set of numerical indicators to forecast prices in parallel with neural networks. Hence, conservative techniques are combined with modern techniques. Thus, it is important to use not only base data but also different indicators to identify key asset flows. The software suite consists of two components: indicator calculation module and forecasting module. Various programming languages are used, including C# and Python (neural networks). In addition, our team has issued other works concerned with financial markets. For example, “Software suite for computer-aided decision-making powered by the QUIK trading platform”. (State registration certificate for a computer program No. 2019661095).

2 Methodology 2.1

Indicator Calculation Module

We have developed the indicator calculation module in the form of a windowed application with many functions. We shall list some of them: the possibility of construction of charts, constructing a correlation matrix, calculating optimal shares for portfolios using different methods (Shiriaev 2016a, b), calculating coefficients (about 10) (Berzon and Doroshin 2012), sampling, saving results to text files (Fig. 1). Technology stack: programming language – C#, technology (platform) – Windows Forms.

Fig. 1. View of the main application window and render window (indicator calculation module).

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The data are entered in the form of .txt text files (quotations) and manually (return on risk-free asset, expected return). Data output: results are displayed in graphic form and stored in files. Functionality. The software calculates the shares of assets in the portfolio based on historical data using the Markowitz Theory and the Tangency Portfolio Theory. Further, the indicators for the three portfolios (introduced by the user and calculated by the software) are calculated. The analysis software uses arithmetic mean return, standard deviation, correlation, covariance, variance, Sharpe ratio, Beta coefficient, Treynor ratio, Jensen’s alpha, Jack Schwager’s ratio, Sortino ratio, Calmar ratio, Modigliani risk-adjusted performance (M2) (Berzon and Doroshin 2012). This software suite provides the possibility to create samples with calculated indicators (samples for forecasting). The essence of this principle is that the whole period is divided into sub-periods and the calculation is made for each of them. Samples are stored in two files: the ratio file and the future profit file (%) (Fig. 2).

Fig. 2. Sample files for the forecasting of future profits.

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Forecasting Module

The forecasting module is our console application with visualization elements (graphic representation of predicted values). Technology stack: programming language – Python, libraries – Keras, Numpy, Pandas, Matlib et al. (Chollet 2018). The main idea used for forecasting is as follows: two samples are formed – one for learning and another for forecasting. Having learned the model using the relevant data, we forecast the profit. We have already indicated that the data represent some numerical data for a certain period, as well as predicted value - actually the profit that we will realize on the asset. Deep neural networks are used for forecasting with the application of a Python library such as Keras (Gamboa 2017). The mean square error (mse) is used as the error function that will be used by the optimizer in the back propagation of error algorithm. The mean absolute error (mae) is used as metrics. Since certain attributes change in different ranges, it is necessary to normalize the data so that to improve the operation of the neural network (so that it would be easier to understand which attribute plays a major role). We shall use data standardization (mean value 0, variance 1). For this purpose, we need to subtract the mean value from each attribute and divide it by the standard deviation. We will use Adam as the optimization algorithm (Goodfellow et al. 2016). Adam is an algorithm for gradient optimization of first-order stochastic target functions based on lower-order adaptive moment estimators. Formulas for calculating moving mean values in Adam algorithm: mt ¼ b1 mt1 þ ð1  b1 Þgt ; vt ¼ b2 vt1 þ ð1  b2 Þg2t ; where m and v are moving mean values, gt is gradient of loss function, 0  b1 \1, 0  b2 \1. Values of coefficients: b1 ¼ 0:9, b2 ¼ 0:999.

3 Results 3.1

Indicator Calculation Module

We shall give consideration to the operation of the software suite using the example of a portfolio consisting of the following shares: Gazprom, Lukoil, Sberbank, and VTB. Besides, we keep in mind the market index, RTSI in our case. The time span is from 25.04.2018 till 25.04.2019 with a frequency of 1 day. The source of data - Finam.ru (https://www.finam.ru/).

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Besides, we should enter the return on risk-free asset and the expected return, 0.027 and 0.035 respectively (per day). User shares of assets in the portfolio are 0.3, 0.3, 0.3, 0.1 respectively.

Fig. 3. Example of operation of indicator calculation module.

Fig. 4 Example of operation of indicator calculation module.

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Fig. 5 Example of operation of indicator calculation module.

Having executed the application (Fig. 3, 4 and 5), we obtained the values of various indicators and the recommendation on the financial asset based on the indicators. In our case, the module evaluates the portfolio as a success. The software analyzes about 15 different indicators to obtain this result. 3.2

Forecasting Module

We shall make a forecast for the profit (profit performance) for the USD_TOD instrument in the interval from 20.05.18 till 20.05.19. The input data for learning will be the average yield, risk, future profit, and the coefficients calculated for USD_TOD in the interval from 20.05.16 till 20.05.18 for the forecast from 20.05.18 till 20.05.19. We shall make a forecast for the profit (profit performance) for GAZP, LKOH and SBER shares in the interval from 20.05.18 till 20.05.19. The input data for learning will be the average yield, risk, future profit, and the coefficients calculated for these shares in the interval from 20.05.16 till 20.05.18 for the forecast from 20.05.18 till 20.05.19. Besides, we shall give consideration to the operation of this software suite in the American market. We shall take S&P 500 as the market index. We shall make a forecast for the profit (profit performance) for the MSFT share in the interval from 20.05.18 till 20.05.19. The input data for learning will be the average yield, risk, future profit, and the coefficients calculated for the shares of a given company in the interval from 20.05.16 till 20.05.18 for the forecast from 20.05.18 till 20.05.19.

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Fig. 6. Actual and predicted profit data.

Fig. 7. Actual and predicted stocks data.

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Fig. 8. Actual and predicted data for a MSFT share.

Having analyzed these results (Figs. 6, 7 and 8), we can note that the software suite has effectively achieved its objective - the forecast of asset price changes. The main trend movements of assets are shown. Besides, we should note the efficient operation of the module for the U.S. market, as exemplified by the MSFT share. The numbering of quotations is shown on the axis of abscisses, and the dynamics are shown on the axis of ordinates (%). Despite small errors, the climb and fall periods of actual and predicted data match. We shall compare the results with data from other researchers. For example, we shall analyze the work “Analysis and forecasting of price performance in the stock market” (Tsyrenov 2019). The author of this work makes a forecast for the quotation of Gazprom shares for the period of 02.03.2019–15.03.2019. Such models as ARIMA (0, 1, 0), ARIMA (1, 1, 0) and the Holt-Winters model are used for forecasting. The data obtained by the researcher are presented in the Figure below (Fig. 9). As we can see, despite the fact that Gazprom’s stock prices actually drop, according to the forecast, they will climb or be in the flat market. The reason for such operation errors (Tsyrenov 2019) is that price is used for forecasting. However, as was pointed out at the beginning of our work, a qualitative forecast requires a wide range of indicators other than a price. To summarize all the results of operation of our software suite, we recognize that the idea of using coefficients together with neural networks is correct, and the suite for analysis and forecasting of financial assets as such is ready for practical application.

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Fig. 9. Actual and predicted data for a Gazprom share (Tsyrenov 2019).

4 Conclusion It is necessary to point out the importance of the use of modern technologies which are continuously evolving, in such a challenging task as analysis of the assets of financial markets. The problem consists in the complexity of describing the structure and current processes of financial markets. In addition, one should note the randomness; it is essential to be able to distinguish trend movements from the general background noise. The results from the examination of examples testify that the use of a set of coefficients helps to find subtle aspects in the market, such as the change of trend, the increase (decrease) of market volatility, etc. The comparison of results with papers of other researchers shows that our idea is correct and the software suite is ready for service. We get a software suite that not only yields the result itself, but also allows individuals with knowledge in the field of financial markets to make their own decisions based on a lot of calculated data using the indicator calculation module. Specific nature consists in the universality of the software suite. It doesn’t matter if it’s a Russian, an American, or another market; a currency market, a time market, or a stock market.

References Andrew, B., Peter, B.: Practical Statistics for Experts in Data Science. BHV-Peterburg (2018) Software suite for computer-aided decision-making powered by the QUIK trading platform: State registration certificate for a computer program 2019661095 (2019) Finam.ru—financial web portal: stock market and economy news, forecasts and analysis. Finam Investment Company. https://www.finam.ru/. Accessed 21 Dec 2019 Chollet, F.: Deep Learning with Python. Piter (2018) Shiriaev, V.I.: Financial Markets, Neural Networks, Chaos and Nonlinear Dynamics. Knizhnyi Dom LIBROKOM Publishing House (2009)

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Oancea, B., Ciucu, Ş.C.: Time series forecasting using neural networks. arXiv preprint arXiv: 1401.1333 (2014). https://arxiv.org/ftp/arxiv/papers/1401/1401.1333.pdf. Accessed 21 Dec 2019 Goodfellow, I., Bengio, Y., Courville, A.: Deep Learning (Adaptive Computation and Machine Learning Series). The MIT Press (2016) Gilmore, B.T.: Dynamic Time and Price Analysis of Market Trends. Bryce Gilmore & Associates, Helensvale (1998) Picasso, A., Merello, S., Ma, Y., Oneto, L., Cambria, E.: Ensemble of technical analysis and machine learning for market trend prediction. In: IEEE Symposium Series on Computational Intelligence (SSCI) (2018) Huynh, H.D., Dang, L.M., Duong, D.: A new model for stock price movements prediction using deep neural networks. SoICT 17, 57–62. (2017). https://danglienminh.github.io/public/ papers/SOICT_STOCK_2017.pdf. Accessed 21 Dec 2019 Berzon, N.I., Doroshin, D.I.: Peculiarities of the application of indicators of return on financial investment. Finansy i Kredit. (14), 21–33 (2012). https://publications.h.ru/articles/66996837. Accessed 21 Dec 2019 Niaki, S.T.A., Hoseinzade, S.: J. Ind. Eng. Int. 9, 1 (2013). https://doi.org/10.1186/2251-712X-91. Accessed 21 Dec 2019 Fang, Y.: Feature selection, deep neural network, and trend prediction. J. Shanghai Jiaotong Univ. (Sci.) 23(2), 297–307 (2018). https://link.springer.com/article/10.1007/s12204-0181938-5. Accessed 21 Dec 2019 Rajput, V., Bobde, S.: Stock market forecasting techniques: literature survey. Int. J. Comput. Sci. Mob. Comput. 5(6), 500–506 (2016). https://www.ijcsmc.com/docs/papers/June2016/ V5I6201685.pdf. Accessed 21 Dec 2019 Gamboa, J.: Deep learning for time- series analysis. arXiv:1701.01887 (2017). https://arxiv.org/ abs/1701.01887. Accessed 21 Dec 2019 Shiriaev, A.N.: Fundamentals of stochastic financial mathematics. Volume 1. Facts, Models. Moscow Center for Continuous Mathematical Education (2016) Shiriaev, A.N.: Fundamentals of stochastic financial mathematics. Volume 2. Theory. Moscow Center for Continuous Mathematical Education (2016) Tsyrenov, A.T.: Analysis and forecasting of price performance in the stock market. Skif. Students’ Sci. Issues 6(34), 18–28 (2019). https://www.elibrary.ru/item.asp?id=38563178. Accessed 21 Dec 2019

The Impact of Smart Technologies on the Foreign Exchange Market Inna V. Kudryashova(&) Volgograd State University, Volgograd, Russia [email protected]

Abstract. Purpose: In recent decades, smart technologies have been created and disseminated in all areas of public life. This arouses research and practice interest in exploring the opportunities offered by such technologies. Considering the importance of the currency system for the economy of any country, the study of areas of influence of smart technologies on the currency market is of vital importance. Design/Methodology/Approach: The paper identifies development and widespread occurrence of electronic trading systems in the currency market, as well as the emergence and use of cryptocurrencies in the private sector of the world economy, as the main directions of influence. The main sources of empirical data include information published by the Bank for International Settlements and the Coinmarketcap website. The following methods were used for the analysis of available data: historical method, comparative analysis method, and statistical research methods. Findings: The authors show that existing changes in the currency market due to improvement of trading systems have mostly positive effects that are manifested in faster currency exchange transactions, reduced risks and costs for their parties. They describe possibilities and risks faced by cryptocurrency users in their calculations, as well as by those who use cryptocurrencies for investment purposes. Originality/Value: The authors conclude that there is a need to develop a legal and regulatory framework for the procedure of emission and functioning of cryptocurrencies that would minimize existing and potential negative effects of their proliferation, and to diversify the areas of their application in order to take advantage from them. Keywords: Foreign exchange market
Electronic trading systems Blockchain
Cryptocurrency
Fiat money JEL Classification Codes: F31





G15

1 Introduction Computers, technical basis of the Internet, search engines and digital platforms form the core of the modern stage of technical advance. The rampant development of modern technologies and the active use of new computer software are present in virtually all areas of public life, including in the currency market. © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 370–378, 2021. https://doi.org/10.1007/978-3-030-59126-7_41

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Smart technologies and digitization make for a change in the means of communication between sellers and buyers, create new objects of trade in the currency market, and increase the motivation of its subjects. Individual directions of current changes in the currency market as a result of the use of smart technologies are being investigated by several foreign as well as domestic researchers. Gallardo and Heath (2009), Rime (2003), are examining the evolution of technologies of exchanging one national currency to another. Much consideration is given to possibilities that are brought to the currency market by the blockchain technology as well as experience of operation of cryptocurrencies in papers by Polevich (2018), Levashenko and Ermokhin (2019), Houben and Snyers (2018). The authors focus on the effects of the emergence and use of cryptocurrencies, for example, in the collaborative work of Shchegoleva and Malsagova (2019). The goal of this paper is as follows: based on the identification of reasons behind the ongoing changes in the currency market related to the provision of technical capability of switching currency operations and expansion of objects of trade, to analyze the extent of innovations that are put into practice and identify their main effects.

2 Materials and Method The empirical basis of the research was the statistical data published by the Bank for International Settlements (BIS) and the Coinmarketcap website. The Bank for International Settlements conducts surveys every 3 years and uses them as a basis for publishing information on technologies of trade in the currency market. The paper used data for 2004–2019. Statistical information on cryptocurrency transactions was obtained from the Coinmarketcap website. This website has been providing information on the market capitalization of all existing cryptocurrencies since April 2013. Since December 2013, it has also been possible to obtain data on the daily traded value. The paper presents the analysis of data for 2014–2020. The following methods were used in this research: historical method, comparative analysis method, as well as statistical methods such as tabular method, graphical method, absolute method, and method of relative indicators.

3 Results 3.1

Electronic Trading Systems

Active trade in the currency market has started after the countries were given the ability to choose their own exchange rate regime for national currencies in the 1970s. Many countries have opted for a particular variety of the floating exchange rate. During this period, foreign exchange trading in the over-the-counter market was carried out via

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telephone lines. When this method was used, as soon as the dealer provided his client with information about quotations over the telephone and a positive decision about the currency exchange transaction was made, there has been a physical exchange of documents between the parties to the transaction; this process was time-consuming and prone to human error. Since information on the terms of the transaction was only available to the parties to the transaction, foreign exchange markets were nontransparent under such conditions. The only source of information about quotations was the continuous announcement of quotations by voice brokers (VB) that were used in the inter-dealer market (Gallardo and Heath 2009). Voice trading systems are still important today for the least liquid currencies (Fig. 1). Computer-based information exchange systems have been introduced for the most liquid currencies late in the 1980s in the inter-dealer market and in the 1990s in the customer market. In 1987, Reuters was the first to launch a system of two-way trading between dealers. In point of fact, it replaced telephone calls with printed messages, yet it established facilities for dealers and increased operating performance by creating ecommerce records. A year after, another similar platform, Electronic Broking Service (EBS) was introduced (Rime 2003). In 2002, the Continuous Linked Settlement system was launched, making it possible to significantly reduce the settlement risk during exchange transactions. Electronic trading systems were introduced in the customer market in 1996, when the global custodian State Street launched its own electronic platform, FX Connect. Although this trading system failed to improve market transparency, it did provide reduction of operational risks to customers. Multibank trading systems were introduced

100% 90% 80% 70% 60% Electronic

50%

Voice and undistributed

40% 30% 20% 10% 0% 2004

2007

2010

2013

2016

2019

Fig. 1. Execution method by instrument and counterparty in 2004–2019, % Source: BIS, 2019, 2016, 2013, 2010, 2007, 2004.

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since 1999, allowing customers to simultaneously send requests for quotations to several banks and to make a decision on a particular dealer using information received. In 2000, the system that customers allowed to trade on an anonymous basis was introduced for the first time in the currency market (King et al. 2011). At present, the trade in the currency market is carried on with the use of different platforms; with the advent of multibank trading systems, the boundaries between interdealer and client segments are gradually erased. However, there is no uniform method for assigning any system to a particular group of technologies. Nevertheless, according to the surveys conducted by the Bank for International Settlements (BIS), the share of electronic systems predominates (Fig. 1). New electronic trading platforms have simplified the processing of applications, reduced operational risks and trade expenses of participants on in the currency market. 3.2

Blockchain and Cryptocurrencies

The functioning of the global currency market is significantly influenced by the use of the blockchain technology, the essence of which consists in distributed data storage and encryption. Blockchain is a distributed database which is characterized by the absence of a common data storage server. In other words, this database is decentralized. It stores a list of simply ordered interrelated records called blocks. Moreover, this list is constantly being expanded. As a result, all users of this system constitute a distributed computer network, and a copy of each block is stored in each individual computer of a particular user. This structural principle predetermines its high invincibility. Its failure is only possible when all computers fail simultaneously. Blockchain information is available to everyone. But at the same time, all personal data in the system are secure. This means that information about a certain transaction can be obtained. However, it is impossible to find out the parties to this transaction. A special identification key, which is stored by each user, is used for confirmation of this information (Polevich 2018). This technology enables recording of information on money transfers between the participants in the system for the entire period of existence of the currency unit. The blockchain technology was put to practice use for the first time by the programmer/team of programmers working under the pseudonym Satoshi Nakamoto, when Bitcoin cryptocurrency was created in 2008. The main reasons for the use of blockchain technology in the financial market are attributed to the shortcomings of the traditional banking system. For example, when an international money transfer is made, it will take several days for the bank to verify necessary information. Moreover, a fee must be paid to the bank for such transactions. In addition, being intermediaries in foreign exchange transactions, banks increase the duration of currency exchange, while charging fees at that. Blockchain, on the other hand, makes it possible to renounce intermediary services in the processing of payments, which is clearly a major advantage for business in terms of costs. Despite more than 10 years of existence, there is no single definition of cryptocurrency so far. The Bank for International Settlements uses the following terms “virtual currency”, “digital currency” and “cryptocurrency” (BIS 2015) to denote currency units that are

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based on the blockchain technology. In characterizing their essence, it identifies their attributes as follows. First of all, digital currencies are assets whose price depends exclusively on the ratio of market demand to supply. However, unlike goods, their intrinsic value is zero. What is more, when they are compared to conventional electronic money, cryptocurrencies are not an obligation of any individual or institution, nor are they supported by any authorities. As a result, their market price depends only on the confidence that they can be exchanged for other goods or services or a certain amount of fiat money at some future day. Finally, the volume of emission of cryptocurrencies is solely determined by computer software (BIS 2015). The European Central Bank (ECB) defines cryptocurrencies as a subset of virtual currencies, a form of unregulated digital money usually created and controlled by their developers, used and accepted by members of a particular virtual community (Houben and Snyers 2018). Therefore, cryptocurrencies are not backed by any goods, they exist only in the form of a program code and can be exchanged for goods. Besides, their peculiarity as compared to fiat money is that their limited turnover and price regulation are actually achieved without any government intervention. The cryptocurrency unit is called Coin. The Coin is encrypted information that cannot be copied. Since cryptocurrencies are a variety of money, it is expedient to describe the functions they perform. Today, despite the fact that there is no unified approach among economists, there is a prevailing opinion that the essence of money consists in its three main functions: unit of account, medium of exchange, and store of value (Houben and Snyers 2018). Since cryptocurrency prices are characterized by high volatility, digital money cannot function as a unit of account. If the prices were specified in cryptocurrencies, they would need to be reviewed frequently due to significant fluctuations in exchange rates of cryptocurrencies. Cryptocurrencies function as a medium of exchange only partially, since certain groups of business entities accept or are willing to accept them in the settlement of goods and services. High volatility of cryptocurrency prices expressed in principal world currencies, makes them an unreliable store of value. Please note that unlike fiat money, cryptocurrencies perform a unique function of transferring and storing information about transactions made by the participants in the system. Since this information is stored in blockchains of cryptocurrencies, it cannot be changed. This makes it possible to refer to this source of information to resolve any issues (Levashenko et al. 2019). Despite their limited capacity of performing money functions, a great demand for cryptocurrencies has developed by now. This is in many respects due to the agents’ expectations of the gain in their market value. Bitcoin, that was introduced in 2008 and has been used since 2009, is not the only cryptocurrency at present. Popular cryptocurrencies include Ethereum (ETH), Ripple (XRP), Litecoin (LTC), Bitcoin Cash (BCH), Dash (DASH), etc. According to Coinmarketcap, by the early 2020, there were more than 5,000 cryptocurrencies. However, despite the introduction and use of new cryptocurrencies, the Bitcoin share in cryptocurrency transactions is still dominant (Fig. 2).

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100% 90% 80% 70%

Bitcoin

60%

Ethereum

50%

XRR Bitcoin Cash

40%

Tether

30%

Прочие

20% 10% 0% 1/1/2014

1/1/2015

1/1/2016

1/1/2017

1/1/2018

1/1/2019

1/1/2020

Fig. 2. Foreign exchange structure of the cryptocurrency market in 2014–2020, %. Source: Coinmarketcap.

Created in 2009, bitcoin was initially worth a few cents. From that point on, despite sizeable fluctuations, its price has sharply risen. The growth over the past 9 years has been 973,803.41%.

700000 600000 500000 400000 300000

Capitalization of Капитализация рынка cryptocurrencies market криптовалют Daily value Объемtraded торгов за 24 ч.

200000 100000 0

Fig. 3. Market capitalization and traded value of cryptocurrencies in 2014–2020, million USD. Source: Coinmarketcap.

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As of the early 2018, the capitalization of the cryptocurrency market was almost as high as 613 billion USD. The market decline could be observed in the following months of 2018. Early in 2020, the total capitalization of the cryptocurrency market was 19.2 billion USD (Fig. 3). The volume of daily market trading was changing in proportion to this trend. Early in 2020, the value of this indicator was 61.5 billion USD. However, despite the significant market growth, the global scale of the use of cryptocurrencies prevents from suggesting that global economic actors are currently abandoning the use of fiat money in favor of cryptocurrencies. This is proved by the following data. In mid-2019, when the capitalization of the cryptocurrency market was 327 billion USD, the capitalization of the global derivatives market was as high as 542.4 trillion USD, and the capitalization of the global stock market was as high as 78.8 trillion USD; the world’s M1 monetary aggregate amounted to 36.8, and the price of gold in the world’s aggregate official reserves was over 1.5 trillion USD (Eurasian Economic Commission 2019), while the volume of daily trade in the global currency market was over 6 trillion USD. Compared to other segments and aggregates of the monetary market, the capitalization of the cryptocurrency market is extremely small. Thus, cryptocurrencies have not yet been able to emerge full blown in terms of their share in monetary transactions. The main reasons behind that include limited capacity, extreme volatility, limited transparency, and unpredictability of circulation costs. In addition, the use of cryptocurrencies is associated with a number of risks. One portion of these risks can also occur in case of the use of fiat money, while the other portion is unique to cryptocurrencies only. The anonymity of cryptocurrency owners is one of the factors that determines their possible use in trade in prohibited goods and services and in the financing of terrorism. Another risk of the use of cryptocurrencies is the risk that of loss of money by their owners due to participation in various projects. This risk is not unique to cryptocurrencies. In this day and age, the operation of a well-developed system of monitoring of activities in conventional financial markets sometimes results in cases of creation of financial pyramids, unfair practices of price-gouging with regard to financial assets and derivatives, etc. However, there is no well-developed and efficient legal and regulatory framework of the use of cryptocurrencies in most countries of the world economy, and there is no informational and learning content that would contribute to promotion of financial literacy and awareness of inexpert investors (Eurasian Economic Commission 2019). Cryptocurrency owners may incur significant losses if they lose a crypto-key due to negligence or as a result of a hacker attack (Shchegoleva and Malsagova 2019). From the macroeconomic perspective, there is a risk that money-and-credit and fiscal policies will become more difficult to implement, that budget revenues from taxation will decline at various levels and that supervising functions of monetary authorities will degrade.

4 Conclusion As can be seen from the above, the impact of smart technologies on the currency market is made in the following principal directions.

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Over the recent 30 years, electronic trading systems have been developed and have become widely used in the currency market, enabling their participants to simplify the process of exchange of information, reduce operational risks and trade expenses. The use of the blockchain technology in the currency market made it possible to develop and implement the idea of cryptocurrencies, the use of which allows sellers and buyers to reduce transaction expenses resulting from currency exchange and settlement transactions, ensure anonymity of transactions, ensure high speed of payments, and allow investors to make a speculative profit. Despite the obvious attractiveness of cryptocurrencies, their operation is involved with significant risks at both the micro and macroeconomic levels. This necessitates the elaboration of the legal and regulatory framework with respect to them, the effective functioning of which will not only reduce the negative consequences of the proliferation of cryptocurrencies, but will also enable monetary authorities to utilize their potential.

References Bank for International Settlements: BIS Q. Rev. December 2019. https://www.bis.org/ quarterlyreviews/index.htm?m=5%7C25&quarterlyreviews=ZnJvbT0mdGlsbD0mcGFnZT0 xJnBhZ2luZ19sZW5ndGg9MTAmc29ydF9saXN0PWRhdGVfZGVzYyZ0aGVtZT1zaW 1wbGVkYXRlJm1sPWZhbHNlJm1sdXJsPSZlbXB0eWxpc3R0ZXh0PQ%253D%253D. Accessed 22 Feb 2020 Bank for International Settlements: Digital currencies. November 2015. https://www.bis.org/ cpmi/publ/d137.pdf. Accessed 16 Feb 2020 Eurasian Economic Commission: Cryptocurrencies and blockchain as attributes of the new economy (2019). http://www.eurasiancommission.org/ru/act/integr_i_makroec/dep_ makroec_pol/SiteAssets/%D0%94%D0%BE%D0%BA%D0%BB%D0%B0%D0%B4.pdf. Accessed 24 Feb 2020 Gallardo, P., Heath, A.: Execution methods in foreign exchange markets. BIS Q. Rev. (2009). https://www.bis.org/publ/qtrpdf/r_qt0903h.pdf. Accessed 12 Nov 2019 Grigor’ev, V.V.: National digital currency as a factor in recovery of the Russian economy. Ekonomika. Nalogi. Pravo 1, 30–36 (2019) Houben, R., Snyers, A.: Cryptocurrencies and blockchain, July 2018. https://www.europarl. europa.eu/cmsdata/150761/TAX3%20Study%20on%20cryptocurrencies%20and% 20blockchain.pdf. Accessed 18 Jan 2020 King, M.R., Osler, C., Rime, D.: Foreign exchange market structure, players and evolution. Norges Bank Working Paper No. 2011/10, 14 August 2011. http://dx.doi.org/10.2139/ssrn. 1935858. Accessed 12 Feb 2020 Kornilov, D.A., Zaitsev, O.A., Kornilova, E.V.: Cryptocurrency market analysis. Dyn. Projections 3(15) (2017). http://itportal.ru/science/economy/analitika-rynka-kriptovalyutdinami/. Accessed 11 Feb 2020 Levashenko, A.D., Ermokhin, I.S., Zubarev, A.V.: Cryptoeconomy, Moscow, Science (2019) Mishina, V.Y., Golovin, M.Y.: Russian Currency Market: achievements towards liberalization. Problemy Prognozirovaniya 4, 113–125 (2006) Moiseev, S.R.: Money-and-Credit Encyclopedic Dictionary, Mosco, Science (2006) Polevich, K.B.: Digitization of foreign exchange markets: a new trend or a global need. Colloquium J. 10(21), 8–10 (2018)

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Shchegoleva, N.G., Malsagova, R.G.: Cryptocurrencies as a vector of the world monetary system digitalization: risks and trends. Gosudarstvennoe Upravlenie. Elektronny Vestnik (74), 273– 296 (2019). http://e-journal.spa.msu.ru/uploads/vestnik/2019/vipusk__74._ijun_2019_g./ ekonomitcheskie_voprosi_upravlenija/shchegoleva__malsagova.pdf. Accessed 18 Feb 2020 Rime, D.: New Electronic Trading Systems in the Foreign Exchange Market (2003). SSRN. https://ssrn.com/abstract=991773. Accessed 17 Feb 2020

Smart Technologies: Trends, Problems and Prospects Nikolay S. Yashin(&), Marina N. Yashina , Olga N. Grimashevich, and Sergey A. Saninsky Socio-Economic Institute Yuri Gagarin State Technical University of Saratov, Saratov, Russia [email protected], [email protected], [email protected], [email protected]

Abstract. Purpose: providing access to priority areas for the development of “smart technologies” to ensure the ongoing development of the Russian economy. Design/Methodology/Approach: The authors implement a method of comparative analysis of all aspects of the possible use of “smart technologies” in Russia by the best foreign practices, as well as a method of researching value chains to identify priority activities for future development. The necessity of a significant change in state policy in the field of digitalization is proved; the main problems of the introduction of “smart technologies” in various fields in Russia are analyzed. Findings: In the course of research, an attempt was made to analyze and systematize theoretical approaches and successful practices of using “smart technologies” in the world and in Russia. In our country, not only technologies were implemented, but also the technologies necessary for new conditions, the need to change its competencies and increase the level of the general information and communication culture of society. Originality/Value: The article substantiates the need to implement the proposed measures to combat epidemics of the society and the effective use of “smart technologies” in Russia. All this must be necessary in order to create the basis for increasing Russia’s competitiveness in the global economy. Keywords: Fourth industrial revolution Digitalization
Human competences JEL Code: O15


Smart technologies
Smart city



O18
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1 Introduction The Fourth Industrial Revolution (Industry 4.0), which determines the current trend in the development of the global economy, represents, first of all, a new level of organization of production and new priorities in managing the value chains of a product or service throughout their entire life cycle. Actually, in the narrow sense of the word, Industry 4.0 is something other than the name of one of the 10 projects of the state Hi-Tech strategy of Germany until 2020, © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 379–387, 2021. https://doi.org/10.1007/978-3-030-59126-7_42

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based on the concept of “smart production” and the global network of the Internet of things and services. But in a global sense, these are fundamental changes in production, exchange, distribution and consumption. In production, first of all, we are talking about the impact of new information and communication technologies on the nature of the organization of production. There is a transition to decentralized, distributed production, horizontal ties within business entities are significantly strengthened while vertical ones are weakened. Significant development is given to network forms of organization of production and provision of services. Due to smart technologies, in particular, 3D printing, the manufacturer gets direct access to the consumer and can maximize the needs of the latter. From the point of view of exchange and distribution, in many cases intermediaries are replaced by distribution networks. All this becomes possible in connection with the emergence of global industrial networks, the Internet of things, the transition from metallurgy to composite materials, the use of renewable energy sources, 3D printers, neural networks, unmanned vehicles, artificial intelligence. In this case, one very important, in our opinion, trend should be pointed out. Today, it becomes important not to own the underlying asset, but to own a technological platform that provides the so-called “demand economy” (shared economy). A business based on such platforms is expanding at the fastest pace and is the most competitive, offering a variety of new services and ensuring the use of, among other things, littleused assets belonging to citizens who have never considered themselves to be providers of these services (for example, free space in a car, performing administrative tasks, etc.). Large corporations themselves, which own and use these platforms, are not owners of underlying assets. So, the world’s largest taxi company Uber is not the owner of vehicles. Alibaba, the world’s largest retail player, has no inventory. Facebook does not create its own content. And this leads to very important economic consequences. Digital platforms significantly reduce transaction costs, which leads to the desire of the cost of production of each additional product or service to zero. It should be noted that these changes are not only dramatic, but also very fleeting. Only 40 years have passed since the beginning of the Third Industrial Revolution (1970), which is much less than the time interval between other industrial revolutions. This means that in the future changes will be just as swift and lagging behind them will become fatal for any country or business. To a certain extent, it can be said that the Fourth Industrial Revolution becomes an intermediary revolution, since priority in the value chain (and, accordingly, the share of profit) goes to this stage of the product or service life cycle.

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2 Materials and Method In recent years, the problem of substantiating the use of “smart technologies” has been reflected both in numerous theoretical developments and in the practical activities of many countries and companies. Monographs and scientific articles by authors such as Schwab et al. (2017), Harari (2019), Form (2017), Tarasov (2019), Knyaginin (2018), Khalin and Chernova (2018), Karmala (2019), Udalov (2018), Popov and Sukhorukova (2018), Malinetskiy (2018), Petrov (2017), Ivanov et al. (2017), Yashin and Yashin (2019) and many others, allowed the authors of the article to form their own position on the problem under study. To identify areas in the most promising use of “smart technologies”, a comparative analysis of all aspects of their possible use for various areas of social and economic development of the society was used. As well as a method of researching value chains, which allows identifying priority activities for the future development of society.

3 Results The emergence of open information systems and global industrial networks, the development of the Internet and cloud technologies, the use of a big data base have a transformative effect on all sectors of the life of modern society, going beyond the boundaries of an individual business entity and being highly systematic. And this, in turn, can provide a new level of production efficiency and profit through the use of digital technologies and the formation of network interaction between suppliers and partners. One of the main concepts that implement a systematic approach to the use of “smart technologies” is the theme of “Smart City”. According to Schwab et al. (2017), by 2025, “the first [smart] city with a population of more than fifty thousand people and without traffic lights” will appear. The goal is to manage the flow of materials, energy, traffic and logistics. The solution is the comprehensive expansion of the network of all kinds of sensors and the use of platforms that provide for the collection and analytical processing of information from this network of sensors. It should be borne in mind, as Form (2017) notes, that since 2014 the cost of all kinds of sensors and sensors has more than doubled, and the ease of connecting to networks, programming and implementation of ready-made solutions has increased significantly. However, the concept of a “smart city” goes far beyond just analyzing the readings of a huge network of sensors based on wireless Internet or “cloud”. Initially, the concept of Smart City 2019+ set the task of optimizing the time of movement around the city, increasing the degree of traffic safety and controlling human flows. The goal is to make the city fully automated and manageable. Perhaps the most vivid example of the practical implementation of this concept was the smart city of Masdar in the United Arab Emirates, created from scratch, according to a project by engineers at the Massachusetts Institute of Technology. It became the first city with zero emissions of carbon dioxide into the atmosphere. All heating,

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cooling, power and fuel systems of vehicles are carried out using renewable energy sources. Waste is not generated, but processed, in particular, as fuel for a power plant. Despite the grandeur of this project, which cost $ 300 billion, in our opinion, this is a very unsuccessful example of a mechanistic and technocratic approach to the use of “smart technologies” to create cities of the future. Cities, in the first place, should be intended for people, not people for cities. As the chairman of the North-West Bank of Sberbank PJSC Alonso (2019): Smart City is a space for people in which advanced technological solutions make life as comfortable as possible. The basic principles are human orientation, digital infrastructure and effective resource management.” Smart cities should be the cornerstone of the digital economy in Russia. In accordance with the Decree of the President of the Russian Federation dated May 7, 2018 No. 204 “On National Goals and Strategic Tasks of the Development of the Russian Federation for the Period until 2024”, as part of the national project “Housing and Urban Environment” and the national program “Digital Economy of the Russian Federation”. In 2018, the Ministry of Construction and Housing and Communal Services of the Russian Federation began its implementation of the smart city industry digitalization project “Smart City”. This project quite fully and deeply describes the necessary measures for its implementation in all subjects of the Russian Federation, however, the degree of preparedness for its implementation and the degree of involvement of the executive branch, business and civil society in the regions is very different. The concept of “Smart City” implies that it is either a city built from scratch, or undergoing a deep transformation and reengineering of an existing classic city, the infrastructure of which integrates the latest intelligent management and technical solutions in order to maximize the convenience of the services provided, save resources, solve environmental problems and improving the comfort of the urban environment. In contrast to the city mentioned above, Masdar is a city-service (Caas-City as a Service), designed to comprehensively and individually improve the lives of citizens. In the near future, it will hardly be possible to find examples of the first approach in Russia. But Toyota is going to begin the construction of such a city on the island of Honshu, at the foot of Mount Fuji already in 2021. It is assumed that this city with the name Woven City will spread over an area of 70 hectares and will be designed for 2 thousand employees of Toyota and their families. Sources of energy for the city will be hydrogen fuel cells and solar panels, and buildings - mainly from wood, which will ensure high environmental friendliness of the city, together with an abundance of green spaces and a central park. The systemic nature of this approach should be emphasized. There is, and quite reasonably, in our opinion, the point of view that the “smart city” differs from the usual one in seven main ways: 1. 2. 3. 4.

Attracting ordinary urban residents to management issues. The presence of intelligent traffic control systems. A reasonable approach to street lighting. Implementation of a citywide and affordable Wi-Fi network.

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5. Active use of solar panels. 6. Availability of a system of warning citizens about emergency situations through SMS messages. 7. Minimum use of cash to pay for services and goods. Wireless sensor networks, online platforms, sensors, electronic cards and applications are the main technologies of such a city. Conceptually, a “smart city” should include the following main components: • Smart economy based on the development of information and communication technologies and innovations; • Smart financial system, providing for the reduction of circulation of cash money supply; • Smart city management with maximum openness and maximum communication with the population; • Smart infrastructure; • Smart city transport, using not only geolocation technologies, but also new unmanned control technologies. At the same time, smart transport controls everything that happens in the passenger compartment and on the roadway. Moreover, he is able to quickly transmit information about traffic violations to the relevant authorities; • Smart lighting using motion sensors that can save up to 80% of energy compared to traditional incandescent lamps; • Smart residents, not only taking advantage of the emerging benefits, but also actively implementing them, that is, accepting the “rules of the game.” In April 2018, an expanded meeting of a special working group was held in the Ministry of Construction of the Russian Federation with the participation of representatives of various regions of the country. At it, Rostelecom presented a roadmap for the new Smart City project as part of the state program Digital Economy of Russia. The Smart City concept developed by Rostelecom includes a number of tasks in six different areas, designed to significantly improve the lives of citizens. Among the most important results of the implementation of this project: • • • •

The introduction of public transport on unmanned control. Reduction of accidents and emergencies in the housing system. Reducing the total number of accidents in cities. Increasing the reliability of energy supply.

The Ministry of Construction of the Russian Federation also compiled a list of municipalities in whose territory this pilot project will be implemented. It included 18 cities: Perm, Voronezh, Veliky Novgorod, Ufa, Yekaterinburg, Novosibirsk, Kotovsk, Yevpatoriya, Tolyatti, Izhevsk, Elabuga, Glazov, Sarov, Novouralsk, Satka, Sarapul, Magas and Sosnovy Bor. It’s hard to believe, but perhaps the most obvious example of the implementation of the concept of “smart city” is the cleaning and sorting of garbage. In the future, and in some cases already in the present, the trash can becomes an intelligent container and part of the Internet of Things (IoT) and helps to improve the ecology of the city, reduce

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logistics and transportation costs. Now garbage cans can not only assess the degree of their filling, but also sort the garbage. As the Finnish specialist Jussi Karmala (2019) notes: “in one of the city’s microdistricts [Helsinki] - Kalasatama - there are already “smart” trash cans that can be opened with special keys that every resident has. In advance, separated and thrown into containers of different colors, waste streams through pipes at a speed of 70 km/h flow to special places - parking lots for garbage trucks, which, in turn, arrive there only after the command that the necessary amount has been collected, “the cargo is ready”. It is this software that is developed by St. Petersburg students and teachers of the St. Petersburg National Research University of Information Technologies, Mechanics and Optics. Finnish experts hope that over time, new areas in St. Petersburg will be built in the same way as a smart city without garbage. It is planned to create demo centers in St. Petersburg and in Helsinki. Finnish competencies will be related to the Internet of things, and Russian competencies will be related to software. In total, 81 projects were aimed at the concept of a smart city, and Helsinki has already achieved high indicators - polls show that 73% of residents are satisfied with the living environment in the capital.” In Russia today, in our opinion, the most advanced practice of a modern smart city is Innopolis forty kilometers from Kazan. So far, a small number of buildings in the city are built with elements of a smart housing and communal services, which keeps records of utility costs using digital services, smart electricity and water meters for diagnosing communication problems and remote control. And soon, Face ID technology will be introduced to automatically open doors. But with all the possibilities of new smart technologies, their application and use in various areas of society is possible only with the appropriate personnel and the skills of specific users. In his book Homo Deus: A Brief History of Tomorrow, the renowned Israeli historian and futurologist Noah Yuval Harari (2019) identified three major new threats to humanity that are global challenges for him. He defined them as nuclear war, environmental disaster, and the destruction of the world with new technologies. And if humanity can resist the first two threats with a reasonable approach, then the third threat should be perceived as an absolute inevitability. “Automation will soon destroy millions of jobs, and although new jobs will be created, there is no certainty that people will be able to quickly relearn and acquire the necessary skills. Those who cannot be in demand in the labor market will become a new useless class. Of course, useless not from the point of view of their friends and family, but from the point of view of the economic and political elite. The gap between the useless class and the growing elite will grow even larger,” says Harari (2019) in his work. According to Western experts, one in five workers on the planet will lose their jobs by 2030 due to automation. Labor markets will also undergo significant changes. It is obvious that many of them will either significantly decrease or disappear altogether in connection with the replacement of living labor by automated systems or artificial intelligence. At the same time, the person himself faces an urgent need for constant training, the acquisition of new, possibly even “redundant” at the given moment competencies for the realization of his labor function in the future.

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We can agree with the authors who make predictions about the death of a number of existing professions in the near future in general, which will pose both difficult problems for the state and citizens. Migration flows of highly professional workforce will also undergo changes in connection, including using freelance. A person ceases to be physically attached to the place of work, country of the company, the conditions of professional activity are changing. Since cloud technology, in this case, defines a person as an individual entrepreneur, companies are not required to fulfill the requirements for the payment of minimum wages, income tax and social security. As Schwab et al. (2017) notes: “For people in the cloud, the main advantage is freedom (work or not work) and the unprecedented mobility that they receive as part of a global virtual network. Some independent performers consider this an ideal combination of a large degree of freedom, lack of stress and increased job satisfaction. Although the human cloud is in its infancy, considerable evidence has already been accumulated that this is due to the “tacit withdrawal of work offshore” (“tacit” because human cloud platforms are not listed anywhere and are not required to disclose their data). The problem to be solved is the development of new forms of social and labor contracts that are consistent with the modern nature of the workforce and the changing nature of work. It is necessary to limit the side effects of the human cloud in relation to the possible exploitation of labor, while preserving the growth prospects of the labor market and without interfering with the participants working as they see fit. If we cannot achieve this, the fourth industrial revolution may lead us to the dark side of the future labor market.” Today, a person is faced with a combination of the need to solve problems of increased complexity and hyper-specialization for conscious participation in all processes. And this leads inevitably to the desire to increase competencies, especially among the younger generation, who often consider themselves undervalued. Improving the level of competencies in the use of smart technologies in Russia should obviously begin with increasing digital literacy of the population. Moreover, these tasks should cover almost all ages and segments of the country’s population. Today, such work has begun in almost all regions of the country and covers a significant part of our population. In addition, by the end of 2023, all state universities in Russia will introduce elements of the Digital University model. The national project “Digital Economy” provides for the creation of international scientific and methodological centers for research, study and dissemination of the best international practices for the training, retraining and training of advanced personnel in the digital economy in the fields of mathematics, computer science and technology. Five such centers appeared in 2019, and another 15 are expected to open in 2020. In 2019, 30 thousand specialists were trained in the competencies of the digital economy, and in 2021 their number should increase to 105 thousand by cumulative total, and by the end of 2024 - to 270 thousand people. Moreover, by the end of 2024, 120 thousand people should be accepted to higher education programs in the field of IT.

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In total, the number of people trained in the development of digital economy competencies within the framework of the state system of personal digital certificates should be: in 2019, 5 thousand people, by the end of 2021 to 160 thousand people, and by the end of 2024 - up to 1 million people. In addition, by the end of 2024, 10 million people should be trained in online digital literacy development programs. In addition, by 2025, almost 80 digital educational and methodological complexes and educational stimulants, virtual laboratories and simulators will be appearing in secondary vocational education programs in computer science, mathematics and technology. All these events, of course, can not only increase the digital literacy of the population, but also create a stable basis for the future development of the country, in accordance with global trends in the socio-economic development of the leading countries of the world, ensure the country’s competitiveness, improve the quality of life of Russians, mastery of smart technologies in all aspects of life.

4 Conclusion The article attempts to identify the main trends in the use of “smart technologies” in the whole world and the features and possibilities of their application in Russia. Global changes associated with the transitions to the Fourth Industrial Revolution will significantly change both the technological development of the real sector of the economy, the priorities of individual links in the value chain, and the socio-economic orientations of society themselves. However, the transition to the use of “smart technologies” in different countries will be determined by the current level of development of these technologies in individual countries and the willingness of the government to these changes. Today’s lag in this crucial issue will become tomorrow almost fatal for the country. Analyzing these processes from these positions in Russia, it is worth noting that despite the adoption of the national program “Digital Economy” and other normative acts, this work lacks a systematic approach, primarily at the regional level. The serious differentiation in the involvement of various regions of the country in the processes of using “smart technologies” is clearly traced. The tendency for the transformation of individual labor markets, and in some cases their significant reduction, manifests itself in the same way, which inevitably leads to the need for people to obtain new competencies for the realization of their labor function in the future. In practice, a situation arises of the need to master the “redundant” competencies today. This requires significant work, primarily by the state, to increase the digital literacy of all segments of the population, which should become the basis for the future development of our country.

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References “Toyota will build a smart city” at the foot of Mount Fuji (2020). https://russiasmartcity.ru/news/ 233-woven_city. Accessed 15 Jan 2020 Petersburg ITMO and Helsinki Smart City will distribute waste (2019). https://russiasmartcity.ru/ news/224-peterburgskiy-itmo-i-umnyy-gorod-helsinki-raspredelyat-othody. Accessed 15 Jan 2020 “Smart city” 2019+ The concept of smart cities is developing (2019). https://2g3g4g5g.ru/smartcity-2019-concept/. Accessed 10 Feb 2020 Form, W.: Smart City: 80+ Projects (2017). https://nag.ru/articles/article/32116/umnyiy-gorod80-proektov.html. Accessed 10 Feb 2020 Yashin, N., Yashina, M.: Trends and risks of digitalization of socio-economic processes in Russia. In: Economics and Management in the XXI Century: New Challenges and Opportunities 2019 Materials of the All-Russian Scientific and Practical Conference in Saransk, Russia, vol. 2919, pp. 190–192 (2019) Knyaginin, V.: Digital Transition (2018). http://www.comnews.ru/content/115296/2018-10-11/ vladimir-nikolaevich-knyaginin-professor-biznes-praktiki-nauchnyy-direktor-centra-cifrovoytransformacii-biznes-shkoly-skolkovo-vice. Accessed 10 Jan 2020 Tarasov, D.: Human orientation. How banks help the development of Smart City (2019). https:// topspb.tv/news/2019/12/20/orientaciya-na-cheloveka-kak-banki-pomogayut-razvitiyuumnogo-goroda/. Accessed 01 Feb 2020 Khalin, V., Chernova, G.: Digitalization and its impact on the Russian economy and society: advantages, challenges, threats and risks, article in Consulting Management, vol. 10 (2018) Harari, U.: A Brief History of the Future, pp. 20–35 (2019) Schwab, K.: Fourth Industrial Revolution, pp. 60–166 (2017) Udalov, D.V.: The threats and challenges of the digital economy. Econ. Secur. Qual. 1(30) (2018) Popov, M.F., Sukhorukova, A.M.: Human resources in the implementation of the program “Digital Economy of the Russian Federation. Bull. SSESU 4(73) (2018) Malinetskiy, G.: The splendor and poverty of digital reality. Sci. Works Free Econ. Soc. Russia 210(2) (2018) Ivanov, V.V., Malinetskiy, G.G.: Digital economy: myths, reality, perspectives, pp. 54–68 (2017) Petrov, A.A.: The digital economy: Russia’s challenge in global markets. Trade Policy 3(11) (2017)

Gold in Innovative Technologies: Demand and Price Boris M. Manakhov(&) Volgograd State University, Volgograd, Russia [email protected]

Abstract. Purpose: To identify the interdependence of demand and price of gold in modern innovative technologies. Design/Methodology/Approach: The scientific research conducted in the article was based on the methodological base, represented by a set of scientific methods (general and specially scientific) of subject-object, structuralfunctional, descriptive and comparative analysis. Findings: The technological needs and economic opportunities for using gold in innovative technologies are correlated, including new approaches to precious metal mining. The increase in the price and demand for gold on the one hand, and the depletion of available and old deposits, the deterioration of mining and geological conditions stimulate the search for new, including innovative methods of mining and producing precious metals, which, while increasing production, at the same time, do not lower influence on the price of gold. The transition to the information economy has not changed the structure of demand for the precious metal, which has remained traditional. The share of its innovative consumers is insignificant relative to the needs of central banks, jewelers and investors. Gold is both attractive and too expensive for the mass products of innovative technologies that should be available to the general consumer. Rising prices are forcing developers and manufacturers to replace gold with other materials, leaving only where this cannot be done. Given the escalation of geopolitical tensions and constant economic uncertainty, trade and sanctions wars, gold has been “mobilized” to fulfill its primary, historical reserve function and cannot be “distracted” by its widespread use in innovative developments, which is certainly bad for the latter. The decline in the quality of their elemental base adversely affects the quality of advanced products and the development of smart technologies in general. Originality/Value: in the information economy, the traditional structure of gold demand, in which innovative sectors will have a relatively small share, will remain. Gold is in demand in innovative technologies and devices, but its growing cost, caused most often by non-economic factors, impedes the use and forces to replace where possible. The “safe haven” function, reserve prevents the expansion of the use of gold in innovation, which reduces the quality of new products. Keywords: Gold
Innovation
Information economy processing technologies
Gold market


Gold mining
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1 Introduction The modern market fate of gold is quite favorable. Global mining annually increases the total volume of the precious metal reserve by approximately 2.5–3 thousand tons. In 2019, according to The World Gold Council, gold reached the best performance since 2010, having risen in price by 18.4% in dollar terms and surpassed the main global bond and stock benchmarks of emerging markets for the same period. Gold prices also hit record highs in most major currencies except the US dollar and the Swiss franc. Investors’ interest in gold was observed throughout the year, as evidenced by the growing gold and foreign exchange reserves of central banks and an increase in COMEX net debt obligations (Gold Outlook 2020). Thus, demonetized gold is also in demand in the information economy.

2 Materials and Method The theoretical basis of the study was the scientific and practical approaches of domestic and foreign scientists in the analysis of the current state and forecasts of the development of the global precious metals market, mining and use of gold. The analytical materials of The World Gold Council and World Bank were used. In addition, the concept of the information economy is also at the heart of the work. The literature on the latest technologies for the extraction and production of gold was used (Vorobev and Zhumambaev 2018; Barchenkov and Kudiyarov 2016; Bütof et al. 2018), its use in industry (Luganskaya and Nikoshvili 2017; Guzhva et al. 2013; Zhu 2018; Liam et al. 2012), as well as in medicine (Castiglione Morelli et al. 2016; Ananieva et al. 2018).

3 Results Most of the global trends that have manifested themselves over the past few years will generally remain favorable for gold in 2020. This is due to financial uncertainty and geopolitical tensions, combined with low interest rates, which can increase the investment demand for gold. Net purchases of gold by central banks are likely to remain stable, even if they are below record highs. In addition, structural economic reforms in India and China, as well as traditional demand in Turkey, will support global demand in the long run. Is it associated with innovative development? Analysts generally refrain from linking fluctuations in gold prices or the dynamics of its production with factors in the development of the information society, as well as with the development of smart and digital technologies. It is customary to evaluate gold mining prospects by the dynamics of gold prices, production costs, the assessment of the profitability of specific deposits, exploration of new ones, etc., but almost never - by innovation factors. Mining companies estimate how much gold remains on each mining project that they have implemented. These are two categories: 1) reserves - gold, which is economically acceptable for mining at the

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current market price; 2) resources - gold that will potentially be economically viable for mining after additional exploration or at a different price level. In either case, companies are potentially interested in using innovations to minimize their costs and increase production, which has traditionally been conducted in ways that are rightly called “primitive” in modern literature, although production methods have gradually changed and improved (Vorobyov and Zhumambaev 2018). Taking into account the growing demand and price of gold, as well as a certain conservative nature of its extraction methods, innovations in this case are in demand in the field of its extraction not only from ore deposits and placers, but actually from the environment. Up to three quarters of all gold not yet put into circulation exists in the form of fine and minute fractions, in fact, gold dust. Modern equipment is able to identify this precious metal in rock, soil, coal. Taking into account that a ton of coal contains up to 1 g of gold, a standard boiler house could produce up to 10 kg during the heating season if there was a method for such separation. A large river, for example, Amur, carries over 8 tons of gold per year, but it is also impossible to extract it from water and silt with modern technical means. Modern washing devices do not reveal gold less than 0.5 mm. In this regard, up to a third of the metal is not mined (Egidarev and Simonov 2014). In the 1990s, microbiological methods for extracting gold from poor ore or placers using the bacteria Thiobacillus ferrooxidans were considered promising (Jacobus et al. 1997). At the same time, this method involves the subsequent environmentally harmful leaching of gold from concentrates, followed by even more harmful cyanidation. The detection of the toxicity of gold ions for the bacterium Delftia acidovorans made it possible to discover the property of this bacterium, protecting itself from gold ions, to extract metal from the solution (Luganskaya and Nikoshvili 2017). The bacterium Cupriavidus metallidurans showed the ability to absorb gold (Bütof et al. 2018). In the framework of traditional, albeit improved approaches, the exhaustion of old, relatively readily available reserves, determines the search for new, methods of extraction and processing, as well as related equipment. Their effectiveness should cover the growing costs of mining in hard-to-reach places, as well as the prevention of environmental damage. Modern technology allows gold mining from great depths and even using robots. The industry is borrowing a method previously used in uranium mining - heap leaching. In this case, gold is mined without direct contact of people, by leaching (dissolving) gold at its location, which is extremely harmful to the environment due to the high toxicity of sodium cyanide solutions that enter underground water. Their disposal is extremely expensive. At the same time, in 2015, Chinese experts developed a new technology based on the Flotent GoldSC 570 reagent (the composition is kept secret by the developer), which allows gold to be leached without using cyanide. The high cost of the reagent (one and a half times more expensive than cyanide) and the process itself, however, make production cheaper, due to the lack of specific tasks for the deactivation of cyanide. The new reagent is capable of technologically ensuring heap leaching of gold from poor ores. Russian tests showed that gold recovery using a new reagent is 12.81% higher than with traditional use of sodium cyanide, and in addition, the consumption of a new reagent itself is 20% lower. The new approach is more environmentally friendly, because does not involve the use of lime (Barchenkov

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and Kudiyarov 2016). In this sense, the innovativeness of many modern gold mining technologies consists in ensuring not so much its greater efficiency as environmental safety. Industry leaders Rio Tinto and Barrick Gold are adopting environmentally friendly technologies. So, Barrick Gold implements about 140 projects in the field of energy efficiency, receiving up to a fifth of the necessary electricity from renewable sources. The company strives to make innovation its mainstream, focusing staff on the fact that innovation is not some technical thing that other people do, but this is what everyone in the company does, i.e. this is the business of all. Thus, by innovation, the company understands both technical improvements and encouraging staff to share new ideas and find new ways to work. At the same time, the company sees its role in launching large innovative processes and tools that would help staff. In terms of technical improvements, Barrick Gold is developing an autonomous mining process, especially for underground operations and mines that operate at an altitude of more than 4,500 m above sea level. In addition, work is underway on new and affordable methods for extracting minerals from extremely low-grade ore masses. Partnerships continue to improve in quality with counterparties, governments, suppliers and other mining companies. The company is developing intelligent systems that facilitate real-time data analysis, increase transparency, speed up planning and give greater flexibility at every stage of the production process. The challenge here is to optimize intelligence - to increase the ability to accurately determine the size, location and characteristics of gold ore bodies. Barrick Gold also seeks to create additional shareholder value using existing intellectual property. For this, a separate company, Barrick Technologies, was created to monetize the already patented technologies that underlie new processes. We are talking about flotation processes of copper based on air and metabisulfate, as well as gold processing technology based on thiosulfate. This will generate new revenue streams and stimulate the development of these new technologies. A special team has been formed at Barrick Gold, which structures action plans, helps to develop topics that drive the company’s innovation strategy. The role of the team of innovators is to launch large innovative processes and tools, as well as to identify areas where the company or individual departments still lack experience. Next, the team is looking for the source of the necessary potential. Barrick Gold collaborates with large companies, including those from Silicon Valley, as well as with Unearthed Solutions, an Australian company that works with extractive industries to stimulate innovation in them. At Northwestern University (Canada), a more environmentally friendly method was developed for replacing cyanide with corn starch. At the same time, this cheap and expectedly effective gold recovery process, which was also planned to be used in the extraction of gold from e-waste, has not been developed. Scientific teams work with different degrees of intensity to solve these problems, since in the information economy, demonetized gold is still in demand by national banks, in the jewelry, electronic and medical industries, in the production of catalysts and plastics.

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From the above parameters it can be seen that gold is mainly in demand in industries and fields that are not innovative. The jewelry industry is conservative, gives priority to creativity and is little susceptible to innovation. For the production of bank bullion and investment coins, traditional proven technologies are used and innovation is not required. The jump in the production of digital communication devices suggested a sharp increase in demand for gold from the electronic industry, just as its consumption in the old, mass analogue electronics grew from the beginning of the 1970s. This growth continued until 2010 (327 tons), until it “bumped” into a multiple increase in the price of the precious metal, which increased four times in 2005–2011. As a result, its use fell in 2016 to 256 tons (Gold in modern technologies. Forecast. 2018). Manufacturers of microprocessors, connectors and other electronic parts began to look for gold substitutes, minimizing its amount in each device. According to the Semiconductor Industry Association, in 2011–2016, the share of gold in the production of contacts fell from 77% to 40%, respectively, the share of copper and silver increased (WGC 2018). At the same time, it is not yet possible to completely eliminate noncorroding gold, especially from the contacts and terminals of the electronics. Today, gold elements retain their positions (up to 80% of technological components where they were traditionally and/or necessary) only in industries where it is impossible (space, aviation, security, etc.) to save on quality or the consumer is willing to pay for it (hi-end equipment, premium segment gadgets). The main manufacturers of the latest Galaxy Note models from Samsung and iPhone, as well as Google and Huawei, contain gold (in a modern smartphone about $ 1–1.5), as this requires the implementation of new functions. Acoustic cables (for connecting speakers) made of gold and OFC type Analysis-Plus Golden Oval, costing about 700 thousand rubles (Analysis-Plus Golden Oval 2020), are on the market. But this is rather an exception and the demand for them is limited. In the rest of the mass consumer segment, gold is unlikely to regain its position in the field of use in contacts and wire connections. We can state the loss of gold dominance in this area, which to a certain extent leads it out of most mass smart technologies and gadgets. At the same time, in industry, a new application of gold nanoparticles was found in the production of automotive catalysts. In 2016, Johnson Matthey produced a catalyst for the synthesis of vinyl chloride monomer (VCM), which is widely used in the manufacture of pipes, as well as the insulation of electrical cables. Previously, VCM was synthesized using a mercury catalyst, which threatened the environment. The new technology can stimulate demand for gold by several tons per year (Johnson Matthey 2015). The development of Johnson Matthey gave manufacturers a cost-effective synthesis method consistent with the Minamata Convention on Mercury. According to the document, from 2017, mercury is no longer used in all newly built VCM facilities, and from 2022 it should not be used at all (Minamata Convention). Hierarchical nanoporous gold is used in digitally controlled catalyst architectures (using 3D printing), which is capable of revolutionizing the design of (electrochemical) chemical plants by changing the scaling ratios between the volume and surface area of the catalyst (Zhu 2018). Gold also finds use as a catalyst in the synthesis of nonsteroidal anti-inflammatory drugs (Liam 2012).

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Demand for gold is presented by technologies for producing solar energy. This use can be considered traditional, since back in the 1960s gold was applied in a thin layer on glass to ensure energy efficiency of buildings. In this case, the film protected from infrared radiation, helping to heat the interior, which allowed saving on air conditioning in the summer (Luganskaya and Nikoshvili 2017). In recent decades, gold nanoparticles and gold-plated electrodes have been used in solar panels, which thereby accumulate large amounts of energy (Guzhva et al. 2013). In the future, this direction will be able to provide demand for gold comparable to that previously presented by the electronic industry. Relatively small demand for gold is represented by innovative developments in medicine and pharmacology. Based on a precious metal, rheumatoid arthritis was developed with Auranofin, which is being tested for treatment. Relatively small demand for gold is represented by innovative developments in medicine and pharmacology. Auranofin was created on the basis of the precious metal for the treatment of rheumatoid arthritis, which is being tested for HIV treatment (Castiglione et al. 2016). Repeated attempts have been made to synthesize antibiotics using gold to combat the resistance of traditional drugs (Ananyeva et al. 2018).

4 Conclusion Thus, in the information economy, the structure of the main demand for gold remains traditional. Innovative sectors in its total consumption have a certain share, which, at least in the medium term, is likely to continue. Exhaustion of available deposits, deepening and complicating production forces the industry to look for new methods, including innovative ones, which today consist of advanced physical and chemical surveys, as well as new forms of organizing production processes and working with personnel. Gold is well suited for use in various innovative technologies, but due to the everincreasing cost, developers and manufacturers are trying to find a replacement for it or use it where such a replacement is not possible. At the same time, the increase in the value of the precious metal is largely due to non-economic factors: sanctions, trade wars, geopolitical tensions. Thus, the attitude to gold as a “safe haven”, its traditional reserve function, prevents its wider use in innovative developments, because of the use of substitutes, their quality decreases, which generally negatively affects the quality of advanced products and the development of smart technologies.

References Bütof, L., Wiesemann, N., Herzberg, M., Nies, D.H., Altzschner, M., Holleitner, A., Reith, F.: Synergistic gold-copper detoxification at the core of gold biomineralisation in: cupriavidus metallidurans. Metallomics 2, 278–286 (2018) Zhu, C.: Toward digitally controlled catalyst architectures: Hierarchical nanoporous gold via 3D printing. Science (2018)

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Gold Outlook (2020). https://www.gold.org/goldhub/research/outlook-2020. Accessed 20 Feb 2020 Liam, T.: Ball Gold-Catalyzed Direct Arylation. Science, 26 Sept 2012 Castiglione Morelli, M.A., Ostuni, A., Minichino, C., Bavoso, A., Flagiello, A., Pucci, P., Matassi, G.: Spectroscopic investigation of auranofin binding to zinc finger HIV-2 nucleocapsid peptides. Inorganica Chimica Acta. 453, 330–338 (2016) Johnson Matthey Completes Sale of Gold and Silver Refining business to Asahi. https://matthey. com/en/news/2015/johnson-matthey-comp. Accessed 20 June 2020 Ananyeva, I.A., Polyakova, Y.A., Shapovalova, E.N., Mazhuga, A.G., Shpigun, O.A.: Separation of b-blocker enantiomers on silica gel modified with gold nanoparticles with immobilized macrocyclic antibiotic vancomycin. J. Anal. Chem. 73(2), 113–120 (2018) Barchenkov, V.V., Kudiyarov, N.Y.: Experience in using Flotent GoldSC 570 non-cyanide reagent in China for leaching gold from ores. Zolotodobycha (214) (2016) Vorobiev, K.A., Zhumambaev, K.K.: Innovative technologies in the gold mining industry. Peoples’ Friendship University of Russia (21), 449–455 (2018) Guzhva, M.E., Denisyuk, A.I., Permyakov, D.V., Voroshilov, P.M., Frank, S.I.: Production and experimental study of metal nanoantennas designed to increase photoabsorption in the active layer of a thin-film solar battery. Sci. Tech. J. Inf. Technol. Mech. Opt. 4(86), 5–12 (2018) Egidarev, E.G., Simonov, E.A.: Environmental impact assessment of placer gold mining in the Amur River basin. Geoecol. Eng. Geol. Hydrogeol. Geocryol. 5, 429–441 (2014) Gold in modern technology. Forecast. According to the WGC. Per. from English: S.S. Verkhozin. Gold mining. No. 236 (2018) Ready-made speaker cable Analysis-Plus Golden Oval. https://www.audiomania.ru/acoustic_ cable/analysis-plu. Accessed 20 June 2020 Luganskaya, N.V., Nikoshvili, L.Z.: Possibilities of applying biotechnological methods to obtain metal nanoparticles. Bull. Tver State Tech. Univ. 1(31), 106–110 (2017) Micro- and nanotechnology in electronics: Materials of the X International Scientific and Technical. Conference (2018) Minamata Convention on Mercury. The official text. http://www.mercuryconvention.org/Portals/ 11/documents. Accessed 20 June 2020 Jacobus, T.P., Johannes, P.V.D., Peter, B., Johannes, G.K.: A method of cultivating Thiobacillus Ferrooxidans and a method for extracting at least one metal from refractory ore. Patent for invention RU 2099412 C1, 12.20.1997. Application No. 5011882/13 of 05/05/1992

Smart Technologies in Scientific Literature on Natural Sciences Lyubov M. Koroleva(&) and Elena V. Koltunova Russian Institute for Scientific and Technical Information of the Russian Academy of Sciences (VINITI RAS), Moscow, Russian Federation {lkorol,chemistry711}@viniti.ru

Abstract. Purpose: To study scientific literature on natural sciences, which is reflective of development projects in the field of smart technologies, and to study trends and prospects of development of individual relevant interdisciplinary research activities associated with smart technologies. Methodology: Statistical analysis, content analysis, comparative analysis, and data handling methods have been used. Results: Consideration has been given to changes in the number of scientific publications on smart technologies with the use of the platform of the international abstract and citation database of peer-reviewed literature Scopus for the period of 1972–2019; a significant increase in the number of publications could be observed since 2012 and subsequently since 2016. Arrays of key words have been analyzed for frequency and novelty. The analysis showed the correlation of stages of development of research activities in the field of smart technologies with social and economic changes in developed economies of the world. Scientific publications that were selected using the Scopus platform, have been analyzed from the perspective of their financial backing. The primary sponsors of research are China, European Commission, the United Kingdom, Taiwan, the United States, Canada, and South Korea. The relevance of topics related to smart technologies has been analyzed in the academic social network ResearchGate. More than 1,700 projects associated with smart technologies have been identified and a wide variety of topics has been shown. In exemplification of the meaningful interdisciplinary research in the field of creation of smart materials and smart technologies, consideration has been given to works aimed at creating theranostic drugs intended for diagnosis of diseases and personalized treatment of patients. Keywords: Smart technologies
Smart materials
Information resources
Scientific publications
Natural sciences
Medicinal chemistry
Theranostics
Theranostic drugs JEL: L65

1 Introduction The set phrase “smart technologies” was used in scientific literature for the first time in 1972. It was first used in an article published in the academic periodical for chemists Modern Plastics, dealing with the technology of the production of expandable © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 395–403, 2021. https://doi.org/10.1007/978-3-030-59126-7_44

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polystyrene (EPS). The paper is entitled “Smart Technology Comes to Polystyrene Foam Molding”. The research has put forward an improved molding technology, which included a preliminary expansion of the polystyrene layers containing the foaming agent as the key stage, described the forms and ways of processing very large molded products, such as polystyrene discs with a diameter greater than 3 meters used in filter systems for waste-water treatment. An anonymous author of this note has prophetically formulated a set phrase which has recently become very popular and is frequently used as a tag in the Internet resources.

2 Materials and Methodology This research presents the look-back analysis of scientific publications concerned with smart technologies with the use of the largest international abstract and citation database of peer-reviewed literature Scopus, as well as the meaningful analysis of sources of information on these topics in Internet resources, including in one of the most popular academic social networks, the Researchgate, which currently brings together more than 15 million researchers and has monthly visit statistics of more than 150 million visits (more than 70 million of which are unique). In preparing this paper, the authors used the method of statistical analysis, content analysis method, comparative analysis method, and data handling methods.

Динамика публикаций в области "умных технологий" по данным БД Scopus

Changes in the number of publications on smart technologies according to the Scopus database

количество публикаций

The number of publications

Fig. 1. Changes in the number of scientific publications on smart technologies according to international the Scopus database

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3 Results The analysis of scientific literature based on the platform of the largest international abstract and citation database of peer-reviewed literature Scopus clearly demonstrates that smart technologies, at first slowly, but from a certain point on, very aggressively attempted to break into the world of research activities (Fig. 1). 1 scientific publication in 1972, 1986 and 1988 each, 2 publications in 1989, 4 publications in 1994, 17 publications in 1999, 128 publications in 2012, and 431 publication in 2019. Such rate of increase in the number of publications whose authors were using the term “smart technologies” clearly reflects social and economic changes in economically developed countries of the world and is directly related to these changes. Virtually indiscernible until the mid-1990s, research activities in the field of smart technologies have been consistently reflected in scientific literature since that time. Since 2012, the number of publications that can be classified as “smart technologies” has been steadily and significantly increasing. In 2012–2016, this was 811 documents, while in the following 3 years – in 2017–2019 – they were supplemented by another 1113 publications in the form of research papers in scholarly journals, reviews, chapters in books, monographs, proceedings of scientific conferences and symposia. Explosive growth in the number of publications on smart technologies has started in 2016. In 2016, the number of publications has increased by 40% as compared to 2015. The number of publications has been increasing at the average annual rate of 27%. Since 2012, this obvious increase in the number of publications has been reflective of the transition of scientific research to a new quality and technology level. New key words include, in particular: Cyberphysical Systems; Big Data; Data Acquisition, Data Mining; Data Handling; Data Privacy; Deep Learning; Digital Storage; Digital Technologies; Economic and Social Implications; Machine Learning; Neural Networks; Real-Time Systems; Smart Devices, Smart Cities, Smart House, Smart Environment, Smart Services; Internet of Things (IoT, IOT); Wireless Sensor Networks; Electrical Networks; Smart Electrical Network; Smart Meters; Information and Communication Technologies; Information Management; Wearable Technologies; Wearable Sensors. The inclusion of new key words in scientific publications on smart technologies is reflective of development of new directions of research and introduction with the involvement of Artificial Intelligence in a particular form. According to many experts, these processes are inextricably connected and are due to the Fourth Industrial Revolution, which has recently started and is also referred to as Industry 4.0. Industry 4.0 places particular emphasis on the three global technology trends: 1) smart technologies (automatic tracking of the occurrence of events and provision of information for decision-making); 2) network integration (ensures communication between individual internet sites and improves information access); 3) flexible automation (includes response mechanisms, actually automation and remote control). Today, when we talk about the latest smart technologies, we mean ultramodern high technologies, that have made their first appearance only recently, and were differing from smart technologies until 2016. These technologies are associated with the use of Big Data, cyber physical systems and the Internet of Things; they are

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characterized by a certain degree of self-organization. Artificial Intelligence becomes a powerful analytical tool for Big Data handling and analysis. These high technologies lead to the emergence of a new concept of Smart Production in the Industry 4.0. Today, the subject of scientific and technological projects encompasses real-time monitoring with machine learning and deep learning; Artificial Intelligence for preventive maintenance; Artificial Intelligence for smart cybersecurity; Artificial Intelligence and robotics in smart production; smart production with IoT support; digital dual-purpose smart production. The web page of the World Economic Forum, widely known organization of annual Davos meetings is concerned with data acquisition, data analysis, coverage of the most current events and trends of Industry 4.0. According to the participants and organizers of the Davos meeting, the Fourth Industrial Revolution results in fundamental changes in our lives, in the way we live, work, and communicate with each other. The technological advance of this revolution brings together physical, digital and biological worlds. According to experts, the Industry 4.0 program, is designed to address, among other things, global problems facing the world: climate change, scarcity of natural resources, and the ageing of the labor force. The relevance of topics related to smart technologies, has been clearly observed not only in scientific databases. In one of the most popular academic social networks, the Researchgate, which currently brings together more than 15 million researchers and has monthly visit statistics of more than 150 million visits (more than 70 million of which are unique), 1,710 projects were found in response to the query “smart technologies”. The topics of these projects are very diverse: deep learning and smart technologies in education; smart technologies in renewable energy sources; smart house technology for people with dementing disease; smart forestry; information and robotic technologies; technologies of smart structural systems; digital clone technologies; smart materials and devices; smart room technology based on the Internet of Things; smart 5G antenna; smart technologies in agriculture; smart technologies for the analysis and monitoring of information of social heritage; smart technologies based on the use of sensors, machine learning and computational intelligence for plant growth monitoring, diagnosis of diseases, and many others. The publications that were selected as a result of the search through the Scopus database, were analyzed from the perspective of their financial backing. From among almost 4.5 thousand publications, 2,038 publications do not contain any information on financial backing. The rest of 2411 publications were mainly funded by China, European Commission, the United Kingdom, Taiwan, the United States, Canada, and South Korea. It should be noted that both public (ministries, universities, science foundations), and non-public (private) organizations act as financing institutions. The absence of Germany in the list of sponsors of research activities on smart technologies most probably means that the German government and the German business finance this research via funds accredited under the European Commission. Smart technologies that are designed to drastically change our life, in their essence cannot result from interdisciplinary research and development projects. Smart materials, smart devices are created at the interface of several sciences, by teams that unite researchers from various academic fields. Such interdisciplinary works result in many cases in the formation of a new interdisciplinary direction.

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One of such new interdisciplinary directions related both to creation of smart materials and development of smart technologies, is theranostics – an innovative direction which has emerged in the last decade as a new healthcare strategy responding to the substantial progress in three different areas: research into the molecular mechanisms of diseases, improvement of devices and tools for image acquisition and visualization of biological objects, and technology for creation of new nanomaterials. Theranostics combines diagnosis of diseases and personalized treatment of patients, characterized by improved efficiency and minimal side effects. A theranostic agent must simultaneously provide: 1) directional delivery to the molecular target; 2) visualization of the abnormal focus and its antemortem imaging in the course of the treatment; 3) effective and selective impact on the molecular target. In other words, the mandatory component of theranostic drugs is the directional (address) delivery module, which provides for address delivery of the therapeutic and diagnostic agent to affected cells. Development of technologies for addressing delivery drugs of organs, tissues and target cells does not require such high investments as creation of a new original biologically active drug. However, their introduction not only prolongs the storage life of known drugs and enhances their bioavailability, but also reduces their side effects, thereby significantly improving the consumer characteristics of biologically active drugs. 9,428 documents related to research and development into theranostic agents have been selected in the international abstract and citation database of peer-reviewed literature Scopus for the period of 1997–February 2020. In the selected document array, the term “theranostics” is used for the first time in a small article in Medical Device Technology magazine in 2000. The increase in the number of publications on these topics has started in 2010. It is in 2010 that Nature Materials published currently the most highly-cited paper, the citation index of which is 2,296, which means that since its publication it was annually cited an average of 255 times (in 2019 – 373 times, in the current 2020–53 times already). The prominence of the topic which this paper is classified to (Organometallics | Drug delivery | Loading capacity) is very high – 99.566. Figure 2 presents data on changes in the number of publications related to research and development into theranostic drugs. The highest number of papers on these topics is written by scholars from China (33.9%) and the United States (26.9%), followed by India (6.6%), Germany (5.9%), France (5.5%), Italy (5.4%), South Korea (4.7%), and the United Kingdom (4.1%). About one half of all scientific publications on the topic indicate Chinese funds and programs as financial sponsors of their research activities. The United States rank second in terms of the number of sponsored research projects. New opportunities for creation of theranostic drugs have opened up as a result of rapid development of nanotechnologies, which made it possible to design the directional delivery module with the use of various nanoparticles. Methods for preparing nanocarriers covered with cell membrane for the address delivery of anticancer agents are summarized in the review article. Reviews Saroj and Rajput (2018), Goel et al. (2017), Zhang et al. (2012), Gautier et al. (2013), Gorbik et al. (2011) present the discussions of various types of polymers and various metal nanoparticles for creation of theranostic agents and their role in cancer therapy and visualization, as well as their future applications, including the vaccination of dendritic cancer cells, gene delivery,

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кол-во публикаций

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Changes in the number of scientific publications on theranostics according to the Scopus database

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Fig. 2. Changes in the number of scientific publications on theranostics, theranostic drugs in 1997–2019 according to the Scopus database (accessed 12.02.2020)

activation of T-cells and modulation of the immune system. The results of patent applications and clinical trials are presented. A review Xin et al. (2019) has summarized various applications of smart nanoparticles of mesoporous silica in therapy, diagnosis and theranostics. The longrange results of using silicone dioxide nanoparticles in the delivery of drugs and diagnostic agents were obtained. Particular emphasis is placed on the nanoparticle design strategies and their applications. Recent advances in radiomedicine are summarized in the review Chakraborty et al. (2018) where they discuss physicochemical properties of nanomaterials required for achieving the best pharmacokinetic properties and targeted molecular imaging in vivo. Detailed description was made of the efficient approach to using radionanosamples in theranostics of cancer. A vast number of research projects and publications on nanoparticles for nanoplatforms that are designed to move inside the human body, is due to the fact that the nanoscale platforms for the delivery of therapeutic and diagnostic agents to pathogenic cells and tissues become extremely high-demand in modern healthcare thanks to their unique physicochemical properties, their ability to properly penetrate into cells and tissues of the body, bypassing various barriers, and versatility, which allows creating multifunctional agents based on them. These features of nanoscale platforms combined allow using them for solving old, but still relevant problems using fundamentally new means. It is now possible to combine the functions of detection of abnormal focus, selective action of the therapeutic agent on it, and monitoring of response to treatment in a single multi-functional complex.

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The analysis of the keywords of the original array of publications (9,428 documents) has made is possible to identify 822 documents related to development and study of metal nanoparticles and their compounds as components of smart theranostic drugs. Gold, iron, silver and gadolinium nanoparticles are studied most intensively (Table 1). Table 1. The number of publications on research and development into theranostic drugs, containing metal nanoparticles and/or their compounds according to the Scopus database (accessed 12.02.2020) Metal The number of publications

Aurum (Gold) 356

Ferrum (Iron) 196

Argentum (Silver) 76

Gadolinium

Gallium

55

5

The analysis of changes in the number of publications shows that in actual fact the number of publications is increasing for each metal. These papers are in high demand, their citation indices are high. More than 10% of works for each metal have citation indices over 100. The maximum citation index of 654 belongs to the paper by that was published by Zhang et al. (2012) and is concerned with theranostics and metal nanoparticles. The special interest of researchers and developers in these nanotransportation systems is due to the fact that the use of metals allows creating transport systems with absolutely new and unique properties. In such a way, their activity can be changed under the influence of external factors, such as infrared radiation, magnetic field, heating, acoustic impact, pH, etc. These smart drug delivery systems are able to detect the additional signal, to regulate the recovery of a drug in response to additional information, as well as to carry out address delivery of the drug to the target (organ, tissue, or cell) under the influence of the additional signal. Such drug delivery systems based on metal nanoparticles, including magnetic metal nanoparticles, are used both for the address delivery of drugs and in capacity of contrast agents of magnetic resonance tomography (MRT), or as independent therapeutic agents controlled by hyperthermia, as well as in capacity of theranostic drugs, combining therapeutic and diagnostic functions. A group of researchers from France dedicated their review to the present-day advance in the field of creation of theranostic systems based on superparamagnetic iron oxide nanoparticles (SPION) and plasmon resonant gold nanoparticles. Researchers are discussing the strategy of loading such hybrid magnetic nanoparticles with anticancer drug doxorubicin and the results of in vivo and in vitro tests of these smart hybrid nanoagents as a theranostic system for simultaneous visualization diagnosis and directional delivery and/or thermal hyperthermia. A promising direction of research activities in the field of creation of magnetic means of directional delivery of biologically active drugs includes development of nanocomposites with multilevel hierarchical architecture, which are able to function as medicobiologic nanorobots. Their functions include the ability to recognize microbiological objects in biological media, directional delivery and deposition of drugs in the target organ, diagnosis and therapy

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of diseases at the cellular level. Physicochemical experimental data, medico-biological studies verify their potential for creation of new pharmaceutical forms of complex cytotoxic, immunotherapeutic, hyperthermal action, for neuron-capturing therapy. The review Deev and Lebedenko (2015) discusses in detail the benefits of conjugation of biomolecules, such as peptides, antibodies with surface made of inorganic nanoparticles, which allows improving their biodistribution and other functions, including diagnostic and therapeutic. The authors Horcajada et al. (2010), Rajendran (2018), Lin et al. (2018), Tang et al. (2018) provide the detailed characteristics of bifunctional magnetic hybrid nanomaterials (MHN) for theranostic applications. Examples of optimization of the structure of MHN for the visualization of magnetic resonance tomography and cancer therapy are given. The analysis of the flow of scientific and technical literature concerned with research and development into theranostic drugs demonstrates a wide variety of methods and technologies that are currently developing at the interface of different sciences, such as organic chemistry, chemistry of macromolecular compounds, medicinal, physical and analytical chemistry, instrumental research methods, molecular biology, molecular genetics, biochemistry, computer modelling, physics, medicine etc.

4 Conclusions The study of the rate of increase in the number of publications whose authors were using the term “smart technologies” has shown that these research activities are directly related to the social and economic changes in economically developed countries of the world. Virtually indiscernible until the mid-1990s, research activities in the field of smart technologies have been consistently reflected in scientific literature since that time. Since 2012, the number of publications that can be classified as “smart technologies” has been steadily and significantly increasing. Explosive growth in the number of publications on smart technologies has started in 2016, when an average annual increase was 27%. This obvious increase in the number of publications is reflective of the transition of scientific research to a new quality and technology level. The multiaspect analysis of arrays of scientific publications in one of new socially important interdisciplinary research areas – theranostics, related both to creation of smart materials and development of smart technologies, has shown high relevance and potential of research on these topics. Theranostics has emerged in the last decade as a new healthcare strategy responding to the substantial progress in three different areas: research into the molecular mechanisms of diseases, improvement of devices and tools for image acquisition and visualization of biological objects, and technology for creation of new nanomaterials. Research activities in this field receive good financial backing, and the high citation index of many research papers bears record to the high demand for these development projects.

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References Deev, S.M., Lebedenko, E.N.: supramolecular agents for theranostics. Bioorg. Khim. 41(1), 539– 552 (2015) Horcajada, P., Chalati, T., Serre, C., Gillet, B., Sebrie, C., Baati, T., Gref, R.: Porous metalorganic-framework nanoscale carriers as a potential platform for drug delivery and imaging. Nat. Mater. 9(2), 172–178 (2010). https://doi.org/10.1038/nmat2608 Bose Rajendran, J.C., Ramasamy, P.: Cell membrane-coatednanocarriers: the emerging targeted delivery system for cancer theranostics. Drug Discov. Today 23(4), 891–899 (2018) Lin, Y., Yang, Y., Yan, Y., Chen, J., Cao, J., Pu, J., Li, L., He, B.: Redox- ATPswitchable theranostic nanoparticles for real-time fluorescence monitoring of doxorubicin delivery. J. Mater. Chem. B 6(14), 2089–2103 (2018) Tang, W.-L., Tang, W.H., Li, S.-D.: Cancer theranostic application of lipid-based nanoparticles. Drug Discov. Today 23(5), 1159–1166 (2018) Saroj, S., Rajput, S.J.: Composite smart mesoporous silica nanoparticles as promising therapeutic and diagnostic candidates: resent trends and applications. J. Drug Deliv. Sci. Technol. 44(1), 349–365 (2018) Goel, S., England, C.G., Chen, F., Cai, W.: Positron emission tomography and nanotechnology: a dynamic duo for cancer theranostics. Adv. Drug Deliv. Rev. 113, 157–176 (2017) Zhang, Z., Wang, L., Wang, J., Jiang, X., Li, X., Hu, Z., Chen, C.: Mesoporous silica-coated gold nanorods as a light-mediated multifunctional theranostic platform for cancer treatment. Adv. Mater. 24(11), 1418–1423 (2012). https://doi.org/10.1002/adma.201104714 Gautier, J., Allard-Vannier, E., Munnier, E., Soucé, M., Chourpa, I.: Recent advances in theranostic nanocarriers of doxorubicin based on iron oxide and gold nanoparticles. J. Controlled Release 169(1–2), 48–61 (2013) Gorbik, P.P., Petranovskaya, A.L., Turelik, M.P., Abramov, N.V., Turanskaya, S.P., Pilipchuk, E.V., Chekhun, V.F., Lukyanova, N.Y., Shpak, A.P., Korduban, A.M.: The problem of directional delivery of drugs: current state and prospects. Khimiya, Fizyka Ta Tekhnologiya Poverkhni 2(4), 461–469 (2011) Chakraborty, A., Boer, J.C., Selomulya, C., Plebanski, M.: Amino acid functionalized inorganic nanoparticles as cutting-edge therapeutic and diagnostic agents. Bioconjugate Chem. 29(3), 657–671 (2018) Xin, T., Shaopeng, L., Jianliang, Z., Zheyan, Q.: Bifunctional magnetic hybrid nanomaterials for theranostic applications. Nanotechnology 30(3), 320–322 (2019)

To the Issue of Identifying Highly Automated Vehicles (HAV) in ITS Infrastructure (Intelligent Transport Systems) to Ensure Compliance with Transport Security Requirements Anatoliy V. Zubach1(&), Mikhail V. Kostennikov2, and Ekaterina V. Kashkina3 1

3

State University of Management, Moscow, Russia [email protected] 2 State University of Management and All-Russian Institute for Advanced Training of the Ministry of Internal Affairs of the Russian Federation, Moscow, Russia [email protected] All-Russian Institute for Advanced Training of the Ministry of Internal Affairs of the Russian Federation, Domodedovo, Moscow Oblast, Russia [email protected]

Abstract. Modern cities are the center of concentration of transport means, large transport hubs. In order to manage cities effectively, taking into account the progress and development of innovative technologies, unmanned transport vehicles are being introduced. The existing normative support of legal relations in the sphere of road traffic safety often does not meet modern requirements. In the course of the conducted analysis and data collection, the measures aimed at improvement of normative regulation of transport safety maintenance at use of intelligent transport systems are offered. Keywords: Road traffic safety
Street and road network technologies
Unmanned vehicles
Driver of the vehicle framework JEL Codes: O31


Innovative
Regulatory


O32
O33
O38

1 Introduction Today, not only in the Russian Federation, but also in most advanced countries, there is a rapid development of cities, with changes and complication of their structure (megapolis, agglomeration), where one of the strategic directions of the territory development is the unification of information, management and intelligent potential in a single resource of strategic changes. Thanks to innovative urban planning concepts, more and more intelligent systems are being introduced into everyday life to make human life more comfortable and convenient. © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 404–409, 2021. https://doi.org/10.1007/978-3-030-59126-7_45

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In Merkulova and Shemyakina’s (2020) opinion, effective management of the city is based on intelligent transport system, organization and optimization of transport flows of the city territory. By displaying the traffic situation on street information panels and smart phones, this allows reducing the load on the road network and increase the efficiency of road services, that is, optimize traffic. As it is known, a large number of vehicles are concentrated in big cities, and the street and road network access system does not always cope with the load, resulting in traffic jams, which in turn lead, firstly, to the emergence of conflict situations on the road, which affects the road safety of participants, and secondly, the financial losses of the state from reduced transport mobility. The real scientific breakthrough in human history, which contributes to improving performance and quality of life, is the unmanned vehicle, whose artificial intelligence replaces the role of the driver. The developers of these means of transport pursued a number of goals, one of which was seen in driving the vehicle without human participation, which will make it possible to centralize the management of the transport complex, minimize the human factor. Despite the technical advantages inherent in unmanned vehicles, a number of drawbacks have been identified during the tests. For example, Google cars cannot move in bad weather conditions, they are also unable to recognize temporary traffic light signals, cannot distinguish police from ordinary pedestrians, etc. But the developers promise that by 2020 these shortcomings will be eliminated.

2 Materials and Methodology By analyzing modern infrastructure, the development of scientific and technological progress, including the use of digital technologies in the field of road traffic, we can recognize the existence of a potential threat to human safety from autonomous transport. In this regard, there is a need for legislative regulation of the emerging new public relations in the transport sector. However, the normative regulation, which exists at the moment in the sphere of road traffic safety cannot be recognized as dynamic, keeping up with all changes in the development of the transport complex. Thus, according to article 8, paragraph 1, of the Vienna Convention on Road Traffic of 8 November 1968 [current edition], every vehicle or combination of vehicles in motion must have a driver. Besides, in the “Road Safety Strategy of the Russian Federation for 2018–2024” adopted by the Government of the Russian Federation in 2018, no mention is made of unmanned vehicles at all. Accordingly, for the legislative regulation of the use of unmanned vehicles there is a need to develop new standards and amend existing regulations adopted in the middle of the last century, which do not meet the requirements of modern realities. In addition to the above, the use of this category of vehicles provokes the possibility of committing crimes outside the scope of traffic safety, for example in the information environment – as one of the targets for hackers. Here, the incident with Ford is noteworthy, where a group of researchers connected a laptop to the diagnostic port of the car and managed to hack into the control system of Ford pickup truck. They completely intercepted the control of the brakes, steering wheel and accelerator pedal,

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which of course tells us that there could be no question of safety. So, improvements in this area are also being made. The current situation once again confirms the absence of comprehensive normative provision of safety of the participants of public relations in the transport sector, which does not allow fully ensuring their safety, as well as to solve the issue of bringing them to responsibility in case of violation of the legislation governing the sphere of road safety. The legislator faces the questions, based on the differences of the essence, actions and possibilities of artificial intelligence and the person, associated with the concept of “unmanned vehicle”, the degree of integration of artificial intelligence in the process of driving the vehicle. Today, at the national level of a number of foreign countries there is a wide variety of forms of regulation of intelligent transport infrastructure, where the leading position is occupied by the United States of America with the lack of the Federation’s competence in the field of robotic traffic and laws, regulations and even just announcements of initiatives to allow using unmanned vehicles on public roads. At the same time, California has adopted rules allowing full autonomous driving on public roads. The first state to approve unmanned vehicle legislation was Nevada, followed by Arizona. China presents the most developed city test regulations for autonomous vehicles on public roads (Beijing, Shanghai, Shenzhen etc.); in Germany it all depends of the particular land. The Netherlands also adopted a law on the test operation of autonomous vehicles in 2017. South Australia, Singapore, Japan and many other regions and countries are on the same path. Thus, the analysis of foreign legislation concerning the mentioned problem shows that in some countries regulatory documents on operation of unmanned vehicles in one form or another have been developed or are being actively developed. The legislation of most countries prohibits use of these vehicles on public roads. However, the question remains open regarding the subjects of legal liability in case of damage to public relations protected by law. At the same time, Germany passed a law defining the legal basis for the use of unmanned vehicles on public roads. The basic requirement of this law is that a driver who is ready to switch to manual operation at any time is behind the wheel, according to Alexandrova et al. (2011), Kazakov and Kutovoy (2013), Kuznetsova and Veremeyenko (2018), Markelov et al. (2014), Merkulov and Shemyakina (2018), Petrov and Kraus (2013), Stepanyan (2019), Yuzaeva and Kukartsev (2016).

3 Results At present, the problem of legal regulation of introduction and operation of unmanned vehicles is actively discussed in our country. There is an extensive database of regulations directly or indirectly affecting public relations in this area, in particular: Federal Laws “On Security of Critical Information Infrastructure of the Russian Federation”, “On Personal Data”, Decree of the President of the Russian Federation “On Improvement of the State System of Detection, Prevention and Elimination of Consequences of Computer Attacks on Information Resources of the Russian Federation”,

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Resolutions of the Government of the Russian Federation “On Approval of the Rules for Categorizing Objects of the Critical Information Infrastructure of the Russian Federation, as well as the List of Criteria of Significance of Objects of the Critical Information Infrastructure of the Russian Federation and their Values”, “On Approval of the Rules for Preparation and Use of the Unified Telecommunication Network Resources of the Russian Federation for Ensuring Operation of Significant Critical Information Infrastructure Objects”. Including domestic technical standards for personal transport vehicles: GOST R ISO 14813-1-2011 “Intelligent Transport Systems. Scheme of Construction of Architecture of Intelligent Transport Systems. Part 1: “Intelligent Transport Systems. Service Domains in the Field of intelligent transport systems, service groups and services”; GOST 56294-2014 “Intelligent Transport Systems. Requirements for Functional and Physical Architectures of Intelligent Transport Systems”; GOST P 56829-2015 “Intelligent Transport Systems. Terms and Definitions”; ODM 218.9.0112016 “Sectoral Road Guidance Document. Recommendations for Implementing the Rationale for Intelligent Transport Systems” published on the basis of the Federal Road Agency Order No. 632-r dated April 25, 2016. In addition to legal regulation, scientific research activities are also carried out. Not long ago, on the initiative of the Committee on Science and Science-Intensive Technologies of the State Duma of the Russian Federation, a round table conference was organized on the topic “Legal regulations of the use of unmanned systems in the Russian Federation”, held on March 30, 2016. During the discussion, a number of provisions were put forward, which, in the form of recommendations, were submitted to the State Duma of the Russian Federation. Thus, it was proposed to make amendments to the Civil Code of the Russian Federation (e.g., to change the wording of Article 1079 of the Civil Code of the Russian Federation so that the concepts of “automobile” and “vehicle” would also cover the concept of “unmanned vehicle”), the Criminal Code of the Russian Federation, the Traffic Rules. The legislative changes proposed at the round table are clearly not sufficient. We believe that the amendments should address the Code of Administrative Offences of the Russian Federation, as well as a number of federal laws, in particular “On Road Safety”, “On Roads and Road Activities in the Russian Federation and on Amendments to Certain Legislative Acts of the Russian Federation”, etc. The introduced amendments and updates to the legal regulation will contribute to the streamlining of public relations in the field of use of unmanned vehicles. However, in order to ensure an appropriate level of safety, a number of organizational and technical regulations establishing the legal framework for the operation of highly automated vehicles also seem necessary.

4 Conclusion In order to improve the legal regulations of issues related to ensuring transport safety when using highly or fully automated vehicles in the intelligent transport infrastructure it is necessary to solve the following issues:

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1. Investigate potential threats to transport and road safety when using unmanned vehicles in road traffic. 2. Define the content, identify essential features and establish an unambiguous understanding of the definitions of technical infrastructure used in the field of unmanned vehicle operation as legal categories. 3. Define the basic directions of development of legal maintenance of safe operation of unmanned vehicles in the field of road traffic on the basis of the analysis of tendencies of development of the domestic and foreign legislation. 4. Determine a list of necessary legal acts to regulate the social relations formed by the operation of unmanned vehicles in the field of road traffic. 5. Determine the list of necessary legal acts establishing the legal framework for the safe operation of unmanned vehicles in the field of road traffic. 6. Justify the need for regulatory requirements for the equipment of public roads and road infrastructure for testing and subsequent safe operation of vehicles equipped with an automatic control system. 7. Develop scientifically grounded recommendations on legal regulation of the procedure of certification of roads and road infrastructure for the use of vehicles equipped with automatic control system. 8. Examine the issues of legal liability for violation of requirements established for roads and road infrastructure designed for safe operation of unmanned vehicles and amend the current legislation on administrative and criminal liability accordingly. 9. Technical standards defining the characteristics of vehicles used for unmanned vehicles should consider the effects of radio-electronic radiation on biological systems. 10. Measures aimed at protection of the intelligent transport infrastructure necessary for operation of highly or fully automated vehicles should be envisaged in the system of ensuring security of the critical information infrastructure of the Russian Federation which is being created. 11. To date, there are virtually no regulations on licensing activities related to the use of highly or fully automated vehicles, which predetermines the development of relevant legal norms. 12. The issue of preparation and admission of individuals to drive and operate a highly or fully automated vehicle deserves a separate legal regulation. 13. State standards should be revised to define the requirements for roads designed for the use of highly or fully automated vehicles in different weather conditions. 14. Regulations for the registration of a highly or fully automated vehicle should be developed and amended accordingly. 15. Necessary changes will be required in the legislation governing insurance activities, both in respect of personal and property insurance. 16. The technical standards on individual elements of the intelligent transport infrastructure used in a highly or fully automated vehicle must consider requirements for their safe impact on other electromagnetic devices used in everyday human activities, including those used to maintain human health.

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References Alexandrova, A.A., Kostyanov, M.S., Kukartsev, V.V.: Problemy vnedreniia intellektual’noi transportnoi sistemy v Rossii [Problems of implementing an intelligent transport system in Russia]. Reshetnevskie chteniia 2(1), 34–49 (2011) Kazakov, M.Yu., Kutovoy, S.I.: Razvitie gorodskogo prostranstva: instrumentarii analiza i kontseptsiia regulirovaniia [Urban space development: analysis tools and regulatory concept]. Reg. Econ. Theory Pract. 45(324), 18–26 (2013) Kuznetsova, M.V., Veremeyenko, E.G.: Perspektivy vnedreniia bespilotnogo upravleniia avtomobil’nymi perevozkami [Prospects for implementing unmanned road transport management]. Molodoi issledovatel’ Dona 5(14), 29–38 (2018) Markelov, V.M., Solovyev, I.V., Tsvetkov, V.Ia.: Intellektual’nye transportnye sistemy kak instrument upravleniia Intelligent [Transport Systems As a Management Tool]. Gosudarstvennyi sovetnik, Moscow (2014) Merkulov, V.V., Shemyakina, T.Yu.: Strategies for creating and developing “smart cities”. Univ. Bull. 2018(4), 29–38 (2018) Petrov, E.A., Kraus, V.A.: Management levels of the intelligent transport system. Vestnik Sibirskoi gosudarstvennoi avtomobil’no-dorozhnoi akademii 3(31), 46–56 (2013) Stepanyan, A.: Unmanned vehicle regulation problems. Vestnik universiteta imeni O.E Kutafina 4, 67–79 (2019) Yuzaeva, A.G., Kukartsev, V.V.: Bespilotnye transportnye sredstva: opasnosti i perspektivy razvitiia [Unmanned vehicles: hazards and development prospects]. Aktual’nye problemy aviatsii i kosmonavtiki 2, 34–45 (2016)

Peculiarities of Standard Cost-Based Accounting Igor’ Somkin1(&)

, Dar’ya Rozhkova2

, and Evgeniy Orlov1

1

2

State University of Management, Moscow, Russia [email protected], [email protected] Financial University Under the Government of the Russian Federation, Moscow, Russia [email protected]

Abstract. The problem of high production costs ceases the performance of many companies. In the modern highly competitive economic environment, contraction of product prime cost is a critical factor in the development of any manufacturing company. In this regard, a tremendous role is attached to the method of the prime cost calculation, as well as the selection of a cost accounting method aimed at enhancement of the efficiency, completeness of accounting and monitoring of costs. One of the methods of cost estimation is cost accounting. Its main objective is to identify the cost-determining factors of overhead costs. In cost accounting, a cost sheet is compiled, where the costs for a unit of output can be estimated by accounting items. After studying the existing approaches to costing, the article solves the main problems associated with the application of the standard cost-based accounting on the example of the construction industry. It is proposed to use the ABC method to increase the degree of regulation of cost accounting. Keywords: Costing JEL Codes: M20


Prime cost
Standards
Costs
Expenses


M41

1 Introduction The industrial revolution arose the need for more sophisticated costing systems, and the development of corporations created large groups of concerned parties (shareholders, bondholders) who were not part of the company’s management, but were directly interested in its performance. Since 1950, there have been speculations on cost accounting and costing, namely absorption costing, which includes both direct and indirect costs. In addition, the stage is distinguished by the emergence of a standard cost system, then direct costing, activity-based costing, and enhancement of tax laws. Much attention was paid to cost planning, timely recognition of deviations from budget figures, comprehensive analysis of costs, and opportunities for implementation of management decisions under cost approach (Gulpenko and Tumashik 2015). The most exhaustive definition of the cost was drawn up by N.P. Kondrakov, who noted that the prime cost is the value expression of costs, which involves the © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 410–417, 2021. https://doi.org/10.1007/978-3-030-59126-7_46

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consumption during the production of material costs, fixed capital and intangible assets, wages and deductions, expenses for production needs, management and sale of manufactured products, certain types of taxes (Kondrakov 2015). One of the methods of cost estimation is cost accounting. Its main objective is to identify the cost-determining factors of overhead costs. In cost accounting, a cost sheet is compiled, where the costs for a unit of output can be estimated by accounting items. Today, Russian scholars have a unanimous opinion on the interpretation of cost accounting (Table 1). Table 1. Analysis of the cost accounting contents Author Shchenkov 1973 Paliy 2003 Ivashkevich 2006 Medvedev 2007 Vrublevskiy 2016

Definition The value of cost record order in accounts System of techniques and methods for unit cost determination Commensuration of costs and the total number of costing items Calculation of the actual cost of end products Generation of various costing configurations

Consequently, there is process-based understanding (Vrublevskiy 2016; Ivashkevich 2006); besides, there is an opinion that cost accounting of product is a set (system of techniques, procedures, etc.) for costing and cost accounting (Paliy 2003). The basic techniques of cost accounting and costing fall under the influence of a great number of factors classified by us into industry-specific and structure-specific factors. Among industry-specific factors that take into account the industry features of the company are: – a range of products, works, and services; – the nature of manufacturing activities; – technologies under use. The second group of factors that assess the structural characteristics of the company cover: – the quality of the management activity-based accounting system: the level of production cost accounting is estimated by the specification of cost center accounting; – the method of internal control over product costing accepted in the company. The study revealed that companies most often use the method of comparing actual costs and standard costs; – the volume and quality of information necessary for the development of management solutions. Completeness, reliability, and timeliness of information greatly affect the unit cost determination. The essential functions of product cost management accounting are budgeting, accounting, analysis, control, costing, which are closely related to each other (Bunkovskiy 2016).

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It should be noted that a variety of methods of cost accounting and costing will help to get the necessary management information and develop effective methods of cost management based on its analysis. The entirety of operating and strategic cost management methods is the foundation of an integrated cost management approach. Of course, picking a cost accounting method is an important and urgent task for any manager. Along with that, the industry-specific factor has become of particular importance.

2 Methodology We suppose that the primary goal of costing in any company should be the generation of accounting information essential for and applicable to estimating the structural features of prime cost of certain types of products (works, services), understanding the company’s profitability and facilities for mitigation of costs, including investment and innovative components. The classification of cost accounting methods is presented in Fig. 1. Cost accounting methods Completeness of cost accounting

Process-oriented method

Promptness of accounting and monitoring of costs

Cost accounting item

Absorption costing

Actual cost accounting

Direct costing

Standard costing

Processing method

Job order method

Activity-based method

Fig. 1. Classification of cost accounting methods (Kerimov 2016; Rozhkova et al. 2013)

The process-oriented cost accounting method is suitable for enterprises of extractive and chemical industries, as well as companies generating electric and thermal power and producing construction materials. This method of accounting provides for the division of costs into direct and indirect ones, which are treated as cost items. The main criterion for the division is the place of cost origin. These places directly depend on the specific features of the production, therefore, in each industry, a certain practice

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of cost items grouping with regard to the production stages has been historically established. The process-oriented method involves a certain sequence of accounting operations (Volkov 2009): 1. 2. 3. 4. 5. 6.

Reflection of direct costs by economic elements. Grouping costs by all-encompassing articles Classification of costs by production stages Calculation of the amount of total costs for the period The distribution of costs by the range of products and production processes Measurement of the prime cost of each type of product for the period

It is advisable to use the processing cost accounting method in companies with a repeating cycle (using identical raw materials) and mass production. In these companies, manufacturing processes have chemical and thermal nature, and raw materials are processed into finished products. Each operation represents certain technological processing. This system is generally used in industries with a division of technological processes into specific stages of steaming raw materials. The job order cost accounting system is applicable to companies engaged in singlepiece as well as custom production. Under this system, the overall costs are added from individual orders. It is suitable for enterprises where materials intended for manufacturing, payroll costs, and production overhead costs can be easily associated with a specific batch of products. The Activity-Based Costing (ABC system) is based on the division of costs into direct and overhead ones (Almeida and Cunha 2017). Under this system, the distribution of indirect costs has specific features. The basis for the distribution is the divisor indices that are in a cause-and-effect relationship with the costs (for example, manhours, machine-hours, areas of office premises and industrial facilities, etc.). The main stages of this approach: 1) 2) 3) 4)

description (selection) of the main processes at the enterprise; recording information on costs for each process in a single cost center; identification of cost-driver for each type of activity; injection of costs in a specific process according to the need for a product (cost exponent is necessary).

The ABC system allows for a more accurate estimation of prime cost of goods (works, services), including cost center accounting, and helps in budgeting and management accounting. The drawbacks of this method are methodological complexity, many conventions in the calculations, complicated development of the model, and identification of cost-driver (Kerimov 2016). It is recommended to use this method if the overhead in the composition of the cost of the enterprise exceeds 40%. Within the sophistication of standard cost-based accounting, it is proposed to employ the standard method of cost accounting. It combines regulation of norms, transfer of commodity, and required materials to the production shop, a compilation of company documentation, costing, economic analysis, and standard cost-based financial supervision.

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The introduction of the standard cost method will be useful with a timely response to internal production costing. Strict compliance with the established standards of consumption is particularly important. The suggested method will make it possible to take proactive measures to identify mistakes along the path of cost reduction. The method contributes to higher internal control and speeds up the contraction of production costs and, ultimately raises the company’s profitability.

3 Findings Bearing in mind that construction is a very lucrative area of the real sector, which, in turn, affects the development of many sectors, one of the main tasks of construction companies is the improvement of cost accounting, determination of prime cost of construction and installation works, and pricing. But until the company builds competent management accounting, the funds will be used inefficiently. Only management accounting will allow the company to raise real profits, which, in turn, will be gained during economic activity. In the course of the study, we have examined the main points of construction and established their impact on cost accounting and costing of construction products. Organizational and technical features of construction can be considered in two dimensions (construction process and construction products) presented in Fig. 2. Organizational and technical features of construction Features of the construction process

Features of the construction product

Time-consuming construction

Variety of construction particpants

End product settlement considerations

Territorybranched construction facilities

Contingency on natural elements

Construction product pricing considerations

Immovable nature of construction product under costant displacement of physical facilities and workers along construction sites

Fig. 2. The key features of the construction

The actual cost accounting of construction products can be presented as five groups of methods. The first group is accounted for the main items of construction costs accounting. This group includes: – Job order method; – Process-oriented method;

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– Processing method; – Standard method. The job order method is used when costing item is an order for the performance of construction work. Its actual cost is calculated after order completion regardless of duration. This method is particularly used in construction and can be also combined with other methods (process-oriented, processing, and standard cost accounting method). Production costs are grouped for each order divided by specific cost items. An example of cost accounting of construction and installation works is given in Table 2. Table 2. Cost accounting of construction and installation of a seventeen-storeyed single-section residential building, rub. Cost items Direct costs: Materials Payroll costs Costs for the maintenance and operation of construction machinery and mechanisms Total direct costs Overhead costs: Administrative and household Costs for construction workers service Costs for workflow management on construction sites Other Total overhead costs The total prime cost of final construction products

For the whole house

Per square meter

120,422,400 115,584,000 41,395,200

15,053 14,448 5,174

277,401,600

34,675

118,272,000 75,264,000 45,696,000 20,966,400 260,198,400 537,600,000

14,784 9,408 5,712 2,621 32,525 67,200

As for the standard method of cost accounting, it is mainly aimed at the timely prevention of inefficient use of the resources at the disposal of the enterprise (physical, labor, and financial). The standard cost method is based on technically and technologically-founded calculations of costs (labor, physical, financial, and others) required for the production of a unit of output. It should be noted that standardization of production costs indicates the degree of organizational and technical development of the company, and also affects the financial performance of the enterprise. In turn, deviations from the standard show the degree of compliance with technological processes during production, the validity of the established standards for the consumption of raw materials, labor, and other types of resources involved in the production. Deviations can be positive (cost savings) and negative (cost overrun). The merit of the standard cost accounting method in the construction company is the timely recognition of deviations of actual costs from established standards, their

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reasons, and impact on the prime cost of construction products. Monitoring of deviations in particular production sites allows for timely troubleshooting. The practical application of this system shows that it is omni-purpose, since it does conflict with the methods of cost accounting and costing, but implies the need for this calculation by certain accounting items. Let us stress that the use of the standard method suggests the establishment of special accounting promptly identifying deviations from established standards, which may complicate the system of management accounting. The enterprises of the construction industry employ “Estimated Standards and Rules” acting as state federal standards. With the application of estimate standards and rules, the companies determine the quantity of physical and labor resources necessary for the performance of the unit of the corresponding work type. We suggest using the ABC method (Almeida and Cunha 2017) to adjust the prime cost of products on the back of a high-performance costing system and to develop an effective pricing policy. Indirect costs in the construction industry display the amount of costs for start-up and repair works, as well as management. Overhead costs are distributed in proportion to the reappointment base approved by the company in the accounting policy. As a rule, the reappointment base is the wages of construction workers or the number of machine-hours. The ABC method regards the company’s production activities as a variety of elements from inventory purchases to the manufacturing of products, hence indirect costs are accumulated in each element and subject to distribution between each type of end product in proportion to the approved base. If projects in the construction industry are similar, processes will repeat throughout the project. These actions are the work that needs to be done. For construction projects, efficient resource management is always critical at all stages of its accomplishment. Moreover, in time-taking construction projects, there is a variety of resources being used. Inadequate planning as well as resource allocation has a significant impact on the project. We propound the following algorithm for the development of the ABC method at the enterprises under examination: 1. Division of the economic activity of the enterprise into key types, if necessary, detailing the functions and operations performed is also possible. The number of types of activity depends on the nature of the business, its complexity, etc. For example, an order for the procurement of materials, operation of basic and auxiliary equipment, quality control, transportation of end products, warranty maintenance, etc. 2. Selection of cost driver for each type of activity. At this stage, the importance is attached to ease of data acquisition, the use of appropriate measurement units for each cost driver, and a match of costs measurement to their true value. 3. Calculation of the value of a cost driver unit as the ratio of total overhead costs (with regard to the functional aspect) to the quantity of an appropriate cost driver. 4. The calculation of the prime cost of goods as a product of driver unit value multiplied by their total number.

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It should be noted that construction companies are distinguished by a clear understanding of processes, stages, and hierarchy.

4 Conclusion The article propounds conceptual approaches to the improvement of accounting and standard cost accounting techniques. The author has suggested practical use of the activity-based cost accounting (ABC system) in the construction companies to enhance the control over cost accounting based on a suitable cost system. Despite the complexity and cost-intensiveness of ABC system, its use will make it possible to calculate the prime cost with the higher accuracy, since this method provides a more accurate breakdown of indirect costs. The recommendations given in this article will better the performance of organizations that in turn will contribute to a higher quality of product and transparency of companies.

References Almeida, A., Cunha, J.: The implementation of an activity-based costing (ABC) system in a manufacturing company. Procedia Manufact. 13, 932–939 (2017) Bun’kovskiy, D.V.: Upravlenie i kontrol’ stoimosti investicionnogo proekta [Management and monitoring of an investment project cost]. Aktual’nye problemy prava, jekonomiki i upravlenija 12, 14–19 (2016) Volkov, N.G.: Uchet finansovyh rezul’tatov v stroitel’stve, [Accounting the Financial Performance in Construction]. Buhgalterskij uchet 8, 43–53 (2009) Vrublevskiy, N.D.: Uchet zatrat na proizvodstvah: uchebnik [Accounting of Costs at Enterprises: A Study Guide]. INFRA-M, Moscow (2016) Gul’penko, K.V., Tumashik, N.V.: Istorija, sovremennost’ i perspektivy razvitija kal’kulirovanija. Sostojanie i perspektivy razvitija jekonomiki (mirovoj, nacional’noj, regional’noj). [History, Present Times and Development Prospects of Calculation. State and prospects of economic development (global, national, regional)] (2015) Ivashkevich, V.B.: Buhgalterskij upravlencheskij uchet [Management Accounting]. Economist (2006) Kerimov, V.E.: Buhgalterskij finansovyj uchet: Uchebnik [Financial Accounting: Study Guide], p. 688. Dashkov and K, Moscow (2016) Kondrakov, N.P.: Buhgalterskij (finansovyj, upravlencheskij) uchet, 4-e izdanie, uchebnik [Accounting (Financial, Management): Study Guide], 4th edn. Prospekt Publishing House (2015) Medvedev, M.Y.: Buhgalterskij slovar’ [Accounting Dictionary] (2007) Paliy, V.F.: Sovremennyj buhgalterskij uchet [Modern Accounting]. Accounting, Moscow (2003) Rozhkova, N.K., Blinova, U.Y., Chupeeva, O.V.: Upravlencheskij uchet kak jekonomicheskaja kategorija [Management Accounting as an Economic Category], no. 11. Vestnik Universiteta (2013) Shchenkov, S.A.: Sistema schetov i buhgalterskij balans predprijatija [Accounting System and the Balance Sheet of the Enterprise]. Finansy, Moscow (1973)

The Value of Corporations in the Investment Process of the Smart Economy Marina Trachenko(&) , Anastasiya Volodina and Vladimir Dzhioev

,

State University of Management, Moscow, Russian Federation {mb_trachenko,ao_volodina}@guu.ru, [email protected]

Abstract. The value of the company is one of the key indicators of the investment attractiveness of the company’s securities and, as a result, an instrument of investment stimulation. In the context of the smart economy, the ways and principles of business entities activity suffer qualitative changes. In particular, financing models are transforming, which confirms the need to study the impact of the digitalization on the country’s investment climate and determines the current importance of this topic. Analysis of the role of a company’s value indicator in the investment process and assessment of the impact of smart technology development carried out using the digital literacy index, digital consumption, digital competencies, and digital security subindices, affects the company’s value and capitalization performances and consequently the investment process. The methodological background of the study is general scientific methods such as analysis and synthesis, as well as statistical methods such as correlation and regression analysis. The empirical background of the study includes 36 companies from various sectors in 5 federal districts of the Russian Federation (Central, Northwestern, Southern, Volga, and the Ural). In the correlation and regression analysis of the impact of digitalization indices (digital literacy, digital consumption, digital competencies, and digital security) on the company’s value and capitalization figures we revealed a close relationship between the knowledge, skills, and abilities of employees in the field of smart-technologies and dependent variables. This allows us to conclude that human capital plays a key role in creating value for shareholders and raising investment efficiency within a digitalized economy. Keywords: Investment process Smart-economy JEL Code: G3


Financing sources
Cost
Capitalization



O3

1 Introduction Today the ways of economic entities’ activity, as well as the form of communication between the representatives of financial and credit system links, suffer qualitative changes. The focus of state policy on the creation of a brand new economic space with © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 418–425, 2021. https://doi.org/10.1007/978-3-030-59126-7_47

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the introduction and use of digital technologies necessitates the development and implementation of smart technologies, training and advanced training of users and innovation developers, structural and functional changes, as well as higher scope and performance of the investment process, which confirms the current importance of the research topic. Thus, investments are one of the crucial drivers of the economy. In turn, the investment process suggests raising temporarily available funds and their allocation as investments for the implementation of projects to gain economic benefit. The issues related to investments and the investment process in general as well as the regional points of the latter (Edronova and Maslakova 2018) are addressed by some researchers (Grishenkov et al. 2008; Ogoev 2010; Koltunova 2003). The principal elements of the investment process as a system are subject, object, financing sources, financing mechanism, and others (Grishenkov et al. 2008; Alekseenko and Strel’nikova 2007). The stages of the investment process are the following: – establishment of financial fund and distribution of financial resources between investment projects; – creation of favorable conditions for the fulfillment of investment obligations; – the exercise of complex functions related to engagement of investment resources, the selection and utilization of tools for the attraction of investment resources, as well as enhancement of the investment potential of the constituent entities of the Russian Federation in particular and the country in general (Ogoev 2010). Fundraising and establishment of appropriate financing framework play a key role in the investment process. As a rule, there is equity, borrowed, and attracted capital, the structure of which is contingent on the functioning of a particular enterprise and various impact of multiple externalities (Charaeva 2014). Despite the attractiveness and advantages of borrowed capital, such as the tax shield effect and lower cost against equity capital, the implementation of innovative projects (within the smart economy, the emphasis is laid on them) brings higher risk and requires heavy investments. The financing based on the issuance of shares and bonds is the main way to attract investments for the implementation of digital technology projects. However, the securities of the issuing company should be attractive to potential investors, and the company’s value performance is a landmark for investors in making a decision on the purchase of a business entity’s securities. It declares the quality of company management, growth potentials, the safety of investments, etc., which affirms the importance of the value indicator in the investment process. It is worth noting several indicators of the attractiveness of the issuer’s securities for the investor, namely value and capitalization indices. Domestic (Brusov et al. 2012; Saradzheva 2014; Dolgikh et al. 2012) and foreign authors (Pohlhausen 2003; Mili et al. 2019; Sharafoddin and Emsia, 2016) dedicated the proceedings to issues of company’s value and capitalization. The value of a company may exceed its capitalization and vice versa, since the value is an intrinsic feature of a business entity, and capitalization is the market price of asset complex, which is generally available to investors. Besides, the capitalization index is of the highest volatility compared to the

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value index, which says the higher risk for investors when using it as a starting point for deciding on investments. Certainly, pursuance of the state policy in the field of smart technologies is aimed at the socio-economic development of the country through the establishment of information infrastructure and enlargement of sci-tech activities (Popov and Semyachkov 2018). However, economic digitalization makes studying and developing methodological foundations to mitigate the risks associated with the introduction and employment of smart technologies. In connection with it, the authors examined the impact of the digitalization on the value and capitalization of companies acting as participants of the investment process.

2 Methodology The empirical background of the study includes 36 companies from various sectors in 5 federal districts of the Russian Federation (Central, Northwestern, Southern, Volga, and the Ural). To the end of assessing the impact of the digitalization on the company’s value and capitalization, we conducted a correlation and regression analysis. The dependent variables (value and capitalization indices) and the independent ones such as digital literacy index (Idiglit), digital consumption sub-index (SubIdigcons), digital competencies sub-index (SubIdigcomp) and digital security sub-index (SubIdigsec) across federal districts of the Russian Federation are presented in Table 1. The digital literacy index is an integrated digitalization performance across the federal districts under consideration covering all the above sub-indices (All-Russian study of the Regional Public Organization “Center for Internet Technologies” (ROCIT, 2015–2018). Unlike the digital literacy level calculated under the NAFI technique (NAFI Analytical Center 2019), the digital literacy index allows assessing skills, which is particularly important for the development of companies and the general investment process in the smart economy (Trachenko 2019). The digital consumption sub-index is estimated by the consumption level of digital resources (social networks, digital public services, etc.). The digital competency sub-index demonstrates the users’ ability to choose and apply information technology with the account to the continuous advanced training in this field. It presupposes skills like the search for information on the Internet, the competent use of mobile communications, social networks, making financial transactions via the Internet, as well as the critical review of information. The digital security sub-index is measured by the ability to use tools to ensure security in the digital space. It implies competencies such as the protection of personal data, the ability to eliminate computer viruses and threats, as well as maintenance of high culture in the digital space.

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Table 1. The findings of the correlation analysis on the impact of digitalization indices on the company’s value and capitalization Idiglit

SubIdigcons SubIdigcom SubIdigsec Idiglit

Value

SubIdigcons SubIdigcom SubIdigsec

Capitalization

Central Federal District −0.8215

−0.3484

−0.5765 −0.9901

0.2233

FosAgro

0.7979

0.1081

0.9815

−0.0581

−0.7608 −0.0490

−0.9911

0.1171

Lukoil

0.0931 −0.6611

0.8034

−0.7763

0.0289 −0.7080

0.7634

−0.8152

−0.6787 −1.0000

0.0935

−0.9877

−0.6842

0.0621

−0.9998

0.2265

0.6738 −0.0762

1.0000

−0.2403

0.9208

0.9151

0.3246

0.8357 −0.4505

Akron

Surgutneftegas

−0.9730 −0.4989

Rosneft

−0.9997

MGTS

−0.5124

0.2740

−0.9814

0.4295

0.4922 −0.2964

0.9767

MTS

−0.6966

0.0449

−0.9992

0.2097

0.8650

0.2276

0.9511

0.0631

0.8381

0.1773

0.9657

0.0118

−0.8478 −0.1950

−0.9609

−0.0299

0.1473

0.8212

−0.6379

0.9043

−0.4661 −0.9637

0.3473

−0.9946

0.2728

0.9356

0.1097

0.9224

−0.7666 −0.4341

Rostelecom Tsentral’nyy Telegraph Megaphon Nauka-svyaz’

0.8875

0.9337

−0.4354

0.9801

−0.8333 −0.1686

−0.9679

−0.0030

0.3509

0.9035

0.1910 0.6115

0.3794

North-West Federal District −0.9753

0.8353

0.5823

0.8654

−0.2943

Lenzoloto

0.1906

0.5779

−0.6658

0.8856

0.3278

0.6878

−0.5533

0.8108

Rollman

0.9981

0.9351

0.5549

−0.2270

0.9840

0.8231

0.7379

−0.4535 0.9579

Gazprom

−0.7640 −0.4305

−0.9761

0.8375

−0.5503 −0.1576

−0.9977

Zvezda

0.2633 −0.1573

0.9271

−0.9997

−0.5741 −0.1859

−0.9992

0.9492

TGK-1

−0.9524 −0.7424

−0.8193

0.5655

−0.3688

−0.9630

0.9963

Lenta

−0.9402 −0.7165

−0.8405

0.5964

0.9955

0.9460

0.5278

−0.1956

0.5716

−0.2467

0.4982

0.8111

−0.3883

0.6874

0.6436

−0.9536

Lenenergo

Okey

0.9991

0.9278

0.0468

Southern Federal District Novorossiyskiy morskoy torgovyy port

−0.5379 −0.9828

0.6467

−0.9524

−0.5414 −0.9820

Magnit

−0.1588 −0.9753

0.8965

−0.7528

−0.1219

0.8755

−0.9843

0.5402

0.6675 −0.4420

0.9084

0.0380

−0.2920 −0.9963

0.8277

−0.8356

−0.6536 −0.7168

Mezhregional’naya raspredelitel’naya kompaniya Yuga Volga Federal District Uralkaliy

0.8932

0.9288

0.8932

0.8932

−0.6536

−0.6536

Nizhnekamskneftekhim

0.8010

0.8499

0.8010

0.8010

0.6769

0.6104

0.6769

0.6769

Kazanorgsintez

0.9462

0.9707

0.9462

0.9462

0.6607

0.7233

0.6607

0.6607

−0.3712 −0.4503

−0.3712

−0.3712

0.9919

0.9992

0.9919

0.9919

0.9987

0.9987

0.9386

0.9650

0.9386

0.9386 0.7899

KAMAZ Tatneft Tattelecom AVTOVAZ

0.9987

0.9993

0.9997

0.9937

0.9997

0.9997

0.7899

0.7337

0.7899

−0.9184 −0.9493

−0.9184

−0.9184

0.9896

0.9983

0.9896

0.9896

Novatek

0.9426

0.9680

0.9426

0.9426

0.8243

0.7721

0.8243

0.8243

Bashneft

0.5969

0.6643

0.5969

0.5969

0.6092

0.5381

0.6092

0.6092

0.7538

0.7538

−0.7538

0.7538

−0.9498 −0.9498

0.9498

−0.9498

Ural Federal District SlavneftMegionneftegas

0.3494

−0.3494

−0.8426 −0.8426

0.8426

−0.8426

UTair

0.8471

0.8471

−0.8471

0.8471

−0.8313 −0.8313

0.8313

−0.8313

Mezhregional’naya raspredelitel’naya kompaniya Urala

0.6314

0.6314

−0.6314

0.6314

0.9120

0.9120

−0.9120

0.9120

VSMPO-AVISMA

0.7994

0.7994

−0.7994

0.7994

0.7545

0.7545

−0.7545

0.7545

Unipro

−0.3494 −0.3494

Source: Compiled by the authors.

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As far as the correlation analysis describes the relationship between the indicators of the sample (no linkage, weak, moderate, strong or full-fledged (functional) one) and allows us generally speak of a moderate and strong relationship between digitalization indices and value/capitalization indicators of selected companies, this type of analysis doesn’t adequately assess the extent to which the influence on dependent variables. In this regard, the authors carried out a regression analysis and evaluated R2 indicators to raise the accuracy and depth of the study (Table 2). Table 2. The findings of regression analysis on the impact of digitalization indices on the company’s value and capitalization. Idiglit

SubIdigcons SubIdigcom SubIdigsec Idiglit

Value

SubIdigcons SubIdigcom SubIdigsec

Capitalization

Central Federal District Akron

94.67% 24.89%

67.49%

12.14%

FosAgro

63.67%

1.17%

96.33%

0.34%

0.87% 43.71%

64.54%

60.26%

Lukoil Surgutneftegas

46.06% 99.99%

Rosneft

45.40%

0.58%

0.87%

97.55%

99.99%

5.77%

33.24% 98.03% 57.89%

4.99%

99.93%

0.24%

98.23%

1.37%

0.08% 50.13%

58.28%

66.45%

46.81%

0.39%

99.95%

5.13%

84.79% 83.74%

10.53%

69.84%

MGTS

26.26%

7.51%

96.32%

18.45%

24.23%

8.78%

95.39%

20.29%

MTS

48.53%

0.20%

99.84%

4.40%

74.82%

5.18%

90.46%

0.40%

Rostelecom

70.24%

3.14%

93.26%

0.01%

71.88%

3.80%

92.32%

0.09%

2.17% 67.43%

40.69%

81.78%

14.40% 87.19%

18.96%

96.07%

Tsentral’nyy Telegraph Megaphon

21.73% 92.87%

12.06%

98.92%

2.84%

93.69%

0.00%

Nauka-svyaz’

78.76%

7.44%

87.54%

1.20%

85.07% 12.32%

69.43%

81.63%

3.65%

Gazprom

58.76% 18.84%

95.11%

69.77%

33.91% 74.90%

8.66%

37.39%

Lenzoloto

3.63% 33.40%

44.33%

78.42%

10.74% 47.30%

30.62%

65.74%

Rollman

99.61% 87.45%

30.79%

5.15%

96.82% 67.76%

54.45%

20.57%

Lenenergo

58.37% 18.53%

95.28%

70.13%

30.28%

2.48%

99.54%

91.75%

North-West Federal District

Zvezda

2.48%

85.96%

99.94%

32.96%

3.46%

99.85%

90.10%

TGK-1

90.71% 55.11%

6.93%

67.13%

31.98%

13.60%

0.22%

92.74%

99.26%

Lenta

88.40% 51.33%

70.64%

35.56%

99.11% 89.50%

27.86%

3.83%

Okey

99.82% 86.08%

32.68%

6.09%

24.82% 65.78%

15.07%

47.25%

28.94% 96.58%

41.83%

90.70%

29.31% 96.43%

41.42%

90.93%

Southern Federal District Novorossiyskiy morskoy torgovyy port Magnit

2.52% 95.12%

80.37%

56.68%

1.49% 76.65%

96.89%

29.18%

44.56% 19.53%

82.52%

0.14%

8.52% 99.27%

68.51%

69.82%

Uralkaliy

79.78% 86.27%

79.78%

79.78%

42.72% 51.38%

42.72%

42.72%

Nizhnekamskneftekhim

64.15% 72.23%

64.15%

64.15%

45.81% 37.26%

45.81%

45.81%

Kazanorgsintez

89.54% 94.23%

89.54%

89.54%

43.65% 52.32%

43.65%

43.65%

KAMAZ

13.78% 20.28%

13.78%

13.78%

98.39% 99.84%

98.39%

98.39%

Tatneft

99.75% 99.87%

99.75%

99.75%

88.10% 93.12%

88.10%

88.10%

Tattelecom

99.93% 98.73%

99.93%

99.93%

62.39% 53.83%

62.39%

62.39%

AVTOVAZ

84.35% 90.11%

84.35%

84.35%

97.93% 99.67%

97.93%

97.93%

Novatek

88.85% 93.71%

88.85%

88.85%

67.94% 59.61%

67.94%

67.94%

Bashneft

35.63% 44.12%

35.63%

35.63%

37.11% 28.95%

37.11%

Mezhregional’naya raspredelitel’naya kompaniya Yuga Volga Federal District

37.11%

(continued)

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Table 2. (continued) Idiglit

SubIdigcons SubIdigcom SubIdigsec Idiglit

Value

SubIdigcons SubIdigcom SubIdigsec

Capitalization

Ural Federal District SlavneftMegionneftegas

56.82% 56.82%

56.82%

56.82%

90.22% 90.22%

90.22%

90.22%

Unipro

12.21% 12.21%

12.21%

12.21%

71.00% 71.00%

71.00%

71.00%

UTair

71.76% 71.76%

71.76%

71.76%

69.11% 69.11%

69.11%

69.11%

Mezhregional’naya raspredelitel’naya kompaniya Urala

39.87% 39.87%

39.87%

39.87%

83.18% 83.18%

83.18%

83.18%

VSMPO-AVISMA

63.90% 63.90%

63.90%

63.90%

56.93% 56.93%

56.93%

56.93%

Source: Compiled by the authors.

3 Research Findings Thus, in the Central Federal District, the digital literacy index and the digital competency sub-index have the greatest impact. Digital consumption and digital security indices have a moderate and weak impact. Moreover, the analyzed effect is sometimes the opposite. If the digitalization index grows, the value decreases. Assessing the impact of digitalization on the company’s capitalization index, we found out that digital consumption and digital security sub-indices have a greater and, on average, positive impact. In the Northwestern Federal District, digitalization has the opposite effect on the value of the companies under consideration, except for digital security sub-index (employees’ skills in the field of data protection have a direct impact on the company’s value). The index of capitalization is positively influenced by all indices under consideration, except for the digital competencies sub-index. As for the Southern Federal District, only digital competencies sub-index exerts a direct action on the company’s value and capitalization. In the Volga Federal District, all the digitalization indices have a direct moderate impact on the value and capitalization of companies under analysis. In the Ural Federal District, only digital competencies sub-index negatively affect the value of companies as well as has a positive effect on capitalization. Based on the findings of the regression analysis, we can conclude that in the Central Federal District, changes in the value indicator are explained by fluctuations of the digital competencies sub-index (the average value of the regression indicator is 68.99%), and changes in the company’s capitalization – by digital literacy index (51.15%) and digital competencies sub-index (67.68%). As showed the assessment of the regression indicators, the rest of the independent variables do not explain the changes. In the Northwestern Federal District, the change in the company’s value is determined by fluctuations of the digital literacy index (63.28%) and the digital competencies sub-index (65.24%), and the value of business entities – by digital competencies (53.6%) and digital security (56.98%) sub-indices. For companies of the Southern Federal District, the company’s value depends on the sub-indices of digital consumption (70.41%) and digital competencies (68.24%), and the value of business entities is measured by changes in all digitalization sub-indices under consideration, exception for digital literacy index, which is integrated one. Within the Volga Federal District, the decrease or increase in both the value and capitalization of companies is

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contingent on all the digitalization indices under consideration (the regression indicator is over 70%). The value of companies in the Ural Federal District doesn’t depend on a decrease or increase in any digitalization index. However, the capitalization indicator doesn’t defy the explanation by the relationship between the market price of a company and fluctuating digital literacy index and digital consumption, digital competencies, and digital security sub-indices.

4 Conclusion According to the outcomes of correlation and regression analysis, we can elicit that digitalization has a direct impact on the value and capitalization of the company and therefore the investment process. For companies of the Central Federal District, the dependent variables are strongly affected by the digital competencies sub-index and digital literacy index. The prevailing independent indicator in the Northwestern Federal District is the digital security sub-index; in Southern Federal District – digital competencies sub-index; in Volga Federal District – all digitalization indicators under consideration; and finally, in the Ural Federal District – digital competencies sub-index. Thus, the key influence on the company’s value and capitalization is exerted by the knowledge and skills of employees in the context of a smart economy. By investing in digital technologies and developing models of corporations’ performance under the demands of the digital space, human assets play a critical role in the achievement of success.

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A New Quality of Economic Growth in “Smart” Economy: Advantages for Developing Countries Elena G. Popkova1(&), Nadezhda K. Saveleva2, and Anastasiya A. Sozinova2 1 Center for Applied Research and Department of Economic Policy and Public-Private Partnership, Moscow State Institute of International Relations, Moscow, Russia [email protected] 2 Vyatka State University, Kirov, Russia [email protected], [email protected]

Abstract. Purpose: The purpose of this paper is to determine a new quality of economic growth in smart economy and to substantiate its advantages for developing countries. Design/Methodology/Approach: The authors use the methods of correlation and comparative analysis for determining the character of change of correlation of digitalization (digital competitiveness according to IMD) and the rate of economic growth (according to the IMF) with the indicators of quality of life (according to Numbeo) in 2020 as compared to 2017. The research objects are countries of BRICS and Newly industrialized countries (NIC). Findings: It is determines that as of 2020 digitalization defines quality of life in developing countries to the same extent as economic growth. Digitalization ensures fighting inflation (49.79%). However, economic growth still defines cost of living (−67.22%). Originality/Value: Based on the analysis of dynamics of change of the statistics, it is substantiated that under the influence of smart economy in developing countries there formed a new quality of economic growth in 2020. The advantages of digitalization include growth of purchasing power of population, development of healthcare, reduction of inflation, and reduction of commute time due to development of online economic operations. Also, economic growth, which is also influenced by digitalization, leads to reduction of cost of living. However, the problem of cyber security is very urgent in smart economy; its solution will influence further quality of economic growth and perspectives of obtaining advantages by developing countries. Keywords: New quality
Economic growth
Smart economy
Advantages Developing countries JEL Code: D91
E01
F42
F43
F64
Q01
Q15 O38
Q56
Q57
O13
O41
O43
O44
O47





O31
O32
O33


© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 426–433, 2021. https://doi.org/10.1007/978-3-030-59126-7_48

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1 Introduction Transition to smart economy is a new stage of technological modernization of economic systems, the Fourth industrial revolution. Experience of the previous industrial revolutions shows their contradictory influence on the global economy. Developing countries, which are traditionally the first to start the processes of technological changes and which occupy the leading positions in new emerging markets, gain the main advantages from this. In particular, the rate of their economic growth grows, new jobs appear – most of which are highly-paid – and the population’s living standards increase. Developing countries conduct delayed modernization of economy, which does not allow them to fully receive the above advantages. Instead, they often face the negative manifestations of industrial revolutions, becoming production centers, suppliers of resources, and sales markets for developed countries’ products. As a result, the power of sellers in the labor market decreases, which strengthens the outgoing migration flows. Depletion of natural resources and increase of hazardous waste increase the ecological costs of developing countries’ economic growth. The Fourth industrial revolution is unique due to a range of reasons: from previously inaccessible total automatization to its implementation against the background of sustainable development goals. This is a logical basis for suggesting the working hypothesis that a new quality of economic growth is achieved in smart economy, which creates advantages for developing countries and allows balancing the global economic system. The purpose of this paper is to verify the offered hypothesis, determine a new quality of economic growth in smart economy, and substantiate its advantages for developing countries.

2 Materials and Method The specific features and perspectives of formation of smart economy in developing countries are studied in the works Andronova et al. (2019), Belik et al. (2020), Haabazoka et al. (2019), Ivanov et al. (2019), Pichkov (2016), Popkova (2019), Popkova and Gulzat (2020a), Popkova and Gulzat (2020b), Popkova and Sergi (2018), Popkova and Sergi (2019), Popkova and Sergi (2020), Popkova and Zmiyak (2019), Popkova et al. (2019), Ragulina (2019), Ragulina et al. (2019), Saveleva et al (2019), Sergi (2019), Sergi et al. (2019), Shulus et al. (2020), Sozinova (2019), Sozinova (2018a), Sozinova (2018b), Sozinova et al (2019), Fokina et al. (2018), Strelets (2017), and Zavyalova et al. (2018). Economic growth – as a characteristic of economic systems’ development – is studied in the works Amusa and Oyinlola (2019), Long (2019). Mohamad Taghvaee et al. (2019), and Saddiq and Abu Bakar (2019). Despite the large number of publication on adjacent topics, the issue of qualitative transformation of the essence of economic growth in the conditions of smart economy and perspectives of gaining advantages from this by developing countries has not been sufficiently studied and solved in the modern economic science.

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Here we use the methods of correlation and comparative analysis for determining the character of change of correlation of digitalization (digital competitiveness according to IMD) and the rate of economic growth (according to the IMF) with the indicators of quality of life (according to Numbeo) in 2020 as compared to 2017. The research objects are countries of BRICS and Newly industrialized countries (NIC) (Tables 1 and 2).

Table 1. Digitalization, economic growth, and quality of life of developing countries in 2017. Category

BRICS

NIC

Country

Digital competitiveness

Gross domestic product, constant prices, Percent change

Purchasing power index

Safety index

Health care index

Cost of living index

Property price to income ratio

Traffic commute time index

Pollution index

Climate index

Brazil

52.290

0.165

42.38

29.38

51.70

53.07

16.96

46.39

61.17

70.76

China

71.452

6.582

67.84

66.10

62.25

44.76

23.29

43.87

88.96

38.70

India

54.367

7.179

76.73

56.04

69.18

25.08

10.28

46.38

76.53

9.30

Russia

62.854

1.400

48.27

53.95

56.40

42.01

13.55

48.57

63.04

10.69

South Africa

55.709

0.817

98.96

24.28

61.72

43.12

3.58

42.98

63.56

88.74

Indonesia

44.225

5.100

27.61

50.32

64.80

41.11

21.03

49.44

76.41

9.62

Malaysia

79.944

4.500

73.34

35.25

65.99

40.24

9.53

39.40

67.08

−79.43

Thailand

63.771

3.002

34.28

50.22

80.66

43.71

24.43

43.56

73.23

−20.21

Turkey

53.867

2.452

55.64

58.91

71.68

38.60

8.87

47.58

70.46

73.19

Chile

65.383

1.672

61.28

52.50

60.97

50.09

10.67

35.70

67.67

89.39

Source: compiled by the authors based on International Monetary Fund (2020), IMD (2020), Numbeo (2020).

Table 2. Digitalization, economic growth and quality of life of developing countries in 2020. Category

BRICS

NIC

Country

Digital competitiveness

Gross domestic product, constant prices, Percent change

Purchasing power index

Safety index

Health care index

Cost of living index

Property price to income ratio

Traffic commute time index

Pollution index

Climate index

Brazil

57.346

2.000

32.81

31.12

56.29

40.22

16.41

41.70

54.98

97.16

China

84.292

5.900

60.88

68.17

64.48

40.04

29.06

41.81

80.77

79.19

India

64.952

7.921

54.30

56.68

67.13

24.58

11.38

46.99

78.87

64.87

Russia

70.406

1.500

38.94

58.88

57.59

39.21

10.77

45.30

62.79

40.36

South Africa

60.865

2.201

73.61

22.51

64.14

42.87

3.93

39.43

57.30

95.25

Indonesia

58.011

5.500

25.05

54.16

60.48

37.27

18.88

43.11

66.56

74.15

Malaysia

82.390

4.880

64.49

41.16

68.10

39.12

9.94

37.03

63.18

57.92

Thailand

68.434

3.110

35.45

59.52

77.95

49.77

22.26

38.23

75.07

69.45

Turkey

59.793

3.794

40.85

60.51

69.80

34.69

7.81

44.65

67.35

93.26

Chile

66.724

2.900

42.50

54.77

65.44

43.62

14.93

35.44

65.78

90.21

Source: compiled by the authors based on International Monetary Fund (2020), IMD (2020), Numbeo (2020).

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3 Results Results of the correlation analysis for 2017 are shown in Fig. 1. Purchasing Power Index 32.12 8.06

Climate Index -48.48 -47.36

84.46 Pollution Index

7.91

Safety Index 56.60 39.53 7.65 Health Care Index

11.56 -65.74

-66.26

10.75

12.29 -0.01 31.19

Traffic Commute Time Index

Cost of Living Index

Property Price to Income Ratio correlation with digitalization, %

correlation with economic growth, %

Fig. 1. Correlation of the indicators of quality of life with digitalization and economic growth in developing countries in 2017. Source: calculated and built by the authors.

As is shown in Fig. 1, in 2017 – when developing countries just started digital initiatives and the effective from smart economy was not yet obtained – economic growth was the key factor of quality of life. In the course of economic growth, production waste grew (correlation – 84.46%), but the general state of environment improved (−47.36%). Growth of safety (56.60%) and development of healthcare (36.53%) were achieved, and inflation was restrained (31.19%). For comparison, let us consider the results for 2020. As is shown in Fig. 2, in 2020 digitalization defines quality of life in developing countries to the same extent as economic growth. Digitalization ensures fighting inflation (49.79%). However, economic growth still defines cost of living (−67.22%). The treatment of a new quality of economic growth in smart economy and its advantages for developing countries based on the values of correlation coefficients in 2020 (values) and their comparison with 2017 (growth) are shown in Table 3.

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Purchasing Power Index 49.79 19.00 40.86 Safety Index Climate Index 35.72 72.56 44.53

-16.85 -48.17

24.05 22.69 Health Care Index

Pollution Index -67.22 -27.99 Traffic Commute Time Index

13.37

33.53

26.76 37.93 Property Price to Income Ratio

correlation with digitalization, %

Cost of Living Index

correlation with economic growth, %

Fig. 2. Correlation of the indicators of quality of life with digitalization and economic growth in developing countries in 2020. Source: calculated and built by the authors.

Table 3. Treatment of a new quality of economic growth in smart economy and its advantages for developing countries. Indicator

Correlation with Correlation with Qualitative treatment of consequences for digitalization economic developing countries growth Value Growth Value Growth

Purchasing power index Safety index

49.79 17.68

19.00

35.72 27.81

40.86

Health care index

22.69 15.04

24.05

Cost of living 13.37 1.08 index Property price 37.93 37.95 to income ratio −27.99 37.76 Traffic commute time index Pollution 44.53 32.97 index Climate index −48.17 −0.81

−67.22 26.76

33.53

10.94 Purchasing power is determined by digitalization and grows under the influence of economic growth −15.73 The most important issue is cyber security, which decreases in the course of digitalization −15.48 Healthcare grows under the influence of digitalization, potential of economic growth is depleted −0.95 Economic growth ensures reduction of cost of living, its influence grows −4.43 Digitalization leads to reduction of inflation, the role of economic growth decreases 22.78 Digitalization stimulates the development of a more effective – online – form of economic activities

72.56 −11.89 Under the influence of digitalization, economic growth is accompanied by sustainable development −16.85 31.63

Source: developed and compiled by the authors.

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As is shown in Table 3, the qualitative treatment of the consequences of economic growth in smart economy for developing countries is as follows: – purchasing power is determined by digitalization (correlation - 49.79%, growth – 17.68%) and grows under the influence of economic growth (19%); – the most important issue is cyber security, which decreases in the course of digitalization (negative dynamics: −15.73%); – healthcare grows under the influence of digitalization (correlation - 22.69%, growth – 15.04%), potential of economic growth is depleted (negative dynamics: −15.48%); – economic growth ensures reduction of cost of living (correlation: −67.22%), its influence grows (growth: −0.95%); – digitalization leads to reduction of inflation (correlation – 37.93%, growth – 37.95%), the role of economic growth decreases (negative dynamics: −4.43%); – digitalization stimulates the development of a more effective – online – form of economic activities (correlation with the traffic commute time index −27.99%); – under the influence of digitalization (correlation with climate index −48.17%, growth by −0.81%), economic growth is accompanied by sustainable development (correlation with climate index −16.85%, negative dynamics of correlation with pollution index: −11.89%).

4 Conclusion Thus, the working hypothesis has been proved. Based on analysis of the dynamics of change of statistics, it has been substantiated that in 2020, under the influence of smart economy in developing countries, a new quality of economic growth has formed. The advantages of digitalization include growth of population’s purchasing power, development of healthcare, reduction of inflation, and reduction transport commute time, due to development of online economic operations. Also, economic growth, which is defined by digitalization, stimulates reduction of cost of living. However, the problem of cyber security is very urgent in smart economy. Its solution will determine further quality of economic growth and the perspectives of gaining advantages from it by developing countries. Future works on the topic of smart economy should be devoted to the perspectives of cyber security provision.

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Belik, E.B., Petrenko, E.S., Pisarev, G.A., Karpova, A.A.: Influence of technological revolution in the sphere of digital technologies on the modern entrepreneurship. Lecture Notes in Networks and Systems, vol. 91, pp. 239–246 (2020) Haabazoka, L., Popkova, E.G., Ragulina, Y.V.: Africa 4.0 as a perspective scenario for neoindustrialization in the 21st century. Afr. J. Econ. Sustain. Dev. 2(2), 20–38 (2019) IMD: World Digital Competitiveness Ranking 2019 (2020). https://www.imd.org/wcc/worldcompetitiveness-center-rankings/world-digital-competitiveness-rankings-2019/. Accessed 28 Apr 2020 International Monetary Fund: World Economic Outlook Database (2020). https://www.imf.org/ external/pubs/ft/weo/2017/01/weodata/weoselgr.aspx. Accessed 28 Apr 2020 Ivanov, O., Zavyalova, E., Ryazantsev, S.: Public-private partnership in the countries of the Eurasian Economic Union. Cent. Asia Cauc. 2(2), 33–47 (2019). English Edition Long, X.: Scientific and technological innovation related to real economic growth. China Polit. Econ. 2(1), 108–122 (2019). https://doi.org/10.1108/CPE-04-2019-0012 Mohamad Taghvaee, V., Agheli, L., Assari Arani, A., Nodehi, M., Khodaparast Shirazi, J.: Environmental pollution and economic growth elasticities of maritime and air transportations in Iran. Mar. Econ. Manag. 2(2), 114–123 (2019). https://doi.org/10.1108/MAEM-09-20190008 Numbeo: Quality of Life Index for Country 2019 Mid-Year (2020). https://www.numbeo.com/ quality-of-life/rankings_by_country.jsp. Accessed 28 Apr 2020 Pichkov, O.B.: Social inequality in the US and Canada. Int. Trends (Mezhdunarodnye protsessy) 2(3), 85–92 (2016) Popkova, E.G.: Preconditions of formation and development of industry 4.0 in the conditions of knowledge economy. Stud. Syst. Decis. Control 169(1), 65–72 (2019) Popkova, E.G., Sergi, B.S.: Human capital and AI in industry 4.0. Convergence and divergence in social entrepreneurship in Russia. J. Intellect. Capital (2020, in press) Popkova, E.G., Gulzat, K.: Technological revolution in the 21st century: digital society vs. artificial intelligence. Lecture Notes in Networks and Systems, vol. 91, pp. 339–345 (2020a) Popkova, E.G., Gulzat, K.: Contradiction of the digital economy: public well-being vs. cyber threats. Lecture Notes in Networks and Systems, vol. 87, pp. 112–124 (2020b) Popkova, E.G., Zmiyak, K.V.: Priorities of training of digital personnel for industry 4.0: social competencies vs technical competencies. Horizon 27(3–4), 138–144 (2019) Popkova, E.G., Sergi, B.S.: Will industry 4.0 and other innovations impact Russia’s development? In: Sergi, B.S. (ed.) Exploring the Future of Russia’s Economy and Markets: Towards Sustainable Economic Development, pp. 51–68. Emerald Publishing Limited, Bingley (2018) Popkova, E.G., Sergi, B.S. (eds.): Digital Economy: Complexity and Variety vs. Rationality. Springer, Cham (2019) Popkova, E.G., Sozinova, A.A., Menshchikova, V.I.: Managing the adaptation of modern society to the industry 4.0 based on information waves and impulses. Voprosy teorii i praktiki zhurnalistiki Theor. Pract. Issues Journal. 8(2), 438–446 (2019). https://doi.org/10.17150/ 2308-6203.2019.8(2). (in Russian) Ragulina, Y.V.: Priorities of development of industry 4.0 in modern economic systems with different progress in formation of knowledge economy. In: Popkova, E., Ragulina, Y., Bogoviz, A. (eds.) Industry 4.0: Industrial Revolution of the 21st Century. Studies in Systems, Decision and Control, vol. 169, pp. 167–174. Springer, Cham (2019) Ragulina, Y.V., Alekseev, A.N., Strizhkina, I.V., Tumanov, A.I.: Methodology of criterial evaluation of consequences of the industrial revolution of the 21st century. In: Popkova, E., Ragulina, Y., Bogoviz, A. (eds.) Industry 4.0: Industrial Revolution of the 21st Century. Studies in Systems, Decision and Control, vol. 169, pp. 235–244. Springer, Cham (2019)

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Smart Technologies in the Modern Economy Ekaterina P. Bondarovich1(&) , Oleg N. Zhilkin2 and Anna N. Zhilkina1 1

,

State University of Management, Moscow, Russian Federation [email protected], [email protected] 2 RUDN University, Moscow, Russian Federation [email protected]

Abstract. The article is devoted to the application of smart technologies in modern society and the impact of such technologies on the state and architecture of modern economy. As a value expression of all processes taking place in society, economy embraces almost all its sides. The application of smart technologies should make it possible to solve both the tasks of optimizing the state economy and providing its citizens with a comfortable and safe ecosystem. The most demanded, and therefore the most developed, directions of introduction of artificial intelligence is the system of rendering public services – electronic government, and financial sphere. Smart technologies are used both in tourism and real estate market. Currently, such complex intellectual systems as energy systems have been developed and are in use. In the study, a special emphasis is put on the development of the payment system. The paper presents the results of the analysis of credit cards issuance dynamics by types, which showed the growth in the number of bank cards. The analysis also showed growth of operations performed with bank cards, especially in recent years. A detailed description of transactions made with the use of bank cards is given. On the whole the study revealed technological capacity and consumers’ readiness to switch to a digital platform of a “people-oriented” economy. Keywords: Smart technology JEL Code: O3


Digital economy
Payment system


E4
G0

1 Introduction The emergence of the phenomenon of “smart economy” should be the logical outcome of the application of smart technologies in modern economy. It should be taken into account that economy implies the most complex multidimensional and multi-element mechanism of interaction of subjects and objects of modern society. Therefore, it is important to understand that the full digitalization of all economic processes, even with the use of modern tools of artificial intelligence, is a complex goal, which seems to be impossible to achieve at first sight. Economy, as a value expression of all the processes taking place in society, embraces almost all its sides. It is necessary to start with those elements and interrelations which are more subject to description and modeling. © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 434–444, 2021. https://doi.org/10.1007/978-3-030-59126-7_49

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2 Background and Methodology Such methods as synthesis and analysis, induction, formalization, comparison of absolute and relative values were used in the research. The very concept of smart community appeared as far back as 1993 in Silicon Valley. The concept of “smart city” (Zhilkin and Zhilkina 2019) should be considered as a historical analogue and, perhaps, the prototype of an economy applying modern information technologies – smart economy. The “smart city” concept is a systematic approach to the use of information technologies based on the analysis of various and multiple data to provide services for the management of resources needed by residents and guests of such a city. The resources managed are varied and diverse, including natural and energy resources, transport and financial infrastructure, health and communications, education, tourism, environment and safety. And it is not a simple system, but a system aimed at sustainable economic development of the city and ensuring high standards of life for every inhabitant. From a technical point of view, the concept of “smart city” is based on the widespread use of information and telecommunication technologies. Technologically, a “smart city” exists, based on the analysis of data on the current state of various systems necessary for making managerial decisions in each direction of its life.

3 Discussion and Results “Smart economy”, as mentioned earlier, is multidimensional. It should consider the regional aspect, peculiarities of the state structure and customs of state management (Kolobov 2008; Astaf’eva and Savinkov 2013). The boundaries of operation of smart technology in the economy have not yet been defined, but there are notions of what tasks in society they should help to solve (Vorob’eva and Antonov 2018; Vedernikova and Petrov 2019; Khotov and Khanmurzaev 2019; Zhilkina and Zhilkin 2019). Smart technologies in tourism, real estate market, in energy systems management are also becoming widespread (Melentii 2017; Belaia and Sigua 2018; Raskulova and Ziialtdinova 2017). Such areas as education and finance directly affecting everyone should not be left out (Martynov et al. 2019; Burmistrova et al. 2018; Zhilkina 2018). Let us evaluate the results of the introduction of smart technologies in one of the essential elements of the economy – the payment system, which has become familiar in many countries over the past few years (Chen 2019; Gupta and Arora 2019). When building any system, especially with the use of information technologies that require a certain formalization, the question arises as to what requirements it should meet. The national payment system is no exception. What is the national payment system like for us, users? It should probably be accessible, uninterrupted and efficient. If the system meets the above requirements, it will be easier to provide services for

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legal entities and individuals to transfer funds both inside and outside the state using both national and international payment and credit cards and other payment instruments. The Russian payment system “Mir” became a positive example of the new national payment system created from scratch in record time. Debit cards of the “Mir” system are already a worthy competition to the existing world payment systems in the Russian Federation, gradually becoming a means of payment abroad. Such result was achieved in the struggle for clients in conditions of serious competition, for example, providing discounts on payments when using cards of this system. Undoubtedly, the support of the state also played a significant role. The latter is explained by the interest of the Russian state in its own payment system, which, on the one hand, is autonomous, and on the other hand, is integrated into the global payment system. Furthermore, the tasks of money circulation transformation in relation to natural persons are also achieved: a reliable payment system increases the population’s trust in non-cash settlements. This approach is also consistent with the forecasts of the Central Bank of Russia (Central Bank of Russia 2018). Let us consider the current state of the national payment system of Russia for 2014– 2019 (Tables 1 and 2).

Table 1. Dynamics of bank payment cards issuance between 2014 and 2019. Share by Growth rate by cards Including by type of card, (compared to type of card, % previous period), % thousands of units Debit Credit Debit Credit Total Debit Credit 1.10.19 280 231 243 341 36 891 86.84 13.16 2.80 2.45 5.15 1.01.19* 272 604 237 521 35 082 87.13 12.87 0.34 −0.84 9.10 1.01.18 271 677 239 522 32 155 88.16 11.84 6.64 6.63 6.67 1.01.17 254 763 224 619 30 144 88.17 11.83 4.44 4.74 2.31 1.01.16 243 925 214 461 29 464 87.92 12.08 7.14 9.47 −7.23 1.01.15 227 666 195 904 31 761 86.05 13.95 4.69 4.05 8.81 1.01.14 217 463 188 275 29 189 86.58 13.42 – – – * According to the updated data, due to the Central Bank’s specification of the methods of internal accounting of indicators Source: compiled by E. P. Bondarovich according to the Bank of Russia website (Central Bank of Russia 2020). As of which date

Number of cards issued

The number of bank payment cards issued by credit institutions and the Bank of Russia as of 1.10.2019 is 280,231 thousand units, as of 1.01.2019 the number is 272,604 thousand units. Thus, there was an increase in the total number of cards by 2.8% or 7,627 thousand units. If we consider this increase by types of cards, as of 1.10.2019 243,341 thousand payment cards and 36,891 thousand credit cards were issued.

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For five years the average growth rate of the total number of bank cards amounted to 4.65%, which is higher than the average growth rate of credit cards – 3.93%, with the average growth rate of payment cards 4.81%. Table 2. Dynamics of transactions by individuals using Russian cards in the period from 2014 to 2019, both in Russia and abroad. Indicators

2014

2015

227.0 242.9 Number of cards at the end of the reporting period, million units 122.2 129.9 using which transactions were made during the reporting period, million units 53.9 53.5 Share of cards used in transactions during the reporting period, % Total number of transactions completed 10 087.8 13 085.1 Number of transactions, million units 34 649.9 39 707.4 Transaction volume, billion rubles including: cash withdrawals: Number of 3 286.5 3 295.6 transactions, million units 23 198.1 23 955.3 Transaction volume, billion rubles on payments for goods and services purchase

2016

2017

2018

253.2

269.2

269.6

9 months of 2019 276.4

139.3

157.8

179.2

188.7

55.0

58.6

66.5

68.3

17 818.7

23 915.4

32 173.2

30 212.2

48 997.6

60 844.2

74 955.0

63 544.0

3 432.6

3 295.3

3 161.9

2 272.6

25 932.2

25 716.6

26 602.3

19 834.1

(continued)

438

E. P. Bondarovich et al. Table 2. (continued)

Indicators

2014

2015

Number of 6 356.5 transactions, million units 7 136.7 Transaction volume, billion rubles other operations 444.8 Number of transactions, million units Transaction 4 315.2 volume, billion rubles Total: 67.4 Share of noncash operations in withdrawal operations, % 33.1 Share of noncash payment volume in withdrawal transactions, % Source: compiled by the authors Russia 2020).

2016

2017

2018

9 023.1

12 985.1

17 881.1

24 524.3

9 months of 2019 23 466.4

9 002.8

12 327.2

16 068.9

20 976.0

18 787.4

766.5

1 401.0

2 739.0

4 487.1

4 473.2

6 749.3

10 738.1

19 058.7

27 376.7

24 922.4

74.8

80.7

86.2

90.2

92.5

39.7

47.1

57.7

64.5

68.8

according to the Bank of Russia website (Central Bank of

By 2019, with the increase in the number of bank cards, the number of cards with which transactions were made also increases: in 2014, individuals had 227 million cards, transactions were made only on 53.9% of these cards; for the first 9 months of 2019, the number of cards increased to 276.4 million, while transactions were made on 68.3% of the total number of cards. From January to September 2019, individuals used cards 30 billion 212.2 million times, while the volume of transactions amounted to 63 544 billion rubles, and the amount of the “average check” spent per transaction rose to 2103.3 rubles. The dynamics of the number of transactions and the volume of transactions of individuals using bank cards are shown in Fig. 1.

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Fig. 1. Dynamics of the number of transactions and volume of transactions of individuals using bank cards [compiled by E.P. Bondarovich]

As can be seen from the chart drawn up in the analyzed period (from 2014 to 2018), in recent years there is a stable and progressive growth in both the number of transactions and their volume, the transition to primarily non-cash payments for purchased goods and services (in the alternative to cash withdrawals from bank cards) is observed. Over 90% of transactions (by number of transactions) are cashless settlements. The situation is somewhat less certain according to the data on the ruble equivalent of transactions for payment for goods and services, but their equality with the volume of cash withdrawal transactions is practically achieved. It can be stated that every year there is an increase in non-cash transactions by individuals. There is a sharp increase in the number and volume of other card transactions (e.g. transfers from card to card, to bank account/deposit, for charitable purposes, etc.) with practically unchanged indicators of cash withdrawal. All this testifies to the growing confidence of the Russian population in the cashless money turnover and to the increasing level of the population’s provision with the payment infrastructure. The number of users in the Russian segment of the Internet (Runet) has already reached 96 million people. The absolute majority of Runet users (85 million people) use mobile internet. Russia is already on the 5th place by the number of supporters of using the Internet in gadgets in the world. The penetration of mobile communications in Russia exceeds 90% (Gazeta 2019). The digital environment in which we all live now has long been a “money environment”. Internet and mobile services help us quickly solve problems related to money turnover – make payments and purchases. Every day millions of Internet users in Russia make numerous financial transactions through services on the World Wide Web – both for personal and business purposes. There are tens of thousands of Internet shops, banking and payment services, paid online services at their service (Central Bank of Russia 2019).

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In order to further increase non-cash transactions, it is necessary to take into account and develop digital literacy and raise the financial literacy level of the Russian population. A study conducted in each of the 85 regions of the Russian Federation in July 2018 as part of a joint project implemented by the Russian Ministry of Finance and the World Bank to promote financial literacy in the country showed (Fig. 2) that the Financial Literacy Index in Russia is at a fairly average level of 12.12 points out of a possible 21 (Karta 2018).

Fig. 2. Financial literacy index (Karta 2018)

The research has shown that financial literacy level tends to be higher among users of digital financial services. The calculation of the financial literacy index considers the ability of each person to manage their finances rationally and consists of the level of each person’s performance in several different areas: • existing knowledge in personal finance; • financial management skills a person possesses; • available attitudes of each person with regard to their personal finances. The situation regarding financial literacy in the country, according to the calculated financial literacy index, taking into account the level of education and age of respondents, is presented in Fig. 3.

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Fig. 3. Financial literacy index by education level and age group (Karta 2018)

The study found that the lowest financial literacy index is for people with incomplete secondary education, secondary education (school or vocational school), secondary vocational education (technical college). The financial literacy index is below 12 for people aged 18–22 years and 63–79 years (Fig. 4).

Fig. 4. Financial literacy index among countries (NAFI 2018)

Russia is on the 9th place by the level of financial literacy among G20 countries. At the same time, the financial literacy index for Russia is the same as for Brazil and Mexico. Digital literacy is the literacy of the 21st century, the language spoken by all: people and machines. Companies that are entering this era need to care not only about the quality of their products, but also about the fact that their consumers will be ready to apply technology and use various digital solutions. The task is to build interaction between citizens and service providers, make them as accessible as possible for everyone. In order for maximum citizens to benefit from the digital economy, it is important to constantly improve people’s overall digital literacy (RT 2020).

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One of the tasks to improve the literacy of the Russian population today is the creation of a publicly accessible free online service that supports the work of a set of educational platforms and solutions to master digital literacy – the implementation date is 31.12.2019 (President of the Russian Federation 2019). To date, the service https:// цифpoвaягpaмoтнocть.pф has been created and work is underway to fill it out. Also, the program of digital economy includes online programs for the development of digital literacy at the expense of budget funds for a total of at least 10 million people: as of 31. 12.2019 – at least 100 thousand people; as of 31.12.2020–2,000 thousand people; as of 31.12.2021–3,000 thousand people; as of 31.12.2022–5,000 people; as of 31.12.2023–7,000 people; as of 31.12.2024 – all 10,000 people (President of the Russian Federation 2019). Within the framework of the Federal Project “Information Security” funds are allocated for domestic developments to ensure information security of data transmission, processing and storage, with the aim of ensuring 100% guarantee of protection of interests of each individual and legal entity and the state as a whole by 31.10.2021. Implementation of the program should lead to the use of exclusively Russian technologies of integrity, confidentiality, authentication and availability of the transferred information and processes of its processing, priority use of domestic software and equipment and application of information protection technologies using Russian cryptographic standards (President of the Russian Federation, 2019). One of the approaches to solving this problem should be the development of socalled “significant” payment systems and ensuring their information security in the first place. Based on the definition of the payment system (President of the Russian Federation 2011) it includes a payment system operator, payment infrastructure service operators and payment system participants, of which at least three organizations are money transfer operators. In this case “significant payment system” is a system of either systemically significant, or socially significant, or nationally significant payment system. Russia’s digital development will be achieved by embedding contactless services into the digital ecosystem of life of people and companies. At the same time, the state can be sure that it is not cheated by anyone, and economic and social development is not hampered by administrative barriers. “Russia has breakthrough technologies to achieve the most ambitious goals in digitalization,” said M. Mishustin (TASS 2020). “Digital economy will become one of the priorities of the country’s development,” stated M. Mishustin. According to him, as a result of reforms, the state should become a digital platform, developed “for people” (RBK 2020).

4 Conclusions The introduction of information technologies in the implementation of individual economic processes has already become a reality. The experience of application of such technologies to the financial sphere, in particular, in the payment system, gives positive results.

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The concept of “smart economy” should be a systematic approach that allows using of information technologies, conducting a full analysis of the necessary data for the rational management of resources, guaranteeing economic growth and welfare of citizens.

References Astaf’eva, O.N., Savinkov, V.I.: Rossiia na puti k informatsionnomu obshchestvu: perspektivy otkrytogo pravitel’stva v kontekste idei modernizatsii [Russia on its way to the information society: prospects for an open government in the context of modernization ideas]. Eurasian Integr. Econ. Law Politics 13, 234–243 (2013) Belaia, E.S., Sigua, V.T.: Vliianie smart-tekhnologii rynka nedvizhimosti na ekonomiku Rossii [Influence of smart technologies of the real estate market on the Russian economy]. Regional’nyi rynok potrebitel’skikh tovarov: perspektivy razvitiia, kachestvo i bezopasnost’ tovarov, osobennosti podgotovki kadrov v usloviiakh razvivaiushchikhsia IT-tekhnologii. In: Proceedings of the VII International Scientific and Practical Conference, pp. 112–115 (2018) Burmistrova, L.A., Suvorova, A.P., Trachenko, M.B., et al.: Finansy v tsifrovoi ekonomike: sokhranenie traditsii i novye gorizonty [Finance in the digital economy: preservation of traditions and new horizons], Moscow (2018) Vedernikova, V.V., Petrov, A.D.: Osobennosti formirovaniia smart-ekonomiki v Rossii na sovremennom etape [Features of smart economy formation in Russia at the present stage]. Jekonomika otraslevyh rynkov: formirovanie, praktika i razvitie. biznes-modeli realizacii koncepcii smart city: evropejskij opyt, sbornik materialov III mezhvuzovskoj nauchnoj konferencii i kruglogo stola. Finance University under the Government of the Russian Federation, pp. 42–46 (2019) Vorob’eva, V.V., Antonov, A.V.: Kontseptsiia razvitiia smart-tekhnologii i smart-obshchestva [The concept of smart-technology and smart-society development]. Nauchno-tekhnicheskii progress kak faktor razvitiia sovremennogo obshchestva, sbornik statei po itogam Mezhdunarodnoi nauchno-prakticheskoi konferentsii, pp. 73–74 (2018) Zhilkina, A.N.: Rasshirenie vozmozhnostei finansovogo analiza v tsifrovoi ekonomike [Enhancing financial analysis capabilities in the digital economy]. Finansy v tsifrovoi ekonomike: sokhranenie traditsii i novye gorizonty, materialy 8-i Mezhdunarodnoi nauchnoprakticheskoi konferentsii, pp. 48–49 (2018) Zhilkina, A.N., Zhilkin, O.N.: Transformatsiia ekonomiki v usloviiakh didzhitalizatsii [Transformation of the economy under the conditions of digitization]. In: Kleiner, G.B. (ed.) L’vovskie chteniia, sbornik statei VII vserossiiskoi nauchnoi konferentsii, pp. 128–133 (2019) Kolobov, V.V.: Rossiia na puti postroeniia informatsionnogo obshchestva (federal’nyi i regional’nyi aspekty) [Russia on the way to building an information society (federal and regional aspects)]. In: Proceedings of Voronezh State University. Series: Philology. Journalism, vol. 1, pp. 196–200 (2008) NAFI: Financial literacy rating of Russian regions (2018) Martynov, V.V., Filosofa, E.I., Shiriaev, O.V., Baikov, R.A., Zaitseva, A.A.: Primenenie iskusstvennogo intellekta v sovremennykh obrazovatel’nykh tekhnologiiakh pri perekhode k smart-obshchestvu [Application of artificial intelligence in modern educational technologies in the transition to the smart- society]. In: Nikitov, S.A., Bykov, D.E., Borovik, S.I., Pleshivtseva, I.E. (eds.) The Proceedings of 2019 XXI International Conference “Complex Systems: Control and Modelling problem, pp. 30–35 (2019)

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Melentii, V.A.: Issledovanie potrebnostei obshchestva v ispol’zovanii smart-tekhnologii v turizme [Study on the needs of society in the use of smart-technology in tourism]. Informatsionnye tekhnologii v obrazovanii i sotsial’noi sfere. Materialy sektsii Mezhdunarodnoi nauchno-prakticheskoi konferentsii “Aktual’nye problemy informatiki i informatsionnykh tekhnologii, Tambov State University named after G.R. Derzhavin, pp. 127–133 (2017) Raskulova, A.I., Ziialtdinova, L.F.: Tekhnologicheskie effekty ot sozdaniia intellektual’nykh energosistem na osnove kontseptsii smart grid v Rossii [Technological effects of creating intelligent power systems based on smart grid concept in Russia]. Intellektual’nye energosistemy Materialy V Mezhdunarodnogo molodezhnogo foruma, pp. 282–285 (2017) RBK (2020). https://www.rbc.ru/crypto/news/5e2038f29a7947423ddeab0f. Accessed 8 Feb 2020 TASS (2020). https://tass.ru/ekonomika/7652087. Accessed 8 Feb 2020 Khotov, A.L, Khanmurzaev, K.E.: Smart obshchestvo [Smart Society]. Sovremennaia mirovaia ekonomika: problemy i perspektivy v epokhu razvitiia tsifrovykh tekhnologii i biotekhnologii. Sbornik nauchnykh statei po itogam raboty vtorogo mezhdunarodnogo kruglogo stola, pp. 74–77 (2019) Central Bank of Russia: Osnovnye napravleniia razvitiia finansovykh tekhnologii na period 2018–2020 godov [Main directions of financial technologies development for the period 2018–2020]. Moscow, p. 22 (2018). https://cbr.ru/statichtml/file/36231/on_fintex_2017.pdf. Accessed 8 Feb 2020 Central Bank of Russia: Gid po finansovoi gramotnosti [Financial literacy guide] (2019). https:// цифpoвaягpaмoтнocть.pф/upload/iblock/cfb/cfb9a410382990da8a68c0be135211eb.pdf. Accessed 8 Feb 2020 Central Bank of Russia: Statistika natsional’noi platezhnoi sistemy [Statistics of the national payment system] (2020). https://cbr.ru/statistics/psrf. Accessed 8 Feb 2020 Chen, C.-W.: Impacts of third-party payment in an open economy. Australian Economic Papers (2019). https://onlinelibrary.wiley.com/doi/full/10.1111/1467-8454.12168. Accessed 8 Feb 2020 Gazeta (2019). https://www.gazeta.ru/tech/news/2019/12/25/n_13857086.shtml. Accessed 9 Feb 2020 Gupta, K., Arora, N.: Investigating consumer intention to accept mobile payment systems through unified theory of acceptance model: an Indian perspective. S. Asian J. Bus. Stud. 9 (1), 88–114 (2019). https://doi.org/10.1108/SAJBS-03-2019-0037. https://www.emerald.com/ insight/content/doi/10.1108/SAJBS-03-2019-0037/full/html. Accessed 8 Feb 2020 Karta (2018). https://www.karta.vashifinancy.ru. Accessed 8 Feb 2020 President of the Russian Federation: Federal Law of 27.06.2011 N 161-FZ (ed. from 2.08.2019) “On the National Payment System” (with amendments and additions, effective from 30.01.2020) (2011) President of the Russian Federation: Passport of the national project National Program “Digital Economy of the Russian Federation” (approved by the Presidium of the Presidential Council for Strategic Development and National Projects, Protocol of 04.06.2019 N 7) (2019) RT (2020). https://www.company.rt.ru/press/news/d453356. Accessed 8 Feb 2020

Smart Technology Advancement in the Transition to the Digital Economy Irina A. Kovaleva(&)

and Alla A. Kanke

State University of Management, Moscow, Russia {ia_kovaleva,aa_kanke}@guu.ru

Abstract. The paper considers the main features of using digital technology for promoting goods and services, identifies trends in consumer behavior in a digital environment. It is noted that the new era of digital promotion has come much wider than Internet marketing and includes not only promotion through the World Wide Web, but also uses all kinds of offline tools, differs in the format of interaction with the target audience, the method of data transfer, channels and promotion tools. The concept of “digital promotion” is based on a customeroriented, personalized approach. Customer-centricity, as a practical implementation of customer focus, implements an omnichannel approach, which should provide not only assistance in the implementation of the acquisition of goods, but also provide an analysis of the characteristics of consumer behavior, as well as collect data and receive feedback. Using digital tools, it is possible to collect and systematize accurate and objective data both online and offline, which help to take timely measures to adjust marketing strategies and predict the effectiveness of the company. Keywords: Omnichannel
Mobile technologies networks
Digital branding JEL Code: M150


Digital promotion
Social


M310
M370

1 Introduction Constant growth in the volume of information created by mankind and tightening of the competitive environment lead to the fact that consumer demand becomes multidirectional and less predictable, it changes faster than ever. At the same time, consumer behavior in the digital environment is characterized by the following trends: – – – –

spread of conscious consumption; prevalence of rational motives over emotional ones; individualization of consumption; total lack of time, which makes people look for ways to compare options and order more quickly; – gradual increase in the share of online trading in all segments; – quick changeover from one solution to another, from one brand to another; – the company’s reputation is growing in importance. © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 445–453, 2021. https://doi.org/10.1007/978-3-030-59126-7_50

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The digital environment not only provides the opportunity for companies to be present in all parts of the world and sell products “without borders”, but also to increase brand recognition and maintain a warmer relationship with the consumer. In the process of globalization, the environmental and social responsibility of a company becomes increasingly important and is projected on the brand as it is transmitted digitally, which in turn leads to a better reputation for the company. The global spread of information and communication technologies (ICTs) is an indicator of globalization and an opportunity for intense worldwide interaction of people, goods and services. The Internet today is the main channel of communication in addition to traditional media, through which marketing communications such as advertising or public relations can be distributed. The effectiveness of marketing consequently depends on the intensity of Internet use. However, marketers often forget that the Internet itself is an ICT product and its potential in both global and local markets is of interest in terms of profitability (Hermeking 2005), and therefore the intensity of Internet use depends on marketing. Internet consumption varies from country to country, which in turn affects consumer awareness of brands and the ability to promote brands to a specific market. Furthermore, the Internet is not a product that eliminates cultural differences. In this regard, companies wishing to achieve a global presence and implementing digital promotion channels face the problem of overcoming significant cultural differences. At present, developing countries are the target of global brands, for example, Brazil is of particular interest as a promising consumer market. Just a few years ago Internet marketing was considered something unusual, incomprehensible term, and today there is not enough knowledge in it, there has come a new era – the era of digital promotion. At the same time, digital promotion is much broader and includes not only promotion through the World Wide Web, but also uses all kinds of offline tools, is distinguished by the format of interaction with the target audience, the way data is transmitted, channels and tools for promotion.

2 Methodology The concept of “digital promotion” is based on a customer-oriented, personalized approach. There are the following key principles of effective personalization: collecting as much information as possible, segmentation of the audience – development of client profiles, development of personalized content, creation of personalized offers. Thanks to this method of communication, the consumer starts to trust the brand more, becomes more loyal, the company increases its sales conversion and gets a real return from the client. Thus, the main goal – to create and offer a product that the target audience needs – is achieved through continuous interaction and flexible response to the transformation of needs, changes in customer behavior and actions. Well-known brands can no longer simply sell products, first of all they offer the right content that allows you to attract and engage customers, and then already offer the right products in the right place at the right time. Brands personalize their websites, emails and mobile app content, multimedia messages, discount offers, sales notices, product and service recommendations, and transactional messages (invoices, receipts and shipping notices).

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Here are just some of the digital promotion channels that are popular and effective: websites, digital and cable TV, digital gadgets (smart bracelets, smart watches), mobile applications, game consoles, interactive showcases and screens, POS terminals, local and social networks, billboards, E-mailing, ATMs, computers and tablets, offline stores. Special attention should be paid to digital advertising, which is a set of advertising tools using Internet technologies to deliver advertising messages to consumers. Digital advertising tools (Godin and Terekhova 2019) are chatbots, mobile version of the site, landing, gamification, promotional codes, CRM-system, collaboration with bloggers and magazines, SMM. A customer relationship strategy focused on helping them solve problems and achieve their goals, or customer centricity as a practical implementation of customer focus, implements an omnichannel approach. Regardless of which digital channel of interaction is chosen by the client, the company must identify the client in any channel with the same efficiency, which should provide not only assistance in the purchase of goods, but also provide analysis of consumer behavior and collect data and receive feedback. The survey, which was attended by over 700 representatives of over 300 Russian companies from 15 industries (Digital transformation in Russia 2020), revealed that 35% of companies are implementing a digital transformation strategy, 60% are studying information and planning to develop a transformation strategy, and 10% are not involved in digital transformation. It is not surprising, therefore, that at the same time 6% (mainly banks and the retail sector) of respondents fully implement the omnichannel approach, about 75% doubt the full application of this approach, and 18% admitted absence of omnichannel approach. Companies in the IT and software development, banking and financial services sectors, as well as the education sector (especially online education) make the most of digital channels, while industry, medicine and business services do not consider digital channels more important promotional tools than traditional marketing tools. A brand combines tangible and intangible attributes and symbols in a trademark, which, if properly managed, create value and influence the perception of the consumer. Digital branding is more than just a visual identification. Therefore, brands in the digital environment must meet the requirements (Almeida 2015): be multidimensional, i.e. expressed in different ways; strategic; flexible. The main aspect in digital branding is the development of a website, which serves as a point of interaction between the brand and consumers, and is also the main tool to attract them. It allows managing the identity of the company, product or service. In addition, it not only provides a company with an approach to its target audience, but can also attract suppliers and distributors from all over the world (Abrar et al. 2016). The next important aspect in brand promotion is social networks. There are several dozens of social networks, and their number is growing every day. The most popular are Facebook, Google, LinkedIn, Twitter, etc. Transformation of social networks from a network of friends into the most reliable and rapidly developing source of information about products and services brings enormous changes in marketing. Consumers can compare prices, look for the best quality products, freely exchange opinions on the

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company’s digital page, and evaluate the brand. A modern person spends about 6 h and 29 min a day online, of which an average of 3 h 14 min on mobile phones and tablets and 2 h 16 min on social networks. There are about 400 social networks, but only 250 of them are the most popular (All Internet statistics 2019). In today’s business environment, Facebook is seen as the most effective tool for reaching target customers, as it provides them with the opportunity to share their experiences, ideas, interests and useful information about the brand (Ayswarya et al. 2019). In Russia, Facebook audience consists of almost 13 million people, with a gender ratio of 53% of women and 47% of men. In social networks, the role of the “smart” promotion tool is assigned to Instagram, whose audience profile is balanced: the gender ratio is 50 to 50, the number of registered users is close to 38 million, their age range is from 18 to 34 years. Consumer behavior in social media can be viewed from the perspective of three components (Sabri 2019): 1. Intention (desire). Consumers planning to make an Internet purchase can spend up to 2 h a day on social networks on average. The goal is to find information about the product and its prices. Therefore, the advertisement should include the price of the product and its image should be attractive, in order to ensure the emotional memory of the advertisement. 2. Formation of a relationship (consumer evaluation) as a result of comparison. The buyer may highlight “advantageous offers”, prestigious products, if the product has a special value (for example, a luxury item), then often consumers involve friends in the discussion, who in turn may also be considered as potential consumers. 3. Decision to purchase (action). According to PwC analysts, more than 50% of the revenue of modern digital companies comes from digitally advanced or purely digital products and services (Global Digital Operations Research 2020). The client solution ecosystem is one of the four elements of the company’s internal digital environment and simultaneously focuses on two key principles: multi-channel interaction with the client and offering individual solutions for clients. At the same time, it provides greater maneuverability in managing a flexible partner network. Multi-channel interaction with the client is carried out by means of implementation of such directions, as, full use of e-commerce, use of third-party platforms, realization of the concept of extended client service, study of weak and strong demand signals, integration of data, analytics and services. On the basis of the received information and constantly updated data it is possible to form personalized offers. The offer of individual solutions for customers is carried out by the following means: use of various programs and applications, integration of platforms, improvement of hardware and infrastructure, continuous improvement of products, offer of complementary products and services, provision of operational, service and financial solutions. In connection with the above-stated we will consider one more element of marketing in an epoch of digital economy – CRM as activity which induces companies to establish and develop partner relations with clients, suppliers, distributors for promotion of image, a product or service on mutually advantageous conditions. Application of modern Internet CRM solutions facilitates the companies’ orientation on the client, interactions with whom is touchpoints with the client. The growing

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number of web and mobile applications is increasing the number of touchpoints. Customers can also interact with the company through multiple touchpoints in multiple information channels. The combination of touchpoints forms an understanding of the client’s path (Decker and Stummer 2017). In this way, information can be collected from product selection to disposal. In this connection, it is expedient to pay attention to possibility of the organization of work with the client concerning product life cycle – in this case touchpoints can turn to touchlines at each stage of life cycle. It will help not only to raise loyalty of the consumer, but also will give the chance to the company to prolong product life cycle. Mobile devices and applications are a significant technology in digital marketing. They are channels of access to the consumer, while performing a number of important functions: information retrieval, phone functions and, therefore, direct interaction, access to stores, products and services (Huang 2019). In addition to the above tools for promotion in the modern digital environment, a prerequisite for the survival and development of the company is the establishment of strategic, mutually beneficial relationships with the client. One of the key tools for the implementation of this method of promotion is expert sales, which are based on the expert approach of the seller, on building reliable long-term strategic relationships between the seller and the buyer. The expert approach to promotion and sales is contrasted with the transaction approach, which is characterized by a short cycle of the transaction, one-sided interaction, little identification of the buyer’s needs. Table 1 shows the key differences between the transaction approach to promotion and sales and the expert approach.

Table 1. Comparison of expert and transaction approaches to promotion and sales. Transaction approach Sells the product Processes customer request Buyer leads Looks for the answer to “What”, “Which” Asks clarifying questions about the product It is the responsibility of the buyer to choose Tries to adjust and please Fear not to sell: the main concern for the seller is to sell at least something

Expert approach Sells the solution Can change customer request Seller leads Looks for the answer to “What for”, “Why” Asks questions about specificity, approach, etc. Partly takes responsibility Expresses their expert opinion Desire to gain trust: a long-term relationship with the buyer. Even if they do not buy anything now

Expert approach to promotion and sales should be implemented in the following cases: a long cycle of the transaction, technologically complex, unique product or market of the client, the seller is committed to a long-term relationship with the client,

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the buyer themselves asks for help, advice, the buyer is at the stage of choice, the seller themselves sees the mistake of the client, the seller wants the client to make a recommendation, bring more clients.

3 Results A survey of 46 thousand respondents was conducted in Harvard Business Review. The results of the survey showed that online customers are 7% and offline customers are only 20%, 73% of customers belong to the “omni” group (Sopadjieva et al. 2017). This proves that the majority of customers are no longer ready for the same type of interaction – only at the point of sale or only on the website (in the application). Customers prefer to get information from interactive shop windows and tablets in the sales area, look through catalogues, compare properties and prices of products. Sometimes they look at the goods on the site and make a decision later, after which they make an online order. At present, such a promotion channel as e-mail is still relevant, but its effectiveness is not so high. Also, voice calls, SMS and call-centers are losing popularity. Bright future is provided for mobile applications, messengers and chatbots (they fulfill the main function of maintaining contact with customers). In the conditions of digital transformation of economy, customers appreciate fast feedback and maximum level of personalization. The main tools for collecting feedback from customers are websites, email, social networking groups, phone, messengers and online consultants, specialized SMS services. Russian consumers choose YouTube and VKontakte, WhatsApp and Viber are among the most popular messengers. Although YouTube cannot be used as a customer service tool, it is one of the most effective channels to promote both the company and its products, in addition, YouTube not only attracts customers, but also significantly increases their loyalty (Krylov et al. 2019). Brands should work with several YouTube accounts at once, post informational and promotional videos several times a week with famous and popular personalities. As studies have shown, it is worth paying attention to promotion using the social network Instagram, as it is the most frequently used by customers in search of new products and tracking fashion trends. For example, in the USA, Europe and Russia some accounts have Insta-shops. We have come to the following conclusions from our research. 1. The use of mobile promotion technologies guarantees a high conversion rate, productivity and cost savings for the company by providing the client with selfservice capabilities. The role of mobile technologies will grow due to their ability to track the entire process of interaction with the customer, not only before buying, but also during the use of the product. In addition, almost 50% of retailers confirm the fact that it is the mobile promotion strategy that triggers and increases sales, both in the outlets themselves and online stores. However, the company needs to provide its employees with digital equipment, so that they perform their professional functions

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quickly and on time. Furthermore, it is necessary to use contactless payment and mobile payment technologies to receive fast payment for products by customers. 2. General discounts are no longer effective, personalized offers are required. For this purpose it is necessary to receive, process personal data of clients, analyze purchase history and brand loyalty. This is the only way to anticipate the desire and intention to form a personal solution to the client’s problems. But here comes a problem that requires not only a balance of interests, but also improvement of legislation in the field of personal data protection: modern clients demand privacy, but also want to receive personalized offers. 3. It is necessary to scale up the omnichannel approach in brand promotion, which requires consideration of client experience, growth opportunities and logistics capacity. The omnichannel model is not limited to online only – it is a strategy of close integration of all types of interaction. According to IDC Retail Insights, the model offers the following advantages: an increase in the average check amount of 15–35%; a 5–10% increase in profits from loyal customers’ services; an increase in the number of LTV customers. And by 2022, the retail sector will double its investment in digitizing its business in order to increase the number of e-commerce orders, including impulse purchases, processing speed, and customer engagement and loyalty based on their personal experience. In implementing the expert approach, promotion and sales should respect the following principles: – consider the fact that the customer has a need and the seller has certain skills – in the first stage of interaction, the seller and the buyer communicate and determine what the seller can do for the buyer; – not to find out what product the customer wants to buy, but to find out what this product is for, why they choose it and what they want to get from the process of its use, with less talking – more listening; – offer a complete solution; – not to put pressure on the customer, they should be as independent as possible to make the purchase decision; – always remain in sight of the customer. All information about the client and the seller should be placed in one file: the information about them, the history of relationships, a list of tools used to promote, for example, a “call” to collect of external data, a worksheet to collect internal data (client status, cost of contact, the seller consultant’s efficiency, the effectiveness of the contractor). Thus, we get synergistic knowledge about the client (Konks et al. 2019).

4 Conclusion Globalization and technological advances have made the use of smartphones and gadgets a necessity and expanded marketing opportunities for businesses (Andreki and Yazdanifard 2014). The number of people migrating to other countries and traveling around the world continues to grow, making it necessary to meet customer needs while being convenient in all parts of the world.

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Digital promotion provides a great advantage in conducting real-time analysis of the target audience. With the help of digital tools it is possible to collect and systematize accurate and objective data both online and offline, which help to take timely measures to adjust marketing strategies and predict the effectiveness of the company. Modern digital media and communication between brands and consumers are twoway, digital tools include social networks, search engine optimization, mobile marketing, online advertising, email marketing and customer relationship management (CRM) (Golubkov Golubkov 2018). When entering the market of another country, the advantages and disadvantages of using standardized or adapted strategies should be taken into account. Decisions on costs, image, brand, advertising, etc., should be carefully analyzed. Naturally, the strategy of standardization is very beneficial, but if the target markets require special conditions for adapting the marketing program, they must be considered, otherwise the company will fail. The main digital trends that reflect and drive the modern digital environment: – improved data protection legislation around the world; closed platforms will be monitored even more closely, which will require greater control over the use and disclosure of user information; – the share of video advertising in the marketing budget will increase, as information for consumers will increasingly be presented in video content format; – brands and retailers will unite for information partnership, and strong customer relationships will come to the fore; – artificial intelligence will become even more widespread in digital promotion; the development and updating of competencies of the company’s employees will be continuous; – voice and visual technologies will be developed (ability to search by picture, oneclick shopping, augmented reality, live chat in real time); – the development of personalization technology; – growth hacking is a marketing area with the help of which it is possible to provide fast growth of sales with the minimal budget for advertising, for example, the use of inexpensive or free promotion tools, increasing the role of customer loyalty; – a paradigm shift in brand identification (branding is squeezed out of the zone of production capabilities into the zone of ideas). Digital promotion becomes an everyday part of work and part of life of every modern person. Information retrieval, knowledge acquisition, communication and entertainment take place through various digital channels.

References Almeida, L.: Targeting Brazilian market through digital branding strategies: the relevance of the cultural dimension. Open J. Bus. Manag. 3(1), 30–39 (2015). https://doi.org/10.4236/ojbm. 2015.31004 Hermeking, M.: Culture and internet consumption: contributions from cross-cultural marketing and advertising research. J. Comput.-Mediated Commun. 11(1), 192–216 (2006). http://dx. doi.org/10.1111/j.1083-6101.2006.tb00310.x

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Andreki, P., Yazdanifard, R.: Is E-marketing the future of marketing field. Am. J. Ind. Bus. Manag. 4(7), 333–336 (2014). https://doi.org/10.4236/ajibm.2014.47040 Sabri, E.: Consumer’s purchase intention towards luxury retailer’s social media advertisements – a case study of a shoe retail—UAE-Dubai Mall. Soc. Netw. 8(1), 39–51 (2019). https://doi. org/10.4236/sn.2019.81003 Abrar, M., Safeer, A., Baig, S., Ghafoor, A.: E-marketing and its implementation on developing social perceptions of customers through effective marketing mix of organic textile products. Am. J. Ind. Bus. Manag. 6(12), 1194–1211 (2016). https://doi.org/10.4236/ajibm.2016. 612110 Ayswarya, R., Telreja, S., Praveena, S., Ilankadhir, M.: Facebook – a boon or bane towards social media marketing. J. Serv. Sci. Manag. 12(5), 628–638 (2019). https://doi.org/10.4236/ jssm.2019.125043 Decker, R., Stummer, C.: Marketing management for consumer products in the era of the internet of things. Adv. Internet Things 7(3), 47–70 (2017). https://doi.org/10.4236/ait.2017.73004 Huang, L.: Research on mobile marketing strategy based on SICAS model – a case study of Yili group. Am. J. Ind. Bus. Manag. 9(4), 1059–1075 (2019). https://doi.org/10.4236/ajibm.2019. 94073 Global Digital Operations Research (2020). https://www.pwc.ru/ru/iot/digital-champions.pdf. Accessed 10 Feb 2020 Digital transformation in Russia. Analytical report based on a survey of representatives of Russian companies (2020). https://drive.google.com/file/d/1k9SpULwBFt_kwGyrw08F0EL I49nipFUw/view. Accessed 10 Feb 2020 Sopadjieva, E., Dholakia, U., Benjamin, B.: A Study of 46,000 Shoppers Shows That Omnichannel Retailing Works (2017). https://hbr.org/2017/01/a-study-of-46000-shoppersshows-that-omnichannel-retailing-works. Accessed 10 Feb 2020 Golubkov, E.P.: Use of digital technologies in marketing. Mark. Russ. Abroad 2, 3–12 (2018) Konks, V.Y., Krasnov, E.V., Sumarokova, E.V. Digital technologies of marketing and sales: big data and the effect of synergy. Bull. GUU (8) (2019). https://cyberleninka.ru/article/n/ tsifrovye-tehnologii-marketinga-i-prodazh-big-data-i-effekt-sinergii. Accessed 16 Feb 2020 Godin, V.V., Terekhova, A.E. Digital advertising as a tool for promoting a product or service. Project implementation experience. E-Management (3) (2019). https://cyberleninka.ru/article/ n/tsifrovaya-reklama-kak-instrument-prodvizheniya-tovara-ili-uslugi-opyt-realizatsiiproektov. Accessed 12 Feb 2020 Krylov, A.N., Kuzina, G.P., Golyshkova, I.N., Yazintsev, R.A.: Improving the efficiency of business communications through the use of DIGITAL channels. Univ. Herald 6, 19–26 (2019) All Internet statistics for 2019 are in the world and in Russia. WebCanape – digital agency (2019). https://www.web-canape.ru/business/vsya-statistika-interneta-na-2019-god-v-mire-ivrossii/. Accessed 11 Feb 2020

Systematization of Natural Resource Conflicts: Theoretical Aspects Nazgul K. Matikeeva(&) Osh State University, Osh, Kyrgyz Republic [email protected]

Abstract. Purpose: The purpose of this article is to systematize the types and types of natural resource conflicts from the point of view of geographical science. Design/Methodology/Approach: The authors distinguish the classification of natural resource conflicts by 18 signs and directions. Based on the goal, the essence of the concept of «natural-resource conflict» is investigated, the nature of conflicts of social groups and communities over resources is studied, the theoretical and organizational aspects of the relationship of man and society with natural resources and the natural system, the causes and ways of resolving conflicts are also studied. Its definition is given as a struggle of a social group or person for the right to possess (access), dispose and use natural resources, based on a comparative analysis of the definitions of the concept of natural resource conflict proposed by various authors. Conclusions: The author justifies the need to develop a classification of natural resource conflicts and, according to the results of many years of observations, field research and logical generalizations, an expanded and systematic classification and typology of natural resource conflicts is developed and presented, territorial and landscape-geoecological aspects of natural resource conflicts are highlighted. Originality/Meaning: A detailed interpretation of all the criteria, signs of classification and factors of the presented classification and the typology of natural resource conflicts is given. The proposed classification can be used in further studies. Keywords: Natural-resource conflict
Natural resources
Actor
Types of natural-resource conflicts
Signs of natural-resource conflicts
Types of natural-resource conflicts
Ownership of resources
Territorial and landscapegeo-ecological aspects of conflicts JEL Code: O-13

1 Introduction Perhaps the struggle for natural resources can be called one of the most common causes and premises of conflicts at various levels. Among such conflicts, the cause of which is the struggle for resources, include a group of natural resource conflicts. Natural resource conflicts are a confrontation between two or more social groups, which are © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 454–461, 2021. https://doi.org/10.1007/978-3-030-59126-7_51

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fighting for the rights to own and dispose of a particular type of resource. In general, natural-resource conflicts are reduced to the following two key aspects of the interaction of a social group or individual with natural resources: the right to own a resource (access to it) and preserve its quality. Therefore, it’s customary to consider them as a conflict of nature management and its main components. At the same time, the nature management system means the priorities of the region’s economic development, nature conservation measures and the specific nature management regime. The results of its functioning can be reflected in either an improvement in the indicators of the economic development efficiency of the region, or in the degradation of natural systems, a reduction in their biodiversity and a decrease in landscape productivity.

2 Materials and Methods Summarizing the various interpretations of the concept of natural resource conflict, we propose to define it as the struggle of a social group or person for the right to possess (access), dispose and use natural resources. Let’s consider the classification of natural resource conflicts. Initially, in the initial studies of 2012, the classification had 8 directions, but with a deeper study of such conflicts in the border areas of the Ferghana Valley, adjustments were made. Based on the classification are empirical studies in the area of local conflicts, which were conducted by Shuvaev et al. (2018), Barmin et al. (2011), Matikeeva (2012), Matikeeva (2019), Matikeeva (2015) (Table 1). Table 1. Classification of types of natural resource conflicts Sign of classification of natural resource conflict

Signs of conflict

Type of disputed natural resources

• • • • • • • • • • • •

Disputed resource type Reasons for the conflict

•

Objectivity of the causes of conflict

• • •

minerals; land resources; water resources; pasture resources; forest resources; natural and recreational resources; biological resources; energetic resources; air space critical to survival; necessary for development uneven distribution of natural resources in space (natural or artificially generated); actions of the parties to the conflict, limiting access to natural resources or reducing their quality; actions of third parties objective (the inability to gain access to the resource in another non-conflict way); subjective (conflict is used as a way to obtain the right to a resource)

(continued)

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N. K. Matikeeva Table 1. (continued)

Sign of classification of natural resource conflict

Signs of conflict

• • • Nature of resource rights • • • Resource ownership • • • Interest of parties to the conflict • • Parties to the conflict • • • • • The geographical aspect of the • conflicting parties • • The number of participants in the • conflict • • The nature of the relationship with • other types of conflict • • The way of conflict • • Relations between conflicting parties • • • Duration of occurrence of the conflict • • • Conflict duration • • • • The nature of the conflict • • Solvability • • • Territorial sign

Source: made by the authors.

regional, cluster, local; external; combined access to resources (without ownership rights to them); the right to a resource, but not to the territory; right to both a resource and a territory «own» resources; «alien» natural resources; third party natural resources zero interest of the parties; non-zero amount of interests between individuals and groups; between two organizations; between an individual and a group; between a person and an organization; between organization and group domestic; interstate; combined bilateral; multilateral; composite natural resource conflicts; overlapping conflicts; complementary conflicts demonstrative; causing real damage cooperation in other matters; probability of future resumption; antagonism sudden; fast; long short-term; medium term; long-term; extra long-term violent; non-violent complete victory; compromise; termination under the pressure of external forces and circumstances; • loss for the parties of the value of the subject of the dispute

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3 Results We consider in more detail each classification criterion. The types of disputed natural resources mean a certain type of resource for which there is a struggle between the parties: the type of raw and mineral resources, land, water, pasture, forest, natural-recreational, biological, energy resources and airspace. By the type of disputed resources, conflicts are distinguished for life-critical resources (such as water, food and means of their production, farmland and land for living); conflicts over resources for development (contributing to the development of new areas of economic activity or ensuring a new standard of living). It should be borne in mind that resources for conflicts can become not only landscapes and territories, but also individual components of the natural environment. The reasons for the conflict may be a natural or artificial shortage of natural resources associated with their uneven spatial distribution; actions of a party to the conflict that lead to an artificial shortage of natural resources (for example, blocking access to a resource), or actions of a third party (usually a state) restricting access to them in a certain territory, i.e. to their shortage. As a striking example in Russian history, we can note land surveying carried out by the tsarist government in the late 19th and early 20th centuries and the allocation of land to immigrants, which limited access of nomadic people to water sources, as a result of which there were massive conflicts between nomads and immigrants. Factors affecting the development and termination of conflicts are the objectivity and rationality of the causes of the conflict. Conflicts over the right to own vital resources are considered objective when access to them under existing conditions in a given area is ensured only through the forced redistribution of these resources. Practice shows that a significant part of natural-resource conflicts is caused not by objective, rational reasons, but from the point of view of the profitability of such redistribution to a certain social group. According to the territory, the flow is distinguished within the territorial (flowing at the place of placement of natural resources); external (occurring outside the place of concentration of resources); and combined (combining the above types) natural resource conflicts. Cluster natural resource conflicts are called conflicts in which the struggle for natural resources is within the local territorial framework, having a certain community of cultural, historical and state development (city, village). A local natural-resource conflict is a struggle for resources that takes place in a specific territory within a country. Examples are conflicts that occur between villages, rural districts, villages of different regions for the right to own pastures. Regional natural resource conflicts include conflicts over natural resources within the natural and/or historically developed regions of the country. The nature of the rights declared on natural resources is differentiated from maintaining the safety and consumer properties of resources in border areas to the right of ownership and disposal of resources. At the same time, rights are claimed for a specific natural resource, their specific properties, in the territory where these resources

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are located. Conflicts related to the right to use resources include conflicts, which are aimed at changing the type of the using of natural resources in any territory (the introduction of a conservation regime on the territory of farmland, pastures). Ownership of resources determines the control strategy used by the parties to the conflict. On this basis, a conflict is distinguished: – for «their» resource (each side of the conflict considers its own); – for a «foreign» resource (in this case, one side of the conflict is fighting for a resource to which it doesn’t have rights in this case); – for the resource of a third party (the parties aren’t in conflict for the resource, but for the right to own the resources of a third party that isn’t involved in this conflict). A comparison of the interests of the parties is also among the determining factors in natural resource conflicts. Conflicts in the ratio of interests of the parties are divided into: with a zero sum of interests); with a non-zero sum of interests. For example, water conflicts of neighboring villages, one of which is located above the other along the stream of a river, channel, canal, etc. In cases where in both settlements water is needed only for irrigation, but in the first case it’s selected, passing to a lower location much less water needed to meet the needs of the village below, there is a water conflict with zero sum of interests, which result is the lack of necessary the volume of water on one side. In cases where the locality below uses water from reservoirs for domestic needs and irrigation, and is used for waste disposal in the locality located above, there is a conflict with a non-zero sum of interests. Such conflicts can be resolved either by stopping access to water in one of the settlements, or in an alternative way, for example, through the creation of waste management systems in an upstream settlement. The two types of natural-resource conflicts, considered by us as an example, are typical of the Ferghana Valley. By the number, nature and level of organization of the parties to the conflict, we can distinguish interpersonal interstate, international natural resource conflicts, conflicts between social groups that occur between similar social structures at the same level and between organizations at different levels (family and state, business entities, various institutes). Classification of natural resource conflicts by the geographical localization of the subjects of the conflict involves the separation of intrastate (civil) and husband state (international) conflicts. In domestic conflicts, there is a struggle between residents of one country. In international conflicts, subjects of different states and the states are at war. Such conflicts include mixed natural-resource conflicts involving citizens of one country, who are members of international organizations or representing their interests. The composition of the parties to the conflict. On this basis, there are bilateral (with the participation of two conflicting parties), multilateral (in which three or more conflicting parties participate) and also composite natural resource conflicts (in which the warring parties lobby the interests of third parties - larger and more complex social communities). Based on the relationship of natural-resource conflicts with conflicts of other types, the struggle for natural resources may take the form:

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– actually natural resource conflicts (not related to conflicts of other types); – natural resource conflicts developing in the framework of larger (interethnic or interreligious) conflicts; – natural resource conflicts leading to other conflicts. The differences between natural resource conflicts are determined by the objectives of the conflict. For example, we can say, that the conflict aims to change the conditions of the right to possess and using natural resources, and other additional causes of the conflict are used to achieve it, here we can talk about the natural-resource conflict, supplemented by other types of conflicts. In cases where the contradiction of a given natural-resource conflict is resolved within the framework of another, interethnic, or inter-word conflict, this natural-resource conflict is considered as an integral part of another larger conflict. The methods of struggle, which are used in natural resource conflicts, can be very different: from threats to appeal to the court right up to armed conflicts. Depending on this, conflicts are divided into violent and non-violent nature; demonstration (in the form of threats) and real (in the form of causing real damage to the other side. Another characteristic of the natural resource conflict, which affects the intensity and possibility of ending the confrontation, is the relations of the conflicting groups, including those are declared for the purpose of the conflict. The aim of the mildest version of the conflict is to preserve each other, and the territories of the parties in preconflict borders, with only a change in the order of access to the types of natural resources located in these territories. At the same time, on issues that affect the scope of the conflict, these parties maintain cooperation among themselves. The most severe options for natural resource conflicts include conflicts aimed at tearing apart the disputed territories, destroying or expelling representatives of the other side from them. Intermediate options are also distinguished, involving the disintegration of conflicting parties with the subsequent integration of its members into the victorious party under various conditions. The next important characteristic of conflicts can be considered the duration of their formation. This is, first of all, the time, which is necessary for the parties of the conflict to realize their interest in this resource and resolve the dispute through the conflict. Depending on the so-called «incubation period», spontaneous natural resource conflicts are distinguished, which, in turn, are divided into spontaneous - with a long period of transition from a conflict situation to an open phase of the conflict, into rapidly forming ones - with a transition to an open conflict, from a few days to one year, and for long-forming ones - which last for several years. Spontaneous conflicts are associated with immediately occurring and fast-moving events that change the living conditions of individuals and social groups as to form an urgent need for any particular natural resource. For example, poor organization of evacuation measures during natural and man-made disasters associated with the need to evacuate a large mass of people can lead to conflicts for critical natural resources drinking water, accommodation between refugees and the local population.

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A natural-resource conflict with a short-term formation period is associated with a rapid increase in mutual claims of the parties and it’s typical mainly for spontaneous conflicts. The duration of the natural-resource conflict is also among its most important criteria. According to this criterion, conflicts can be short-term (with a duration of up to 1 year), medium-term (from 1 year to five years), long-term (5 to 18–20 years), ultralong-term or permanent (with a duration of tens or even hundreds of years, equal to the period multi-generation updates). Natural-resource conflicts can be violent and non-violent in its nature. Conflicts, in which one of the parties uses a variety of methods of compulsion against the other to gain or maintain dominance, conquer certain privileges in the using and possession of natural resources, are violent. In order to preserve their privileges, as a rule, the prevailing social groups apply various methods of violence (up to mass terror). Conflict can be named non-violent when non-violent forms of coercion are applied against the conflicting party to acquire or maintain economic and political dominance over natural resources. According to the method of resolution (termination), it’s customary to distinguish between natural-resource conflicts with the complete victory of one of the parties; conflicts that are resolved through compromise; conflicts that stop or freeze under the influence of external forces and factors; conflicts that cease due to the loss for the parties of the value of the disputed items (for example, depletion of natural resources, their sharp depreciation as a result of scientific and technological progress). According to the criterion of significance, we can distinguish value, status, and institutional types of natural resource conflicts. In the first type, the criterion and method of assessing their own significance for the warring parties is considered the ownership of natural resources. In the status type of natural resource conflicts each of the parties demonstrated superiority over second parties for natural resources. The institutional type implies that the instance, which has the right to make decisions on the approval or refutation of the superiority of any party that, resolves and regulates the conflict, is the institutions.

4 Conclusion Summarizing all the text above, it should be noted that in order to study such a complex social process as the natural-resource conflict, its classification from various aspects is required. In this case, the most important criterion for the classification of natural resource conflicts from geographical aspects is territorial, landscape-geo-ecological factors, the causes and nature of their course. The territorial component of the conflict is associated with the characteristic of geographically significant quantitative features of the origin and resolution of the confrontations, such as the location, size and configuration of the conflict zone, territory, part of the territorial economic systems, the disputed borders of the territories of the conflicting parties, etc. In cases where in time

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and after the conflict it’s not possible to qualitatively change the economic structure of the parties, the type of exploitation of resources in disputed places, we are talking about a natural-resource conflict that proceeds mainly with a territorial component.

References Shuvaev, N.S., Vyaznikova, A.V., Mineev, E.A.: The conflict of environmental management: definition of the concept, features and problems of materials. In: Materials of the International Scientific Conference Astrakhan Petrovsky Readings: “Russia - Astrakhan - East: Integral Interaction (on the 300th Anniversary of the Formation of the Astrakhan Province)”, pp. 220– 222. Science, Moscow (2018) Barmin, A.N., Shuvaev, N.S., Iolin, M.M., Asanova, G.Z., Kolchin, E.A.: Conflicts in the field of nature management in the territory of the Astrakhan region and their cartographic mapping. Geodesy Cartogr. 7(1), 43–49 (2011) Matikeeva, N.K.: Classification of natural resource conflicts. In: Bulletin of Osh State University Materials of the International Scientific-Practical Conference Dedicated to the 70th Anniversary of K. Matikeyev (2012). Special issue. Osh, 2(1), pp. 345–348 Matikeeva, N.K.: Natural-resource conflicts of the border regions of the south of the Kyrgyz Republic (on the example of the Ferghana Valley): the experience of complex geographical analysis. Diss. and abstract diss. for the degree of candidate of geographical sciences. Science, Bishkek (2019) Matikeeva, N.K.: Approaches to the study of natural-resource conflicts in geography and related sciences. Sci. New Technol. Innov. Kyrgyzstan 11(1), 34–48 (2015)

Current Experience and Perspectives of Application of “Smart” Technologies in Society

Local and Global Analysis of Fertility Rate in Italy Massimo Mucciardi(&) Department of Cognitive Science, Education and Cultural Studies, University of Messina, Messina, Italy [email protected] Abstract. Following the rapid and intense decrease after the “babyboom”, today Italy is one of the nations with the lowest fertility rate, In recent time the Total Fertility Rate (TFR) was equal to 1.35, very close to the so-called “lowest low fertility” threshold. These low values of fertility not only impact on the population’s age structure, but also on social welfare systems since the increasing share of elderly needs more financial aid while the support from the working age population decreases. But is this decline at the national level? Do some determinants of the TFR act more in a specific territory? As we know the role of the determinates on fertility is largely unexplored at the territorial micro-level in Italy. So in this paper, through the use of a Semiparametric Geographically Weighted Regression (S-GWR) model, we try to investigate the impact of the socio-economic determinates on the provincial TFR in Italy. Keywords: Total Fertility Rate
Semi-parametric Geographically Weighted Regression
Georeferenced provincial data
Socio-economic variables

1 Introduction The Total Fertility Rate (TFR) is one of the most famous demographic indicators because it indicates the status of well-being of the population as well as an understanding of the productive potential and development of a nation. Following the rapid and intense decrease after the “babyboom”, today Italy is one of the nations with the lowest fertility rate, both at the European and world level among those nations considered to be advanced. In recent time the TFR was equal to 1.35, very close to the socalled “lowest low fertility” threshold. These low values of fertility not only impact on the population’s age structure, but also on social welfare systems since the increasing share of elderly needs more financial aid while the support from the working age population decreases. But is this decline at the national level? Do some determinants of the TFR act more in a specific territory? In light of these questions, through the use of a Semi-parametric Geographically Weighted Regression (S-GWR), we try to investigate the effect of the local and global socio-economic determinates on provincial TFR in Italy. In particular we consider the following predictors: the marriage rate, the female labor participation, the percentage of people who have a university degree and the percentage © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 465–474, 2021. https://doi.org/10.1007/978-3-030-59126-7_52

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of childcare services for children under 3 years of age on fertility. From statistical point of view, spatial model like Geographically Weighted Regression (GWR) captures locally varying processes to better understand the drivers of the spatial distribution of the dependent variable. The Semi-parametric Geographically Weighted Regression (SGWR), in addition, has both geographically varying and fixed coefficients in the same model. We have enough evidence to assert that the local model performed better and provided significant improvement over the classic regression model and the results show the utility of such technique for exploring local processes that drive fertility. The paper is structured as follows: we continue in the next section with an brief overview of TFR in Italy; the Sect. 3 explains the S-GWR model and the data used in the analysis; Sect. 4 presents the results of the analysis and, finally, Sect. 5 concludes by summarizing the main findings, the data problems and the possible prospects.

2 A Brief Background of TFR in Italy As stated in the introduction, as compared to the rest of Europe, Italy is characterized by some anomalies or delays. The low fertility and low participation of the women in the labor market are two examples. The literature argues that at the national level the relationship is negative even if, starting by the end of the 1990s, there is a clear difference between the Northern and Southern regions: a traditionally negative relation to the South against a positive relationship to the North-Center (Del Boca and Rosina 2009; Del Boca 2003). This means that the analysis at the national level hides differences at the local level (Calamo and Pereiro 2014). On the other hand the percentage of women with a university education is low: against a European average of around 32%, the Italian average is at 19.8% (Eurostat 2015), although there is a strong recovery among the younger generations. Several studies state that the negative correlation between female education and fertility is strong but not the same across countries. As emphasized by Kim (2016), educated women generally have fewer children than uneducated women. The maximum number of children a couple can have depends on how long they have been in a relationship. If higher-educated women delay marriage or cohabitation then education reduces their fertility due to age. So higher education, together with female employment, is an important variable for the explanation of fertility (Calamo and Pereiro et al. 2014; De Santis 2011; Righi 2003; Trimarchi 2011). However couples may abandon the idea of having (more) children if the they perceive that this could negatively influence their living standard (Di Pino and Mucciardi 2004). Another problem is that the public childcare system in Italy does not provide services which are of much assistance to women in terms of combining childbirth and work. There are relatively few childcare services for children under 3 years of age (nursery school) as only 54% of municipalities offer the service (ISTAT-datasource 2015). Furthermore, Italy has always distinguished itself with a high marriage rate1 in respect to the rest of Europe (3.2 marriage per thousand inhabitants in 2015) and the level of cohabitation is low. Generally married couples tend to have higher birth rates (Brown and Dittgen 2000). However, it is necessary to distinguish the different

1

We recall that most fertility in Italy occurs in religious marriage.

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regions of the country: high levels of marriage are traditionally recorded in South and Central Italy; in the North rates are lower2. To gain better insight into these territorial differences, it is crucial to go beyond regional (or macro-regional) aggregate comparisons and to look more carefully the TFR inside the Italian provinces.

3 Data and Methods This section presents the methodology adopted and the data used. Although time series analysis has been widely used to describe the temporal evolution of various demographic variables, increasing attention has recently been given to the study of the spatial distribution of these variables (De Iaco et al. 2015). In fact, demographic research is often based on individual and contextual level data taken over a wide range of spatial and temporal scales, and therefore the corresponding variables, which involve correlated social and economic aspects require a deep understanding of the spatial context (Voss 2007; Entwisle 2007; Logan et al. 2010; Matthews and Parker 2013). While standard Geographically Weighted Regression (GWR) captures locally varying processes to better understand the drivers of the spatial distribution of the dependent variable, the Semi-parametric Geographically Weighted Regression (SGWR) has, in addition, both geographically varying and fixed coefficients in the same model (Fotheringham et al. 2002; Nakaya et al. 2005; Nakaya 2015). The S-GWR model can be defined as follows: yi ¼

X

b ðu ; v Þx þ k k i i k;i

X l

al zl;i þ ei

ð1Þ

where yi is the dependent variable, xk;i is the k-th independent variable with a local coefficient in the location i, ðui ; vi Þ is the x-y coordinate of the location i, zl;i is the l-th independent variable with a fixed coefficient al and ei is the Gaussian error at location i. So, with this model, the local and global components are incorporated into the same framework. The data employed in the analysis comes from geo-referenced provincial data. This geodatabase is formed by 110 Italian provinces based on administrative boundaries. The explanatory variables are taken from the Italian National Institute (ISTATdatasource 2015) and include, in addition to TFR (Fig. 1), the marriage rate (MR)3, the female labor participation (ER_W), the percentage of people who have a university degree (DE) and percentage of childcare services for children under 3 years of age in the municipalities of the total municipalities of the province (NURSERY). The data was appropriately geocoded and processed using GWR 4.0 (estimates) and Arcgis 10.2 software (maps). For reasons of availability of data, the reference year for all database variables is 2015.

2

3

For a reconstruction of the evolution of fertility in Italy, see also the researches by various demographers (Livi Bacci 1977, 1986; Ventisette 1986; Kertzer et al. 2007; Pozzi and Sonnino 2012; Breschi et al. 2013, Caltabiano and Dalla Zuanna 2015). In this analysis we take only formal unions (civil and religious marriages).

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4 Results Looking at the geographical distribution of TFR in the year 2015 (Fig. 1), fertility rates tends to present high spatial variability and the strong provincial differences is clear. In fact the Moran’s spatial autocorrelation index (IM = 0.59; p-value < 0.000)4 indicates a strong tendency towards the clustering of neighboring provinces. Therefore, it is necessary to process data using spatial analysis methods such as geographical regression.

Fig. 1. Spatial distribution of TFR by quintiles range in Italy (year 2015).

4

We recall that Moran’s I ranges from −1 to +1 and tends to 0 if there is no relationship between the value of a certain location and the average value of neighboring location. A positive Moran’s I indicates high spatial autocorrelation, which implies that values in neighboring positions tend to cluster together. A low negative Moran’s I is an indication that high and low values are interspersed. The values of p-value (p) indicate the significance level of the null hypothesis “no spatial autocorrelation” (see Anselin 1988).

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Fig. 2. Local coefficient estimates of MR by quintiles range (year 2015).

As a first step, we check which variables vary at the local level and which do not. Based on the Geographical Variability Test (GVT) (see Nakaya 2015 for more details) we set MR, DE and ER_W as local variables while NURSERY as global or fixed variable in the S-GWR model (see GVT in the Table 1). For the calibration of the SGWR model we considered the centroids of the provinces for the distance calculation between spatial units and the fixed kernel5 technique for bandwidth selection (Fotheringham et al. 2002). Adjusted R2 value showed significant improvement in GWR model (adjusted R2 = 0.65). Corrected Akaike Information Criterion (AICc) value using the S-GWR model is much less (AICc = −217) than those in the global regression model (AICc = −181, adjusted R2 = 0.26) and the spatial autocorrelation of

5

Although there are several options for the estimation methods of bandwidth, the fixed kernel function was employed because it fits the best to this model.

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Fig. 3. Local coefficient estimates of DE by quintiles range (year 2015).

the residues disappears6. Moreover, GVT shows that NURSERY has a slight positive value that indicates this variable is best assumed as global7. Now we are going to comment on the results of the single determinants. First of all, the OLS model explained 26% of the variance in TFR. Instead the results indicate that the S-GWR model represents a statistically significant improvement over the global model OLS8. The R2 produced by the S-GWR model is 0.65 (more than double), representing a large improvement in explained variance (see Table 1). The MR variable is positively correlated with TFR (0.0809) but this correlation is stronger in the Central-Southern provinces and in the North-East of Italy (see Table 1 and Fig. 2). The situation of the DE variable is more complex. As reported in Table 1, the OLS model shows a (non-significant) negative correlation between TFR and DE

6

7

8

In fact, the Moran’s I test on the residuals after fitting OLS model suggests that there is strong signal of spatial autocorrelation among the residuals (Moran’s I = 0.41; p-value < 0.00; Spatial Weight Matrix = inverse distance). So the independence assumption of the error term appears to be violated. Positive value of GVT suggests no spatial variability in terms of model selection criteria (see Nakaya 2015 for more details). The variables utilized in the OLS model have low values of multicollinearity. The Variance Inflation Factor (VIF) for all the variables is about 2.

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Fig. 4. Local coefficient estimates of ER_W by quintiles range (year 2015).

(−0.0003), but S-GWR model reveals the existence of a greater negative relationship in the South of Italy discouraging (or delaying9) families from having children (see Table 1 and Fig. 3). We can reasonably assume that if consumption aspirations are high, parenthood will be reduced or at least postponed (Balbo et al. 2013). However, more social analyses should be done to explain this phenomenon. The action of the ER_W variable seems dual. Even if the OLS estimate is slightly positive (0.0047), in Northern Italy the variable is strongly positively correlated with the TFR, while in the South of Italy the traditional low values of female labor participation seem to discourage or postpone childbearing (see Table 1 and Fig. 4). However, it is clear that high levels of education influence work opportunities in terms of expected earnings (Dankmeyer 1996). The NURSERY variable reveals the existence of a positive significant relationship in the global model with fertility, even if the local model does not provide any significant spatial non-stationarity (see the small positive value in the GVT

9

This process is generally referred to as the postponement of childbearing which is the central focus of timing studies in fertility research. We know that OECD countries have witnessed a rising mean age at first birth since the 1970s, coupled with an increasing proportion of births among mothers at advanced ages (Balbo et al. 2013).

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Table 1. Estimates and test for the OLS and S-GWR model (For the “best bandwidth size”, “AICc”, and “GWR ANOVA Test” see for more details Fotheringham et al. 2002; Nakaya et al. 2005; Nakaya 2015). Variable OLS Min Lower quartile Median Upper quartile Max GVT Intercept 0.7577** 0.4181 0.9147 1.1006 1.2326 1.5971 −40 MR 0.0809** −0.0492 −0.0294 −0.0017 0.0265 0.1240 −87 DE −0.0003 −0.0141 −0.0053 −0.0024 −0.0011 0.0023 −27 ER_W 0.0047** −0.0063 0.0015 0.0059 0.0088 0.0122 −92 NURSURY 0.0011** – – – – – 0.45 Global regression results (OLS): AICc = −181; Adj-R-square = 0.26 S-GWR results: best bandwidth size = 156 km; AICc = −217; Adj-R-square = 0.65; GWR ANOVA Test: F = 4.06* *= p < 0.05; **p < 0.01

in Table 1). This result is very important as it confirms the positive effect of public childcare services for children under 3 years of age in the municipalities on TFR for all the Italian territory without significant territorial differences.

5 Conclusion This paper explores the impact of the local and global socio-economic determinates on provincial TFR in Italy. The findings of this research are generally consistent with previous studies and the results show the utility of such technique for exploring local processes that drive fertility. We showed local impact of the provincial determinants on fertility, in particular we have found that areas with a high proportion of female labor participation are more likely to have high fertility while the public childcare service has a positive effect on fertility, without significant territorial differences. This result confirms the findings of previous studies, highlighting the importance of the public childcare and female labor participation as determinants of TFR. From a methodological point of view, we have enough evidence to assert that the local model (SGWR) performed better and provided significant improvement over the classical global regression model (OLS). Global statistical methods like OLS sometimes ignore local information and, therefore, present a false relationship (Mucciardi and Bertuccelli 2010). Instead, considering the spatial variability could be an important tool for to explain TFR reduction in Italy. Clearly, in a demographic prospective, the analysis could be further improved. In fact the low level of explanatory power in OLS model is an indication that the global model may not be completely specified. There are several reasons for this level of unexplained variance. Some determinants of TFR that are missing from this model (some due to the unavailability of data at the provincial level) could improve the OLS results and consequently to improve the performance of the spatial model. We refer, for example, to the job insecurity, part-time opportunity, migrants’ fertility, parental leave policies, lagging economic growth and other (unobserved) characteristics of a given

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area. Moreover, there are other aspects to consider regarding the low value of the TFR: Italy is losing its young people. With the fact that 5.11 million Italians live outside of Italy and there has been a significant increase in the emigration of young women the prospects for a revival of the baby population are not very optimistic. Perhaps new national policies that provide financing for more childcare centers and increased employment incentives for young people to stay home can all contribute to increase the fertility. However further analysis should be performed. As soon as the new provincial data will be available, the analysis should be replicated in different years to catch even temporal differences in addition to the spatial ones. A new research on these problems is currently in progress by the author.

References Anselin, L.: Spatial Econometrics: Methods and Models. Kluwer Academic Publishers, Dordrecht (1988) Balbo, N., Billari, F., Millis, M.: Fertility in advanced societies: a review of research. Eur. J. Population 29, 1–38 (2013) Breschi, M., Fornasin, A., Manfredini, M.: Patterns of reproductive behavior in transitional Italy: the rediscovery of the Italian fertility survey of 1961. Demogr. Res. 29, 1227–1260 (2013) Brown, E., Dittgen, A.: Fertility of married and unmarried couples in Europe. Paper presented at the FFS Flagship Conference Partnership and Fertility Revolution? Brussels, 29–31 May 2000 (2000) Calamo, R., Pereiro, T.G.: Occupazione femminile e fecondità in Italia tra cambiamenti edivergenze regionali. RIEDS LXVIII, 71–78 (2014) Caltabiano, M., Dalla Zuanna, G.: The delayed fertility transition in North-East Italy. Eur. J. Population 31(1), 21–49 (2015) Dankmeyer, B.: Long run opportunity-costs of children according to education of the mother in the Netherlands. J. Popul. Econ. 9(3), 349–361 (1996) De Iaco, S., Palma, M., Posa, D.: Spatio-temporal geostatistical modeling for French fertility predictions. Spat. Stat. 14, 546–562 (2015) De Santis, G.: Vi presento la mia famiglia. Retrieved from Neodemos (2011). http://www. neodemos.info/articoli/vi-presento-la-mia-famiglia/ Del Boca, D., Rosina, A.: Famiglie sole. Sopravvivere con un welfare inefficiente. Il Mulino, Bologna (2009) Di Pino, A., Mucciardi, M.: An endogenous dummy variable estimator of women’s opportunity costs of children in Italy. In: Dagum, C., Ferrari, G. (eds.) Household Behaviour, Equivalence Scales, Welfare and Poverty. Contributions to Statistics, pp. 55–73. Phisica Verlag, New York/Berlin (2004) Del Boca, D.: Low fertility and labour market participation of Italian women: evidence and Interpretation. OECD Labour market and Social policy, Occasional Paper, 61, OECD, Paris (2003) Entwisle, B.: Putting people into place. Demography 44(4), 687–703 (2007) Eurostat (2015). https://ec.europa.eu/eurostat/statistics-explained Fotheringham, A.S., Brunsdon, C., Charlton, M.: Geographically Weighted Regression: The Analysis of Spatially Varying Relationships. Wiley, Hoboken (2002) ISTAT-datasource (2015). http://dati.istat.it/Index.aspx

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Kertzer, D.I., White, M.J., Bernardi, L., Gabrielli, G.: Italy’s path to very low fertility: the adequacy of economic and second demographic transition theories. Eur. J. Popul. 25(1), 89– 115 (2009) Kim, J.: Female education and its impact on fertility. IZA World of Labor, Institute for the Study of Labor (IZA), Bonn (2016). Iss. 228 Livi Bacci, M.: A History of Italian Fertility During the Last Two Centuries. Princeton University Press, Princeton (1977) Livi Bacci, M.: Social-group forerunners of fertility control. In: Coale, A.J., Watkins, S.C. (eds.) The Decline of Fertility in Europe: The Revised Proceedings of a Conference on the Princeton European Fertility Project, pp. 181–200. Princeton University Press, Princeton (1986) Logan, J.R., Zhang, W., Xu, H.: Applying spatial thinking in social science research. GeoJournal 75(1), 15–27 (2010) Matthews, S.A., Parker, D.M.: Progress in spatial demography. Demogr. Res. 28(10), 271–312 (2013) Mucciardi, M., Bertuccelli, P.: Modelling spatial variations of fertility rate in Italy. In: Giusti, A., Ritter, G., Vichi, M. (eds.) Classification and Data Mining. Studies in Classification, Data Analysis, and Knowledge Organization. Springer, Heidelberg (2010) Nakaya, T., Fotheringham, A.S., Brunsdon, C., Charlton, M.: Geographically weighted Poisson regression for disease associative mapping. Stat. Med. 24, 2695–2717 (2005) Nakaya, T.: Semiparametric geographically weighted generalized linear modelling: the concept and implementation using GWR4. In: Brunsdon, C., Singleton, A. (eds.) Geocomputation: A Practical Primer, pp. 201–220. Sage Publication, Thousand Oaks (2015) Pozzi, L., Sonnino, E.: Demografia storica: un secolo di ricerca in Italia. Popolazione e Storia 2, 129–182 (2012) Righi, A.: Le tendenze di fecondità e di partecipazione femminile al mercato del lavoro. Roma, Istat (2003) Voss, P.R.: Demography as a spatial social science. Popul. Res. Policy Rev. 26(5–6), 457–476 (2007) Trimarchi, A.: Dove più si studia si fanno più figli? Un’analisi della fecondità delle regioni italiane (2011). http://www.neodemos.info/articoli/dove-pi-si-studia-si-fanno-pi-figli-unanalisi-dellafecondit-delle-regioni-italiane/ Ventisette, M.: Nuove tavole di fecondità dei matrimoni per l’Italia, 1930-1981, Firenze, Dipartimento Statistico dell’Università degli studi di Firenze (1986)

Tendencies of the Labor Market and Prospects of Future Professions in Russia Tatiana V. Suvalova(&) , Galina V. Mokhova and Vadim A. Zhukov

,

State University of Management, Moscow, Russian Federation [email protected], [email protected], [email protected]

Abstract. The purpose of this research is to analyze the Russian labor market and to determine the tendencies and decisive factors of development of new professions. The authors study perspective skills and current competencies of future professions and alternative forms of employment, substantiate the changes in modern business that lead to emergence of new spheres of activities, and establish that global automatization and robotization of business processes lead to optimization of the number of personnel. This paper contains an analysis of the results of research of demand for professions by experts of Skolkovo, the Agency for Strategic Initiatives, international recruiting company Xays, recruiting portal hh.ru, job hunting web-site Paбoт[email protected], and international recruiting portal LinkedIn. The authors note the changes of the Russian labor market due to development of the IT sphere and Internet communications. A list of top professions of the future are given, and the perspectives of development of nano-technologies, bioenergy, agriculture, medicine, pharmacy, information security, engineering, and financial and banking spheres are outlined. The level of professional correspondence and readiness of specialists for changes of the Russian labor market are determined. Importance of the taken measures for building a successful career in the future is substantiated, and the most perspective technologies of training are determined. The role of IT, robotics, and migration processes is analyzed. The changes in working hours are forecasted, and growth of the popularity of balance between work and personal life among young people is noted. The authors distinguish the employment forms that influence the interrelations between employer and employee and enumerate professions that could disappear due to implementation of AI, robotization, and automatization of functions. The spheres of activities in which new professions will appear are given. An overview of changes of the labor market in medicine, IT, financial sphere, and recruiting is performed. The current knowledge and skills for future professions are determined. Keywords: Labor market Competencies JEL Code: M500


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1 Introduction Changes in the modern business environment and society’s industrial sphere open universal opportunities for development of the existing professions and emergence of new ones. Additional opportunities for skilled specialists appear in the labor market. A range of professions will disappear due to the growing tendency of society for informatization and digitization of social and business aspects. New skills, competencies, and knowledge are actualized and popularized due to technological progress in a lot of business sphere and industry. Alternative forms of employment appear, and the system of higher education changes in view of the current needs and requirements of the labor market (Future of labor market. Opposition of tendencies that will form the working environment in 2030). Changes dictate the needs for new unique knowledge and skills, which are not yet taught in the modern educational structures. Changes of the functional duties require new professional competencies. The modern society requires a skill of adaptation to changes, quick reaction, ability to make justified decisions quickly, and universal knowledge in various spheres. Personnel will be reduced due to automatization and robotization of processes (The main tendencies of the labor market in Russia). Let us analyze the results of a research of the list of perspective professions that was performed by the recruiting portal hh.ru in April 2014 with the help of online survey of job applicants and employers in Russia (Which professions will be popular in 5–7 years, 2020). Changes of the Russian labor market analytics are connected to quick development of the IT sphere and ubiquitous implementation of IT. This tendency is also observed in the world labor market. In the modern society, the priority in the medical sphere and psychology is given to technologies and computerization. In medicine, the most important issues are fighting the aging process and demographic problems caused by ecological problems. In the sphere of psychology, the problems in human communication, caused by the development of Internet communications, increase. The level of concern, stress, conflicts, and rush is very high in the modern world. Growth of the level of pollution of the ecological environment and necessity to restore eco-systems lead growth of the need for professionals in biotechnologies (Professions of the future: new and perspective, 2020). According to the experts of the recruiting portal hh.ru, the top professions should have been specialists in the sphere of nanotechnologies, robotics, programmers, aerospace designers and professionals, and specialists in fighting the aging process. However, it is difficult to find such vacancies in the Russian head-hunting web-sites in 2020. As a result of a joint study by Skolkovo and the Agency for Strategic Initiatives, there will appear 136 new professions after 2020. “Atlas of new professions” has been developed as a result of the performed research (Atlas of new professions 2015). According to the experts of this research, development of biotechnologies will allow creating unique construction materials, alternative bio-energy, genetically modified cultures, and bio-synthesis drugs instead of traditional ones. Thus, the professions of bio-pharmacist and urban ecologist will appear (Professions of the future: tendencies and tops from the futurologists).

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In the sphere of medicine, the following directions are developed: artificial organs and tissue donors. This will create demand for the professions of IT doctor, IT genetic specialists, genetic consultant, clinical IT specialist, and molecular nutrition specialist. Climate change will lead to changes in the sphere of agriculture. The tasks of robotization of agricultural machinery, design of agricultural complexes, biotechnologies, and transfer to solar and wind energy will appear. There will appear a need for agricultural cyberneticists, agricultural ecologists, and GMO agriscientists. The sphere of construction will see application of energy efficiency and eco materials, architectural digital technologies, and biological waste disposal. Thus, there will appear the professions of designer of an intellectual system of home control and ecological analyst. According to the analysts of Paбoт[email protected], Russia has too many jurisprudents, marketing specialists, psychologists, and economists; there’s a deficit of engineers, constructors, agriscientists, and medical workers. Almost 90% of the graduates of humanitarian universities cannot find a job in their profession. In view of globalization of the labor market, it is possible to recommend selecting a popular profession of the future, taking into account the world labor market Abramova (2017), Alekseev and Korolev (2019), Artamonov (2019), Skolkovo (2015), Balukhto and Romanov (2019), PWC (2020), Eremin (2019). According to the forecasts of the international recruiting portal LinkedIn, there will be growing demand for the professions of doctor, pharmacist, technical project supervisor, and data base engineer.

2 Research Methodology The purpose of this research is to determine the tendencies of employment and the perspective of professions of the future in the spheres of medicine, IT, finance, and recruiting. The research of the labor market and its perspectives has been performed with the help of an online survey by the international recruiting company Hays in 2018 (Hays, 2018). The survey covered 2,550 respondents aged 25–40, of whom 54% of males and 46% of females; 5% - CEO’s, 37% - top managers, 27% - middle-ranking managers, and 31% - specialists. The purpose of the survey was to determine the respondents’ opinions regarding the changes in the labor market, tendencies of development of skills for professions of the future, and successful current career in view of the perspectives.

3 Research Results An important issue is the level of the respondents’ readiness for changes in the Russian labor market and their correspondence to new professional requirements with the orientation at perspectives. Most of the respondents (60%) state that they realize the perspectives of their current profession with certain possible changes. 37% of the respondents are optimistic and confident that their profession will not change and will be popular in the future; only 2% think that their profession will disappear due to

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robotization of their functions. 1% of the respondents think that demand for their profession will be growing. The question of respondents’ evaluation of their professional correspondence to the current level of development of the sphere of activities: 33% - “fully conform”, 49% “basically conform”, 8% - not sure. It is possible to conclude that most of the respondents are confident in their level of professionalism and are ready for further development in their spheres. From the point of view of professional mobility and in the course of career development, a specialist may wish to change the profession. 17% of the respondents think about changing the profession, of which 11% plan to change the sphere of their activities, 5% master new profession, and 1% plan to start their own business. Most of the respondents – 83% - are confident in their professional choice and are developing in their sphere. 44% of them are aware of the significant functional changes, but are ready for further growth and development in the selected sphere of activities, and 39% consider their profession to be perspective and want to develop within it in the future. Expansion of the activities of companies that dictate the changes of functions and automatization of a lot of processes motivates specialists for development of the professional outlook. Growth of qualification is stimulates by the work in innovative projects, interaction with business partners, workshops, and other training methods (10 Professions of the future: what to expect in 2025 and beyond). Understanding the perspectives of changes in professional activities, specialists try to develop their own professions. Most of the respondents (34%) track changes in the business environment and processes, studying analytical programs, reports, and speeches of the leading specialists of their sphere. 27% of the respondents try to develop in new projects, for expanding their professional competencies. 24% of the respondents attend advanced training courses for development of their qualification. Professionals who are able to interact with foreign colleagues (13% of the respondents) consider exchange of practical experience to be a good preparation for future changes in their sphere of activities. Only 2% of the respondents use the services of career consultants. For career development, an important factor of success is combination of professional skills with developed social competencies (Abramova 2017). Communication skills, foreign languages, negotiation skills, and seeking own and partners’ interests become the unique skills of professionals of the future. A wide outlook and universal competencies in adjacent spheres oust narrow specialization. Integration of business in adjacent spheres requires specialists with a wide specter of knowledge. Question “Which measure do you take for development of skills and building a successful career in future”: development of professional uniqueness – 66%, studying modern technologies – 61%, studying several foreign languages – 56%, development of professional knowledge in adjacent spheres – 40%, development of skills in several spheres – 38%, understanding own life position and interests – 35%, forecasting future skills – 33%, and development of entrepreneurial qualities – 30%. The respondents were allowed to choose several answers. The received results show the respondents’ readiness for development in their spheres. Most of the respondents take regular measures that stimulate the growth of their professionalism. Understanding the demand for deep knowledge dictates the growth of regular education in the selected sphere. Classical lectures are replaced by remote studies with

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final testing. Lack of time for attending educational centers could be compensated by online conferences and self-education. Video training is more popular than traditional education. Majority of people prefer remote forms of studies. Professionals realize the importance of development, but they do not have enough time for attending classes. At present, most video conferences are conducted during week-ends, when people can spare some free time. According to the respondents of the performed survey, education in Russia does not conform to the strategic tasks of employers. A lot of organizations invite undergraduates for on-the-job training in order to prepare them for performing real functions and teach them to work with the company’s software. Significance of corporate training centers grows. It is more efficient to invest in creation of own center, which is oriented at the business’s specific needs. The changing labor market influences the competition between job applicants. Apart from robotization and automatization of the functions, the employers’ requirements also grow. 71% of the respondents think that it will be more difficult to find a job in the future. A lot of respondents note the requirements regarding skills in quick processing of large arrays of information. The role of quick reaction to multi-layer tasks increases. The current political and economic crises in Russia also have a negative influence on the labor market. Outflow of foreign investors led to decrease of production and dismissal of personnel. Growth of unemployment causes a lot of concern with the older generation, which cannot easily adapt to the changing business environment, new technologies, and tough competition at work. Migration processes increase the competition between young employees and medium-level specialists. Receiving education in Russian universities, foreigners stay in Russia and work in Russian companies. They do their best for building a successful career, agreeing to long business trips, rotational shiftwork, night shifts, and irregular working hours. Soon-to-retire workers and female workers with children have the largest concerns. At present, employer needs a responsible and active workaholic, not a person with a sick note. The topic of health is very topical nowadays. A lot of employees are afraid of using sick leaves and continue working, infecting their colleagues. Everyday stresses and overtimes, chronic tiredness and low immunity, as well as the ecological factor, negatively influence an average statistical Russian worker. At the same time, young people strive for a balance between work and personal life (Artamonov 2019). Young people form a well-balanced personal career path. The main purpose is achievement of the set tasks – not the time spent in the office. The changes will also influence the traditional eight-hour working day. With the help of the modern communication means, certain functions are performed remotely, and one could always contact the employee for clarification of certain issues. Question “What changes in the forms of employment do you think to be most perspective?”: change of a strict start and finish of working hours and transition to more flexible working hours – 53%; disappearance of the very notion “working hours” - 48%; traditional eight-hour working day remains – 20%; working hours and the number of tasks will be increased – 16%; working hours will reduce due to robotization and implementation of AI – 12%. The respondents were allowed to choose several answers. 53% of the respondents consider flexible working hours the most optimal option. In large cities, morning traffic jams make the process of arriving at work in due time very difficult. The possibility to work the “morning” 30 min in the evening is an assuaging factor for a lot of people. Fines

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and administrative reprimands for 15-min delays cause stress and fears with employees. It is rather interesting that 16% of the respondents expect increase of working hours. However, it is traditional for managers to work more than eight hours per day. Responsible professionals usually stay late – until the set goals are achieved. It is possible to conclude that duration of the working day depends rather on specifics and sphere of the activities, as well as on the employee’s position. Forms of employment will also undergo certain changes. At present, some professionals work for several employers at the same time and participate in various projects. The paradigm of attitude to employee - as a subordinate - changes. Today, there’s a need for a business partner, who associates his success with the company’s success. The respondents’ attitude to the forms of employment is shown in Table 1. Table 1. How the forms of employment will change in the future? Answer Simultaneous work for several employers Traditional work in one company Change of the employment from – from performer to business partner

% of the respondents 42% 38% 19%

For certain professions, working in several companies at the same time is a normal way of things. Accountants, teachers, and programmers have been traditionally providing services for several customers. The opinion of 19% of the 19% respondents, who are confident in the change of the philosophy of interaction between employer and employee, is very interesting. Instead of a performer, employer needs a loyal business partner who will care about the company’s development. According to experts, certain professions will become less popular or will simply disappear due to implementation of AI, robotization, and automatization of functions (100 Professions of the future. Economics of education. Project of RBC. Trends, 2020). The number of working professions, sales assistants, operators, and librarians is expected to decrease. Machines already perform a lot of previously human functions at factories, and e-libraries replace traditional libraries. The only exception is school libraries. Question “Which professions will become less popular or will disappear in the future?”: working professions – 37%, accountant – 15%, sales assistant – 15%, interpreter – 4%, operator – 4%, librarian – 3%. IT sphere has been and remains very perspective. Development of IT led to increased demand for the corresponding specialists. The role of engineering and technical support will grow (Alekseev and Korolev 2019). Therefore, the demand for engineers-physicists and specialists in hi-tech equipment will grow. As was mentioned above, significant development is observed in medicine and psychology. Nutrition specialists are in high demand in medicine. The profession of personal development consultant will appear within the sphere of psychology. Development of biotechnologies and bio-engineering creates demand for the profession of bio-engineer. Also, professions in innovative and scientific research and creative professions will be

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in demand (Professions of the future: Top 20 new and perspective professions, 2020). The data on perspective professions are shown in Table 2. Table 2. In which spheres professions will be in demand? Answer IT Engineering and technical support Medicine Psychology Bio-technologies and bio-engineering Science, innovations

% of respondents 45% 19% 10% 7% 7% 6%

Most of the respondents (45%) believe in top-priority development of the IT sphere. 6% of the respondents think that new professions will be developing due to science and innovations.

4 Conclusions The performed research showed the readiness of specialists for the changes of the labor market. A lot of specialists take measures on development of their skills and increase of the educational level for supporting their competitiveness and demand in the future. The changes of the labor market in medicine, IT, financial sphere, and recruiting are as follows. The main changes in medicine are connected to implementation of the strategy Farma 2020. The demand for pharmaceutical marketing specialists grows. Skilled personnel are obtained through cooperation with medical universities. It is not profitable to buy professionals; instead, companies try to teach young specialists and develop their own professionals. Trainings and programs of experience exchange in foreign companies are used. On-the-job training becomes very popular. The demand for specialists in female diseases grows. Online pharmacies are expected to appear. Online sales will lead to emergence of the profession of courier with medical degree, who will be able to provide consultation for a customer. During hiring of employees in the sphere of IT, attention is paid to applied factors: in which projects the specialist participated, which projects were implemented, which projects are still working. Remote work becomes popular. The man problem is brain drain from Russia to perspective Western companies. The motivation for IT specialists is not money but their own development within a large project. Applicants look for a job in the USA and Europe. The important skills are proactivity, initiative, personal effectiveness management, and working with large arrays of data. The sphere of finances is peculiar for the global automatization of operations and accounting (Eremin 2019). Preference is given to leadership skills, performance of additional functions, responsibility, and decision making. Requirements regarding the

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English language and professional certification grow. In the financial sphere, there will be demand for sales analysts, financial analysts, sectorial experts, and specialists on interaction between business and public authorities. A lot of undergraduates take onthe-job training during their studies. Apart from deep knowledge, practice is required in this sphere. In the banking sphere, customers are transferred to online services. Thus, the need for information security specialists and relationship managers will grow. The sphere of recruiting is peculiar for automatization of a lot of processes and implementation of programs and apps for selecting applicants (Balukhto and Romanov 2019). It is offered to transfer to flexible working hours, which allow for a better balance between work and personal life. There might be a demand for compliance specialists. The demand for specialists in training gamification grows the role of social network for the search for applications increases. The most required skills include resilience and effective time management.

References Abramova, O.A.: Professions of the future: which competencies will employees need? Int. J. Humanitarian Nat. Sci. (11), 102–105 (2017) Alekseev, A.N., Korolev, G.V.: Reorganization of companies in the age of digitization. Bull. Sci. Pract. 5(6), 301–305 (2019). https://elibrary.ru/item.asp?id=38578867 Artamonov, A.S.: Perspective solutions in the sphere of motivation of personnel in the digital economy. Manag. Consult. (4(124)), 105–113 (2019). https://elibrary.ru/item.asp?id=38254 372 Skolkovo: Atlas of New Professions, 2nd edn, pp. 1–288. Agency for Strategic Initiatives, Skolkovo, Moscow (2015). http://www.skolkovo.ru/public/media/documents/research/sedec/ SKOLKOVO_SEDeC_Atlas_2.0.pdf. Accessed 09 Feb 2020 Balukhto, A.N., Romanov, A.A.: AI in space engineering: state, perspectives, and development. Aerosp. Eng. Inf. Syst. 6(1), 65–75 (2019). https://elibrary.ru/item.asp?id=38582920 PWC: Future of the labor market. Opposition of tendencies that will form the work environment in 203 (2020). https://www.pwc.ru/ru/publications/workforce-of-the-future-rus.pdf. Accessed 21 Apr 2020 Eremin, V.V.: Robotization and employment: a delayed threat. World New Econ. 13(1), 25–35 (2019). https://elibrary.ru/item.asp?id=37420450

The Role of Smart Technologies in the Process of the Labor Market Transformation: Tendencies and Problems Maria F. Mizintseva(&) , Tatyana V. Gerbina Anna R. Sardaryan , and Maria A. Chugrina

,

Russian Institute for Scientific and Technical Information of the Russian Academy of Sciences (VINITI RAS), Moscow, Russian Federation [email protected], [email protected], [email protected], [email protected]

Abstract. Purpose: The purpose of this paper is to study smart technologies in the process of labor market transformation and to study the main tendencies and problems connected to emergence of these technologies. Design/Methodology/Approach: Analytical and comparative analysis, grouping, processing of information, and statistical methods are used. Findings: The authors study the essence and the main perspectives of automatization of jobs in the labor market and consequences of this technology, including disappearance of a lot of jobs of traditional specialties and emergence of new professions. It is concluded that the largest changes in the structure of professions will take place in the sphere of information technologies. Technologies of speech recognition, cognitive computing, and other technologies will lead to disappearance of certain professions. Originality/Value: The authors study virtualization of jobs and its positive and negative consequences, including for certain categories of people (including handicapped people) and consider the main forecasts of further processes of virtualizaton. The authors analyze such smart technology in the labor market as digital platform and consider the perspectives of its development. Importance of regular monitoring of the current tendencies, including in the sphere of smart technologies, by government, timely forecasts of changes in the labor market, evaluation of the national and other workforce markets, and development of effective forms of managing the labor market in the modern conditions is substantiated. In perspective, it is necessary to develop theoretical approaches to the digital labor market, determine the structure of the digital labor market, and study the influence of smart technologies on development of the labor market. Keywords: Smart technologies
Transformation of labor market Digitization
Robotization of labor
Digital platform JEL Code: F22





J21
J23
J61

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 483–489, 2021. https://doi.org/10.1007/978-3-030-59126-7_54

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1 Introduction At present, global digital transformation, which covers economies of all countries of the world, opens new horizons of development and sets new challenges. The role of information and communication technologies in countries’ economic development grows each year. Without digital transformation of economies, countries develop within the traditional processes and have no access to a lot of opportunities and perspectives of development, including economic growth. Speed of the digital change of the world dictates also new conditions of competition. Development of new technologies in various spheres leads to growth of importance of other approaches in managing the labor market, which becomes more flexible and global. Thus, a special role belongs to smart technologies, which transform labor markets of a lot of countries of the world. However, despite a lot of positive factors, smart technologies also lead to certain serious problems, which should be solved in the near future. All the above predetermines the importance of the topic of this work.

2 Materials and Method The issues of development of the modern labor market have been studied in the works of Russian and foreign scholars, including (Gratton et al. 2013), (Currie and Eveline 2011), (Kaiser et al. 2011), (Grant et al. 2013), (Gallie 2017), (Choudhry et al. 2012), (Scarpetta et al. 2010), (Schriner and Oerther 2014), (Bulanov and Volgin 2014), (Rudenko and Murtozaev 2014), etc. There are also a lot of overview of international research and educational organizations and consulting companies devoted to the modern technologies in the labor market: “The future of the labor market. Opposition of tendencies that will form the work environment in 2030” (PricewaterhouseCoopers 2018), “The future of jobs ‘Employment, skills and workforce strategy for the fourth industrial revolution’” (World Economic Forum 2018); “Technology, jobs and the future of work” (McKinsey 2017), “The risk of automation for jobs in OECD countries” (OECD 2016). We see that foreign and Russian researchers pay a lot of attention to the issues of functioning of digital labor markets; however, there are no scientific works devoted to the structure of this market, theoretical approaches to the digital market, and study of the influence of smart technologies on further development of the labor market. As of now, there is no unified complex approach to sustainable development of the digital labor market and employment and there is no scientific & theoretical substantiation and evaluation of the influence of digitalization on the labor market in the whole. In the course of this research, the authors use the methods of analytical and comparative analysis, grouping, processing of information, and statistical methods.

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3 Results Transformation of Labor Market in the Digital Economy. Implementation of the largescale project “Digital economy of Russia for 2019–2024”1 largely depends on successful solution of multi-task problems connected to the rates of development of information technologies, which cannot but influence the formation of new models of labor and employment and intellectualization of labor on the whole. In these conditions, the main source of competitiveness and efficiency is human resources, which are the main wealth of any society. The nature of labor market changes, the classic organization of labor and usual forms of employment become blurred, and new economic forms appear: platform economy, new business models of labor, platform labor (crowdwork, micro-work, cloud work, etc.) and Work 4.0. The digital labor market and employment market, in which subjects’ interaction takes place with the use of information and communication technologies, forms. Development of new technologies, emergence of new forms of corporate management, and growing competition in the globalizing world lead to release of labor resources in all spheres of economy and redistribution of labor resources between different spheres. These changes gradually form new professions and specialties. Thus, specialists in the sphere of labor market have been recently forecasting the emergence of new professions, which will be in high demand in the conditions of new society’s formation. These are, for example, specialists in the sphere of environment protection (ecologists, specialists in “green” engineering, urban farmers, “ecopreachers”, etc.). It is probably that new professions in the social sphere will be in high demand: generation interpreters, communication companions, etc. (Table 1). According to certain analytical data, it is expected that the largest changes in the structure of professions will take place in IT. Thus, the following professions are to appear in this sphere: designer of neuro-interfaces, architect of information systems, supervisor of information security, cyber-technician of smart spaces, cyber investigator, etc. (Table 2). In these conditions, countries – for the purpose of sustainable and progressive development – have to eliminate the expected deficit of skilled specialists in these spheres. Qualification and skills of labor resources will have a large influence on effectiveness of the processes of economy’s transformation, which will lead to the necessity to create conditions for development of professional digital skills (including in the sphere of use of smart technologies). Importance of Robotization and Virtualization as Smart Technologies in the Process of Labor Market Transformation. Recently, developed and developing countries have been peculiar for a large growth of computers’ computational power. This allows expending the spheres of application of the modern digital technologies. In view of the current tendencies, it is possible to expect that active robotization of jobs will lead to 1

“Digital economy of the Russian Federation”, adopted by the protocol of the Presidium of the Council with the President of the Russian Federation on strategic development and national projects dated June 4, 2019, No. 7. [Online source]. Available at https://digital.gov.ru/ru/activity/directions/ 858/.

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Profession “Green” engineer

Characteristics Specialist in calculation of energy consumption of various household and industrial appliances Urban farmer Specialist in green planting on roofs and walls of buildings in cities Generation interpreter Specialist in communication between representatives of different generations Traffic coordinator Specialist in search for optimal ways of movement within a city, also for reduction of traffic jam time Medical robots operator Specialist with deep knowledge in the sphere of medicine and IT, who’s able to control medical robots Specialist who helps population to preserve mental Counsellor, who helps to health in the conditions of continuous and overcoming information contradictory information flow “overheating” “Eco-preacher” Specialist in teaching population responsible behavior in the sphere of environment protection Smart space designer Specialist in design of an effective system of use of water and electric energy in homes and offices Healthy old age consultant Specialist in development of the programs of healthy living for the retired Source: (Atlas of new professions until 2030). Table 2. Expected future professions in the IT sector. Profession Designer of neurointerfaces Architect of information systems Supervisor of information security Cyber-technician of smart spaces Cyber investigator Source: (Atlas of new

Characteristics Specialist who deals with development of interfaces (in view of psychology and physiology of users) aimed for work with computers and home and industrial robots Specialist who works with creation of complex IT systems for automatization of business processes Specialist in the sphere of IT of technological processes in automatized production Specialist dealing with lower levels of the information infrastructure and ensuring security of the network’s segments Specialist in investigation of cyber crimes professions until 2030).

gradual disappearance of such professions as accountant, interpreter, ticket man, quantity surveyor, corrector, librarian, travel agent, notary public, dispatcher, pharmacist, etc. Large progress is observed in the sphere of speech and image recognition. These changes could lead to quick redistribution of professional duties between humans and computers. In particular, cognitive computing seems to be a real alternative to various routine human actions (e.g., grading of commodities or correspondence).

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In the sphere of car transportation, the use of unmanned cargo convoys will reduce the expenditures of the global industry of cargo transportation by tens of billions of dollars. Economy will be achieved by means of dismissal of personnel and cutting the expenditures (e.g., after road accidents). However, quantitative forecasts of experts who try to evaluate the number of jobs that will be reduced in the course of robotization differ a lot. Certain experts say that the average unemployment level will reach 75% by 2100 (Self-driving trucks 2016). The WEF experts forecast that development of robotics and AI technologies will lead to reduction of 5 million jobs in 15 largest economies by 2020 (which is an equivalent of 1.25% of the total number of jobs in these countries) (Atkinson 2017). Special attention should be paid to virtualization of jobs, which was influenced by globalization. Thus, the recent decade saw gradual increase of remote workers. Though 20–30 years ago it was expected that virtualization of jobs will become the main tendency of early 21st century, it did not reach the forecasted scales. However, the labor market has become more flexible, which means appearance of its new state, which could be characterized by non-standard regimes of work time, forms of employment, etc. There is a global trend of so-called on-demand employment – i.e., part-time freelance workers. Growth of such employment was largely stimulated by development of digital technologies, including wide distribution of various head hunting web-sites and specialized online platforms. Digital Platform as a Smart Technology for Labor Market. Growth of online employment leads to growth of technologies for provision of this process. One of these technologies is a digital platform for search for temporary job. The platform economy appeared in early 2000’s, together with expansion of the use of Internet. It provided wide opportunities for production and delivery of a range of services through Internet markets (platforms). In the recent two decades, this new form of work transformed the employment model. At present, work on digital platforms in the sphere of labor market allows working from any place in the world. Development of digital platforms leads to the labor market transformation and change of the systems of employment. This is due to the fact that subjects of the labor market (employers and employees) have more contacts in virtual space. Thus, special recruiting virtual services appeared, which allow for communication between potential employees and employers – digital platforms (Kergrouch 2017). Digital platforms in the labor market take various forms. Thus, there are platforms with crowdwork and platforms with work upon request through applications (Kergrouch 2017). Digital platforms in the sphere of employment are peculiar for their architecture; some of them offer exchange of labor with high level of replaceability or standardization (Uber or CrowdFlower), while other provide space for workers for developing more specialized services and forming a network (e.g. Toptal). However, according to experts, employment at digital platforms of work still remains low – from 0.5% of work force in the USA (Gidirim 2016) to 5% in Europe (Farrell and Greig 2017). It is expected that digital employment will be expanded in the future, as more and more jobs or tasks will be moved from the autonomous sphere of labor to the online economy.

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Digital platforms allow using more flexible forms of employment and lead to harmonization of labor relations, especially in the “work-family” vector. Besides, they are expected to ensure reduction of cultural and gender barriers (Kergrouch 2017) and provide wide opportunities of labor activities for the handicapped.

4 Conclusion The recent two decades saw the start of cardinal changes in the labor market, which influence developed and developing countries. Apart from expansion of the processes of globalization, which stimulate the growth of the global labor market, there appear new technologies, which change traditional forms of employment, stimulate the appearance of new and disappearance of traditional professions, and provide wide opportunities for different categories of population for entering the labor market. For optimizing the system of labor market management, each country has to track the current tendencies, including in the sphere of smart technologies, forecast changes in the labor market, evaluate the national and other markets of work force, and develop efficiency forms of managing the labor market in the modern conditions. In other words, there is a need for large-scale research in this sphere, based on deep theoretical and practical analysis, and formation of the management systems in the new realia. The results and conclusions, which have been presented in this work, could be used in further scientific studies and practical developments on the problems of labor market management in the conditions of economic and social transformations, in view of emergence of smart technologies in the labor market.

References Skolkvoo: “Atlas of new professions” of SKOLKOVO business school and Agency for strategic initiatives [Electronic resource.] (2020). http://atlas100.ru/ Bulanov, V., Volgin, N.: Labour Market. Uchebnik. Ehkzamen, Moscow (2014) Gidirim, A.: Talant na platforme: kak cifrovye tekhnologii izmenyat rynok truda (2016). https:// www.rbc.ru/opinions/business/21/06/2016/576934269a79479aab95fdc9 Kergrouch, S.: Industriya 4.0: novye vyzovy i vozmozhnosti dlya rynka truda. Forsajt. 11(4), S.6–S.8 (2017) Rudenko, G., Murtozaev, B.: Formation of labor markets. Uchebnoe posobie. EHkzamen, Moscow (2014) Choudhry, M., Marelli, E., Signorelli, M.: Youth and the total unemployment rate: The impact of policies and institutions. Int. J. Manpower 33(1), 76–85 (2012) Currie, J., Eveline, J.: E-technology and work/life balance for academics with young children. High Educ. 62(4), 533–550 (2011) Gallie, D.: The quality of work in a changing labour market. Soc. Policy Adm. 51(2), 226–243 (2017) Farrell, D., Greig, F.: The online platform economy: Has growth peaked? JPMorgan Chase Institute, Washington, DC (2017). https://www.jpmorganchase.com/corporate/institute/ document/jpmc-institute-online-platform-econ-brief.pdf

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Grant, C.A., Wallace, L.M., Spurgeon, P.C.: An exploration of the psychological factors affecting remote e-worker’s job effectiveness, well-being and work-life balance. Empl. Relat. 35(5), 527–546 (2013) Gratton, L., Johns, T.: The third wave of virtual work. Harv. Bus. Rev. 91(1–2), 66–73 (2013) Kaiser, S., Ringlstetter, M.J., Eikhof, D.R., Cunha, M.P. (eds.): Creating Balance? International Perspectives on the Work-Life Integration of Professionals. Springer, Heidelberg (2011) Scarpetta, S., Sonnet, A., Manfredi, T.: Rising youth unemployment during the crisis: how to prevent negative long-term consequences on a generation? OECD Social, Employment and Migration Working Papers, New York (2010) Schriner, A., Oerther, D.: No really, (crowd) work is the silver bullet. Procedia Eng. 78, 224–228 (2014)

Social Aspects of Eco-Systems’ Development in the Digital Economy Galina V. Serebryakova(&) , Ivan V. Nezamaykin and Tamara B. Shramchenko

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State University of Management, Moscow, Russian Federation [email protected], [email protected], [email protected]

Abstract. The article reflects the results of the study of social factors of ecosystem development in the digital economy. The purpose of the material presented in the article is to justify the impossibility of successful, sustainable development of the participants of the ecosystem without creating a single value system. Information communications cannot be effective if the behavior of socioeconomic systems is not aimed at creating shared value through integration, first of all, information resources in the process of interaction. Based on the theory of value management, the authors argue that sustainable ecosystems depend on the value coherence of its participants. It is the building of trust between different elements of ecosystems that is the source of the synergy effect of their interaction. The main result of the study is to prove the consistent value-oriented behavior of organizations as the main condition for ecosystem sustainability. The establishment and development of information links between the actors of the economic space is effective only if the interaction of participants is based on a single value basis, contributing to the development of the entire ecosystem, and not individual elements of it. The novelty of the material presented in the article is the proof of the need to establish a value balance between the value systems of all ecosystem participants. The development of a system of interactions should be preceded by the implementation of the value design of joint actions, the development of a single system of value standards for joint functioning. Ecosystem participants should be able to predict the interaction partner’s behavior based on shared values that ensure the sustainability and long-term relationship system. Neglect of the social aspects of digitalization processes can lead to the destruction of connections between the participants of interaction, will make these relationships conflict, which will lead to the destruction of ecosystems, without which the harmonious development of society in the era the digital economy is becoming impossible. Keywords: Digital economy environment
Values JEL Codes: A13


Interaction
Eco-system
Cultural


M10
M14

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 490–498, 2021. https://doi.org/10.1007/978-3-030-59126-7_55

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1 Introduction The modern conditions of functioning of economy and society have changed: the environment, which formed as an extrapolation of the previous experience, is no more. The driving force of development and the national idea is digitization. The speed of change of the surrounding environment is much higher than speed with which companies realize it. Distribution of digitization in all spheres of activities, emergence of new communication technologies, and necessity for increase of integration and creation of sustainable interconnections are the reasons of significant changes in management. Digital transformation of society and economy became a modern reality, with transformation of the activities of socio-economic systems by active use of digital technologies. Since their appearance, information systems changed the mechanisms of organizations’ functioning. The process of change has two directions – technical and social – which are interconnected. On the one hand, due to wide dissemination of information technologies in all spheres of activities, organizations have to implement them into their products. On the other hand, it is necessary to implement new systems of interrelations, which emergence is caused by society’s informatization. Formation of information connections between organizations and human resources requires studying the social aspects of establishment of the interconnections. Information networks, which cover companies, are more difficult to control; formation of a sustainable system of interrelations led to the necessity for development of eco-systems that require supporting the sustainable system of interactions between the participants. Strict methods of management become ineffective, and development of digitization is possible only under the condition of active search for innovative methods that are oriented at creation of a unified value-based environment of the interacting organizations. Increase of openness of the information field of the activities of socio-economic systems influences the results of their functioning. It is difficult to control the system of interrelations with the actors of external environment; for building sustainable relations, it is necessary to create a common cultural environment of interaction in the ecosystem. Absence of unified – accepted by all participants – system of values threatens the reputation of organizations, which value – as a condition of provision of sustainable development not only of organization but also of the whole eco-system – grows. Free flow of information changes the ways of interaction and the structure of functioning of socio-economic systems, which – in the modern conditions – face the task of becoming an active participant of increase of the value of the whole eco-system. Development of economy’s digitization is slowed down due to neglect of the social component of this process, for it is necessary to change the value basis of management. In order to achieve success, organizations – as participants of the eco-system – have to create new mechanisms of management that are aimed at overcoming the negative social tendencies. For development of a sustainable system of interaction in the ecosystem, it is necessary to create a common value-based system that regulates interrelations between various participants.

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Successful development of the digital economy directly depends on creation of a value-based system of interaction, which should be based on trust, mutual responsibility, openness, and mutual help – which, in the modern conditions, are the factors of success and effectiveness of eco-system’s participants.

2 Methodology Development of the digital economy led to increase of the competitive struggle and reduction of product’s life cycle, which made the problem of survival and sustainable development of socio-economic systems more topical. Due to this, the main problem, which threatens further existence of organizations, is inadequate managerial models and mechanisms of management, which are based on consideration of the socio-cultural component of the digitization processes. Application of the system of management, which formed in the conditions of limited information interaction, reduces the level of adequacy of the socio-economic systems’ reactions, leads them to a crisis by means of increase of irreversible consequences of incorrect decisions, and is the main reason of disruption of interconnections between the participants of organizational and economic interactions. Information flows, which piece the economic environment of organizations’ activities, are the main conditions of formation of new models of management in ecosystem, which should be based on the principles of interconnection, support, and cooperation. Functioning of organizations in the digital space is possible only under the condition of development new skills and competencies. Increase of the number of information ties of socio-economic systems led to expansion of the number of participants, interaction with which determines their success and feasibility. Organization cannot be considered only as an open system, ignoring a lot of interconnections with a range of external and internal stakeholders. In the conditions of development of the digital economy, the management object is totality of organizations which are in constant interactions – i.e., business eco-system, in which the participants are connected by the interrelations networks. When developing a strategy of development, socio-economic system should take into account that together with other socio-economic systems from the business ecosystem it implements the process of value creation; success of this process depends on the level of cooperation and interest. Management is shifted from the sphere of relations within one organization into the sphere of relations management between the participants of interaction; main attention should be paid to information flows management, which authenticity and reliability determine the level of interaction of the ecosystem’s participants. Disruption of information connections and neglect of the interests of the participants within the eco-system leads to disruption of the connections and destruction of the eco-system. Digitization of socio-economic processes leads to appearance of new realia: uncontrolled process of information circulation, impossibility of development without support and increase of the system of interconnections with other participants, changing value-based environment, etc., which neglect might lead to the organization’s failure.

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Information content of the economic environment and different directions of the process of information exchange influence the efficiency of the socio-economic systems’ activities. The modern external environment of organizations’ functioning is peculiar for constant interactive exchange of information between various participants. M. Castells, an ideologist of the network approach (Castells 2000), proved that companies faced a new reality – the necessity to consider the activities of the external environment’s actors, unified by information networks, during development of managerial actions. (Castells 2000) showed that “as a matter of fact, organization has operations with other companies: dozens of relatively different partners, with which it cooperates and competes at the same time; in this world, friends and foes are identical” (Castells 2004). Increase of sustainability and duration of connections between the participants of an interaction leads to evolution of socio-economic systems, which turn into a business eco-system (Moore 1996), the main quality of which is constant interaction of its various participants based on establishment of sustainable ties. For normal activities, an eco-system has to have the following important characteristics (Power 2001): 1) sustainable system of mutually reinforcing interactions between the participants; 2) interaction is conducted based on coordination of values, purposes, and common desires. Vitality of an eco-system depends on the level of sustainability of partnership relations of its participants and common values within the eco-system, which brings management into the sphere of managing the coordination of values (Goodwin 1994). Eco-system partners should realize the importance and necessity for social co-evolution and the necessity for increase of the interconnections’ sustainability. Building a system of interaction, which is oriented at partnership and mutual support, allows increasing sustainability of an eco-system against the negative phenomena of the external environment, by means of formation of the sustainable networks of cooperation. In the conditions of development of information networks, it is possible to manage the relations within eco-systems only in view of the process of interaction of socioeconomic interests of various participants: the purpose of management is to find a balance of preferences of all partners of the interaction, which become a “stakeholder value network” within the eco-system. Each participant of the eco-system should understand the value of connections and strive for their development; this is what moves the borders of socio-economic systems by means of influencing the process of creation of value network interactions, which are based on information exchange. All participants of the eco-system have to identify and take into account their motives and interests as groups of suppliers of various types of resources and potential creators of reputation and relations’ capital. The methodological tool of evaluating the importance of preferences of the eco-system’s participants could be a map of concerned parties (Serebryakova 2015). Study of the system of interrelations should be based on research of a “relations portfolio” between the eco-system’s participants: frequency, duration, recurrence, sustainability of connections, etc. Digitization leads to the situation when for successful development organizations have to acquire the skills of establishment of interconnections between all participants

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of the eco-system. The main advantage of functioning within eco-systems is reducing the level of uncertainty of the interrelations, optimizing costs, and increasing competencies of participants’ interactions by means of joint participation in the processes of value creation. This could be achieved only by creating a common cultural field within the ecosystem. The digital economy changes the cultural environment and the system of values. The eco-system’s participants should be aware of the value system of their partners. Increase of the number of interconnections between socio-economic systems moves diagnostics of their value basis to the foreground. On the one hand, values are economic categories, for they reflect the importance of interactions for satisfying the needs and creation of new value. Values are the basis for behavior models and systems of relations between the participants, which characterizes the social content of this notion. Thus, development of the digital economy led to a new understanding of value, which is based on the pragmatist approach. We think that development of eco-system requires formation of a common value-based system, which would allow each participant to receive advantages from functioning within its limits. Due to the above reasons, the process of successful functioning of participants cannot be considered separately from the partners in the eco-system. The main role for provision of the eco-system’s sustainability in the modern conditions belongs to valuebased design. Based on the results of the value-based audit, it is necessary to form the value-based foundations of the eco-system’s sustainability – a system of value landmarks, observing which will allow each participant to obtain advantages from functioning within the limits of the eco-system and will be a guarantee of stability of the partners’ behavior. Value eco-system is a system of value foundations, which should be a guide for all its participants during the interaction between each other and with the external environment. S.L. Rubinstein emphasized that only a shared value could be a landmark of behavior (Rubinstein 1973). The value environment of an eco-system should include value interaction of all participants, which transform into values of each socioeconomic system and are shared by its participants. Value interaction is formed based on the importance of the system of interrelations between its participants; however, in order for interrelations to be harmonious, a socio-economic system should build its system of values by cascading the value orientations that are adopted in the eco-system (Serebryakova 2015) Functioning of an eco-system in the conditions of the digital space depends on the level of shareability of the common values by all its participants. Information content requires transformation of the information culture of the interaction partners, for which consistency, coordination, and mutual responsibility are important. Balance of value systems of participants leads to a value balance in the eco-system – i.e., it stimulates the growth of partners’ confidence in observation of accepted responsibilities, which eventually leads to creation of the relation-based and social capital of the eco-system, growth of loyalty, and balance of functioning of all participants. Disruption of the balance requires an urgent “value revision” of the interaction partners – for determining the value mismatch that results in destruction of the relational capital. Creation of the value commonness within an eco-system is the basis for increasing the level of interaction capitalization. Within an eco-system, values are a social

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phenomenon, a product of interaction of all participating organizations. The indicator of the high level of development of eco-system is acknowledgment and cultivation of trust values. Formation of trustworthy relations in the eco-system is the basis of joint successful functioning of all its participants. “This… depends on the communities’ sharing the common norms and values and subjecting individual interests to interests of multiple groups. Such shared values lead to trust, and trust is a large and measurable economic value” (Fukuyama et al. 2016). High level of trust in eco-system is the important resource of its development, and its low level is a reason of its destruction. The basis of formation of trust in the eco-system is such shared values as partnership, ability for cooperation, loyalty, support, coordination, social responsibility, etc. Different studies showed that eco-system’s development directly depends on the level of adoption and sharing of trust values by its participants.

3 Results We think that formation of trust mechanisms within eco-systems should be based on the pragmatist approach. Development of interrelations between partners in an ecosystem should be based on the results of diagnostics of the value system of relations between various participants. The scientific and methodological basis of the research and creation of an effective system of social interaction is the laws of system interaction (Belopolsky 2015). For successful functioning of eco-system, the following should be taken into account: – law of interaction, which expresses the necessity for establishing sustainable and significant ties between its participants, which are based on the shared values; – law of organized nature, which application should stimulate the increase of connections that are to strengthen the order and coordination of the participants’ functioning within the limits of an eco-system. Taking this law as the basis, it is necessary to perform the value-based monitoring of the state of eco-system, which allows determining the value distortion of a participant’s behavior. Interaction of eco-system’s participants should ensure the increase of its results – i.e., increase of the value coordination of the interacting parties is a source of the synergetic effect. Eco-system’s participants, who are interests in the interaction, should understand that success of joint actions depends on the scale and duration of their interrelations. This requires value monitoring, which includes studies of the following: • commonness of value foundations of eco-system’s partners’ behavior; • character of the provided resources – primarily, reliability of the information connections; • character of profit – expected and received by each participant of the interaction; • power of influence of the participants on the results of the eco-system’s functioning. The strategy of development of interaction in eco-system is based on a desire to obtain additional value in the process of joint functioning. This requires development

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of the system of monitoring of value flows and the level of value coordination of the eco-system’s participants. The level of mutual influence and mutual approach of the values of the ecosystem’s participants is characterized by the level of inter-system convergence; managing the interrelations on the value basis within an eco-system sets the following additional strategic tasks before each participant: • balancing the value flows of various interacting parties; • providing conditions for creation of value for all participants of the interaction. Sustainable functioning of eco-system depends on whether its participants could turn interrelations into a strategic value and obtain the synergetic effect of the value commonness. Increase of the information activity of environment requires finding new forms of interaction, which should be based on the shared value-oriented behavior of the ecosystem’s participants; incorrectly chosen value basis of the interaction will lead to destruction of the eco-system. Lack of coordination of the value systems of the interaction partners is a source of conflicts, disorganization of the interaction, and disruption of connections, which are often impossible to recover due to loss of trust within the eco-system. Coordination of values of the interacting participants stimulates preservation of the value from joint actions within the eco-system and its increase. The multi-aspect character of manifestations of the value interaction opens the interconnection of the results of functioning of the participants and their value orientations and influences the duration and strength of interaction in the eco-system. Forecasting of partners’ behavior based on top-priority values of joint functioning is the most important element of value management in eco-system. Richness of the information space of organization’s functioning and the number of connections with various organizations, which a socio-economic system should track and support for normal activities are the main reason of creation of a common value system of the interaction. Implementation of the unified value approach in the activities of the eco-system’s partners will allow ensuring its functioning as a single whole. The value concept of managing the interaction forms a reliable basis for increasing the value of joint functioning of organizations within eco-systems.

4 Conclusions/Recommendations The performed research confirmed the authors’ hypothesis that further development of the digital economy in society is value-oriented. Creation of new information connections, as the basis of interaction between companies, stimulates the development of business eco-systems, which activities’ basis is shared values. Therefore, successful functioning of eco-systems directly depends on the cultural environment which is formed by its participants. It should be taken into account that cultural environment of eco-system constantly changes in the course of the interaction of its participants. Not only it forms the participants’ behavior but also is subject to transformations under the influence of implementation of their strategic plans.

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Using the value-oriented concepts for studying the cultural environment of ecosystem in the conditions of the information environment allows for a conclusion on transition from the cultural paradigm, which is based on treatment of culture as a system of relations, to the pragmatist paradigm: culture is a type of specific activities that emerges in the process of interaction (Fetisov 2010). Eco-system is a multi-cultural entity. Supporting their integrity during their functioning is possible only under the condition of a system of values that is shared by all its participants. Integration – as the main feature of eco-system – could be achieved during creation of a system of values that is shared by all its participants and that aims at harmonious and well-coordinated development for leveling the contradiction between the heterogeneous elements within the eco-system. In the opposite case, information ties will be disrupted, which will lead to distortion of the true understanding of the situation, emergence of conflicts, and destruction of the eco-systems. Substantiation of the necessity to create a common system of values of the ecosystem, which allows forecasting the participants’ behavior and implementation of value-based design and value-based monitoring, as the inseparable elements of the system of interaction management, constitute the novelty of the performed research. Acknowledgments. The presented materials, research, and conclusions became possible due to support from State University of Management.

References Belopolsky, N.G.: The Basics of Manufacturing and Economic Enviironic. Economy, Moscow (2015) Castels, M.: Information Age: Economy, Society and Culture. Economy, Moscow (2000) Castells M.: The Power of Identity. In: The Information Age: Economy, Society and Culture, 2nd edn. Oxford, V.2. Malden (2004) Fetisov, A.V.: Culture Management. The case, Moscow (2010) Fukuyama, F.: Trust. Ed. AST, Moscow (2016) Kane, G.C., Phillips, A.N.: The Technology Fallacy. How People are the real Beg to Digital Transformation. The MIT Press, London (2019) Goodwin, B.: How the Leopard Changed the Spots: The Evolution of Complexity. Touchstone, New York (1994) Gurta, S.: Driving Digital Strategy. Harvard Business Review Press, Harvard (2018) Mazzucato, M.: The Value of Everything Making & Taking in the Global Economy. Hacherre Book Group Inc., New York (2018) Moore, J.: The Death of Competition: Leadership and Strategy in the Age of Business Ecosystems. Harper Collins, New York (1996) Power, T., Jerjian, G.: Ecosystem: living the 12 principles of networked business.- FT. com (2001) Rowles, D., Brown, T.: Building Digital Culture. Harvard Business Review Press, Harvard (2018) Rubinstein, S.L.: Problems of General Psychology. Science, Moscow (1973)

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Saldanha, T.: Why Digital Transformations Fail?. Berrett-Koehler Publishers Inc., London (2019) Sanchez, R., Heene, A.: The New Strategic Management. Wiley, New York (2004) Serebryakova, G.V., Musaelyan, I.K., Nezamaykin, I.V.: Methodology for the development of value management of socio-economic systems. CRNS, Novosibirsk (2015)

“Digital Assistants” in the Consumer Society: Global Trends and Vectors of Russia’s Development Sergey A. Pankratov1(&) , Liliia S. Pankratova2 Sergey I. Morozov1 , and Sergey D. Gavrilov1

,

1

Volgograd State University, Volgograd, Russia {pankratov,morozovsi,gavrilov_sd}@volsu.ru 2 Saint Petersburg State University, Saint Petersburg, Russia [email protected]

Abstract. The purpose of this paper is to analyze the dominating directions and spheres of applications of AI and robotics in everyday practices of the modern Russian society. Emphasis is made on the demand for these innovative systems in various segments of the existing “consumer society” at the national and global levels. The results of theoretical and empirical studies, which determine real and potential risks and threats that emerge in the process of the Russian society’s digitalization, are interpreted. The authors study subject-object and service characteristics of “new actors” – “digital assistants” – in satisfaction of the needs of various groups of population and substantiate the main consumer trends with representatives of various generation groups and their readiness and ability – at the individual and group levels – for the positive life activities in the conditions of a new digital culture formation. The specifics of implementation of the Fourth industrial revolution – Industry 4.0 – in the Russian Federation are determined. Its essence consists in implementation of technical and technological (cybernetic) systems that provide human with the highest living standards and consumer comfort. The authors use theoretical conclusions of the researchers who specialize in the sphere of philosophy of technology and the theory of intellectual systems, the concept of institutionalization, factors of structural transformations of the modern consumer society, and provision of national and global security. Keywords: Digital technologies
AI
Consumer society
Russia
Priorities
Threats JEL Code: O33 technological change
Choices and consequences
Diffusion processes
D6 welfare economics

1 Introduction The modern civilization’s development is based on the results of long practices of transformation of nature, human, and human society. Technological innovations are the means of transforming activities at the macro- and micro-levels. However, according to © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 499–506, 2021. https://doi.org/10.1007/978-3-030-59126-7_56

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the German researcher of the theory and philosophy of technology and technological progress F. Rapp, “Capabilities of artificial mechanical systems in calculations, targeted behavior, and solution of creation problems challenge the traditional borders between human and machine” (Rapp 1989). Most scholars agree that the world has entered the age of the Fourth industrial revolution – Industry 4.0. The First industrial revolution of the XVII- XVIII centuries was based on a steam engine breakthrough. Invention and dissemination of electricity ad mastering of conveyor production were the essence of the Second industrial revolution. The technologies of semi-conductors, use of electronic computing machines, and application of transistors became the essence of the third stage of revolutionary industrial transformations. Industry 4.0 is peculiar not only for implementation of Internet and electronics in economic and household spheres but also for creation of infrastructural complexes that provide conditions for the work of “smart machines”. While machines used to perform human orders in the past, now they start “thinking” and make their own decisions (Dvorak 2019). According to K. Schwab, the President of the World Economic Forum in Davos, “we are facing the revolution that will change our life, labor and communication. The scale, volume and complexity of this fourth industrial revolution have no analogues in human history” (Schwab 2019). Development and implementation of the AI systems (technical and technological component) in early 21st century led to the necessity for reconsideration of not only economic consequences but also the problem aspects of socio-political stratification of society and directions of changes in the consumer, value, and cultural priorities and stereotypes and practices of population’s behavior. The influence of the digital revolution and dissemination of AI on market agents, economic relations, employment, and consumption is studied. A conclusion is made on positive and negative effects, perspectives, and risks of dissemination of AI: intensification of global competition between companies due to the possibility to use Big Data; increase of economic globalization – consumers could purchase goods in anyplace anytime; risk in the form of innovative products/services in the market will bring profit; disadvantages include unemployment and increasing socio-economic stratification (Makridakis 2017). The issues of preservation of information confidentiality, protection of privacy, freedom of individual, and control with the help of the modern digital technologies and AI systems in the Interne space are considered. One contradiction is that, on the one hand, users of social media and Internet resources are afraid of excessive popularization of advertising and marketing tools (tracking searches, analysis of user’s activity) in the personal space (virtual), and, on the other hand, they are spoiled by personification of the analysis systems which guess their desires and demands. The following question is actualized within the public discourse: to which level are we ready to let smart technologies that collect information about us into our life? Vs. The desire to easily receive the necessary information – the desire for our wished to be guessed. The notion “intimacy of surveillance” (Ruckenstein and Granroth 2020) marks the specifics of the established relations between consumer and business – namely, surveillance and supervision of the actions of a real/potential consumer by

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business – with the help of AI systems – as a manifestation of care (parents – children). This metaphor is to draw attention to the limits of allowed control from marketing (Jin 2018). A range of studies is devoted to the necessity and possibility to protect consumers from marketing companies that interfere with their private life with the help of AI systems – “consumer-empowering AI”: limiting the access to tracking personal (blockers); technologies of determining unfair interference, control, etc. (Contissa et al. 2018). Scientific attention is drawn to “digital assistants” (apps for search and booking or purchase of services and goods – tickets, etc.), which aggregate, analyze, and “learn” based on the collected information on users, as an intermediary between consumer and market that influences the decisions on purchase of product/service by a social subject (Soutjis 2020). Scholars focus on analysis of consequence and effects of implementing the robotized technologies that function on the basis of AI systems in the everyday life and different spheres of life (education, care, private life – erotic and emotional relations). It is noted that “humanization” of robots in the body & visual and cognitive & emotional aspects could lead to the following effects: robots with consciousness become consumers and could express themselves through consumption of brands (GonzalezJimenez 2018). It should be emphasized that robots on the basis of AI could turn – from intermediaries between seller and buyer – into consumers, making decisions on alternatives for the products they offer to the host. How will these algorithms work? Will marketing industry have to look for an approach to communication with AI? It is necessary to start thinking about future challenges (Ivanov and Webster 2017). The forecasted long period of adaptation of robots and humans – for the purpose of joint co-existence – will be accompanies by conflicts, according to most scholars. What will be the basis for assessment of the value of human and automatized labor? The concept of heteromation. (Ekbia and Nardi 2017). Despite the scattered studies of the issues of transformation of consumer trends and consumer culture due to dissemination of AI technologies, the factors of demand for these innovative systems in various segments of the existing “consumer society” at the national and global levels have not been systematized.

2 Methodology There are different methodological approaches to understanding the essence and goals of creation of AI and, as a result, to explanation of the processes of digitalization and robotization of the modern society. Three domination directions appeared in the middle of the 20th century; they try to conceptualize studies of AI (Levitin and Pospelov 1991). The first direction connects the development of AI to heuristic (information purpose) – i.e., creation of programs for automatization of human activities, which belong to intellectual and creative forms. The final result is important – results, obtained by “machine”, which would coincide with “human” results during solution of the same task or problem.

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Supporters of the bionic goal associate the creation and application of AI with determination and analysis of the processes with which a human who solves specific tasks deals. In this case, it is important to determine the course of intellectual activities at the mental, physiological, bio-chemical, and other levels, inherent to human through modeling of the intellectual activities with a created substrate. Representatives of the evolutional direction characterize AI through the ability of the technical and technological system for learning (based on the example of children who are able to master knowledge). These methodological discussions are reproduces and have a lot of supporters. In this paper we shall use the definition of AI offered by the academician I.A. Kalyaev: “AI is an ability of artificial systems to solve intellectual tasks for which the solution algorithm is absent (Kalyaev 2019). Such theoretical and methodological position is connected to the fact that this understanding reflects the essence of the phenomenon of intellect in the cognitive and applied senses. Moreover, the offered treatment largely agrees with the definition of AI that is recorded in the “National strategy of development of AI until 2030”, adopted on October 10, 2019. “AI is a complex of technological solutions that allows imitating cognitive functions of human (including self-education and search for solutions without a set algorithm) and obtaining results that are comparable to the results of human intellectual activities. A complex of technological solutions includes the information and communication infrastructure, software (including software that uses machine learning methods), processes, and services on data processing and search for solutions” (National strategy 2019). Legal confirmation of the notion of AI does not mean the end of the scientific search for its contents and structure. Also, this allows for theoretical and practical landmarks for analyzing the processes of influence of AI technologies - “digital assistants” – on transformation of the consumer society and development of consumer values and settings in the Russian Federation and abroad. Methodological disputes regarding the characteristics of consumer society are equally hot as the disputes regarding analysis of AI. Giving credit to the authors that set the foundations of research of this type of public relations (Baudrillard 2006), including in Russia (Ilyin 2005), we think that the position of V.V. Kozlovsky is the most efficient for implementing the proclaimed goal. Consumer society is treated as “totality of conditions, resources, and means of consumption which are set by public production and which for, the level, quality, and style of the modern individual and collective life” (Kozlovsky 2011). In the methodological aspect, this approach will allow distinguishing and interpreting mutual influence in development of AI technologies and the priorities in satisfying the dominating consumer trends of various groups of Russians. Like any technological novelty, use of AI in various life activities of a specific human, group, and society causes concern and the necessity to study the accompanying risks and threats and development of security systems. In our analysis, we shall use the risk theory of U. Beck (Beck 2000) and understanding of social security as a state of protection of the interests of social subjects at the macro- and micro-levels. We also pay attention to the activities of government and civil institutions aimed at determination, prevention, and elimination of real and potential dangers for the processes of digitalization and robotization.

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3 Results Analysis of the results of theoretical and empirical studies by Levada Center, the center of social design Platforma, and telecommunication company Ericsson (2017–2019) allows distinguishing the global trends of implementing the AI technologies into everyday consumer practices. The first specific feature is human society’s striving for “full automatization of everyday tasks”, including electronic menu in public catering establishments (restaurants, cafes, etc.), instantaneous selection of clothes, purchases in supermarkets without cashiers, instructions for repairing devices (smart glasses or gloves), work of designers in the fashion industry, etc. (Zhurenkov 2019). Such consumer diversity is predetermined by a large variety of technologies and different levels of demand in specific countries. Also, societies with developed economy have an increased demand for integrating digital innovations in the complexes of “smart city” or “smart home”. A part of such system is “house intercom”, which recognizes the faces of residents, watchers over children at the playground, and could make a call in case of an emergency. “Smart assistants” which allow taking care of pets – walking, feeding, and cleaning toilets – were the leading trend of 2019. Russia conducts an experiment on implementation and exploitation of a citizen’s profile based on the unified system of identification and authentication, which provides access to personal data in the data bases of government establishments (Pankratova and Pankratov 2016). It is planned to synchronize exchange of data with the help of electronic forms between citizens, government and municipal bodies, and banks. One of the most important trends of creation of a digital assistant aims at supporting human health and performing a range of operational actions that simplify the work of medical personnel – “digital health”. An assisting robot is to track the state of health of patients and elderly people and to be their companion. Thus, one of the popular trends of using a digital assistant is its orientation at “sensing” the human. Using the CoBrainAnalytics platform allows analyzing human biomaterial and helping a doctor to determine the correct diagnosis. Residents of Moscow have electronic digital records, which allow seeing their tests’ analysis, specifying the diagnosis, and checking doctor’s recommendations. Finland expands the project “Virtual hospital 2.0”, which covers medical centers and universities and the medical industry. It is obvious that in the future ten years consumer preferences of the Russian society will be determined by representatives of generation Z – centennials. Personal profiles, mobile banks, new products, remote offices, and online banks – this is only a small list of smart assistants that are present in the life of a young person. Orientation at consumer preferences of the youth with the simultaneous process of transformation of the system of education and transfer of inter-generation traditions and values. It is necessary to distinguish “career navigators” with the help of VR – technologies and ranges of products that are oriented at healthy living and preventive medicine. As a result of studied of pedagogues and psychologists, a conclusion has been made on formation of a new “digital child”, who, following the communication with digital assistants and analog parents, masters social roles in the digital reality and digital

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system of values. Thus, the global consumer trend is development of methodological recommendations on harmonization of “human” and “digital” and overcoming of the symptoms of “brain laziness” in the sphere of domination of AI. Studying the trends of digitalization of society, it is necessary to note the most important one – deliberate leaks of information and use of personal data for unlawful purposes. A new slang appeared: “data is the new oil”. Specialists note the growing possibility of hunting data, which is one of the restraining factors of dissemination of intellectual assistants. Personal and commercial information is of the approximately equal value. Smart kettles, vacuum cleaners, and fridges are connected to their company’s service via Internet and could turn their host’s life into a “digital concentration camp” by leaking information to different places. In 2019, more than 14 billion records of user were made open access, which was two times more than in 2018. The share of such data in Russia constituted 40%. Manufacturers of smart equipment around the world are involved in the industry of advertising, marketing, and trading users’ data. Implementation of AI technologies actualized the topic of “superfluous human”. The Fourth industrial revolution creates a global world, in which human and society are assigned the role of observers and – but not always - consumers. In the modern consumer society, robots acquire the roles of dominating consumers, which sets before researchers and business new technological and resources tasks, which solution will largely influence the place of human in the world of AI.

4 Conclusions Despite the multiple attempts at socio-economic and political modernization, the Russian society is behind developed countries by important indicators. The selected model of formation and institutionalization of the mixed economic system stabilized the situation in the consumer market, but wasn’t able to fully satisfy the consumer demands of various groups of population, especially youth, which socialization takes place in the system of values of the Western culture of consumption. Russia also far behind other countries by the rates of digitalization. In particular, the share of the digital economy in the USA equals 35%, in the EU countries – 27%, and in China – 16%, while in Russia only 5%. The leaders of digitalization are the spheres of resource economy (oil and gas, mining, metallurgical, and other sectors). The lowest level of digitalization is observed in the housing and utilities sphere, agriculture, and healthcare (Digit devoured resources 2019). The political and legal basis for solving this problem could be “National strategy of development of AI until 2030”, adopted by the President’s Decree on October 10, 2019, No. 490. We think that it is important to understand that the goal is not just a transition to a higher technical and technological level, but “provision of growth of well-being and quality of life of the Russian population, provision of national security and order, and achievement of sustainable competitiveness of the Russian economy, including the leading positions in the sphere of AI” (National strategy 2019). Implementation of AI technologies in production and practice of consumption will requires from population to master a new set of skills that conform to the requirements

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of the digital society and digital culture. Scholars are yet to form this list (which will include a range of socio-demographic, residential, and other features), but there will obviously be a need for creative skills, critical thinking, and adaptation to constantly changing conditions. It will be necessary to master the “advanced” level of media literacy, basic knowledge of AI, technologies of AI management, and mechanisms of protecting one’s legal personality, without passing it to “smart machine”. We think that using AI technologies in diversification of the strategies of citizens’ consumer behavior in the Russian conditions is one of the decisive factors of provision of political stability and foundations of statehood, which are based on the principles of federalism, sovereignty, and provision of human rights. Diversity of the ethnic and confessional structure of the Russian society should be taken into account during development of specific measures and mechanisms of observation of balance between traditions, culture, and implemented innovations. It is also necessary to minimize the risks of using the manipulative technologies as immanent ones in the conditions of globalization of demands. Acknowledgments. The research was performed with financial support from the Russian Foundation for Fundamental Research and Administration of Volgograd Oblast within the scientific project No. 19-411-340006 r_a “Socio-economic political design of the public space and the system of mass communication in regions of the Russian Federation (by the example of Volgograd Oblast)”.

References Rapp, F.: Philosophy of technology. In: Rapp, F. (ed.) Philosophy of Technology in Germany: Translated from German. Progress, Moscow (1989) Dvorak, M.: Topic of superfluous man. Profil 45, 13–16 (2019) Schwab, K.: The Fourth Industrial Revolution. Eksom Publ, Moscow (2019) Makridakis, S.: The forthcoming Artificial Intelligence (AI) revolution: its impact on society and firms. Futures 90, 46–60 (2017) Ruckenstein, M., Granroth, J.: Algorithms, advertising and the intimacy of surveillance. J. Cult. Econ. 13(1), 12–24 (2020) Jin, G.Z.: Artificial intelligence and consumer privacy. In: Agrawal, A., Gans, J., Goldfarb, A. (eds.) The Economics of Artificial Intelligence: An Agenda, pp. 439–462. University of Chicago Press, Chicago (2018) Contissa, G., Lagioia, F., Lippi, M., Micklits, H.-W., Pałka, P., Sartor, G., Torroni, P.: Towards Consumer-Empowering Artificial Intelligence. In: Lang, J. (ed.) Proceedings of the TwentySeventh International Joint Conference on Artificial Intelligence (IJCAI-18), pp. 5150–5157 (2018) Soutjis, B.: The new digital face of the consumerist mediator: the case of the ‘Yuka’ mobile app. J. Cult. Econ. 13(1), 114–131 (2020) Gonzalez-Jimenez, H.: Taking the fiction out of science fiction: (Self-aware) robots and what they mean for society, retailers and marketers. Futures 98, 49–56 (2018) Ivanov, S., Webster, C.: The robot as a consumer: a research agenda. In: Paper Presented at the “Marketing: experience and perspectives” Conference, 29–30 June 2017 (2017) https://www. researchgate.net/publication/316587652_THE_ROBOT_AS_A_CONSUMER_A_ RESEARCH_AGENDA. Accessed 2 Feb 2020

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Ekbia, H.R., Nardi, B.R.: Heteromation and Other Stories of Computing and Capitalism. The MIT Press, Cambridge (2017) Levitin, K.E., Pospelov, D.A.: Budushchee iskusstvennogo intellekta [The Future of Artificial Intelligence]. Nauka, Moscow (1991) Kalyaev, I.A.: Effekt stiral’noy mashiny [Effect of washing machine]. In: Russian Newspaper, p. 9, 26 June 2019 National strategy of development of artificial intelligence until 2030, adopted by President’s Decree dated 10 October 2019, no. 490. https://www.garant.ru/products/ipo/prime/doc/ 72738946/. Accessed 1 Feb 2020 Baudrillard, J.: The Consumer Society: Myths and Structures, M. Kul’turnaya revolyutsiya, Respublika (2006) Ilyin, V.I.: Obshchestvo potrebleniya: teoreticheskaya model’ i rossiyskaya real’nost’ [Consumer society: a theoretical model and the Russian reality]. Mir Rossii 2, 3–40 (2005) Kozlovsky, V.V.: Obshchestvo potrebleniya i tsivilizatsionnyy poryadok sovremennosti [Consumer society and the civilization order of modern times]. J. Sociol. Soc. Anthropol. 5(58), 55–65 (2011) Beck, U.: Risikogesellschaft – Auf dem Weg in eine andere Moderne. Progress-traditsia, Moscow (2000) Zhurenkov, K.: Avtomaticheskoe zavtra [Automatic tomorrow]. Ogonek 1, 4–5 (2019) Pankratova, L.S., Pankratov, S.A.: Implementing e-democracy in Russia: institutional resources and modernization risks. In: 10th IEEE International Conference on Application of Information and Communication Technologies, AICT 2016; Baku; Azerbaijan; 12 October 2016, no. 14, October 2016. Institute of Electrical and Electronics Engineers Inc., Baku, Qafqaz University, pp. 610–614 (2016) Tsifra poglotila syr’e [Digit devoured resources]. In: Russian Newspaper, p. 7, 4 March 2019

The Role of Network Technologies in Preventing Youth Extremism in the Context of Integration of Government and Civil Society’s Activities Vladimir M. Shinkaruk(&) , Pavel P. Fantrov and Natalya A. Solovyova

,

Volgograd State University, Volgograd, Russia {shinkaruk,pavelfantrov,solovieva_na}@volsu.ru

Abstract. Purpose: The purpose of the paper is to substantiate the necessity for using network technologies for efficient interaction of public authorities and citizens’ association on preventing extremism among the youth. Design/Methodology/Approach: The authors use a system of scientific methods that are based on the principles of consistency, institutional approach, and sociological method, which allow determining the role of network technologies that are used in the process of joint activities of government and civil society on preventing youth extremism. Findings: The paper shows that extremism enters the forms of public consciousness and could directly influence the relations between social institutions (public associations, political parties, government structures, confessions, etc.). Thus, the issue of the necessity to use network technologies for preventing various forms of manifestation of extremism is very important. The authors show effectiveness of network crowdsourcing, which purpose of unifying the subjects of prevention of youth extremism for well-coordinated solution to this problem. It is noted that effectiveness of crowdsourcing of network technologies should be measured based not only on the number of determined facts of the extremist nature but also based on quality of dealing with negative consequences that are caused by extremist activities. When evaluating their efficiency, the authors substantiate the effectiveness of implementing the projects “Kiberdruzhina” (Cyber militia), “MediaGvardiya” (Media guard), and “STOPTERROR”, which stimulate the decrease of crime rate of the extremist character. Originality/value: It is concluded that network technologies are the optimal mechanism for supporting the system of prevention of extremism among the youth, and their development stimulates a clearer expression of citizens’ position on this problem. Their successful implementation into the law enforcement practice will stimulate socialization of the system of prevention of extremism among the youth. Keywords: Network technologies
“smart” technologies
Prevention of extremism
Youth
Government
Civil society
Slacktivism JEL Code: K40

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 507–513, 2021. https://doi.org/10.1007/978-3-030-59126-7_57

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1 Introduction Network technologies are a powerful trend of the recent years. They open a new “virtual dimension” in the practice of the process of provision of protection of person, society, and state. Network technologies are a mechanism that mobilizes – effectively and quickly – people who have similar ideologies and supports a free discourse in civil society regarding the issue of provision of national security, including the problems on prevention of extremism among the youth. The positive influence of network technologies in the context of prevention of extremism among the youth is manifested in decrease of space and time limitations of the interaction of law enforcement and public associations. Based on their specifics, network technologies are an environment of many-sided interactions based on discussion and feedback on the most topical problems of security of person, society, and state. The value sense of the modern virtual communications, according to L.V. Baeva, consists in the representatives of civil society, who participate in prevention of youth extremism, receiving an opportunity for subject-subject communication in the identical context of public discussion (Baeva 2015). Using network technologies, citizens could protect their interests in view of their existential needs. Many-sided virtual communications is a democratic dialog form of communication, which stimulates open communications and allows a subject to be heard during public debates, including the ones on the problems of youth extremism prevention. There are a lot of discussion platforms of citizens’ association, including virtual ones, which allow expanding the mechanisms of network coordination and cooperation of the existing law enforcement agencies in fighting extremism among the youth (Morozov 2019a). However, simplicity of Internet access and possibility of flexible influence provoke radical forces for using the Internet space for their extremist activities. Thus, there appears a necessity to integrate the activities of the government and civil society on preventing the extremist activities of citizens.

2 Methodology The methodological basis of this research is a system of the scientific cognition systems, which were used for determining the role of network technologies, implemented by government and civil society in the process of prevention of extremism among the youth. The following scientific methods are used here: – general scientific (rising from the abstract to the concrete, analysis, synthesis, induction, deduction, modeling, and comparison); – systemic method, used during evaluation of interaction of government structures and civil society, which are the main subjects of the activities on preventing extremism among the youth; – institutional method, which is oriented at studying the activities of the institutions that are subjects of preventing extremism among the youth; – sociological methods, which allow – based on quantitative and qualitative data – evaluating the efficiency of network technologies that are used during the interaction of the government and civil society on preventing youth extremism.

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3 Results Development of network technologies changes the traditional form of interrelations of the institutions of civil society and government, stimulating the increase of the information exchange between actors. Network technologies help changing quantitative and qualitative aspects of citizens’ public activities. Development of new technologies in the sphere of AI and wi-fi brings a lot of advantages for humanity (Gulyaikhin and Shiro 2013), but also could bring certain dangers. Accessibility of information sometimes causes government’s concerns, for Internet technologies could get youth involved in the activities of radical groups (Pusko 2012). Thus, they influence the speed of organization of extremist activities. An example of this could be the peak of interest in the network civil activity in 2009–2011, when the revolutionary events in Egypt and Tunisia and tumults in Iran led to reflections on the idea of Twitter revolutions and the influence of “smart technologies” on civilizational transformations. Network online campaigns could lead to a large resonance with minimum expenditures. That’s why the Russian political elite reacted to this phenomenon, providing a virtual opportunity for people to express their civil position. Thus, since 2012 there has been implemented a crowdsourcing project “Russian public initiative”, according to which a petition that reaches 100,000 votes is sent for consideration to the State Duma of the Russian Federation. In reality, multiple filters were created: a lot of important public initiatives, including “On freedom of Internet”, were rejects, for formally they contradicted the goals of national security provision. On the whole, implementation of the resource and technological components of the “Russian public initiative” leads to positive structural changes in the mechanisms of national security provision, stimulating the increase of the public & political status of non-government actors. With the help of network technologies, citizens participate in the political process – but the practical implementation of this crowdsourcing project has certain drawbacks. Firstly, Russians are still skeptical regarding the idea of presenting and implementing initiatives. A vivid example is the fact that public initiatives implement few initiatives that have the necessary number of votes and do not support the ones that have less than 100,000 votes. Secondly, the network project was criticized for driving up the numbers, which was confirmed by statistical anomalies. Thirdly, presence of the similar initiatives at the network crowdsourcing platform complicates evaluation of its real support. This problem could be solved by creating a system of references to similar public initiatives. Thus, a range of question arises. Is the implementation of the network crowdsourcing project “Russian public initiative” effective? Does it have to be implemented in the conditions of insignificant influence on political decisions in the sphere of prevention of extremism among the youth? There might be s situation when an initiative that is not popular in the Russian community of government bodies is registered at the web-site of “Russian public initiative”, and then, regardless of the number of votes, it will be implemented as a public initiative. This will lead to manipulation of Russian citizens’ opinions and, moreover, to full neglect. The following problem situation will arise: support for public initiatives is not necessary for their implementation, and popular ideas will not stand a chance. Such state of affairs will negatively influence

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the level of public activity in support for the network project “Russian public initiative”. Despite the existing drawbacks of implementing its resource and technological aspects, this network project draws public interest. This is confirmed by 2,394 initiatives that are on the vote at the beginning of 20201. Implementation of the resource and technological aspects of network projects, which purpose is openness of the national and regional policy in the sphere of youth extremism prevention, stimulates the improvement of quality of strategic decisions, which leads to increase of trust between government and the public. According to I.A. Bronnikov, the resource and technological support for the political process of the interaction between the government and civil society on solving the tasks of increase of security of person, society, and government could be provided by network expert communities (Bronnikov 2019). Their implementation is especially topical in a smart society, as a lot of active citizens learn about the measures in this sphere through Internet resources and social networks. However, in prevention of youth extremism one should not count only on “online” mobilization (Gulyaikhin and Panteleev 2017), ignoring the capabilities of “real” technologies, which are usually implemented by the law enforcement, for the use of network technologies could have certain drawbacks (e.g., slacktivism). The imitation specifics of slacktivism include the fact that a lot of irrational and quick likes, posts, and signed petitions on the problem of prevention of extremist activities among the youth do not lead to real results. Besides, activity in social networks often imitates real activities. Slacktivism is a phenomenon that is convenient for manipulators who separate citizens from the problems of protection of person, society, and state (Fantrov 2017). Thus, an overview of petitions at the web-sites “Russian public initiative” and change.org shows that most of them do not lead to the expected effect: as a rule, private problems of citizens are solved. Slacktivism moves the civil activity of a person into a channel that is secure for manipulators, but it raises citizens’ awareness and the level of their social, legal, and political culture. Actualization of the social problem of citizens’ public consciousness could lead to real actions, which – directly or indirectly – stimulate the prevention of extremism among the youth (Morozov 2019b). The result of growth of awareness is person’s involvement in the socially useful activities. However, due to the mental specifics, Russians rarely perform active measures aimed at supporting security of person, society, and government, and are actually lazier slacktivists as compared to citizens of other countries. In the aspect of integration of the activities of the government and civil society on preventing extremism among the youth, the following tasks are very important: resource and technological provision of their joint activities; implementation of unified efforts that could raise citizens’ social activity; coordination of the goals of collective actions, development of measures for protecting the interests of youth; coordination of priorities and consolidation of parties; transparency of functioning of government and non-government actors of youth extremism prevention through creation of the unified information field with application of smart technologies. For solving this task in

1

Russian public initiative. Initiatives on the vote. Available at https://www.roi.ru/poll/.

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modern Russia, a system of horizontal public connections is created, which is supported by different non-profit and non-government organizations. According to I.A. Bronnikov, “…network civil activism has a large potential for increasing the effectiveness of systemic dialog practices between the government and institutions of civil society” (Bronnikov 2018). Development of network technologies as a resource of such crowdsourcing projects as “Kiberdruzhina”, “Mediagvardia”, and STOPTERROR shows their effectiveness in the context of youth extremism prevention. A network crowdsourcing project “Kiberdruzhina” was created by the League for Secure Internet in 2011. It unifies more than 20,000 volunteers in 36 subjects of the Russian Federation; however, the activities of cyber militia are not regulated at the federal level. Cyber militia could look for Internet resources of the extremist character, but law enforcement might ignore the information received from them. The activities of cyber militia on determination of web-sites with unlawful content could be legalized in 2020, for there is a law draft in work. Its meaning is as follows: MP’s from “United Russia” political party have initiated the creation of cyber militia as a public organization with notification of the corresponding body of executive authorities. Citizens of legal age could become member of cyber militia. Consideration and further adoption of this law draft will raise the effectiveness of extremist activities prevention. This is confirmed by the fact that in recent five years cyber militia helped to block at least 10,000 web-sites and open more than one hundred criminal cases2. A successful example of youth extremism prevention in Russian regions is implementation of a crowdsourcing project “MediaGvardiya” by the Young Guard of the “United Russia”, which has been functioning since March 13, 2013. The purpose of this network project is to integrate the efforts of activities of the Young Guard of the “United Russia” and the law enforcement for determining web-sites of the extremist character. Thus, in 2018 the Young Guard checked 50,000 web-sites, of which 5,000 were blocked due to unlawful content, and prepared methodological recommendations “How to avoid ISIS recruiters”, which were disseminated on Internet and in educational establishments3. Due to a complex of reasons (economic, political, cultural & historical, etc.), South of Russia is most susceptible to the extremist activities of radical forces (Fantrov and Shinkaruk 2018). That’s why for the subjects of the Southern Federal District and the North Caucasus Federal District the top-priority direction of national security provision is fighting extremism among the youth. According to the Secretary of the Security Council of the Russian Federation N.P. Patrushev, January-August 2019 saw the blocking of 88,000 web-sites with extremist and terrorist-related information in the South of Russia. Unlawful information was deleted from more than 100,000 web-sites. Besides, 460,000 messages about unlawful content were processes, and more than

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Kiberdruzhina. Available at https://kiberdruzhina.ru/. MediaGvardiya. URL: https://everything.kz/article/47135422-mediagvardiya-v-2018-godu-nashiitogi.

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50,000 court decisions on ban on dissemination of such content were made4. This shows the necessity for further development of the system of civil association as an important component of fighting extremism among the youth. Since 2015, the Commission of the Public Chamber of the Russian Federation on harmonization of inter-ethnic and inter-religious relations has been implementing a crowdsourcing project STOPTERROR (also in the subjects of the Southern Federal District and the North Caucasus Federal District). This network project has been organized for the purpose of monitoring of the Internet space, including social networks, for determining content that advertises extremism and inter-religious enmity. During the first two years of its functioning, the project coordinators considered more than 7,000 requests from citizens with links to specific resources with unlawful content, and more than 1,000 web-sites were blocked5.

4 Conclusions/Recommendations Using network technologies during joint activities of the government and civil society in the context of prevention of extremism among the youth helps solving the following tasks: realization of citizens’ rights to participate in government affairs for attracting the Russians’ attention to solving this problem; development of cooperation and communication ties between public authorities and civil society; improvement of law on preventing extremist and legitimization of norm-setting ideas in this sphere. It should be noted that not all of these tasks are implemented fully in modern Russia. Also, it is still unclear which of them are of top-priority for the government (Davydova and Goncharova 2015). We think that the most important issue is realization of citizens’ rights to participate in government administration, including the issues of improving the laws on preventing extremism among the youth. While citizens face objective and subjective obstacles, they might think about an imitation of democracy. Elimination of negative preconditions is possible if the government is ready for an efficient dialog with the civil society and take into account its political demands. Network technologies are the optimal mechanism on preventing youth extremism, which could attract a lot of subjects in the horizontal social ties through “new media” and the related smart projects. Their development stimulates a clearer expression of citizens’ position on the current social problems of national security, including fighting youth extremism. Their successful adaptation to the Russian social space will stimulate socialization of the system of prevention of extremism among the youth and progress in the interaction between person and government towards the model of society of the liberal type, preventing the limitations for communications during solution of important problems, such as manifestation extremist ideas in the society. Thus, sustainable development of the Russian superethnos could be achieved.

4

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Patrushev: 88,000 extremist web-sites blocked in the South of Russia. Available at https://rg.ru/2019/ 09/13/reg-ufo/patrushev-na-iuge-rf-zablokirovano-okolo-88-tysiach-ekstremistskih-sajtov.html. Project STOPTERROR: intermediary results. Available at https://www.oprf.ru/press/news/2017/ newsitem/40861.

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Acknowledgments. The reported study was funded by RFBR, project number 20-011-00688 “Model for the prevention of extremism among the youth: integration of the activities of civic associations and law enforcement agencies in the context of legal socialization”.

References Baeva, L.V.: esearch megatrends in the information society and the problems of socio-cultural security. Inf. Soc. 2–3, 13–24 (2015) Bronnikov, I.A.: Political practices of network civic activism in Russia: new platforms and technologies. PolitBook 2, 6–24 (2019) Bronnikov, I.A.: The crisis of representative democracy and new practices of civic activism. PolitBook 1, 64–78 (2018) Davydova, M.L., Goncharova, A.A.: Problems and prospects of the Russian public initiative project. North Caucasian Legal Bull. 3, 123–131 (2015) Fantrov, P.P.: Political crowdsourcing in the system of ensuring national security of Russia. In: News of Saratov University. Series of Sociology, Political Science, no. 2, pp. 231–235 (2017) Fantrov, P.P., Shinkaruk, V.M.: Regional strategies of national security of the South of Russia: opposition of civic associations to criminal threats. Legal Concept 2, 33–38 (2018) Gulyaikhin, V.N., Panteleev, E.V.: Archetypal basis of legal education of a person. Philos. Law 1, 105–112 (2017) Gulyaikhin, V.N., Shiro, S.V.: The process of legal socialization of youth in Russian sociocultural space. Law Educ. 10, 68–77 (2013) Morozov, I.L.: Left extremism in modern Russia: definition, classification, trends. Questions Polit. Sci. 5, 910–917 (2019a) Morozov, I.L.: Patriotism and intercultural dialogue as a paradigm of the future for Russia and the whole world. Politbook 1, 34–47 (2019b) Pusko, V.S.: Problems of the formation of civil society and ensuring its security. Soc. Law 2, 226–229 (2012)

Analysis of the Existing Human Capital Development Monitoring System Zhanar Baigireyeva1(&) , Shakizada U. Niyazbekova2 Aliya K. Butkenova3 , and Ainur S. Baidalinova3

,

1

Kazakh Humanitarian Juridical Innovative University, Semey, Republic of Kazakhstan [email protected] 2 Moscow Witte University, Moscow, Russian Federation [email protected] 3 Financial Academy, Nur-Sultan, Republic of Kazakhstan [email protected], [email protected]

Abstract. This study is dedicated to the study of Kazakhstan’s human capital at strategic, industrial facilities that are being transformed under the influence of Western management. Since the company attaches great importance to the training and retraining of specialists and workers, the development of human resources is purposefully carried out by the philosophy of the company. Research Outcomes:

1. The practice of sending workers and specialists to study new machinery and equipment, get acquainted with the methods of its maintenance and repair at the manufacturing plants was studied. 2. The research revealed that the enterprises conduct training of personnel and workers on safety, industrial sanitation, fire safety measures and other rules of health protection of workers, as well as control over employees’ compliance with the requirements of rules and instructions on labor protection. 3. It was found out that in the established practice of the enterprise functioning, spending money on social needs is considered as an obstacle on the way of profitability growth. Keywords: Human capital
Industrial enterprises Monitoring
Resources
Economics JEL Code: E 24





O10
O20
O30

1 Introduction The modern rhythm of work in the deep mines of the Karaganda coal basin has a significant impact on the reduction of life expectancy, the mortality of mineworkers who have not reached retirement age is increasing. © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 514–521, 2021. https://doi.org/10.1007/978-3-030-59126-7_58

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2 Background and Methodology The methodological basis of the research is based on fundamental positions, categorical apparatus of theories revealing the essence of the human capital development monitoring system, concepts, structural approaches and methodological basis for defining and assessing the human capital development monitoring system.

3 Discussion and Results In general, the situation concerning the age structure of the personnel of coal enterprises in the Karaganda region is satisfactory, but it is necessary to analyze in terms of specialties and professions to identify the needs for the short and medium-term (Table 1). Table 1. Staff movement 2011–2018 «ArcelorMittal Temirtau» JSC Indicator 2011 % 2012 % 2014 % 2016 % 2018 % Concluded 29063 −8,1* 27788 −4,4* 26212 −2,3* 26266 2,0* 24369 −2,6* workers as of January, 1st Arrived 1391 4,8 1820 6,5 1584 6,0 1637 6,2 1507 6,2 Including: from 30 2,2 11 0,6 6 0,4 4 0,2 7 0,5 the army From 20 1,4 52 2,9 49 3,1 14 0,9 46 3,1 institutions Free hiring 806 57,9 1226 67,4 1311 82,8 899 54,9 1247 82,7 Other reasons 535 38,5 531 29,2 218 13,8 720 44,0 207 13,7 Decreased 2666 9,2 2775 10,0 2054 7,8 2874 10,9 2511 10,3 Retired 176 6,6 274 9,9 273 13,3 335 11,7 378 15,1 87 3,3 84 3,0 104 5,1 90 3,1 155 6,2 Disability due to illness 364 13,7 299 10,8 681 33,2 563 19,6 563 22,4 Violation of labor discipline Death 99 3,7 110 4,0 111 5,4 85 3,0 92 3,7 Downsizing 183 6,9 77 2,8 12 0,6 35 1,2 18 0,7 Own wish 1251 46,9 1320 47,6 620 30,2 984 34,2 927 36,9 Other reasons 506 19,0 611 22,0 253 12,3 782 27,2 378 15,1 27788 −4,4* 26833 −3,4* 25742 −1,8* 25029 −4,7* 23365 −4,1* Consists of workers at the end of the year Note: * -% growth rate compared to the previous year Source: compiled by the authors according to the data of JSC «ArcelorMittal Temirtau» (2020).

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«Shubarkol Komir» JSC. Since September 2011 the coals of Shubarkolsky open pit have been developed by «Shubarkol Komir» JSC. During the period under study, over KZT 2 billion were invested in the development and improvement of the technological level of the mine. Mineral resources of the corporation are 664 million tons, which at full production capacity for the calendar year according to the forecast project of 6 million tons is the service life of production facilities of the corporation more than 100 years. The company has developed a practice of distribution and study by the personnel of other divisions of experience of high-performance work of demonstration mines (Abdrashitova 2018). It is practiced to send workers and specialists to study new machinery and equipment, to get acquainted with methods of its maintenance and repair at the manufacturing plants. The qualification level of production personnel of «ArselorMittal Temirtau» EP JSC is shown in Table 2.

Table 2. Monitoring the qualification level of production personnel of «ArselorMittal Temirtau» JSC, people, 2011–2018. Worker grade 2011 2012 2013 2014 2015 2016 2017 2018 6 grade 2,8 2,9 2,8 2,7 2,7 2,7 2,6 2,4 5 grade 30,6 29,0 30,5 29,9 29,7 29,8 28,7 28,2 4 grade 21,4 21,4 21,8 22,0 22,4 22,8 22,7 22,4 3 grade 17,3 17,7 17,9 18,4 18,8 19,8 21,5 22,6 2 grade 8,2 8,5 8,1 8,5 8,6 8,9 9,6 10,9 1 grade 2,5 2,6 2,7 3,1 3,1 3,2 3,2 2,8 Without grade 17,2 17,9 16,3 15,4 14,7 12,8 11,9 10,7 2 or more professions 0,1 0,1 – – – – – – Total, people 17984 17729 18655 19310 19590 18805 19347 19105 Total, % of the total number 64,8 66,0 71,2 76,4 74,6 76,2 79,3 81,8 of employees Source: compiled by the authors according to the data of JSC «ArcelorMittal Temirtau» (2020).

From Table 2 we can see the contradictory dynamics of the level of qualification of the production personnel of «ArselorMittal Temirtau» JSC - the increase in the specific weight of the employees of the 5th category, which was outlined in 2012–2013, starting from 2014 begins to gradually decrease, which, in our opinion, is caused by major accidents that occurred at the enterprise (Butkenova 2017). The analysis of personnel by level of education was carried out by us in sections: engineering and technical workers and workers (Grekov 2016). Employees of «Shubarkol Komir» who study in the profile of the company - Polytechnic University, Mining and Mechanical College, Railway Institute or College - are provided with paid study leave at the rate of 0.5 monthly notional units per day.

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«Shubarkol Komir» JSC reimburses the employee injured at work for the costs of health improvement and other types of targeted and spa treatment. Separately, funds are allocated to employees and their family members, pensioners of the company for purchasing health resort vouchers, vouchers to children’s health centers. The company monitors employees’ compliance with the requirements of rules and instructions for the function performed. The estimation of the professional morbidity rate of the employees of «ArcelorMittal Temirtau» is given in Fig. 1. 70 60 y = 3,3571x2 - 12,843x + 41,8 R2 = 0,8647

50 40 30 20 10 0

2012 Dust Bronchitis

2013

2015

Vibration disease

2017 Radiculitis

2018 General Tendency

Fig. 1. Occupational disease rate assessment of «ArcelorMittal Temirtau» JSC employees, 2012–2018. Source: compiled by the authors according to the data of JSC «ArcelorMittal Temirtau» (2020).

Figure 1 shows an increase in occupational diseases at the enterprise in question. One of the negative trends reflecting the changes taking place in the structure of occupational diseases of the staff of «Shubarkol Komir» JSC, the number of registered cases of upper respiratory tract diseases has increased by 7.3% since 2017. In addition to the increased severity of work, coal mining differs from many other professions by objectively increased risk level. Stress in the workplace is also recognized as a significant risk to health and safety at work: the incidence of coronary heart disease has increased by 6.5%. The structure of occupational morbidity of «Shchubarkol Komir» personnel is shown in Fig. 2.

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600 2

y = 30,143x - 138,46x + 480,4 2 R = 0,9759

500 400 300 200 100 0 2012

2013 Dust Bronchitis

2015 Arthroses

2017 Others

2018

General Tendency

Fig. 2. Monitoring of professional morbidity of the staff of «Shubarkol Komir» JSC, 2012– 2018. Source: compiled by the authors according to the data of JSC «Shubarkol Komir» (2020).

In the established practice of the APC of «ArcelorMittal Temirtau» JSC, spending funds on social needs is considered as an obstacle to the growth of profitability of the enterprise. Incomplete use of the existing potential and lack of sufficient resources played a role in deterring social development processes, but enterprises do not take into account that the provision of social development services has a positive impact on productivity growth. Thus, it can be concluded that social development systems of coal industry enterprises in Karaganda region differ significantly. According to the information provided by the corporation to the Labor Committee Department, every year according to the plan the technology of drilling and blasting works is improved, new blasting technologies and drilling mechanisms are introduced, the improvement of which shows the effectiveness of the implemented measures. In order to improve the performance of locally produced granulated explosives, a production area for the centralized production of A-6 pellets and other important types of explosives for quarries was built and commissioned by analogy and methodology of the Spanish company «UEB», which meet the requirements for the use of explosive materials. In accordance with regulatory acts and in agreement with the Emergency Situations and Mining Supervision Agency of the Republic of Kazakhstan, «Kazakhmys Corporation» LLP has improved its Occupational Health and Safety Management System to ensure the safety of mining operations. In this regard, the Occupational Health and Safety Department of the enterprise has been established on the basis of the Occupational Health and Safety Department, expanding the rights, functional responsibilities and measures of responsibility of its specialists. The Department reports to all health and safety departments of the enterprise.

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In addition to occupational injuries, there is an equally pressing issue of working conditions, which is dangerous and harmful for most workers. These are not only deep mines, where work is associated with a long stay underground, interaction with complex drilling machines, in conditions of high concentrations of dust in the air. In concentrating production the operation mode of miners is conditioned by high dustiness, presence of various chemicals and constant industrial noise. Harmful and harsh working conditions in the power shop, copper production and other divisions of the corporation, active human activity, and population growth have a devastating impact on the environment. The corporation has seen positive growth in the number of employees working in harmful industries and is actively pursuing a policy of maintaining employee health. The policy of human capital activation considers various options of personnel motivation, including career growth as a factor of human resource development. These concepts are of particular importance for management and economy in the integration process of Kazakhstan economy, and secondly, these issues are especially relevant not only for corporations but also in terms of human capital development - as the main factor of competitiveness of Kazakhstani economy. The presented analysis of the existing monitoring system in «Kazakhmys Corporation» LLP allows to characterise this activity as follows: From 2016 to 2018, «Kazakhmys Corporation» LLP reduced output per employee. The decline may be due to a number of reasons (lower market demand and, consequently, lower supply of our goods and, consequently, lower output per employee), but combined with high turnover against the background of low wages and harsh working conditions, this indicates a decrease in the efficiency of HR management. There is a significant disproportion in the output figures for the workshops and the main production site of the corporation. Stable social and labor environment in «Shubarkol Komir» JSC during the study period is largely due to the effective impact of the existing system of social partnership. Acute social and labor and related economic issues were resolved in the initial stage of development thanks to negotiations accepted by the employer. The enterprise provides charitable assistance to the participants of the Great Patriotic War, equal to them and veterans of labor, pensioners of the enterprise. It is directed up to 3 million KZT annually for the allocation of an interest-free loan to workers of the enterprise. To the large families having 4 and more children, to the single mothers having 3 and more children, to families lost on manufacture by New Year’s holidays the material help at a rate of 5 settlement indicators is rendered. The administration, on the recommendation of the «Shubarkol Komir» JSC Commission for Assistance, provides material assistance to employees to pay for medical services in the amount of up to 70 monthly notional units.

4 Conclusions Thus, within the framework of our research, we have analyzed the existing system of monitoring the development of the human capital of the corporation, based on the developments of world economic science. The subject of the study was the most

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significant structural elements of the monitoring system of human capital development: the number of employees, qualification level of personnel occupational diseases and industrial injuries, social development of personnel, which have been intensively developed in corporations over the past 10–15 years. Thus, it can be concluded that the system of social development in the context of human capital development at Kazakhstan enterprises differs significantly from foreign management.

References Aetdinova, R.R., Balabanova, O.N., Balabanov, I.P.: The modern methods of increase of management efficiency of small and medium businesses. Life Sci. J. 11(11/98), 558–561 (2014) Baigireyeva, Z., Niyazbekova, S.: Human capital as the dominating factor of economic growth in the Republic of Kazakhstan. In: International Scientific Conference “Far East Con” (ISCFEC 2020) (2020). https://doi.org/10.2991/aebmr.k.200312.456 Budanova, A.K.: The human capital of industrial enterprises. Econ. Anal. Theory Pract. 17(3), 473–490 (2018) Bunevich, K., Amanova, G., Gavrilova, E.N., Niyazbekova, S., Ivanova, O., Varzin, V.V.: External Debt Analysis and State of National Debt in the World Finance System (2020). https://doi.org/10.2991/aer.k.200202.011 Butkenova, A.K.: Influence of labor conditions on human capital in industrial enterprises. Innov. Dev. Econ. 5(41), 191–197 (2017) Demyanova, O.V., Zaidullina, Ch.N.: The role of free economic zones in the innovation development. IIOAB J. 9(1), 164–169 (2019) Galiullina, G.F., Aetdinova, R.R., Makarov, A.N.: Classification of territories of advanced socioeconomic development. Dilemas contemporaneos-educacion politica y valores 6(84), 34–49 (2018) Imangozhina, Z., Satenova, D., Niyazbekova, S., Zuyeva, A., Issayeva, B.: Development of trade and economic cooperation in the oil and gas sectors between Kazakhstan and Russia (2020). https://doi.org/10.2991/ismge-19.2019.54. Accessed 21 Feb 2020 JSC “ArcelorMittal Temirtau”: Regulations on stimulation and motivation of labor of JSC “ArcelorMittal Temirtau”, Karaganda, Science (2020) Niyazbekova, Sh.U., Grekov, I.E., Blokhina, T.K.: The influence of macroeconomic factors to the dynamics of stock exchange in the Republic of Kazakhstan. Econ. Region 12(4), 1263– 1273 (2016). https://doi.org/10.17059/2016-4-26 Niyazbekova, Sh., Grekov, I.E., Blokhina, T.K., Mussirov, G., Aetdinova, R., Suleimenova, B. B., Bunevich, K.G., Burkaltseva, D.D.: Macroeconomic analysis of the securities market of the Republic of Armenia. Bull. Natl. Acad. Sci. Republ. Kaz. 1(383), 156–162 (2020). https:// doi.org/10.32014/2020.2518-1467.19. ISSN 1991-3494 Nurpeisova, A., Niyazbekova, S., Dyussembayeva, L., Seitova, Z.: Problems of development of mathematical models and creation of innovative products in the Republic of Kazakhstan (2020). https://doi.org/10.2991/ismge-19.2019.103. Accessed 21 Feb 2020 Nurzhanova, G.I., Niyazbekova, S.U., Nurpeisova, A.A., Imangozhina, Z.A., Satenova, D.E.: Youth labor market analysis and assessment of the Republic of Kazakhstan. In: Proceedings of the International Scientific Conference “Far East Con” (ISCFEC 2020). https://doi.org/10. 2991/aebmr.k.200312.053

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Sanalieva, L.K., Kengzhegalieva, G.B., Idelbayeva, A.S., Niyazbekova, Sh.U.: Investigation of Modern economic mechanisms for construction of the intellectual potential of the country as a moving factor of innovative economic development. Natl. Acad. Sci. Republ. Kazakhstan 5 (1), 144–148 (2018). https://doi.org/10.32014/2018.2518-1467.19 Semenyuk, O., Abdrashitova, T., Beloussova, E., Nechay, N., Listkov, V., Kurbatova, V., Niyazbekova, S.: The influence of ecology and economic factors on eco-architecture and the design of energy efficient buildings. World Trans. Eng. Technol. Educ. 16(2), 186–192 (2018)

Competitive Human Capital as a Factor and a Result of the Forming and Development of Smart Cities Veronika V. Antonenko(&) Volgograd State University, Volgograd, Russia [email protected]

Abstract. Purpose. The main results of the new modern phenomenon study are presented in the article. This is the forming and development of smart cities. The purpose of the work is to show the key role of the creating and invitation of high-quality human capital in this process. It takes place around the world today. Methodology. The theoretical and methodological basis of the research is the latest concepts and works of leading experts in the field of modern urban studies. They are economists and sociologists specializing in the study of this phenomenon. The information required for analysis was obtained from public sources. It characterizes cities, megacities and metropolitan areas, which match on their parameters to the concept of “smart city”. Results. To get the status of “smart city”, cities should use the latest information, communication, environmental and resource-saving technologies. This must be done in the economy, governance, social sphere and everyday life of people. It improves the quality of life, comfort and safety of every resident in a city. And all this is not at the expense of future generations, but given their needs. Originality/Importance. It has been shown that quality human capital plays a key role in this process. This is a factor of the smart city forming, and the result of its life activity and development also. Keywords: Smart city
Human capital
Intellectual technologies
Sustainable development
Quality of life JEL Code: O33


O340

1 Introduction The modern city is fast changing the daily lifestyle of a person. It creates a new environment for his development, the implementation of intellectual, creative and other potential. Therefore, cities create, develop and invite quality human capital. But for successful competition for human resources, cities must today change their old development strategies. The comprehensive implementation of “smart” technologies and solutions in all spheres of life is necessary for this. This will make the urban environment truly accessible and comfortable for every resident. In turn, it will attract investors and help to unlock the full potential. © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 522–529, 2021. https://doi.org/10.1007/978-3-030-59126-7_59

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“Smart city” is a concept widely used today for the development of urban spaces. This is aimed at solving the typical problems of a modern city with the help of “smart” information and communication technologies. But there is not exact and universal definition of the term “smart city”. In the process of developing the concept of a smart city, this term has gradually been evolving. This concept changed from a negative attitude to any new technologies to a strategy for solving the problems of a modern city that is oriented towards each resident. This is a strategy for sustainable urban development. Today it is impossible to implement without the widespread use of smart technologies. The terms “smart” or “innovative” city are generally used where various information and communication technologies (ICTs) are wide applied. This is done to improve the quality of life, increase the efficiency of urban life support systems (housing and communal services, transport, etc.), create the most comfortable forms of service delivery, etc. All this is not to the detriment of future generations. There must be a balance between the satisfaction of economic, social and environmental needs of both current and new generations. In modern science and practice it is called sustainable development.

2 Methodology The term “smart city” first appeared in scientific and popular literature in the 90s of the last century. But it became widespread only in 2010 thanks to IBM. The company has announced the “Smarter Cities Challenge” in grants for cities using digital technologies in key areas of life, such as public safety, environmental protection, economic development, etc. IBM provided the winning cities with financial support, proprietary smart technologies and the assistance of its leading experts. In this project, the company used its technologies to improve the infrastructure of cities. These solutions made cities “smarter” and more efficient. The company proposed the definition of a smart city just then. This is one “that makes optimal use of all the interconnected information available today to better understand and control its operations and optimize the use of limited resources”1. Cisco experts offer a similar definition. This company is one of the world leaders in the field of information technologies and networks. According to their opinion, smart cities offer visibility into real-time city data for improving mobility, connectivity, and safety services. In 2010, the Global City Index was proposed to assess the development level of the most attractive cities in the world. This is the collective development of the international marketing and consulting agency AT Kearney, the American journal Foreign Policy and the Chicago Council on Global Affairs. This index includes five key indicators of the city development: business activity, human capital, information exchange, cultural interaction and livability. Each of these indicators is subdivided into more specific ones. For example, business activity is also evaluated on five components: the number of international conferences held in the city, volume of goods flows

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(through air and sea ports), capital markets, the number of leading companies in the world and from the “Fortune Global 500” with headquarters in a city. The Global City Index has already become popular worldwide. Cities of the world today compete to get this rating or seek for starlet. To get into this rating, cities invest in business, infrastructure, education, and provide stable growth and development. But to compete with other cities in the future, they must invest in their greatest value, which is human capital. The authors of Global cities note that it is very important for cities and companies today to plan in the present, but prepare for the future. The competition of cities for human capital and investment is growing in the contemporary world. Success in the past, which allowed to take the first lines in world ratings, does not guarantee the same in the future. The concept “smart city” includes many components. Expert, analyst and author of studies on urban and regional development, Professor R. Jiffinger identifies five areas for evaluating a smart city: competitiveness, human and social capital, quality of governance, transport system, quality of life and environment. According to him, smart city is doing well in all these areas. This is through good governance, environmental protection and care for the living conditions of city residents. Antonenko and Antonov (2014), Erohina (2019), Erohina (2018), Rachmawati et al. (2018), Ramachandran et al. (2018), the experts in the development of smart cities, has a similar opinion. According to him, to get the status of «smart city», the city should use ICTs. It is also necessary to define measurable performance indicators. Researchers of urban spaces Ivanov and Nurmuhametov (2019), Petkova (2019), Albino et al. (2015) offered three key indicators of “smart city”: – technologies as a key tool for transforming the urban environment; – human capital as a source of technology creation and development; – dialogue between authority and residents as a condition for the successful technologies implementation. According to them, a city can be called smart if it develops stably and the life quality of its residents improves. This is achieved through the effective management of investments in human capital and the IT infrastructure of a city. But only using the latest technologies does not yet make a city the smart one. At first, these technologies need to be fully compatible with each other. It is necessary to create a holistic integrated system. At second, technologies are secondary to the management system, which defines the development vector, monitors the implementation of tasks and analyzes performance indicators. Barlow and Bencheton (2019) say that the ability to attract talents is the main competitive advantage of a city. As a result, city becomes an environment in which creative people want to develop themselves and to help development of the city in which they live. He considers that another such advantage are technology. Economic growth and socio-cultural development in a city will attract new talents, and they, in turn, will attract or create a business. As a result, innovations are created that stimulate further economic growth. Florida (2002) and Florida (2008) indicated success factors for a modern city: communications, people, opportunities and money capital. Moreover, the competitiveness of cities leads to the achievement of national competitiveness. He also received

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the following empirical result: if the population of a city increases by 10%, then its income grows already by 30%. The author defines city as a place of interaction between human and financial capital. The main condition for the success of a city is the cooperation of smart people. It encourages innovation, develops markets, culture and everything else. The key terms of the E. Glaeser’s concept are also “knowledge”, “innovation”, “city of knowledge”, “knowledge economy”, etc. All these are necessary conditions for the creation and existence of a smart city. Consequently, human capital will necessarily be the basis of such transformations. This will be independently of whether its development is the cause or the consequence of digital transformation and the involvement of global corporations in this area. Most likely, the world leaders in the future will be those cities which today attract highly qualified specialists and talented people. This is a new human-centered concept. Corporations will play a key role in it. They will be important partners in development of cities. Corporations help to attract, form and develop talents, transform life in a city through new smart technologies.

3 Results Human capital: the role in creation of a smart city. Human capital is a combination of knowledge, skills and competencies, which are necessary to ensure the competitiveness of their owner in the labor market and for his quick adaptation to changes in modern society. Today, human capital (especially such its element as intellectual capital) becomes a key factor in the success of smart city projects. High-quality human capital makes possible the maximal using of the institutions and infrastructure of a city. It is necessary for complex socio-economic development, for initiating and correctly assessing changes. Therefore, human capital is a factor of the successful integration of digital technologies in the social and cultural processes. In all the reviewed by us concepts of a smart city, the most important role is assigned to the social environment. It should make the interaction between a city and residents most friendly, safe and intuitive. Otherwise, any changes do not make sense. It can be concluded that scientists, experts and analysts identify five main elements that a smart city includes: smart economy, smart people, smart management, smart communications and smart infrastructure. The main principles should be the improvement and development of the knowledge economy, human and social capital, the transport system, citizens’ participation in urban governance. As a result, it will lead to an increase in the life quality of city residents. Any modern city cannot function effectively without investing in human capital and infrastructure projects (transport, utilities, construction, new ICTs). But city may be considered smart only if these investments ensure sustainable economic growth, high quality of life, rational and environmentally friendly using of resources. Integrated security is also critical in creating a smart city. The socio-economic environment for the sustainable development of a smart city should be created through the use of modern technologies. It include the using of:

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– mathematical models of social interactions in an urban environment; – тexнoлoгий «big data» для пpoeктиpoвaния инжeнepнoй, coциaльнoй и кoммepчecкoй инфpacтpyктypы в гopoдe и eгo aглoмepaции, – “big data” technologies for the design of engineering, social and commercial infrastructure in a city and its agglomeration, as well as for studying and modeling of the circular migration processes; – modern technologies for the organization of urban infrastructure (projects “Smart Home”, “Modern School”, “Innovation Road”, etc.). Municipal authorities around the world take smart city development programs. This is done to find effective solutions to pressing urban problems. The using of digital technologies is the main component of these programs. It is necessary to optimize urban management and the interaction between public and private entities. The main aim is to ensure the sustainable development of cities and selected urban areas, as well as agglomerations. The most competitive cities in the world are London, New York, Singapore, San Francisco, etc. They did not become so due to luck. It happened through the implementation of a clear and well thought-out municipal policy. The key elements of this policy are human capital, smart investments and the desire to create a technological basis for city of the future. As a result, these cities became global economic, social and cultural centers. They attract both the population and business. All this would not be possible without the support of the human capital development. Therefore, promising cities should attend to this if they want to attract investment, business, private individuals, to provide everyone with comfortable conditions and security. Macro-strategy: the forming of human capital. So, cities have to attract, retain and develop human capital in order to improve or at least not lose their competitiveness. But the aim is not just to increase the population. It is necessary to maintain optimal for the city development population structure, which takes into account various age, gender, educational and other parameters. For this, cities need to keep the following principles: 1. Support and stabilization of the optimal population structure. The most developed modern cities have all the necessary mechanisms and tools for this. These are economic incentives, improving healthcare facilities and medical services, providing affordable and quality education, development programs for sparsely populated urban areas, and much more. 2. Expanding the areas and possibilities of using human capital, including the aged people. Clearly, the retirement and pre-retirement ages in modern highly developed cities are much different in comparison with other types of settlements. Therefore, a revision of employment policies, investment in technology and education, and retraining of older people are required. All this will allow prolonging the labor activity by 10–20 years. Consequently, there is a significant potential for increasing of using efficiency of the city residents human capital. 3. Forming, attraction and maintenance of talents. Talented people are always a minority in comparison with the total population. Therefore, the search for talent and the struggle for them can lead to serious competition between cities. At the same time, expanding the possibilities of self-realization for talented and gifted

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people helps to engage high-quality human capital from outside and keep own one. Cities can also improve the reputation and competitiveness by creating and promoting their own unique brand. Large corporations play a crucial role in this, providing platforms for the training and development of talented youth. 4. Combining the efforts of man and artificial intelligence (AI). The fast development of AI and computer technologies fundamentally transforms a number of sectors and areas of urban life, such as transport, medicine, education, the provision and consumption of goods and services. Today, researchers mainly study how similar technologies can make up for the shortage of labor. However, solving the problem of effective interaction between AI and living people in various spheres of the modern city life is no less important. Micro-approach: improving of individual well-being. Economic and infrastructural transformations are not necessary on their own. Their single final aim is to improve people’s daily lives, to make it more comfortable and safe. Therefore, it is not coincidence that cities with the most developed economies and infrastructure are also most comfortable for living people. Modern cities are entering a new era in their development. The balance of wide social needs and individual comfort of each resident will be crucial in it. Four main factors should contribute to this: 1. Creating a comfortable for life and available environment. People come to cities for job search, but the high quality of life encourages them to stay there. Not every city is so good. These are only cities in which a healthy environment is created, investments in infrastructure development are made, leisure activities of citizens are organized (museums, festivals, etc.). 2. Expanding job opportunities. Most people choose their place of residence based on the criterion of employment options accessibility. Therefore, the city authorities must offer its residents wide opportunities for employment or for their own business. This is necessary to keep the economically active population. Innovation, support for startup projects and a variety of forms of employment can not only improve the life quality of citizens, but also create a sense of social well-being in them. 3. Involvement of city residents in decision making. Modern cities need to focus more on the interests of citizens than classical ones. They should provide more active feedback and participation from individual citizens, their organized groups, nonprofit organizations, business, etc. 4. Support for diversity and inclusion. The most comfortable cities in the world are at the same time the most diverse in terms of lifestyles, nationalities or cultures. City authorities, scientists and experts must decide together how to create an open and inclusive environment. Such environment protects and creates comfort for all citizens, regardless of their religion, political views or income.

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Smart economy Smart people

Smart management Smart regulation Smart mobility

Smart city is a city with an economy based on ICTs and other smart technologies, with the required using of these technologies in production and business Smart city is a city, in which most residents have ICTs skills and a high level of education. This is a city with high quality of human and social capital Smart city is a city with the smart management that uses new forms of interaction with citizens (“e-governance”)

Smart city is a city with modern transport systems, technologies and logistics that improve urban mobility and quality of life Smart Smart city is a city with a safe and comfortable (“green”) environment, in environment which new technologies are integrated into the natural environment without harm to it Smart living Smart city is a city in which every resident is an active participant in interaction with the state and commercial services. He defines how they fit his needs himself. Smart city provides a high quality of life through personal safety, comfortable housing, friendly infrastructure, etc. Smart Smart city is a city with infrastructure based on intelligent systems, the infrastructure “Internet of things” and other smart technologies Source: made by the authors.

4 Conclusions The key features that distinguish smart cities from classic ones are presented in Table 1. The development of smart cities with a new urban, industrial, economic, social and environmental policy contributes to the new industrialization and transition to the digital economy. Smart cities create more attractive conditions for life, work and education, develop human and social capital, invite financial resources and business. The term “smart city” is used not only in relation to cities now, but also more widely. Smart cities are also agglomerations, suburbs and rural settlements if they use smart technologies. New digital technologies form new relationships between manufacturers, suppliers and consumers. Smart technologies and solutions go far beyond manufacturing. They transform logistics, marketing and other elements of business at all levels of the economy (city, region, country). They also change transport, energy systems and other infrastructure elements. This creates a new urban environment in which everything is integrated, interconnected and equipped with intelligent technologies. All this forms the industrial and technological basis for the being of smart cities. Their development becomes a key factor in the forming of a new society.

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References Albino, V., Berardi, U., Dangelico, R.M.: Smart cities: definitions, dimensions, performance, and initiatives. J. Urban Technol. 22(1), 3–21 (2015) Antonenko, V., Antonov, G.: Medium-term trends in the demographic development of the Volgograd population. Natl. Interes. Prior. Saf. 10(8(245)), 49–54 (2014) Barlow, M., Bencheton, C.L.: Smart Cities, Smart Future: Showcasing Tomorrow. Wiley, New Jersey (2019) Erohina, O.: Prospects for the creation of “smart cities” in Russia. T-Comm Telecommun. Transp. 12(4), 17–22 (2018) Erohina, O.: Growth points in the digital economy: smart city projects. Infocommun. Technol. 17 (2), 240–246 (2019) Florida, R.: In the Rise of the Creative Class. Basic Books, New York (2002) Florida, R.: Cities and the Creative Class. Routledge, Abingdon-on-Thames (2008) Ivanov, V., Nurmuhametov, R.: About the concept of “smart” city: discussion questions. Manag. Bus. Adm. 4, 15–26 (2019) Petkova, T.: The effectiveness of human capital management in a region in the digital economy, no. 11(433), pp. 95–101 (2019) Rachmawati, R., Hapsari, S.A., Cita, A.M.: Virtual space utilization in the Digital SMEs Kampongs: implementation of smart city and region. Hum. Geogr. J. Stud. Res. Hum. Geogr. 12(1), 41–53 (2018) Ramachandran, G.S., Radhakrishnan, R., Krishnamachari, B.: Toward a decentralized data marketplace for smart cities. In: Proceedings of the IEEE International Smart Cities Conference (ISC2), pp. 654–661. IEEE, Piscataway (2018)

Omnichannel as a Modern Concept of Interaction with the Consumer Nadezhda I. Arkhipova1(&), Gennadiy L. Azoev2, and Madina T. Gurieva1 1

Russian State University for the Humanities, Moscow, Russian Federation [email protected], [email protected] 2 State University of Management, Moscow, Russian Federation [email protected]

Abstract. The article deals with changes that have occurred in the process of consumers’ decision-making to purchase in the conditions of digital transformation. It was found that almost at all stages of the process, digital technology in general, as well as the Internet and social networks in particular, have a significant impact on the result of the purchase. Multichannel strategies no longer provide optimal results, as they are designed to ensure that different points of contact with the brand and different channels will be used by different consumers. In fact, the same consumer now uses different channels, moreover, it often happens simultaneously. This leads to the recognition of the need for enterprises to develop omnichannel strategies for interaction with consumers, resulting in a unified approach. Consequently, all efforts (in assortment planning, distribution channels, pricing policies, communications) should be aimed at complementarity and consistency with this end-to-end process of making a purchase decision. Keywords: Digital transformation Consumer behaviour JEL Code: M31


Digital marketing
Omnichannel



M16

1 Introduction The efficiency of any company depends on the consumer’s choice made in its favor. Since any manufacturer and seller wants the consumer’s choice to be in favor of their products (goods or services), and competition is intensifying in almost all markets, it is often the effective interaction of the company with the consumer that determines their choice. However, not all companies (company managers) understand that for a positive choice of the consumer it is necessary to establish an effective interaction with the consumer and, most importantly, how to do it in the changed conditions of the omnichannel environment.

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 530–537, 2021. https://doi.org/10.1007/978-3-030-59126-7_60

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2 History and Methodology The following methods were applied: universal scientific methods, including methods of idealization and formalization. Experimental research methods of observation, modeling, abstraction, comparison were also used. The study was based on the works of domestic and foreign experts on the studied problem (Aleshnikova et al. 2019; Gotwald-Feja 2017; Hossain et al. 2017; Rooderkerk and Kök 2019), as well as consulting firms and marketing agencies experience (McKinsey 2017). The digital transformation of the economy has led to changes in the interaction of manufacturers, sellers and consumers. The spread of the Internet, and especially the mobile Internet, has made the consumer accessible to online advertising and other digital communications, which are characterized by the possibility of targeting and personalization. More and more purchases have begun to be made in online stores, which has led to multichannel and rapid development of both online shops of manufacturers and retailers, such as eBay, Amazon, AliExpress. However, further development of digital technology has led to the fact that almost every consumer begins to simultaneously communicate in all available areas, and a new period has started—a period of omnichannel marketing.

3 Discussion and Results The omnichannel concept appears most vividly in retail, as this area is directly related to the new consumer approach to shopping, which was made possible by the increasing penetration of digital technologies into life. Their impact has changed the classic “consumer journey”—the process of making the purchase decision, the purchase itself and the behaviour afterwards. According to the traditional scheme (Engel et al. 1986), this journey included such stages as awareness of need, search, evaluation of alternatives, purchase, consumption, post-purchase evaluation of the product, followed by a further purchase or refusal to use the product later. In the omnichannel environment, the “consumer journey” is undergoing significant changes that require the attention of the manufacturer: 1. Instead of a “buy” point, there are “order” and “execution” points, which reflect the prevalence of online commerce and, consequently, those situations where the sales transaction and the actual transfer of goods are separated by time; 2. Due to the change in the behaviour of online buyers, who are quite often disappointed to see their purchase in the physical embodiment, and make a return much more often than it was typical of offline buyers, there is a new, optional, point of the “journey”—“return”; 3. “Post-purchase item evaluation” in the omnichannel environment is replaced by “post-purchase journey evaluation” due to the fact that the buyer now evaluates not only the product itself, but also the convenience of the process of making a purchase on the site or even in a traditional store, as well as the speed and accuracy of delivery, the adequacy of price, etc.

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4. At all stages of the “journey”, the impact of digital and Internet technologies is increasing. Thus, at the stage of awareness, the potential consumer is influenced by the company itself through targeted and personalized impact of digital marketing tools. At the same stage, the consumer can discuss their needs in social networks, consult, read reviews and opinions. At the stage of search, the consumer makes use of the Internet, both of resources controlled by the manufacturer (for example, an official website or an online store) and resources outside their control (blogs, price aggregator sites, sites of specialized online stores that also present competitors’ products). It should be noted that a potential consumer is most willing to consider information about those products that have already been evaluated and recommended by other representatives of “their circle”. This circle can be formed by age, gender, hobbies, needs, which the desired product is designed to meet, and other attributes. At the stage of evaluating alternatives, the impact of digital and social media (blogs, reviews, aggregators, own social media accounts, where the potential consumer can ask for advice and recommendations of their own choice) increases. At the points of “order” and “execution”, there are a number of alternative methods for making the transaction (through the website of the company itself, through a specialized multi-brand online store, through a mobile application, etc.) and receiving the goods (by mail, courier delivery, on the terms of pick-up from the store/from the warehouse/parcel automat, etc.). The impact of online technology is especially pronounced at the point of “return”: on the one hand, it is the growth of online commerce that contributes to an increase in the number of returns, and on the other hand, the company has the ability to use digital technology and prevent errors in the choice by providing more information, videos with a realistic demonstration of the size and function, the use of augmented reality technology, etc. And finally, the post-purchase evaluation of the “journey” is almost fully reflected on the Internet and social networks, spreading much faster and wider than in previous times, when the circle of communication of a person was limited to their real friends; 5. In the new environment, consumer-brand contact points (Baxendale et al. 2015) are associated with different channels—both controlled and uncontrolled. In the process of promotion, the client not only moves from stage to stage, but also passes from one point of contact to another, and even within one stage. The specificity of the omnichannel environment is that one and the same consumer constantly moves from one channel to another, from online to offline and vice versa; the number of touch points increases, and the transition from one to another is accelerated. New technical features, especially the spread of mobile Internet, allow the consumer to be present in the real and online environment simultaneously. For example, a person can compare alternative proposals on the aggregator’s website and read reviews of the product on social networks, while being in the store and viewing the product «live”. In addition, the “journeys” of different consumers are increasingly interconnected: consumer A can share his opinion with an unlimited number of people at anytime, anywhere, and this will affect consumer B’s behaviour to a much greater extent than watching paid advertising.

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Under such conditions, almost the only condition of competitiveness for a company is conscious formation of an omnichannel strategy. While a company with a singlechannel strategy trading could afford to be present in one environment, i.e. choose between a traditional store and an online store, and a company with a multichannel strategy could serve one group of consumers online, and the other one offline without any crossings, now the situation has changed—the same buyer has the opportunity to simultaneously be present and buy in both environments. Companies should focus their efforts on creating an end-to-end consumer journey, assuming that the same consumer will definitely seek and receive information and interact with the company at different touch points in different environments. Accordingly, all efforts (in assortment planning, distribution channels, pricing policies, communications) should be aimed at complementarity and matching this single route. The problem of interaction with the consumer in conditions of new level of technology development requires changes in the scheme of communications itself. The traditional approach to communication as a two-way process connecting the sender and the receiver, between whom information is transmitted, has an important feature in marketing: the main purpose is not only, and not so much to provide information, but also to convince the consumer of the value of the offered product and encourage certain target actions, desirable for the company (Hossain et al. 2017). To achieve this goal, the company (by transferring optimal data and incentives through various channels) has an impact on the consumer, taking into account their preferences, needs, immediate desires, as well as the impact that the consumer experiences from the external environment and under the influence of which their personality is formed. As a result of such interaction, mutual benefit is achieved: the client’s needs are clear to the manufacturer and satisfied, and the company, in turn, gets the desired result, including the financial one. However, it became clear in the mid-1990s that this understandable scheme was losing its effectiveness. The impact on the consumer through the use of numerous “traditional” channels began to diminish for a number of reasons, the main of which was a change in the consumer’s attitude to the message received from the company. The consumer aims at two-way communication with the company, they are more demanding not only to the functional characteristics of the product or service, but also to the social position of the selling company, they trust in advertising less and listen to the opinion leaders more. The presence of a large (and constantly expanding) number of channels of communication allowed different categories of consumers to use one (or several) channels that are most convenient for them, and it is not necessarily that these same channels were the most financially advantageous or easily managed from the point of view of the manufacturer and seller. However, it is important to communicate with them through the most preferable channels for specific consumers. This is what companies do when they really want to interact (not just communicate) with the consumer. A very important point is the right channel selection from the perspective of the target audience. However, being correct in terms of attitude to the consumer, this approach is rapidly becoming obsolete in terms of covering as many of them as possible. Companies that are aware of this are increasingly using more than one communication channel, which increases the degree of interaction with existing and, most

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importantly, potential consumers. This approach, in which different channels are offered to different consumers, is called multichannel. Multichannel has proven to be very effective, and over the past decade many companies have adopted this form of interaction with consumers. But the rapid development of technology, including in marketing, required even greater contact with all consumers. This approach is ensured by the concept of omnichannel. The main idea of the omnichannel is to obtain data about the client from all possible communication channels into a single system to establish the most accurate interaction with them. The main difference from multichannel is that in this case there is a complex use of all channels of communication, with the creation of end-to-end management of communications. At this, each individual channel is informationally (and most often technically) connected with the others. That is, the omnichannel is determined by the maximum possible (at the moment) depth of integration of all communication channels to obtain information from the consumer and to form a single, most attractive to them, offer of goods or services. At the same time, omnichannel implies, of course, presence in the Internet environment. This is due to the fact that communication channels and tools are easier to link with each other on the Internet and form them into a single system. But modern digital technologies have also moved beyond the Internet. Collecting information about consumers was previously possible not only on the Internet. Thus, it is quite common to receive information from different individuals, such as filling out a questionnaire with data in cooperation with banks and other state and commercial organizations. Loyalty programs and CRM systems accumulate rather large data sets. Digital technologies have made a better and more personalized collection of information from individuals possible both inside and outside the Internet space. For example, the Japanese company Acura switched to face recognition technology in its vending machines a few years ago (Rooderkerk and Kök 2019). The range offered to the customer for real time purchase depends on their demographic characteristics. KFC in China, in cooperation with the Baidu search engine (Google’s local counterpart), uses a similar technology: the client will first be offered a range that best suits their age and gender group, and when they visit again they will be recognized and offered to repeat the previous order (Mironenko 2016). Understanding that omnichannel is, first of all, the collection of maximum possible information about consumers (potential and actual) explains the fact that it is the most necessary instrument of retailing. We can say that omnichannel has formed new trends in retail marketing. In a way, omnichannel changes the traditional business model in retail and creates a different quality of demand. Accordingly, new marketing approaches are required. Consumer behaviour is changing and so the space in which contact with consumers takes place must change, too Information about customers is becoming increasingly important in value creation. Any solutions for customers are valued by them in the presence and combination of such factors (of course, besides the key ones—price, range, etc.) as convenience, speed, clarity of the purchase mechanism, etc.

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Digitalization leads both to new channels of communication with clients and to more efficient use of the “traditional” ones. Thus, on the one hand, thanks to the Internet, retail trade has ceased to be geographically tied to the consumer, or rather such dependence has weakened greatly. This proved to be very convenient for consumers, but adversely affected the competitiveness of many “traditional” stores with a long history. On the other hand, the issue of geography and location continues to be relevant: in many cases, a major breakthrough was the ability to identify a client by geolocation and offer them the most advantageous offer based on their location and time of day. A Dutch pharmacy chain adapts its Internet advertising accordingly to promote its own brand of sunscreen: depending on the customer’s location, the temperature and distance to the nearest outdoor leisure facility are shown to them. Depending on the time of day, the client is either shown sunscreen and encouraged to make a purchase at the nearest pharmacy (at daytime), or skin care products after tanning are shown and the customer is offered to go to an online store (in the evening and at night). Another example of customer-friendliness is the creation of visual images using virtual reality technologies, such as a simulated bathroom or a kitchen to select equipment and materials that match different parameters. IKEA has already become a classic example, when with the help of virtual reality, the client can “install” the furniture in their house and see if it suits them personally. Thus, IKEA reduces the number of returns and the degree of possible dissatisfaction of the customer due to incorrect assessment of the space without placement in the real room, even if all the information provided by the company is relevant and there is no company’s fault in the error. A fairly new phenomenon of “augmented reality” is close to the concept of “virtual reality”. The application of augmented reality has great prospects for obtaining detailed information about consumers in general. Thus, in clothing stores customers project their clothes, choosing the style, color, etc. This way, the probability of the right choice increases, while the probability of return decreases. Also, collecting information about the possible choice of consumers allows them to make an offer in the future with an emphasis on their preferences. Omnichannel is based on constant market monitoring, analysis of so-called Big Data, etc. In fact, omnichannel required a new approach to marketing analysis and research. The increase in volumes of information, its integrated processing, development of information management algorithms, demand forecasting on the basis of this work led to a significant change in the mechanism of interaction with consumers. Traditional advertising technologies are increasingly combined with digital communications, which increases the focus of communications on a particular client. The range of measures to stimulate sales has expanded greatly. Another important factor is that digital communications encourage consumers to initiate contacts with companies whose products they intend to purchase.

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4 Conclusions The specifics of marketing communications in an omnichannel environment are related to the diversity of its elements and the complexity of their interrelationships. These connections are multidirectional, and the consumer is placed in the very center of the system, like in the concept of “Marketing 360”, and the consumer is not only the object, but also an active subject of communication (Gotwald-Feja 2017). In the omnichannel environment, in contrast to the multichannel environment, not only the company integrates its messages to convey information to the consumer, but the consumer is able to get the additional information they need, and feels that each communication tool used at a particular time, aims directly at meeting their individual needs. The level of individualization achieved in an omnichannel environment is absolutely unprecedented. At the same time, messages transmitted through different media should not be identical, but complementary. Superfluous (information) efforts in such system are eliminated from consumer experience, and needs are satisfied more fully and quickly that, as a whole, underlines the customer centricity of the whole omnichannel concept.

References Aleshnikova, V.I., Beregovskaya, T.A., Sumarokova, E.V.: Omnichannel marketing strategy. Vestnik universiteta (GUU) – 2019, no. 2, pp. 39–45 (2019) Baxendale, S., Macdonald, E.K., Wilson, H.N.: The impact of different touchpoints on brand consideration. J. Retail. 91(2), 235–253 (2015) Engel, J.F., Blackwell, R.D., Miniard, P.W.: Consumer Behavior, 5th edn. Dryden, Hinsdale (1986) Gotwald-Feja, B.: Komunikacja marketingowa w realiach omnichannel – ujęcie modelowe. Marketing i Zarządzanie 11, 261–271 (2017) Hossain, M., Kabir, S., Rezvi, R.I.: Influence of the integrated marketing communication on brand orientation and market orientation: a literature review. Aust. J. Bus. Sci. Des. Lit. 10(1) (2017) Marketing Communication in Omnichannel Reality – A Model Approach. https://www. researchgate.net/publication/323019809_Marketing_Communication_in_Omnichannel_ Reality_-_a_Model_Approach. Accessed 13 Feb 2020 McKinsey: Building omnichannel excellence (2017). https://www.mckinsey.com/industries/ consumer-packaged-goods/our-insights/building-omnichannel-excellence. Accessed 12 Feb 2020 Mironenko, V.: KFC Restaurant uses facial recognition technology to offer a dish (2016). https:// 3dnews.ru/944969. Accessed 12 Feb 2020 Nagy, E.: New consumption spaces and cross-border mobilities. In: Hall, D. (ed.) Tourism and Geopolitics. Issues and Concepts form Eastern and Central Europe, pp. 142–158. CAB International, Wallingford (2017) Pantano, E., Timmermans, H.: What is smart for retailing? Procedia Environ. Sci. 22, 101–107 (2014)

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Rooderkerk, R.P., Kök, A.G.: Omnichannel assortment planning. In: Gallino, S., Moreno, A. (eds.) Operations in an Omnichannel World. Springer Series in Supply Chain Management, vol. 8. Springer, Cham (2019) The Wall Street Journal: Wal-Mart builds supply chain to meet e-commerce demands (2015). https://www.wsj.com/articles/wal-mart-builds-supply-chain-to-meet-e-commercedemands1431016708. Accessed 10 Feb 2020 The Wall Street Journal: Target says online sales surge tied to store inventories (2016). https:// www.wsj.com/articles/target-says-online-sales-surge-tied-to-store-inventories-14563482. Accessed 12 Feb 2020 The Wall Street Journal: Rampant returns plague e-retailers (2013). https://www.wsj.com/ articles/rampant-returns-plague-eretailers-1387752786. Accessed 10 Feb 2020

Forming Analyst’s Competencies of Specialists for Modern Transport Companies Viktoriya V. Degtyareva1(&) , Svetlana Y. Lyapina2 and Valentina N. Tarasova3

,

1

2

State University of Management, Moscow, Russian Federation [email protected] National Research University “Higher School of Economics”, Moscow, Russian Federation [email protected] 3 Russian University of Transport, Moscow, Russian Federation [email protected]

Abstract. Implementation of Big Data Analysis (BDA) and intelligent analytical methods in modern transport companies is a prerequisite for their efficient functioning in the Digital Economy (DE). Integration new intelligent technologies and new organizational principles into transportation is the main reason of rapid changing functions and competences of specialists in transport companies. The paper includes justification and description of a new professional activity in modern transport systems – Transport Analyst who must be ready to solve different sophisticated cross-functional and multi-objective tasks both in technological strategy and in operational management. Development of digital competencies (DC) on transportation becomes a new direction of the educational and training programs at universities. The paper also includes some examples of analytical tasks of the implementation of Industry 4.0 elements in transport systems and a description of a new approach to the preparation of a new type of analysts for transport that are able to solve these tasks. Keywords: Transport analyst
Digital competencies
Intelligent analytical system for managing the transportation
Artificial intelligent technologies
Organization and management of transportation JEL Code: I230


I260

1 Introduction The majority of researchers and specialists have a common point of view that nowadays the global economy is transforming into digital production (Medovnikov et al. 2012; Perez 2009; Schwab 2017, etc.). According to recent research by PWC (Puha 2017), there are five key factors changing the global economy radically: (1) new tendencies at global market, such as new moving forces and new strong players (“national champions” or “unicorns”); (2) changes in demography, high rate of population growth and migration; (3) urbanization and increasing demands for quality of © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 538–547, 2021. https://doi.org/10.1007/978-3-030-59126-7_61

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life; (4) progress in science and technology; (5) resource limitation and global climate change. That’s why digital transformation is a new main trend of development for industrial companies not only in Russia but around the world, too. According Microsoft analytical report (Putevoditel’ v budushchee 2018), about 60% of industrial companies in Eastern and Central Europe have included digital transformation to their strategies. New information technologies (such as VR/AR – Virtual/Added Reality, IoT – Internet of Thing, Cloud Technology, BDA, ML, etc.) impact on all branches and sectors of economy. These technologies influence on service sector because it is close and has direct communications with customers. As a rule, to improve customer’s satisfaction transport companies search new technological possibilities which allow to reduce costs, raise quality or add new value of products and services (Oslo Manual 2018). In case of digital transformation of a transport company, all changes are based mainly on implementation of a special IT named as “smart” (if it connects to customer) or “infrastructural” (if it indirectly affects customer satisfaction). Because of long life-cycle of transport services the main part of digital innovations aims to infrastructural objects, i.e. they are characterized as “infrastructural” ones. According to the result of the authors’ research in general Russian transport companies elaborate their digital transformation strategies meaning mainly automatization of productive functions: driverless operation, automatic control and selfregulating equipment, active monitoring of infrastructural objects and supporting processes, etc. For example, Russian Railways and Moscow Metropolitan announced that since 2020 their joint project “Moscow Central Circle” will be operated with driverless carriages. Another example: position and moving parameters (direction, speed, number of passengers inside, etc.) of each bus, trolley or tram is controlled in real time at Moscow Passenger Transportation System. Unfortunately, often each innovation is included in technology development strategy of transport companies as a relatively autonomic project without elaborating a common base. Sometimes very effective innovations don’t fit each other even in one transport company and it cuts down some useful results of their implementation. For example, a company has bought high-speed vehicles and modernized old vehicles to raise their cargo capability; without the optimization of operation infrastructure efficiency of the company will decrease as the increase of a number of vehicles functioning will create difficulties in traffic, average velocity decrease and a decline of clients’ satisfaction. It’s common practice when experts speak about digital technologies in transportation and logistics they mean driverless vehicles, automatic warehouses and smart hubs, and other “hard” innovations more often. No doubt that all of these solutions are very useful and effective. But it’s necessary to notice, all of them are elaborated by companies which don’t belong to transportation, and strictly speaking, the implementation of these digital solutions can only be viewed as a derivative of real technology innovations in other industries (machine-building, metallurgy, chemistry, etc.). Despite digital base of hard innovations in transportation and logistics equipment they are only prerequisite of real digitalization in infrastructural industries where the most significant changes base on new approaches to make decisions. When a transport company buys a new smart vehicle it would be effective only if the usage of this vehicle was changed and became smart, too. So, when we speak about the digital

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transformation of a transport company we must first mean a real innovation in “soft” area (planning, operation model, software, etc.) but not in “hard” one because the new equipment is designed only for real business development of transport companies. The importance of “soft” innovations in digital economy was underlined by OECD experts when they prepared 4th Edition of Oslo Manual (Oslo Manual 2018). In addition to 4 types of innovations which were highlighted earlier a new group of innovations (“product and business process development”) was included in the classification as a special type, the importance of which is growing in digital transformation process. To maintain and strengthen their competitiveness in the digital economy transport companies have to develop a dynamic and effective innovation activity. The main focus of management’s attention should be on both – “soft” and “infrastructure” – innovations, which mostly relate to the management system of transport companies (organization of transportation and regulation of infrastructure, making strategic and operational decisions, developing an intelligent communication system with customers, partners, stakeholders and other external agents, etc.). Moreover competition between different transport companies (both among themselves and between different types of transport) is replaced by relations of collaboration and partnership (for example, the joint operating flights by different airlines, jointly and severally responsible for the delivery of cargo in united supply chain of logistics companies, etc.). Multimodality and collective ownership and usage of hubs are becoming more frequent in transportation and logistics. Accordingly, the system of external management communications should become more open in transport companies, and when making decisions in the field of technological strategies, the external context and a wider coverage of factors of the external industry environment becomes significant. Thus “product and business process development” as the 5th type of innovations (Oslo Manual 2018) must take a central place in technology development strategy of transport companies. It’s a new type of innovations for transport companies and to be successful in this area it is necessary to have a competent staff including specialists with new analytical competences.

2 Methodology To find out new requirements to transport analysts and elaborate new educational programs, we studied modern trends in transportation. 2.1

Changing Approaches to Strategic Decision Making in Transport

To make a correct decision in transport and logistics area in modern conditions it’s very important to find out many different internal and external factors and to combine them in the sophisticated model. Unfortunately, classical analytical models use limited number of parameters to justify a decision. For example, famous economical models generate systematic mistakes because described functions include quantitative variables and if an impact of only one parameter changes whole model needs to be updated.

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Now when rates of technological changes are very high methods of correlative analysis and other economic (econometric) models are incorrect. In particular, it is demonstrated by forecasting errors based on economic correlation models. Showing quite high accuracy in retrospective calculations, these models do not always adequately describe the real future. So, for example, several years ago, such kind of models was used as a basis for developing a strategy for the development of Russian economy, but a number of strategic tasks such as creating high-performance jobs, productivity growth, etc., were unfulfilled, as the predicted targets – parameters of development – were evaluated incorrectly. Moreover for service branches, quality of human capital makes a big difference. Such qualitative factors as a structure of human capital, competences, tacit and implicit knowledge, image and reputation and many others influence on business results stronger than trivial number of worked person-hours. But based on quantitative approaches economic models are useful for explaining causal relationships in the process of learning, but are not useful in making real business decisions. Thus traditional economic models work properly only in sustainable conditions, but if the rate of environmental change is raising, the possibility of mistake is increasing because new significant forces appear and old ones lose their power. On the other hand, there is a growing need for early detection or prediction of the emergence of new factors and trends, the assessment of weak signals and implicit driving forces. This need is particularly acute in infrastructure sectors with a complex and expensive material and technological base, where the cost of error in making strategic decisions is quite high. For example, the decision to build a transport highway without forecasting the needs for transporting goods and passengers, taking into account both the mobility and solvency of customers, and the prospects for alternative transportation and new technological opportunities. In addition, possible “strategic surprises” in the form of irrational political decisions, natural disasters and other unpredictable factors should be taken into account. Additional complexity is caused by the fact that the building or modernization of infrastructure facilities requires not only significant investments, but a long time to realize the project, that is, a decision must be made several years before actual operation begins, when significant factors may either not manifest or act differently. Additional complexity is caused by the fact that the creation or modernization of transport infrastructure facilities requires not only significant investments, but a long time to implement the project, that is, a decision must be made several years before actual operation begins, when significant factors may either not manifest or act differently. Due to the fact that most of the traditional methods and models turn out to be less and less compliant with the requirements of dynamically changing environment, it becomes necessary to elaborate new approaches to making managerial decisions that would maximize capabilities of artificial intelligence-based information technologies as maximal as possible. New approaches to decision-making should provide a justification for the development strategies of transport systems and form the basis of operational models of operation for the efficient and reliable transport of goods and passengers. This is a task that must be solved not only by science, but also by education, which should prepare new specialists who own modern analytical tools.

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Technological Trends in Transportation

According to the Industry 4.0 paradigm (Schwab 2017; Baker 2015; Feshina et al. 2019) the rapid developing digital transformation of transport leads to changes in personnel structure of companies: a number of professions and specialties are losing their value or disappearing, in the same time the demand for new competencies (Sergeeva et al. 2019), which were previously either unclaimed or implicit, is appearing and growing. For example, as a result of implementation of automatic control and diagnostic systems for monitoring railway track, on the one hand, a number of track workers are reducing, but on the other hand, it is increasing new needs for specialists who would be able to form an optimal support and repair plan path based on the prediction of its condition by using data flow from the measuring equipment. Similar changes occur in other functional divisions of transport organizations. The general trend of these changes can be defined as follows: the scope of work with the direct participation of workers is reducing, but new functions and operations in the area of creating and configuring technological solutions without human participation are appearing and developing. The more creative, intellectual and difficult it is to formalize an activity, the faster will be its demand in the digital economy. This trend was predicted by P. Drucker, when he attracted his attention to the fact that most management functions are routine and would be automated in future: “Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs” (Drucker 1954). In modern conditions, this quote is applicable to almost all types of activities and it often means a change in the content of management activities as well. Structural shifts occur not only as a result of redistributing tasks, responsibilities, productive operations between workers’ and managers’ workplaces, but also as a consequence of changes in the functional composition in company’s management system. In addition, experts are increasingly talking about digital competencies as a cross-functional area, the value of which is constantly growing in companies. In transport, the key changes are associated with such new principles of organization as multimodality, uberization, intelligent (smart) transportation technologies, and intelligent control systems. Multimodal transportation is the organization of routes using several types of transport. Despite the obvious advantages for customers, the interaction and partnership of various transport organizations in this area is not developing fast enough. Nevertheless, in the field of passenger transport there are a number of successful examples of the development of multimodal transportation, primarily where different types of transport operate under control “from one center” (for example, urban transport systems operating by municipal governments and including buses, trolley buses, trams, subways and railways). Examples of multimodal freight traffic can be found in major transport and logistics holdings engaged in international transport with offices around the world. Multimodality requires the development of logistics up to 4PL and 5PL levels, as a rule provided by various types of transport belonging to the same holding structure (Omarova et al. 2019). The idea of multimodality is not new, but its implementation becomes possible only with the development of Industry 4.0 paradigm in

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various transport companies. Multimodal transportation requires not only a creation of docking stations (interchange systems for passengers or cargo hubs), but also a solution of complex analytical tasks on coordinating routes and schedules, optimizing flow topology, general monitoring and coordination of traffic. According to ILF, “multimodality in transport requires sound knowledge of the traffic processes and the interaction between different types of transportation as well as modern tools to be able to make accurate forecasts of traffic volumes and to simulate movement scenarios.” (Pannel 2015). The main trend of digitalization in service is based on “uberization” phenomenon. The term uberization was suggested as a common practice in urban taxi companies; the first of them was UBER (Baker 2015). Uberization means “providing on-demand services for as many needs as possible” (Cambridge Dictionary 2020). Other authors (Multimodal Transportation 2020) describe “uberization” as a process of elimination of agents and dealers in supply chains: modern computer and mobile technologies allow simplification of contacts and negotiations between producers and customers. Uberization is a new principle of organization of transport systems based on a special multifunctional IT platform. Uberization as a new organizational model of transport systems is based on modern information and communication technologies, including mobile services, cloud storage, distributed computing, management and protection of high-loaded data processing systems, streaming data analysis, etc. To develop all of these technological blocks of uberization it is necessary to elaborate and support virtual models describing the movement and the state of vehicles in the relevant infrastructure. These models, in turn, are developing by new type analysts with complex competences in the field of modern IT, mathematics, and logic, applied to the tasks of transport logistics and the actual tasks of organizing the transport of passengers and goods. In general, intelligent transport technologies intend to ensure operational management. They can be divided into two groups: technology for driverless vehicles and smart traffic control technology for transport infrastructure. Both types of intelligent technologies are also developed on the basis of analytical models; they might be named as complex cyber-physical systems. The central place is occupied by the Internet of Things, which integrates knowledge in such areas of mathematics as the topology of complex networks, the identification and recognition of anomalies in the time number series (streams), as well as competences for the development of information technologies such as optimization, machine learning and predictive analytics. Accordingly, transport companies have a growing need for new type of analysts who are able to formulate terms of reference and develop the concept of technological implementation of intelligent (smart) technologies for transport systems. Intelligent management system is a core element of transport company in digital economy. The management system makes strategic decisions that determine the efficiency of transport companies. The more factors are included in a model of making strategic decisions, the more accurate and close to reality the result will be. Therefore, the elaboration of intelligent management systems for transport companies bases on formation of a united platform for all functional management tasks that are currently implemented at Russian transport enterprises independently, with separate and unrelated databases (ERP, HR-Analytics, etc.). As a result, in the process of making

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complex cross-functional decisions, specialists face conflicting data and performance criteria; decisions within one functional service contradict the decisions of another division, which inevitably leads to decreasing quality of the strategy and reduces the efficiency of the transport company. The tasks of an intelligent transport management control can be divided into internal and external. Internal tasks are focused on full or individual automation of routine business processes (financial accounting, HRM, planning, procurement, etc.). Creating a united corporate platform not only eliminates the contradictions of the autonomic databases, but significantly reduces decision-making time. The integration of functional databases of a digital company allows you to create new management models and make adequate management decisions. For example, at present, in the procurement of the maintenance of transport infrastructure in Russian companies, as a rule, following specialists take part: (1) engineers responsible for the condition of the track; (2) procurement specialists; (3) representatives of financial services. At the same time, short-term economic interests prevail, because a smaller quantity of necessary materials with lower quality is often acquired. External tasks of the management system provide stable relations and productive relations with clients, external stakeholders, and business partners. For service companies (including transport enterprises), the quality of implementation of external management tasks becomes a critical success factor, and the operational integration of external requests and factors increases the flexibility and dynamism of organizations. To create intelligent control systems for transport companies, it is necessary to form a unified decision-making methodology across all functional areas and integrate offline databases. That’s why there is a new strong demand for transport analysts, who would be able to define structure of tasks and describe new business processes on the base of new intelligent IT solutions in companies realizing digital transformation of their businesses.

3 Results 3.1

Competencies of Transport Analysist in Digital Economy

The new trends (listed above) in organization of cargo and passengers transportation and management of transport companies create a background to considerate a new professional activity with special competencies. Therefore, it makes sense to describe both the composition of these competencies and approaches to their development. According to the previous description there are 4 groups of competencies of transport analysist (Fig. 1): IT – Information Technologies, CS – Computer Science, M – Math, T – Transport Technologies. To develop these competencies it is necessary to elaborate new educational programs combined with knowledge in different areas (Fig. 1) and aimed to solution of real practical tasks of digital transformation at transport companies.

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Fig. 1. Structural model of competencies of transport analysist in digital economy (IT – Information Technologies, CS – Computer Science, M – Math, T – Transport)

3.2

Innovative Practice in Developing Transport Analyst Competencies for Modern Transport Systems

The period of IT and Computer Science updates is currently about 2 years. Fundamental Informatics and Applied Mathematics are rapidly developing, too. We can watch a dynamic generation change of transport machines and infrastructural equipment. That’s why we face to a difficult task for education: because the cycle of training bachelor-level specialists is 4 years, and it is 2 years for master degree, the knowledge gained in teaching students becomes obsolete during both of these periods. In addition, there is no time to turn new knowledge and best practice into textbooks and methodology of teaching. Thus, the traditional model of developing new educational programs, which are popular among Russian universities, is of little use for the dynamically carried out digital transformation of transport. A new model of education includes direct students’ participation in projects of digital technology for real transport companies. It is a modified model of “learning by doing” based on close and active collaboration with specialists and consulters of ITcompanies, academic and industrial scientific and research institutes, R&D centers, etc. (Fig. 2). A transport company with general consultant makes a project of its digital transformation. These tasks define activities in special laboratories at universities where students participate in both research and R&D projects of digital transformation of a real transport company. This approach allows synchronizing processes of generation of new knowledge and developing competencies of future transport analysts. The MSc programs in transport analysis are applied, focused on the formation of competences, organically combining deep theoretical knowledge in the field of engineering and technology with modern and effective analytical methods, models and tools. It is aimed to develop students’ ability to identify technical, technological, organizational, economic and social problems of the transport and logistics systems and to discover new opportunities for increasing their effectiveness, and therefore the

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Fig. 2. New model of developing competencies of transport analyst in digital economy (IT – Information Technologies, CS – Computer Science, M – Math, T – Transport)

training is complex and interdisciplinary. Based on the best traditions of high-quality engineering education, training of business analysts and economists, the program accumulates rich experience and accumulated empirical base (including database of statistics of various types of transport) in the field of transport and logistics systems.

4 Conclusions The described approach to developing Master’s degree program was elaborated with the participation of the Association of Manufacturers of Railway Machinery, Russian Railways OJSC, Aeroflot PJSC and other employers and is fundamentally new in the domestic system of higher education. Such kind of programs provides for the integration into the educational process of technological disciplines that are traditional for the training of engineers, as well as disciplines that form the basis of organizational and economic design and modeling. In addition, training includes an in-depth study of information technology and specialized tools that allow you to create and develop digital models of transport and logistics systems. The program provides for the inclusion of modules hosted on open platforms for mass training courses from leading Russian and foreign universities.

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References Medovnikov, D.S., Rozmirovich, S.D., Saraev, V.V.: Zhrebij eshche ne broshen. Expert, #2(785) (2012). https://expert.ru/expert/2012/02/zhrebij-esche-ne-broshen/. Accessed 11 Feb 2020. (in Russian) Perez, C.: Technological revolutions and techno-economic paradigms. Camb. J. Econ. 34(1), 185–202 (2009) Schwab, K.: The Fourth Industrial Revolution. Crown Publishing Group, New York (2017). 192 p. Puha, Yu.: Industrial’naya revolyuciya 4.0 (2017). www.pwc.ru. Accessed 11 Feb 2020. (in Russian) Putevoditel’ v budushchee: Cifrovaya transformaciya stalareal’nost’yu dlya predpriyatij v stranah CVE (2018). https://info.microsoft.com/CE-DIGTRNS-CNTNT-FY19-10Oct-22-Guidetothe futureDigitaltransformation-MGC0003199_01Registration-ForminBody.html. Accessed 11 Feb 2020. (in Russian) Oslo Manual: Guidelines for Collecting, Reporting and Using Data on Innovation, 4th edn. (2018). https://doi.org/10.1787/9789264304604-en. Accessed 11 Feb 2020 Baker, M.: Digital Transformation (Digital Expertise), 2nd edn. CreateSpace Independent Publishing Platform, Scotts Valley (2015). 226 p. Feshina, S.S., Konovalova, O.V., Sinyavsky, N.G.: Industry 4.0—transition to new economic reality. In: Popkova, E., Ragulina, Y., Bogoviz, A. (eds.) Industry 4.0: Industrial Revolution of the 21st Century. Studies in Systems, Decision and Control, vol. 169. Springer, Cham (2019) Sergeeva, M., Shilova, V., Evdokimova, A., Arseneva, N., Degtyareva, V., Zuykov, A.: Future specialists’ socialization in the context of competence approach. PráXis Educacional 15(34), 571–583 (2019). https://doi.org/10.22481/praxisedu.v15i34.5796 Pannel, D.: The ‘uberisation’ of the workplace is a new revolution (2015). https://www.euractiv. com/section/social-europe-jobs/opinion/the-uberisation-of-the-workplace-is-a-newrevolution/. Accessed 11 Feb 2020 Multimodal Transportation/ILF Consulting Engineers. https://www.ilf.com/th/geschaftsbereiche/ verkehr-bauwerke/multimodal-transportation-tha/. Accessed 11 Feb 2020 Cambridge Dictionary: Uberization (2020). https://dictionary.cambridge.org/. Accessed 11 Feb 2020 Drucker, P.: The Practice of Management. Harper & Row, New York (1954). 404 p. Omarova, Z.K., Nikishov, S.I., Ellaryan, A.S., Bobryshev, A.D., Kamchatova, E.Yu.: Information technology in logistics systems: problems, solutions, innovations. J. Adv. Res. Dyn. Control Syst. 10(10S) (2019). https://doi.org/10.5373/jardcs/v11sp10/20192845

Modified Informatization Index of Children’s Life Igor Krivolapchuk1,2(&) , Maria Chernova3 Anastasia Gerasimova3 , Vadim Chicherin2 and Vladimir Myshyakov4

, ,

1

4

Federal State-Funded Scientific Institution, Institute of Developmental Physiology, Russian Academy of Education, Moscow, Russia [email protected] 2 Federal State-Funded Institution of Higher Education, State University of Management, Moscow, Russian Federation [email protected] 3 Institute of Developmental Physiology, Russian Academy of Education, Moscow, Russian Federation [email protected], [email protected] Educational Institution, Grodno State University named after Yanka Kupala, Grodno, Belarus [email protected]

Abstract. Today, there is an urgent need to develop simple, reliable and informative methods to measure the informatization level of children’s life that would be suitable for assessing the daily usage rate of computer equipment and digital technologies. The purpose of the study is to substantiate through experiment a modified informatization index of life activity, suitable for assessing the usage rate of computer equipment and digital technologies in the daily life of 6–7 and 8–9year old children. Methodology. The population study covered preschoolers of 6–7 years (n > 2500) and schoolchildren of 8–9 years (n > 2800) from different regions of the Russian Federation. The experimental study also involved 6–7-year old (n = 203) and 8–9-year-old children (n = 120). The study calculated screen time, computer load, TV time, the informatization index, the duration and quality of sleep. Also, heart rate, blood pressure, height, and weight were measured. On the back of this information, indicators of autonomic homeostasis, adaptive capabilities, and physical development were computed. Findings. After analysis of statistical data bulk, we proposed and experimentally substantiated a modified informatization index (Imod), involving the time of computer equipment use and the total duration of wake time during the day. It has been established that Imod is highly stable, consistent, and factorvalid. Given the results for children of age groups under consideration, we made up 5 functional Imod classes. Finally, we have found statistical differences by several indicators of the functional state and physical development of children due to the informatization of their lives. © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 548–557, 2021. https://doi.org/10.1007/978-3-030-59126-7_62

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Conclusion. We have substantiated a modified informatization index of children’s life (Imod), which is defined by high stability, consistency, and validity. Besides, we have revealed differences in the functional state and physical development of children, explained by the high and low rate of informatization. Keywords: Informatization
Reliability and validity analysis
Screen time
Computer load JEL Code: I10


Grading
Factor


I12
I20

1 Introduction In recent years, these problems have been in special focus in Russia and abroad. Research centers, research laboratories and university departments of most developed countries are working out various issues of children’s life informatization. Despite the unquestionably positive effects of using computer equipment and digital technologies in all areas of children’s life, the potential risks to their development and health associated with the excessive use of informatization means also can’t be denied (Kuchma 2015; Straker et al. 2018; San’kov and Kuchma 2019; Hinterlong et al. 2019). Plenty of scientific papers has shown that in the context of general informatization can occur imbalance between the volume and usage rate of computer equipment and digital technologies, on the one hand, and the peculiarities of the functional state of the child’s body at various stages of age development, on the other hand (Arora et al. 2014; Körmendi 2015; Kuchma 2017; Thapa et al. 2018). Today, there is an urgent need to develop simple, reliable and informative methods to measure the informatization level of children’s life that would be suitable for assessing the daily usage rate of computer equipment and digital technologies. The purpose of the study is to substantiate through experiment a modified informatization index of life activity, suitable for assessing the usage rate of computer equipment and digital technologies in the daily life of 6–7 and 8–9-year old children.

2 Methodology The population study covered preschoolers of 6–7 years (n > 2500) and schoolchildren of 8–9 years (n > 2800) from different regions of the Russian Federation. The experimental study also involved preschoolers (n = 203) and primary school students (n = 120) of the corresponding age referred to the basic medical group for health reasons. The use of information technology and computer equipment in children’s daily routines has been monitored on the basis of the survey. Screen time has been calculated from children’s activity timing, a questionnaire survey of parents, careers or teachers (Guerrero 2018; Ghekiere et al. 2018; Hardy et al. 2018).

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The volume of the computer load (CL) has been computed as the total indicator of usage time of digital devices during the day and week. For sleep assessment, children together with their parents every morning filled out a special diary during the week. Sleep diaries have become widespread in foreign studies (Morin 1993). The index of informatization (I) has taken into regard the time of using informatization means during the day (percent) (Kuchma and Tkachuk 2015). The tension of regulatory systems has been estimated by a mathematical analysis of the heart rate (Shlyk 2009). The heart rate has been recorded at rest in a seated position with the II standard lead for 5 min. Such variables as the average duration of the RR interval (RRNN), the spread of cardio intervals (MxDMn), the mode amplitude (AMo50), the standard deviation (SDNN), the number of pairs of cardio intervals with over 50-ms difference as a percent of the total number of cardio intervals (pNN50), stress index (SI) have been estimated. During the study, we have recording heart rate (HR), systolic (DM) and diastolic (DD) blood pressure by Korotkov sounds in accordance with WHO recommendations. Based on these measurements, we have calculated mean pressure (MAP), double product (DP), vegetative Kerdo index (VKI), Myznikov index (MI) and adaptive potential index (AP) (Baevskiy 2020). The measurements of height and weight of the body have been used for the calculation of body mass index (BMI). We have employed the methods of mathematical statistics, such as prediction of main statistical performances of measurement series; testing of statistical hypotheses using parametric and nonparametric statistics, as well as factor analysis (the principal component analysis with the subsequent rotation of the reference axes by the Varimax criterion). The feasibility of factor analysis was assessed using the Kaiser-Meyer-Olkin test (KMO).

3 Findings and Discussion At the initial stage of the study, relying on the analysis of statistical data bulk I.A. Krivolapchuk and M.B. Chernova proposed and experimentally justified a modified Informatization Index (Imod) involving the usage time of computer equipment and the total waking time during the day: Imod ¼

ti 100%; 24  ts

where: Imod is the modified informatization index, ti is the total time of informatization means usage (in hours), ts is the total sleep duration (in hours). The Modified Informatization Index (Imod) can be calculated for both one child and the group. The data has been collected through observation and questionnaire surveys. It has been found that this index is closely correlated with the total screen time and the weekly value of the computer load.

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There are statistically important correlations of Imod with TV time and waking during the day. It has been established that the value of this index among the same children greatly varies during the school week. To assess the accuracy of informatization measurements and the stability of the test results over time, we have calculated reliability indicators of the developed technique. The stability of informatization assessment results has been measured through retesting after 2 weeks and after 2 months under the same conditions (Table 1). Table 1. Reliability of test results (rank correlation coefficient) at different time intervals 6–7 years old Test

8–9 years old Test Retest after Retest after 2 weeks 2 months Imodtotal, 0.95 0.79 Imodaverage, percent percent Imod7, 0.79 0.65 Imod7, 0.87 0.74 percent percent Imod6, 0.87 0.71 Imod6, 0.79 0.60 percent percent 0.81 0.75 Imod5, 0.63 0.49 Imod5, percent percent Imod4, 0.87 0.79 Imod4, 0.75 0.53 percent percent Imod3, 0.70 0.56 Imod3, 0.73 0.60 percent percent Imod2, 0.84 0.57 Imod2, 0.74 0.43 percent percent 0.59 0.41 Imod1, 0.67 0.44 Imod1, percent percent Note: indices 1, 2, 3, 4, 5, 6, 7 have been recorded on Monday, Tuesday, Wednesday, Thursday, Friday, Saturday and Sunday, respectively Retest after 2 weeks 0.92

Retest after 2 months 0.83

Also, we have calculated the rank correlation coefficient between the Imod indices obtained on the same children during retesting. There have been wide fluctuations in the Spearman rank correlation coefficient for all days of the week when studying the reproducibility of test results in the indicated time intervals. Thus, when re-testing after 2 weeks this index ranged from 0.5 to 0.92 among children of 6–7 years and made up 0.63–0.95 among children of 8–9 years. The research materials show the highest stability of the average values of Imod (Imodaverage) calculated per week (see Table 1). To get the impartial assessment of the informatization level, we invited two different persons who tested the same children in the standard conditions of the educational institution. In this case, we assessed only the informatization of children’s lives in an educational institution. The results indicate a high consistency of the test technique under consideration (Table 2). It has been revealed that among preschoolers of 6–7 years this indicator was in the range of 0.64–0.91, and among schoolchildren of 8– 9 years – 0.59–0.89.

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When comparing the results of different testers for the same sample of test persons under the same conditions, it has been found that the average estimates calculated per week had the highest stability of the informatization index. The latter allows us to talk about the high reliability of informatization assessment when used by different specialists. Table 2. Reliability of the Imod assessment results (rank correlation coefficient) obtained by two different testers on the same sample of test persons under similar conditions Boзpacт 6–7 years old 8–9 years old Imodaverage, percent 0.91 Imodaverage, percent 0.89 Imod7, percent 0.73 Imod7, percent 0.83 Imod6. percent 0.81 Imod6. percent 0.78 Imod5. percent 0.67 Imod5. percent 0.59 Imod4. percent 0.75 Imod4. percent 0.70 Imod3. percent 0.80 Imod3. percent 0.83 Imod2. percent 0.64 Imod2. percent 0.82 Imod1. percent 0.77 Imod1. percent 0.66 Note: indices 1, 2, 3, 4, 5, 6, 7 have been recorded on Monday, Tuesday, Wednesday, Thursday, Friday, Saturday and Sunday, respectively

Thus, the Imod index is characterized by high stability of assessment results of children’s life informatization over time and high consistency of test results attained by different testers. The informative value of the Imod index has been assessed by means of factor analysis (Table 3). When investigating the structure of the functional state of children of age groups under consideration within modern information and educational environment, we identified a relatively independent factor “Informatization of living standard”. This factor included Imod, I, CL, ST, TVT measured on different days of the week, as well as weekly average values of these indices. By factor analysis among children of 6–7 years old, we have revealed a close relationship between this factor and Imod values recorded on different days of the week (r = 0.73–0.85), as well as I values (r = 0.53–0.83), CL values (r = 0.52–0.83), ST values (r = 0.52–0.81), and TVT values (r = 0.31–0.62). All indices under consideration have a positive interrelationship. It is important to note that in the framework of “Informatization of living standard”, Imod is described by the highest factor loads, besides the average value of Imod calculated for the week (r = 0.87) turned out to be the most informative. Similar data have been attained on a representative sample of 8–9-year old children. The above factor correlates with Imod values recorded on different days of the week (r = 0.66– 0.91), as well as I values (r = 0.57–0.83), CL values (r = 0.51–0. 82), ST values (r = 0.46–0.83), and TVT values (r = 0.41–0.65). In the structure of the factor under

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consideration, Imod has been featured by high loads, while the average Imod value for a week (r = 0.91) has also turned out to be the most informative. Thus, the Imod index has a high factor informative value concerning the assessment of children’s life informatization. In general, the findings indicate that getting impersonal information about the general level of informatization requires the calculation of the Imod index in relation to the average values of informatization means usage time during the week and the average values of wake time for the same period. Further, using the Imod index we measured the informatization of lives of 6–7-year old and 8–9-year old boys and girls. For the children of the above age groups, we highlighted 5 functional classes of this index: low (M + 1.0r).

Table 3. Factor informative value of the modified informatization index Informatization of children’s life 6–7 years old Index FL 0.87 Imodaverage. percent Imod7. percent 0.85 Imod6. percent 0.84 Computer load4. percent 0.83 Iaverage. percent 0.83 Computer loadaverage. percent 0.81 Computer load3. percent 0.81 Screen time7. percent 0.81 Screen time6. percent 0.79 I2. percent 0.79 Computer load6. percent 0.79 Imod5. percent 0.78 I5. percent 0.78 Imod1. percent 0.78 Imod3. percent 0.77 Screen time5. percent 0.76 Screen time1. percent 0.75 Screen time3. percent 0.74 Imod2. percent 0.73 Screen timeaverage. percent 0.73 I3. percent 0.72 I6. percent 0.71 Computer load5. percent 0.71 Computer load7. percent 0.71

8–9 years old Index FL Imodaverage. percent 0.91 Imod6. percent 0.86 Imod7. percent 0.86 I1. percent 0.85 Imod1. percent 0.83 Iaverage. percent 0.83 Screen time4. percent 0.83 Computer loadaverage. percent 0.82 Computer load7. percent 0.82 Imod2. percent 0.81 I7. percent 0.81 Computer load1. percent 0.80 I5. percent 0.79 I2. percent 0.76 I6. percent 0.74 Imod5. percent 0.73 Screen timeaverage. percent 0.72 Computer load5. percent 0.71 Screen time5. percent 0.71 Imod3. percent 0.70 Computer load6. percent 0.70 Screen time6. percent 0.70 Computer load2. percent 0.69 Imod4. percent 0.66 (continued)

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I. Krivolapchuk et al. Table 3. (continued) Informatization of children’s life 6–7 years old 8–9 years old Index FL Index FL 0.63 Screen time3. percent 0.65 TV time7. percent Computer load1. percent 0.62 TV time4. percent 0.65 TV time6. percent 0.57 Computer load3. percent 0.64 0.56 I3. percent 0.63 I1. percent TV timeaverage. percent 0.56 Screen time1. percent 0.61 Screen time2. percent 0.56 TV time2. percent 0.61 Imod4. percent 0.55 TV time6. percent 0.58 TV time3. percent 0.53 I4. percent 0.57 I7. percent 0.53 TV timeaverage. percent 0.53 Computer load2. percent 0.52 TV time5. percent 0.52 Screen time4. percent 0.52 Computer load4. percent 0.51 TV time5. percent 0.51 Screen time2. percent 0.50 TV time1. percent 0.48 TV time1. percent 0.49 I4. percent 0.43 Screen time7. percent 0.46 TV time4. percent 0.32 TV time3. percent 0.43 TV time2. percent 0.31 TV time7. percent 0.41 Note: FL is a factor load; indices 1, 2, 3, 4, 5, 6, 7 have been recorded on Monday, Tuesday, Wednesday, Thursday, Friday, Saturday and Sunday, respectively. For the abbreviations, see the section “Technique”.

These scales can be used to establish a quantitative relationship between the informatization of life, on the one hand, and the functional state of the body and the physical development of children, on the other hand. Table 4 presents an estimation scale for the informatization rate for 8–9-year old girls. In the course of the study, we have found statistical differences in terms of the functional state and physical development of children due to the informatization of their lives. In particular, among children of 6–7 years old the differences (p < 0.05– 0.001) were in RRNN, MxDMn, VKI, MI, DP, MAP, API, BMI, and among ones of 8–9 years old – MxDMn, VKI, MI, DP, SP, DP, MAP, API (p < 0.05–0.001). Table 4. Assessment of informatization among girls of 8–9 years old using modified index (percent) Level of informatization High Above average Average Below average Low

Modified informatization index (Imod), percent >17.0 14.0–16.9 5.0–13.9 2.0–4.9 0.05) to improve the indicators of the time of dribbling and throwing the ball into the basket from is observed from the end of the 1st to the end of the 2nd semesters. The results of jumps remained practically unchanged. The girls in Table 2 have approximately the same results as those shown in Table 1: a downward trend in jumping results and a reliable improvement (p < 0.05) in free throws. The dribbling time has not changed much. Consequently, the dynamics of sports and technical preparedness results during the academic year, as presented in Tables 1 and 2, are almost identical for both boys and girls. We evaluated the results of sports and technical preparedness testing of the 1st year students of GPP-groups (Table 3) according to the standards developed by us. As for the boys, at the end of the 1st and 2nd semesters the results of counter movement jumps

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were estimated by three points, dribbling time – by two points, and efficiency of free throws – by four points. Table 3. Assessment of indicators of sports and technical preparedness of students of the 1st year of the main GPP-basketball groups (total sample). Semesters

Statistics

Boys J (cm) 1 M 43.0 Mark 3 n 48 2 M 43.7 Mark 3 n 69 Note: J – jumps, D – dribbling, T

D (sec.) 8.8 2 48 8.6 2 69 – throws.

T (number of times) 2.7 4 48 3.3 4 69

Girls J (cm) 31.7 3 21 28.0 3 43

D (sec.) 9.7 3 21 9.8 3 43

T (number of times) 2.4 3 21 3.4 4 43

As far as girls’ results are concerned, at the end of the 1st and 2nd semesters the results of counter movement jumps and dribbling time were estimated by three points. The efficiency of free throws improved from three points at the end of the 1st semester to four points at the end of the 2nd semester. These results demonstrate the need to pay more attention to improving ball techniques in the first-year classes in the main division. The results of the study indicate the need to continue the sports and technical preparedness research of 1st–3rd year students of the main GPP-groups in order to identify the characteristics of the dynamics of the studied indicators and develop standards for assessing girls’ sports and technical preparedness. In this type of testing, sports and technical preparedness (at the end of each semester) evaluates mainly the effectiveness of the teacher’s work with students in the spring semester. Therefore, it is more appropriate to test students’ sports and technical preparedness at the beginning and end of each semester.

2 Conclusions 1. Boys outperform girls in terms of counter movement jumps and dribbling time both at the end of the first semester (p < 0.01) and second semester (p < 0.01). At the same time, the effectiveness of free throws has no reliable differences. 2. The tendency (p > 0.05) of young men to improve the indicators of dribbling time and free throws from the end of the 1st to the end of the 2nd semesters. The results of the counter movement jumps practically haven’t changed (p > 0.05). 3. As for girls, there is a tendency to decrease the results of counter movement jumps and a reliable improvement (p < 0.05) in the results of free throws. Dribbling time has not practically changed.

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References Abalakov, V.M.: Novaia apparatura dlia izucheniia sportivnoi tekhniki [New equipment for studying athletic technique]. Fizkul’tura i sport, Moscow (1960) Barantsev, S.A., Nosonov, V.V., Novikova, E.L.: Dinamika sportivno-tekhnicheskoi podgotovlennosti studentov 1–2 kursov osnovnogo otdeleniia grupp OFP so sportivnoi napravlennost’iu (nastol’nyi tennis). Prioritety i perspektivy fizich. kul’t. i mass. sporta v usloviiakh industrial’no-innovatsionnogo razvitiia [Dynamics of sports-technical preparedness of students of the 1st–2nd years of the main GPP-groups with sports orientation (table tennis). Priorities and prospects for physical cult and mass sports in industrial and innovative development]. In: Proceedings of the International Scientific and Practical Conference, pp. 145–147, Science, Astana, Kazakhstan (2013) Barantsev, S.A.: Planirovanie soderzhaniia uchebnykh zaniatii distsipliny “Fizicheskaia kul’tura” Плaниpoвaниe coдepжaния yчeбныx зaнятий диcциплины «Физичecкaя кyльтypa» [Planning of the educational process in the discipline “Physical Education”]. Izdatel’skii dom “GUU”, Moscow (2015) Barantsev, S.A.: Indikatory effektivnosti fizicheskogo vospitaniia studentov [Performance indicators for physical education students]. “Torgovyi dom “Sovetskii sport”, Moscow (2020) Barantsev, S.A., Bychkova, N.S.: Normativy otsenki sportivno-tekhnicheskoi podgotovlennosti studentov osnovnogo otdeleniia grupp OFP-atletizm [Norms of assessment of sports and technical preparedness of students of the main GPP-athletics groups]. In: Proceedings of the 25th Scientific and Practical Conference “Human, Health, Physical Culture and Sport in a Changing World”, pp. 242–247, State Social and Humanitarian University, Kolomna, Russia (2015) Barantsev, S.A., Kachalov, S.B., Nosonov, V.V.: Normativy sportivno-tekhnicheskoi podgotovlennosti studentov 1–3 kursov osnovnogo otdeleniia grupp OFP so sportivnoi napravlennost’iu (nastol’nyi tennis) [Standards of sports and technical preparedness of the 1st–3rd year students of the main GPP-groups with sports orientation (table tennis)]. In: “Federal Target Program for Education Development for 2016–2020”, Proceedings of the All-Russian Scientific and Practical Conference, 19–20 October, pp. 185–190. Science, Izhevsk, Russia (2016) Barantsev, S.A., Katilin, N.S., Naidenova, E.G., Sarycheva, N.N.: Sportivno-tekhnicheskaia podgotovlennost’ studentok pervogo kursa osnovnogo otdeleniia grupp OFP so sportivnoi napravlennost’iu (voleibol) [Sports and technical training of first-year students of the main GPP-groups with sports orientation (volleyball)]. In: Proceedings of the 13th International Scientific Conference “The Civilization of Knowledge: Problems and Prospects for Social Communication”, Part 1, pp. 94–96. RosNOU, Moscow (2012) Barantsev, S.A., Naidenov, E.G.: Sportivno-tekhnicheskaia podgotovlennost’ studentov 1–3 kursov osnovnogo otdeleniia grupp OFP-voleibol [Sports and technical preparedness of the 1st–3rd year students of the main GPP volleyball groups]. In: Proceedings of the 27th Scientific and Practical Conference on Student Physical Education “Human, Health, Physical Culture and Sport in a Changing World”, pp. 309–314, State Social and Humanitarian University, Kolomna, Russia (2017) Barantsev, S.A., Skorodumov, M.A.: Dinamika sportivno-tekhnicheskoi podgotovlennosti studentov 1 i 2 kursa osnovnogo otdeleniia grupp OFP so sportivnoi napravlennost’iu (futbol) [Dynamics of sports and technical preparedness of 1st and 2nd year students of the main GPP-groups with sports orientation (football)]. In: Proceedings of All-Russian Scientific Student Conference with International Participation, vol. 1, pp. 324–327. Irkutsk National Research Technical University, Irkutsk (2013)

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Beliaeva, N.A.: Metodicheskie aspekty provedeniia zaniatii po basketbolu: metodicheskie ukazaniia [Methodical aspects of basketball classes: methodological guidelines]. State University of Management, Moscow (2013) Emel’ianova, Iu.N., Khmyrova, O.A.: Mnogoletniaia podgotovka v basketbole [Long-term basketball training]. Science, Tiraspol’, Russia (2009) Kurakov, E.M., Kliueva, V.V., Pilipovskii, A.Z., Rumiantsev, V.P.: Testirovanie obshchei i spetsial’noi fizicheskoi podgotovlennosti (dlia samostoiatel’nykh zaniatii studentov vsekh spetsial’nostei) [Testing of general and special physical preparedness (for independent studies of students of all specialties)]. State University of Management, Moscow (2007) Mandrikov, V.B., Turkin, R.A., Mitsulina, M.P., Ushakova, I.A., Golubin, S.A.: Basketbol na zaniatiiakh po fizicheskoi kul’ture v meditsinskikh i farmatsevticheskikh vuzakh [Basketball in physical education classes in medical and pharmaceutical universities]. Volograd State Medical University, Volgograd, Russia (2012) Shcherbakov, V.G., Volkov, V.Iu., Davidenko, D.N.: Primernaia Programmoi distsipliny “Fizicheskaia kul’tura” [Example Program of the discipline “Physical Education”]. Science, Moscow (2010)

“Smart Specialization” of Regional Economies as a Factor in the Dynamics of Living Standards and Income Inequality Vladislav A. Ostapenko(&) State University of Management, Moscow, Russian Federation [email protected]

Abstract. At the present day in many countries “smart economy” is being formed and developed in regions. These processes are linked to the growing political and economic autonomy of the regions and the development of interregional cooperation. “Intelligent specialization” acts as a catalyst of economic growth, allowing creating conditions that are favorable for realization of entrepreneurial initiatives and innovative activity. However, “intelligent specialization” of the regions is hindered by a number of factors, in particular, limited innovative potential, lack of budget resources of federal, regional and local budgets allocated for stimulation and support of socio-economic development. The article is concerned with defining the role of “smart specialization” of the economies of the regions of Russia in raising the standard of living of the population and reducing income inequality (on materials of the Sverdlovsk and Ulyanovsk Oblasts). It has been shown that “smart specialization” of the region’s economy can have a positive impact on the income of the population, but its impact on income inequality remains uncertain, depending on a number of factors, including the nature of distributional relations, The level of average per capita income, the degree of substitution of labor by capital in the context of the digitization of production and the State income policy. In both regions, the first task at the stage of implementation of the strategy of “smart specialization” is to increase the real income of the population and the real wages paid, and to approximate the level and quality of life to the regions-leaders. Keywords: Smart region
Regional economy
Standard of living
Income Inequality JEL Code: O33





R11

1 Introduction During the last years the topic of “smart specialization” of economy is in the center of attention of scientists and practitioners. Despite the fact that the concept of a “smart” economy remains rather unclear, many scientific works and official documents have been devoted to its formation and development. In the spatial aspect until recently the most attention was paid to “clever specialization” of territory economy - mainly urban, © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 811–818, 2021. https://doi.org/10.1007/978-3-030-59126-7_90

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in more rare cases - rural settlements. In Russia since 2018, the project “Smart City” is being implemented within the framework of the national project “Housing and Urban Environment” aimed at digitizing the urban environment, industrial production, transport, engineering and social infrastructure, social sectors, commerce, finance, municipal government. Similar programs and projects are being implemented in many foreign countries. Over time, it has become clear that the digital economy of municipalities cannot be effectively addressed by local resources alone, and projects need to be supported by regional and federal authorities, especially since in many cities budgets are chronically subsidized. The lack of coherence between the development strategies of the regions and their constituent settlements is causing the widening of the gap between the “smart” cities and the other settlements that do not have such status. In practice, programs on development of “smart cities” gradually began to be extended to surrounding cities of territory, covering entire agglomerations. The noted circumstances necessitated the shifting of the focus of state economic policy from the support of individual innovations realized at the local level within the framework of projects of “smart cities” to the formation of development strategies of “smart regions”. The advantages of such approach are seen, first, in the fact that it ensures the development of the regional economic complex as a single system, taking into account its internal and external linkages, allowing for the smooth implementation of advanced digital technologies as municipal and also as the inter-municipal and regional levels; Second, it makes it possible to achieve better integration of digitization projects in different, including related, regions. In Russia there are not yet federal programs of “smart specialization” regions, while at the level of individual subjects of the federation documents of this kind have recently started to appear. In 2018, the concept of creation a “smart region” was developed in the Sverdlovsk Oblast (Department of Informatization and Communication of the Sverdlovsk Region 2018), a year earlier a similar document was approved in the Ulyanovsk Oblast (Fund for the development of information technologies of the Ulyanovsk region 2019). The preparation of the concept for the creation of the “Smart Region” was announced in the Khanty-Mansiysk Autonomous District (International Independent Investment Policy Analysis Institute 2018), but at the time of writing the article was not completed. The present study focuses on the role of “smart specialization” of regional economies in raising the standard of living of the population and reducing income inequality. The topicality of the research is due to the fact that “intelligent specialization”, contributing to the transformation of the sectoral structure of the region’s economy, forms and content of labor activity, interregional economic ties, influences the social position of the population, Standard of living and income distribution.

2 Research Methodology The basis of the research is the concept of “smart specialization” regions, which was originally formulated by the expert group of the European Commission “Knowledge for Growth” (“Knowledge for Growth”) in 2009. Concept of RIS3 (innovation regional

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strategy of smart specialization) turned out to be in demand in European countries, as it enabled the regions to increase their competitive position by diversifying their economic structure, innovating and developing new market niches. Since 2010, RIS3 has been widely applied in the EU in the implementation of regional policy, becoming part of the more general strategy “Europe 2020”. Obtaining the status of a “smart region” allowed the regions to claim funds from the European structural and investment funds (ESIF). The possibilities of access to additional financing turned out to be so attractive that the strategy of “smart specialization” began to claim even those territories of Western European countries that were traditionally characterized by low level of innovation activity and lack of any significant knowledge-based industries (e.g., the Aland Islands, which are part of Finland). The growing popularity of “smart specialization” strategies can also be explained by the accompanying globalization process of regionalization, connected with the growth of political and economic autonomy of regions, development of interregional cooperation at the international level. “Intelligent specialization” in modern conditions is considered as a catalyst of economic growth in the region, allowing to form conditions favorable to realization of entrepreneurial initiatives and innovative activities (Bosch and Vonortas 2019). Concept of RIS3 involves interaction of science, education, business, local and regional authorities and civil society on the principle of “bottom-up”, that is, the result of this interaction should be, First of all, the identification of entrepreneurial initiatives requiring support (investment, innovation projects, etc.) and, on this basis, the implementation of public regional policies. An important concept in RIS3 is that of a domain defined as the middle of the hierarchy of a regional system. A domain is not a single enterprise, nor a region as a whole, but a group of economic agents (including enterprises, organizations) working in one or related economic activities, sharing knowledge and other resources. D. Foray defines the domain as the level of the regional system on which the priorities of the “smart specialization” strategy can be identified, evaluated and supported (Foray 2015). Public domain policies should aim at strengthening intersectoral linkages among their member enterprises and organizations, encouraging knowledge transfer and joint innovation. The methods used in the preparation of the work are those commonly used in regional economic studies: analysis and synthesis method, grouping method, index method. The main economic sectors of the regions were defined by the index of specialization (OECD 2013). Difficulties of the research were connected with lack of methods of economic evaluation of “smart specialization” due to novelty and insufficient level of theoretical development of its concept.

3 Results Since in Russia to date only two constituent entities of the federation, the Sverdlovsk Oblast and the Ulyanovsk Oblast, have the concepts of formation on their territory of “Smart Region”. The analysis was devoted to the identification of the trends of their economic and social development at the present stage, as well as to the identification of what influence “intelligent specialization” could be on the standard of living and

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income inequality of the population. The solution of the latter problem was complicated by the fact that strategies of “intelligent specialization” are only in the initial phase of implementation, so the consequences of their implementation can only be foreseen. The stated objectives predetermined the need to determine, first of all, the current state of the region’s economy, the historical specialization of their economy, the level of innovative activity and the social status of the population. Unfortunately, Russian Federal State Statistics Service’s (Rosstat) publication of statistics on absolute and per capita GRP is delayed by 2–3 years. For the period 2010– 2017. It is known that the volume of GRP as a whole increased by 19.5% in the federated entities, while it increased by 20.5% in the Ulyanovsk Oblast, and by 34% in the Sverdlovsk Oblast (Rosstat 2019b). Thus, the regional economies were more advanced. In terms of per capita GRP, the federated entities studied were far outside the group of leaders, but in recent years they have managed to reduce the gap slightly. From 2010 to 2017 the ratio of the per capita gross domestic product of the Ulyanovsk region to the per capita gross domestic product calculated for all constituent entities of the Russian Federation increased from 52% to 53%, while that of the Sverdlovsk region increased from 92% to 97% (Rosstat 2019b). Thus, the Ulyanovsk region is currently teetering on the brink of falling into the group of depressed regions with per capita GRP less than 50% of the average Russian, while the Sverdlovsk region is a typical oldworld region, Stable economic development at the national average. “Intelligent specialization” in the future should contribute to positive structural changes in the region’s economy, but in the first years of implementation these changes may have little reflection in statistics. In the Sverdlovsk region, the first line of action is the creation of a “smart city” in Yekaterinburg at the exhibition site Expo-2025. In the territory of the region, it is planned to establish centers for the development of smart solutions that are competitive not only within the country but also on the world market; consolidation of all smart services into a single complex (Department of Informatization and Communication of the Sverdlovsk Region 2018). In Ulyanovsk Oblast, a pilot site is planned for the development and implementation of smart solutions for smart cities; Creating new digital jobs; modernization of the information infrastructure (Fund for the development of information technologies of the Ulyanovsk region 2019). According to data for 2017, both Ulyanovsk and Sverdlovsk Oblasts were characterized by the specialization of farms in such economic activities as: manufacturing (27.0% and 31.0% respectively, as against 17.4% for Russia of the total) and other services (0.7% and 0.6% against 0.5% for the Russian Federation) (Rosstat 2019b). The main economic sectors in the Ulyanovsk region were also agriculture, forestry, hunting, fishing and fish farming (7.4% as against the average Russian 4.6%), education (4.5% as against 3.0%), health care (4.8% as against 4.0%) State administration and military security, social security (7.0% as against 4.7%), and Sverdlovsk Oblast was relatively well represented in the sectoral structure of the economy by trade (17.1% as against 16.7% on average for Russia), and energy (4.4% versus 3.3%), transport and storage (8.7% versus 8.0%). The data available show that in the sectorial structure of gross value added in the Ulyanovsk region, in addition to the manufacturing sector, the share of social and public administration sectors is high; that in Russia often illustrates the problems of

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private sector development and may sometimes be an indirect sign of its depressed state. Sverdlovsk Oblast, for its part, is characterized by a shift in the sectorial structure towards material production sectors, but with a low level of participation of the extractive industry (only 1.5% as against 12.1% on average for the totality of all the entities). It follows from the world practice of regional development that “smart regions”, as a rule, there is an increased level of innovation activity and higher than the average national share of knowledge-intensive production in gross value added. Also, in recent years, the degree of digitization of material production, services and public administration is an important feature of “smart specialization”. In Ulyanovsk Oblast, the number of research and development organizations remains very small, even for the Volga Federal District. From 2005 to 2018, it increased from 22 to 28. In Sverdlovsk Oblast, the number fell from 117 to 111 over the period, with the region consistently ranking first in its federal district and sixth in Russia (Rosstat 2019b). The number of research and development staff in Russia as a whole fell by 16% over the period, but in both regions the trend was more dramatic: in Sverdlovsk Oblast the decrease was 18% and in Ulyanovsk Oblast the decrease was 37% (Rosstat 2019b). Share of regions in the production of innovative products at the national level for 2006–2018. increased, although in general it remains relatively small: in Ulyanovsk Oblast - from 0.5% to 0.8%, in Sverdlovsk Oblast - from 1.3% to 3.4%. For comparison, the share of Moscow in 2018 was 6%, the Moscow region - 8%, St. Petersburg - 8.3%, the Republic of Tatarstan - 13% (Rosstat 2019b). If we calculate the share of innovative goods, works, services as a percentage in relation to the total volume of goods shipped, the federated entities claiming the status of “smart” also do not fall into the category of leaders. In 2018, it was 13.4% in the Ulyanovsk Oblast and 6.9% in the Sverdlovsk Oblast. By comparison, the first positions in Russia in this indicator in 2018 were: Republic of Mordovia (24.3%), Khabarovsk Krai (21.3%) and Republic of Tatarstan (20.9%). As can be seen from the above data, the federated entities that lead in the share of the scientific output in the volume of goods shipped, works performed, services rendered were almost twice the size of Ulyanovsk Oblast, and the Sverdlovsk Oblast about three times. Thus, it is logical to come to the conclusion that the statement about the status of the “smart region” should not yet be taken as a statement of the fact of his technological and innovative leadership. Rather, the development and acceptance of the concept of “smart specialization” act as an additional means of attracting private investment and public funds for the purpose of digitization and activation of innovative processes. In the analyzed concepts of creation of “Smart Region” important place is given to the improvement of social status of the population. In the concept of the Sverdlovsk region it is noted that a smart region is “a territory of innovative development using digital technologies to increase the standard of living, efficiency of human activity and competitiveness of the economy” (Department of Informatization and Communication of the Sverdlovsk Region 2018). The main objectives of the Concept are to develop human capital and improve the quality of life of the population. In the Concept “Smart Region” of the Ulyanovsk Oblast, it is also a question of introducing digital

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technologies, “capable of speeding up the economic development of the territories and improving the quality of life of citizens” (Fund for the development of information technologies of the Ulyanov Region 2019). Thus, in both cases “smart specialization” of the region’s economy acts as a tool for solving not only economic, but also social problems. The question of how the digital economy can contribute to raising living standards and overcoming excessive income inequality remains a matter of debate. Wages are the main source of income for the population today. Consequently, the standard of living is determined, firstly, by the employment of the population providing income from work and, secondly, by wages, the development of which depends on the rate of growth of labor productivity, the wage systems applied in firms and institutions, The phases of the economic cycle, the State’s labor market policy and a number of other factors. There are different views on the impact of digital change on employment and wages in science: from technological alarmism, which believes that robotization will lead to massive technological unemployment (Frey and Osborne 2013) Techno-optimism confidence that new, high-tech jobs will emerge in the future, and wages will grow steadily as productivity increases (Schmidt and Cohen 2013). However, most researchers agree that digitization reinforces income inequality, as it leads to a greater division of workers by skill level and, above all, by level of digital technology, and deepens the gap between income from labor and capital (Brynjolfsson and McAfee 2016). In recent years, our country has experienced a negative trend in real monetary income. On the whole for the Russian Federation for 2015–2018. they decreased by 7.2%. In the regions studied, the fall in real income was even greater: in Ulyanovsk Oblast - by 17.8%, in Sverdlovsk Oblast - by 12%. With real wages increasing at an average rate of 2.4% over the period, in the Ulyanovsk region they rose by only 0.5%, and in the Sverdlovsk region they fell by 2.3% (Rosstat 2019b). Calculations of the regional index of prices of average monetary income show that in 2018 the Ulyanovsk region was 25% below the Russian average. while the Sverdlovsk region was 11% ahead. At the same time, the average monthly nominal wages, adjusted for regional differences in prices from the Russian average, fell behind both regions: Ulyanovsk region by 29%, Sverdlovsk region by 13% (Rosstat 2019b). It should be noted that these adjustments smooth out the distance for the Ulyanovsk region, since in this region the cost of living is lower than the average in Russia, while the price level in the Sverdlovsk region is approximately the national average, so the adjusted value of income is very close to the starting point. The problem of unequal distribution of income in the regions under consideration is less acute than in many traditionally developed constituent entities of the Russian Federation. In 2018, the fund ratio for Russia as a whole was 15.6 times, whereas in Ulyanovsk Oblast it was 10.4 times, and in Sverdlovsk Oblast it was 14.6 times. Accordingly, the Gini index was 0.356 and 0.403 for the Russian total of 0.413. In comparison, in Moscow the fund ratio was 15.8 and the Gini index 0.415. At the same time, in regions with low living standards, the concentration of income remained moderate (for example, in the Tywa Republic in 2018, the fund ratio was only 9.7 times) (Rosstat 2019b). The data presented reflect the well-known pattern of income distribution based on the principle of “equality in poverty” in traditionally backward

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and depressed regions, on the one hand, and the reproduction of the situation of social polarization in the constituent entities and, First of all, in the metropolitan area, on the other hand. In the structure of monetary income, according to the sources of formation in the Sverdlovsk and Ulyanovsk Oblasts, the share of wages roughly corresponds to the average Russian wage (53.9% and 54.3% as against 57.4% for Russia). However, Ulyanovsk Oblast differs sharply from Sverdlovsk Oblast in the share of social transfers: 27% as against 18.2%, and also in the share of other monetary receipts 11.6% against 20.0% (Rosstat 2019a). These figures show that the Ulyanovsk region is more densely populated than the Sverdlovsk region, but the size of the shadow economy seems to be smaller. Thus, based on the contents of the considered concepts of the formation of the “Smart Region”, it can be noted that both in Ulyanovsk and Sverdlovsk Oblast the primary task is to increase the real incomes of the population and, in particular, the real wages paid, Gradual approximation of the standard and quality of life to the leading regions. Income inequality is less acute and the possibilities for addressing it through comprehensive digitization are very limited. The influence of “smart specialization” regions on distributive relations is not yet clear. It appears to be determined by a number of factors, including the nature of the distribution relationship, the level of well-being achieved, the extent to which labor has been replaced by capital in a digital environment, and the characteristics of government income policies.

4 Conclusions/Recommendations At present, three interrelated processes - globalization, regionalization and digital transformation of the economy are developing in parallel. Becoming independent in political and economic life, the regions are endeavoring to make maximum use of the resources available to them in order to achieve balanced economic development, raise the standard of living of the population and solve pressing social problems. In this connection, realization of projects of “smart specialization” of the regions seems to be an attempt to intensify innovative activity, attract additional investments of the private sector as well as state resources. In the developed countries it has long been realized that it is necessary to move from point-to-point support of the largest economic and scientific-technical centers within the framework of the concept of “smart cities” to comprehensive innovative development of regional scientific-production complexes, enable the digital divide between urban and rural areas to be overcome, the quality of life of the population, regardless of where it lives, to be improved in a sustainable manner. The implementation of the RIS3 concept on a large scale is, however, constrained by a number of factors, among them the limited innovative capacity of the regions, the lack of federal and regional budgets dedicated to stimulating and supporting regional development. The authorities of the regions do not always have sufficient experience in organizing innovative activities in the territories under their control, which make it possible to combine the interests of the State, the population and business organically.

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The comparative analysis of the current state of the economy of the two constituent entities of the Russian Federation, Sverdlovsk and Ulyanovsk Oblasts, in which the program documents on the transition to a “smart economy” were developed, allows to conclude, That Sverdlovsk Oblast is among the old-hardened regions with an average level of economic development, while Ulyanovsk Oblast has a lower per capita GRP average, but is gradually reducing its lag. The stated goals, tasks and activities in the concepts of “smart specialization” of the regions reflect the desire of their authorities to ensure sustainable development, increase of well-being of the population through intensification of innovative activity, digitization of production and state administration. The priority is solving social problems in the regions, the creation of new jobs in the high-technology sectors of the economy, ensuring that real wages and real monetary incomes rise by increasing productivity and efficiency.

References Bosch, A., Vonortas, N.: Smart specialization as a tool to foster innovation in emerging economies: lessons from Brazil. Foresight STI Governance 13(1), 32–47 (2019). https://doi. org/10.17323/2500-2597.2019.1.32.47 Brynjolfsson, E., McAfee, A.: The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies. W. W. Norton & Company, New York (2016) Department of Informatization and Communication of the Sverdlovsk Region: The concept of building a “Smart region” in the Sverdlovsk region, Yekaterinburg (2018). https://dis.midural. ru/uploads/document/1530/umnyj-region–smart-region-kontseptsiya-postroeniya-naterritorii-sverdlovskoj-Oblasti.pdf. Accessed 22 Jan 2020 Foray, D.: Smart Specialisation – Opportunities and Challenges for Regional Innovation Policy. Routledge, London (2015) Frey, C., Osborne, M.: The Future of Employment: How Susceptible are Jobs to Computerization?. Oxford Martin School, Oxford (2013) Fund for the development of information technologies of the Ulyanovsk region: The concept of introducing intelligent digital technologies in the Ulyanovsk region Smart Region for 2017– 2030 (2019). http://it-fund73.ru/ulsmartregion/Koncept.php. Accessed 07 Feb 2020 International Independent Investment Policy Analysis Institute: The concept of smart region will be developed in Ugra (2018). http://xn–80aplem.xn–p1ai/news/Koncepciu-Umnyj-regionrazrabotaut-v-Ugre/?utm_source=yxnews&utm_medium=desktop&utm_referrer=https%3A %2F%2Fyandex.ru%2Fnews. Accessed 01 Feb 2020 OECD: Innovation-driven Growth in Regions: The Role of Smart Specialisation. Preliminary Version, p. 202 (2013). https://www.oecd.org/sti/inno/smart-specialisation.pdf. Accessed 13 Jan 2020 Rosstat: Cash income and expenses of the population in 2013–2018. In: Statistical Bulletin. Rosstat, Moscow (2019a) Rosstat: Regions of Russia. In: Socio-economic indicators: 2019. Rosstat, Moscow (2019b) Schmidt, E., Cohen, J.: The New Digital Age: Reshaping the Future of People, Nations and Business. Hachette, London (2013)

Motivational Factors in Ensuring the Transition to Blended Learning of the Subject “Physical Education” Irina A. Kabanova1(&) , Nina V. Terekhova1 and Gozel D. Kurbanova2

,

1

State University of Management, Moscow, Russian Federation [email protected], [email protected] 2 Pavlodar State Pedagogical University, Pavlodar, Kazakhstan [email protected]

Abstract. In order to increase interest to PE lessons and follow the modern educational tendencies of development and effective approach to the organization of the educational process, specialists more and more often turn to the search of rational solution in the field of innovative technologies. This study attempts to examine the impact of PE lessons on the development of cross-cultural competencies of learners to switch to forms of blended learning that include a combination of traditional and e-learning with online components. An anonymous survey was conducted among the 2nd year students of the University in 2019/2020 academic year. 405 students from study groups with different sports orientation and students of special medical department took part in the study. The questions concerning the respondents’ attitude to the educational activities of the department were selected for the questionnaire. Methods of theoretical analysis of data from literary sources and Internet resources, questionnaires, determination of the percentage of the responses received to the total number of respondents were used. The results obtained confirm the increased interest in the discipline “Physical Education and Sport”, which is a good basis for the following creative use of physical education means and methods for professional and personal development and physical self-improvement of students. A variety of motivational factors was a prerequisite for the transition to new, modern forms of learning. Keywords: Blended learning education
Questionnaires


General cultural competence
Physical

JEL Code: I29

The rapid development of information technologies has affected all aspects of society, including education. The analysis of available experience in the use of information and computer technologies in the educational process has shown the effectiveness of using mixed forms of education. Moreover, a significant part of blended learning goes online [6, 9–11].

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 819–824, 2021. https://doi.org/10.1007/978-3-030-59126-7_91

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It is important to note that blended learning changes not only the form of transmission of educational material, but also the nature of interaction between teacher and student in the direction of personalization of the educational process, increasing the share of responsibility of the student themselves, stimulating the development of their personal characteristics [2, 3, 5]. Based on the above, in order to effectively build and organize the learning process in the transition to new digital technologies, it is necessary to analyze students’ ideas about the subject and readiness to engage in physical education [4, 7, 8]. The purpose of this study is to determine the impact of physical education on the formation of general cultural competencies of students to move blended learning. Methods of Research. Analysis of literary sources and Internet resources, questionnaires, statistical methods of experimental data processing. Organization of Research. 405 2nd year students of the university in 2019–2020 academic year were interrogated. Questionnaires were filled in anonymously. Students from study groups with different sport orientation and students of special medical department participated in the study. Research Results. Questions concerning the real situation of the respondent were selected for the questionnaire [1]. The questions reflected the main criteria for the formation of general cultural competencies for personal self-development by means of physical culture to modernize the curriculum of practical training according to blended learning. The question: “What place does physical education occupy in your life?” showed increased interest in the subject. 79.5% of respondents consider the role of physical education as the main one in the organization of a healthy lifestyle. When asked about the motivation for physical training, most students chose strengthening the functional state of their body (36.3%) and body shaping (25.1%) as the main factors. The rest of the students were almost equally distributed, choosing: to lead an active lifestyle; to manage their psycho-emotional state and improve their physical skills and abilities (13.1%; 12.8%; 12.7%) (Fig. 1).

Fig. 1. Motivational factors for physical training activities.

The PE curriculum includes practical and theoretical sections. In order to move to a distance (online) form of learning, it is important to understand which sources of information in a given subject are essential for learners. Thus, when asked: “What is the

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main source of information and knowledge on physical culture and sports for you?” almost half of the respondents mentioned mass media (TV, radio, Internet) as the main source (43,6%). 38.8% of students choose obtaining knowledge about the methods and means of physical education at the lectures and workshops on the curriculum of the department; 14.3% get the information from parents and friends. Low interest in scientific and methodological literature (3.3%) has been detected (Fig. 2).

Fig. 2. Sources of information in the field of physical education and sport.

The interviewees actively responded to the search for new forms of studying the theoretical foundations of the subject. For acquisition of additional knowledge students of various institutes and departments choose communication in the form of joint discussion (round tables – 12.1%), organization and participation in sports events of the university (50.6%), joint viewing and discussion of popular science and educational films (26.9%). The teacher’s personality (84.4%) with such qualities as friendliness (30.9%), communicativeness (28.7%), positivity (22.7%) and sense of humor (15.8%) has a great influence on the motivation and successful mastering of the proposed competencies (Fig. 3). At the same time, students note the importance of the professional qualities of the teacher, where priorities were given to the ability to choose an interesting method (exciting tasks and ways to perform them) – 33.8%, the ability to achieve the final result – 23% and extensive knowledge of the selected sport – 18.8%, the ability to regulate the emotional state of those engaged in the class – 13.5%, the ability to provoke interest (proper presentation of information) – 10.9%. Availability of material and technical resources and their convenient location are undoubtedly the basis for successful training process. Therefore 50.4% of students expressed their willingness to engage in physical education regularly twice a week. 24.9% do not mind a three-time attendance of classes in two weeks, five classes in two weeks are sufficient for 9.1%, one class per week is enough for 7.4% of respondents. The rest of the surveyed students offered their answers: not at all, daily, free schedule of classes. The share of these students was 8.2% (Fig. 4). This active desire to engage in physical education is confirmed by an assessment of the existing conditions at the university, which are defined by students as good (48.4%), normal (45.7%), and not corresponding to the perceptions of respondents (5.2%).

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Fig. 3. .

Fig. 4. Necessary number of classes to maintain good physical shape.

Availability of material and technical base and qualified teaching staff of the department stimulates students’ desire for additional physical training in extracurricular time: in the gym (17.8%), or dancing (15.6%), swimming (15.3%), doing yoga (13.3%), playing football (13.3%), volleyball (12.3%) and other various kinds of sports directions (12.4%) (Fig. 5). The results of the research are based on the study of interests and opinions of university students about the subject “Physical Education”, leading to the stage of modernization of the educational process from existing traditional forms to electronic (online) forms of education, which will significantly expand opportunities in education with the help of developing modern technologies.

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Fig. 5. Sports activities offered by students with a teacher in non-school hours (%).

1 Conclusions The results revealed a high level of students’ interest in the discipline, which will serve as a good basis for creative use of innovative means and methods in teaching physical education. Various motivational factors, such as good material and technical resources, the desire to attend classes regularly, the presence of a positive influence of personal and professional qualities of the teacher to master the general cultural competencies for the discipline, will become a prerequisite for a transition to blended learning in the future.

References 1. Vorob’ev, A.V., Mikheeva, T.V.: Sotsiologiia fizicheskoi kul’tury i sporta [Sociology of Physical Culture and Sports], p. 92. Siberian Academy of Physical Culture, Omsk (2002). https://www.elibrary.ru/item.asp?id=23395406 2. Demchenko, S.V., Korol’kov, A.N.: Effektivnost’ primeneniia informatsionnokommunikatsionnykh tekhnologii pri obuchenii mladshikh shkol’nikov tekhnike pryzhka v dlinu s mesta [The effectiveness of information and communication technology in teaching junior high school students the technique of standing long jump]. Uchenye zapiski universiteta imeni P.F. Lesgafta 1, 54 (2017). https://elibrary.ru/item.asp?id=28363503 3. Ivanas’, N.I., Maksimova, S.Iu.: Ispol’zovanie informatsionno-pedagogicheskikh tekhnologii dlia aktivizatsii pedagogicheskogo vzaimodeistviia mezhdu doshkol’nym uchrezhdeniem i sem’iami vospitannikov [Use of information and pedagogical technologies to enhance pedagogical interaction between preschool institutions and families of pupils]. Uchenye zapiski universiteta imeni P.F. Lesgafta 7, 96 (2018). https://elibrary.ru/item.asp?id= 35583584 4. Ivashchenko, V.P, Mitenkova, L.V., Khalilova, L.I., Skliarova, I.V.: Otsenka effektivnosti informatizatsii kak sposoba motivatsii studentov spetsial’noi meditsinskoi gruppy k zaniatiiam fizicheskoi kul’turoi [Evaluation of the effectiveness of informatization as a way of motivating students of a special medical group to engage in physical education]. Uchenye zapiski universiteta imeni P.F. Lesgafta 2, 164–168 (2019). https://elibrary.ru/item. asp?id=37102118

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5. Krasnikova, O.S., Pashchenko, L.G., Korichko, A.V., Pashchenko, A.Iu., Polushkina, L.N.: Sovremennye problemy organizatsii fizicheskogo vospitaniia shkol’nikov [Contemporary problems of physical education organization]. Teoriia i Praktika Fizicheskoi kul’tury 12, 38– 40 (2014). https://elibrary.ru/item.asp?id=22631308 6. Leifa, A.V.: Fizicheskaia aktivnost’ i kachestvo zhizni sub”ektov obrazovatel’nogo protsessa v VUZe: strukturnye komponenty i ikh otsenka [Physical activity and quality of life of subjects of the educational process in higher education: structural components and their evaluation]. Tomsk State Univ. J. 429, 196–202 (2018). https://doi.org/10.17223/15617793/ 429/25 7. Lukina, S.M., Lobanov, Iu.Ia., Sharonova, A.V., Iarchikovskaia, L.V., Mironova, O.V.: Osvoenie distsipliny « Fizicheskaia kul’tura i sport » v vuze s primenenie innovatsionnykh tekhnologii [Mastering the discipline “Physical Culture and Sports” in the university with the use of innovative technologies]. Teoriia i Praktika Fizicheskoi kul’tury 4, 44–46 (2019). https://elibrary.ru/item.asp?id=37257703 8. Sorokin, V.P., Androsov, A.M., Ivashchenko, D.E., Timofeev, I.Iu., Kolbaia, I.M.: Tsifrovye tekhnologii v praktike fizicheskoi podgotovki v Vysshem voenno-uchebnom zavedenii [Digital technologies in the practice of physical training at the higher military educational institution]. Uchenye zapiski universiteta imeni P.F. Lesgafta 7(161), 257–258 (2018). https://elibrary.ru/item.asp?id=35344107 9. Al-Avamleh, A.: The degree of satisfaction of students of the faculty of physical education with blended learning programs. Sci. Educ. Today 5, 37–47 (2019). http://dx.doi.org/10. 15293/2658-6762.1905.03 10. Johnson, L., Becker, S., Estrada, V., Freeman, A.: NMC Horizon Report: 2014 Higher Education Edition. The New Media Consortium, Austin, Texas (2014). Accessed 10 Feb 2020. https://www.learntechlib.org/p/130341/ 11. Means, B., Toyama, Y., Murphy, R., Bakia, M., Jones, K.: Evaluation of evidence-based practices in online learning: a meta-analysis and review of online learning studies (2010). https://www2.ed.gov/rschstat/eval/tech/evidence-based-practices/finalreport.pdf

Evaluation of the Socioeconomic Efficiency of the Film Project Marina I. Kosinova(&) State University of Management, Moscow, Russia [email protected] Abstract. The article gives the concept of socioeconomic efficiency of the film project. Different methods of social projects evaluation and possibility of their application for evaluation of social efficiency of film projects are considered. The author deals with the scenario method, SMART, SWOT analysis, parametric, subject-specific, statistical evaluation method and in-depth interview method. The author has identified the most optimal methods to assess the social effect of film projects. Various foreign and Russian models for assessing the economic potential of a film project are considered, in particular, the algorithm developed by the Belgian company ScriptBook for the analysis of the script using artificial intelligence. The tools developed for scenario optimization by a team of researchers from Cambridge University, the University of Western England and the Alan Turing Institute are reviewed. And also an American film forecast model adapted by the Russian company Movie Research for research in the film business is observed. The relationship between the social and economic efficiency of the film project has been studied. The method of evaluating the audience potential of the film project through a detailed expert analysis is considered. The author has studied the method of determining gross box office receipts, which is to calculate the estimated revenue from the film in cinemas. Based on the study, the author concludes that only a comprehensive approach is needed to assess the potential of a film project, in which all possible tools to assess its social and economic efficiency are used. To date, such an integrated approach has hardly been used in the Russian film industry. Keywords: Film project
Social efficiency
Economic efficiency
Evaluation of the potential of the film project JEL Code: Z110

1 Introduction Today, the predominant function of cinematography is entertainment. Most people regard watching a film as a way to spend their free time. But the cinematographic orbit includes a much wider range of functions, which were especially clear in Soviet cinema: educational, cognitive, social, compensatory, and many other functions. Speaking about the evaluation of the social and economic efficiency of the film project, we should immediately define the concepts. Economic efficiency is primarily © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 825–831, 2021. https://doi.org/10.1007/978-3-030-59126-7_92

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related to the entertainment function of the film industry. And the social one is connected with all the others, mentioned above. Since its inception and at all times, the cinema has balanced between two extremes – the desire to make a profit and the desire to sow the good seed. At various periods of its existence, our cinema has moved both towards ideology and commerce. Today we are witnessing the search for some harmony and balance. Most commercially successful films are, at the same time, socially significant projects and have a high social impact. Let’s try to understand how we can assess this effect at the pre-production stage, when only the concept of the future film is developed. At this stage, the film is called a film project, and the methodologies used in project management are quite applicable to it. Socioeconomic evaluation of the project can be called “a judgment developed on the basis of systematically and in a certain way collected and analyzed information in order to come to conclusions about the degree of readiness of the project for implementation, the feasibility, desirability and necessity to continue its implementation, as well as about the quality of project management and, if necessary, the need to improve quality, the need to make some changes in the project and/or development of plans for further activities” (Avtonomov and Khananashvili 2014).

2 Methodology 2.1

Methods of Evaluating the Social Efficiency of a Film Project

It is difficult to assess the social efficiency of a film. The social effect of any project may consist, for example, in the growth of people’s well-being, in increasing the population’s education, or in the population’s growing interest in cultural heritage. This effect can be measured in quantitative terms (increase in the percentage/number of educated population, increase in the percentage/number of population satisfied with living in a certain region, increase in the percentage/number of population provided with good housing, etc.) or qualitative terms (change in the attitudes of the population, solution of personal problems of a particular person). It is also possible to present social efficiency as a ratio of goal to achieved results – this way is easy to use with quantitative indicators and much more difficult with qualitative ones. Social efficiency can be assessed through surveys, in-depth interviews and post-project analysis. There is a way to assess efficiency in terms of whether the objectives are consistent with the problems. But in the case of film projects, it can be considered very subjective, because if a film deals with the problem of a small social group, it does not devalue the problem, does not make it less important, and does not make the film project inexpedient. Let’s examine in more detail the existing methods for evaluating social projects and the possibility of applying them to assess the social efficiency of film projects. The method of social project assessment can be defined as a set of techniques and operations forming a way of making a judgment about advantages and disadvantages of such a project with a conclusion about the degree of its suitability for implementation, about the progress of its implementation, about the achieved result, about the effect

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upon its completion (Avtonomov and Khananashvili 2014). A large number of different methods can be used individually and jointly in the evaluation of projects with a social focus. Each method has its own characteristics and advantages, as well as limitations and disadvantages. Some methods can be used at any stage of the project, and some at certain stages or even in relation to individual project elements. A scenario-based evaluation method consists of a description of possible events in case of implementation of the project plan and in case of refusal to implement it (for example, due to lack of funding). The scenario provides options: optimistic, pessimistic and most realistic. This method allows covering a large amount of information, taking into account various factors and possibilities. The method is very complex, but one of the most appropriate for planning and implementing a film project. It can also include a number of economic aspects and eventually become a complete project plan with all the necessary data. The following method is called SMART. It allows estimating, whether the project will turn out as it was conceived, whether it will be effective, or it is necessary to correct it. With the help of this method the following aspects can be determined: the level of individuality, specificity of the project; whether the result is measured at achievement of the goal; whether the goal is achievable; whether it is of public importance; whether it is possible to determine the period of time during which the goal will be achieved. If the answers to all these questions are positive, it makes sense to implement the project. It is possible to apply such widely known method as SWOT analysis. It is necessary to build a matrix, which will reflect the four sides of the project: strengths, weaknesses, opportunities and threats. It is important to remember that strengths and weaknesses lie within the project itself, and opportunities and threats are outside of it. Once all factors have been identified, it is necessary to determine how to build on strengths, how to address weaknesses, exploit opportunities and avoid threats. SWOT analysis is often used to assess the economic potential of a film project. It can also be used successfully to assess the social impact of film projects and contribute to their implementation. Another method is parametric. When it is used at the planning stage, certain parameters are set to achieve the intended goal of the project. And if they are eventually met, it is believed that the highest efficiency has been achieved. For film projects, this method is quite difficult to apply. Another important method is statistical evaluation. It is often used to assess the importance, necessity of film projects. On the basis of statistical data on a certain problem or phenomenon, a conclusion is made on what to say and how to talk about it, how to convey the necessary information to the audience. The method is widely used for socially directed film projects; statistics help to identify the severity of a problem and to focus on it. The last method we will consider is in-depth interviews. This type of interview uses includes questions which require full answers, not simple or unambiguous ones. The interviewee can be a representative of the target audience, the social group under study, or an expert on a particular issue (expert interview). In the case of film projects, we can usually talk about qualitative social efficiency. But there is quantitative efficiency as well, everything depends on how wide the audience of a film will be and, of course, on its quality.

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Models for Assessing the Economic Potential of a Film Project

Today, the global film industry often uses artificial intelligence to assess the economic potential of film projects. Algorithms that, after analyzing the script, can predict whether a film will be commercially successful already exist in the world film market. One of these algorithms was developed by the Belgian company ScriptBook. According to N. Azermai, the founder of ScriptBook, film companies could save more money if they used the computer algorithm they developed, rather than relying on the opinion of experts, as is now the case around the world (Khizhniak 2018). The company’s management notes that the efficiency of their system is more than 80%, which three times higher than expert forecasts. Another interesting example of the use of artificial intelligence to work with screenplays is the tools that help authors improve their scripts during the editing process, as well as help investors assess the potential of the future project and make the right decision. Scientists from Cambridge University, the University of Western England and the Alan Turing Institute have created similar tools. They analyzed the audience’s preferences and, using artificial intelligence, generated the most expected film stories, which can be used in future work on the scenarios (Pastukhov 2018). There are also products on the Russian film market that allow assessing the potential of a future film before the production process begins. One of them is used by the Movie Research Company, which was created specifically for research in the film business. The model allows determining the number of viewers who will watch the film, depending on the characteristics of the film, the selected promotion strategy and distribution. Calculations allow getting a weekly increase in the number of viewers, estimating future rental income. One of the tasks of modelling is to evaluate different promotion strategies and choose the best one. The most important thing is to quantify the film’s target audience according to viewer preferences. This model is quite often used to assess the potential of film projects of different genres, budgets, and box office returns. It turned out that the model is good at determining the number of potential viewers, and the error is in the range of 5–15% of the actual data. Specialists of Movie Research Company adapted the American model of cinema forecast, based on Markov chains, taking into account such parameters as the primary information about the film, characteristics of the advertising campaign, quality of the film, the direction of “bush telegraph” and others. Prediction of the box office revenue at the stage of formation of the project is necessary for primary determination of its commercial potential and use of the results of the prediction when searching for an investor. At subsequent stages, when obtaining additional information, the forecast can be refined. At different stages of work on the project researchers use various tools, conduct all kinds of quantitative and qualitative research, test film materials, advertising materials, etc. It should be emphasized that all the listed models of project economic efficiency evaluation are oriented, first of all, at studying the commercial potential of the projects. Social efficiency is part of the orbit of the interests of film sociologists who study films, but not of producers of films.

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3 Results 3.1

Ratio of Social and Economic Efficiency of the Film Project

There are many ways to assess economic efficiency of cultural projects. If the project is commercial, it should be approached thoroughly. But if we are talking about a socially significant project, and making a profit is not a priority, it is enough to make some simple calculations. In this case, economic efficiency is the result that can be obtained by comparing the indicators of profitability of production in relation to total costs and used resources. Accordingly, at its estimation it is necessary to answer the following questions: what financial investments the project will demand; whether the project will pay off and in what terms. The main financial document of any film project is an estimate. It details all expenses, deciphers each position, and as a result, the total cost of all stages of production, promotion, and screening of the film (in the case of screenings on a charity basis) becomes clear. After calculating the estimated necessary amount of investment, we answer the first question. In order to calculate whether the project will pay off, we need to find out how much will be the profit from its implementation. For this purpose it is necessary to use a technique of estimation of spectator potential. Evaluating the potential of a film project through detailed expert analysis of the script is important because usually arguments in favor of film production are based on the subjective opinion of the authors of the film about its artistic value, or on their intuition. And if we are talking about a commercial project or just a desire to make a profit, it is not enough. An expert evaluation can serve as a good basis for making corrective decisions in the pre-completion phase or for deciding to abandon a project to avoid unjustified risks. A number of studies have found that films produced with such assessment tools tend to have higher box office receipts (Sarymsakov 2009). The technologies for conducting such expert assessments are detailed in various sources. For example, in a book written by film sociologists, “The Phenomenon of Mass Cinema” (Zhabskii 2004), the chapter “The Experience of Sociological Studying Factors of Film Spectator Success” contains a large list of social and aesthetic features of a film project that are hypothetically correlated with the distribution success of a film. In the textbook “Profession of film and television producer. Practical Approaches” (Ogurchikov and Sidorenko 2010) in the chapter “Evaluation of the audience potential of a film project at the stage of its preparation” (by S.K. Sarymsakov) provides a detailed methodology for evaluating the project using the expert method. To carry out such an assessment, criteria for the success of the film with the audience are determined, which can be combined into four groups: the construction and elements of the script structure, the correspondence of the content of the future picture to the needs and tastes of the target audience of the film, business and professional reputation of the film creators, the promotion of the film to the audience. The expert survey is most often conducted in the form of a multi-tour procedure with no direct expert contact and without applying the method of averaging evaluation

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results. The experts face the task of classifying a film as one of the established levels of spectator success based on the analysis of the above criteria. On the basis of the following information – screenplay, analysis of the current state of the film market, information about the target audience, calculation of the preliminary production cost of the film, data about the studio, producer, director, main actors, filmanalogues, project implementation plan – each expert determines to which critical point the project under consideration belongs. A summary table summarizing the results of the expert evaluation is then produced. Taking into account the total cost of the film and the desired profit percentage for the producer, gross box office receipts are calculated at critical points. Another way to determine gross box office receipts is to calculate the estimated revenue from showing the film in cinemas. Depending on the scale of the film and how well it meets the needs of a wide audience, it is estimated how many weeks of distribution the film will be “full screen” (6 sessions per day) or whether it will have to be put on “half screen” (3 sessions per day), in which cinemas the film will be shown (multiplexes or small cinemas). Also, when generating revenue, it is important to take into account fees for showing the film on television, in other countries, on Internet platforms, if such distribution channels are used. This method of determining economic efficiency corresponds to the general method of determining profitability based on a simple rate of return. It uses the same indicators, such as net consolidated returns, which are received for the whole period of project realization and the volume of investments. This criterion shows what part of costs is compensated by the volume of net consolidated returns received.

4 Conclusion Once the social and economic efficiency of a film project has been determined, it is necessary to determine their ratio. It is defined on the basis of what is given priority. If the project is commercial, its main goal is to make a profit. And in the case of socially oriented projects, social efficiency comes first. That is, socioeconomic efficiency represents a certain balance. Ideally, both social and economic efficiency should be high, then the project will have significance for both society and the creator of the project. But few films can boast such high rates. The Department of Cinematography of the Ministry of Culture and the Foundation for Social and Economic Support of Russian Cinematography provide support to film projects in our country. Both these organizations use some of the above methods in assessing the potential of projects, in particular, the expert method. However, as practice shows, the results of their activities cannot always be considered satisfactory. Not all state-supported films have high social or economic efficiency. There are only a few. This suggests that, to date, the entire set of tools that should be used to assess the efficiency of a film project has not been involved. Only individual elements are used. And it is the systemic, comprehensive approach that is important in this matter. It is necessary to perform a full assessment of each film project’s potential, calculate its economic and social efficiency, conduct various quantitative and qualitative studies,

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and adjust the project at an early stage based on the results of the study, rather than relying on the intuition and intuition of authors and producers, as is common in our country. Only in this case we will get a high result at the output, and the state will not waste money.

References Avtonomov, A., Khananashvili, N.: Otsuka sotsial’nykh proektov [Evaluation of social projects]. Izdatel’skaia gruppa “Iurist”, Moscow (2014) Veber, M.: Osnovnye sotsiologicheskie poniatiia. Izbrannye proizvedeniia [Basic sociological concepts. Selected works]. “Progress”, Moscow (1990) Dobren’kov, V., Kravchenko, A.: Sotsiologiia: v 3-ekh tomakh: slovar’ po knige [Sociology: in 3 Volumes: Dictionary of the Book]. Faculty of Sociology of Lomonosov Moscow State University, Moscow (2003) Zhabskii, M.: Fenomen massovosti kino [The Phenomenon of Mass Cinema]. NII kinoiskusstva, Moscow (2004) Zhabskii, M.: Poliusa kinoprotsessa: pritiazhenie i ottalkivanie [Poles of the Film Process: Attraction and Repulsion]. Federal Culture and Cinematography Agency, NII kinoiskusstva, Moscow (2007) Elkina, V.: Iskusstvennyi intellekt snial fil’m: rezul’tat poluchilsia pugaiushchim [Artificial intelligence made a film: the result was frightening], 2018 (2020). https://rb.ru/story/zone-out/ . Accessed 9 Feb 2020) Ivanov, G., Ogurchikov, P., Sidorenko, V.: Osnovy prodiuserstva. Audiovizual’naia sfera [The Basics of Film Producing. Audiovisual Sphere]. UNITY-DANA, Moscow (2003) Ogurchikov, P., Sidorenko, V.: Professiia prodiuser kino i televideniia. Prakticheskie podkhody [Profession Film and Television Producer. Practical Approach]. UNITY-DANA, Moscow (2010) Pastukhov, A.: Issledovateli razrabotali instrumenty, kotorye mogut pomoch’ kinoindustrii [Researchers have developed tools that can help the film industry] 2018 (2020). https:// tproger.ru/news/ai-does-movie-business/. Accessed 9 Feb 2020 Sarymsakov, S.: Otsenka zritel’skogo potentsiala kinoproekta kak faktor povysheniia effektivnosti upravlencheskikh reshenii v sfere fil’moproizvodstva [Evaluation of the audience potential of a film project as a factor for improving the effectiveness of management decisions in the field of film production]. Menedzhment v Rossii i za rubezhom, 1, 34–49 (2009) Soboleva, S.: Kak iskusstvennyi intellekt meniaet sovremennoe televidenie i kinoindustriiu [How artificial intelligence is changing the modern television and film industry] (2018). https://blog. onlime.ru/2018/10/02/iskusstvenniy-intellect/. Accessed 9 Feb 2020 Tarabarko, V.: Iskusstvennyi intellekt pokoriaet Gollivud – eto sposobstvuet tvorcheskomu protsessu [Artificial intelligence conquers Hollywood – it contributes to the creative process] (2018). http://gearmix.ru/archives/42783. Accessed 9 Feb 2020 Fokht-Babushkin, I.: Iskusstvo v zhizni liudei: konkretno-sotsiologicheskoe issledovanie obshchestva v Rossii vtoroi poloviny XX veka. Istoriia i metodologiia [Art in people’s lives: a concrete sociological study of society in Russia in the second half of the XX century. History and methodology]. Aletheia, Saint-Petersburg (2001) Khizhniak, N.: Odobreniem kinostsenariev budet zanimat’sia iskusstvennyi intellekt [Approval of screenplays will be handled by artificial intelligence] (2018). https://hi-news.ru/technology/ odobreniem-kinoscenariev-budet-zanimatsya-iskusstvennyj-intellekt.html. Accessed 9 Feb 2020

Organizational Transformation of Culture of the “Smart” Enterprise Irina A. Kovaleva1(&) , Tatyana N. Eremina1 and Anna Brusina-de Roos2

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1

State University of Management, Moscow, Russia {ia_kovaleva,tn_eremina}@guu.ru 2 Radboud University, Nijmegen, The Netherlands [email protected]

Abstract. The success of a modern enterprise is largely determined by the desire of employees to work as efficiently as possible, implementing their professional skills and knowledge. Implementation of the concept of “smart” city, which is based on the rapid development of digital technologies and their use in all spheres of society as a whole and in the life of each individual in particular, requires serious changes in the management of the company and in the organization of business processes. And any changes are due to the fact that there is an inevitable need to intensify work with objections, dissatisfaction, fears and other stressful situations on the part of employees. Therefore, it is the organizational culture of the company that should be taken into account in the conditions of the rapid process of digitalization. The purpose of this work is to investigate the factors influencing the transformation of organizational culture of the modern enterprise in the conditions of continuous development of new digital products on the scale of urban changes, which inevitably lead to the restructuring of business processes of the enterprise, and, consequently, to the need for staff development. Keywords: Organizational culture
Digital economy
Staff
Information technologies
Smart city
Smart enterprise
Corporate social network
Knowledge management JEL Code: D23

1 Introduction The concept of “smart” city includes the following attributes: urbanization, economic growth, technological progress, environmental sustainability. “Smart” city requires a new type of management, which is characterized by the full involvement of the population in public policy, i.e. technological innovations provide the population with the opportunity to influence the process of city management, and as a result of constant exchange of information, the population is increasingly closer to the city, as they are directly involved in making socially significant decisions (Polese et al. 2019).

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 832–841, 2021. https://doi.org/10.1007/978-3-030-59126-7_93

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In the process of transition to a digital economy (Order of the Government of the Russian Federation No. 1632-r 2017) and, consequently, the spread of information technologies, attention to knowledge and innovation is growing – new knowledge must be formed and the process of its management should be organized (Kaufmann 2018). According to statistics, in 2030 60% of all professions will be automated, which will lead to the disappearance of 57 existing professions today. They will be replaced by 186 new professions, which will require a completely different level of knowledge and new professional additional competencies. By 2045, 47% of jobs will disappear due to automation and 375 million people will have to undergo professional retraining (Rudenko 2018; Industry 4.0 in 20 figures and facts 2020). Enterprises are one of the main objects of the digitalization process. The key method of transition to digital economy will be creation of “digital shadow” of the enterprise. A competitive enterprise is the one that sells innovative (knowledge-intensive) products using high (digital) technologies. One of the main obstacles to digital innovation for many enterprises is the lack of transformation of organizational culture and the mismatch between the qualifications of personnel and the new requirements in the digital economy. According to the research results, CGI Global 1000 (CGI Global 1000 Insights from Conversations with Business and IT Executives around the World 2016), the main barrier to the digitalization of the enterprise is resistance from the staff to changes in the field of organizational culture (72%). And according to the results of a survey of Russian enterprises conducted by KMDA in 2018 (Digital Transformation in Russia: Analytical Report based on the results of a survey of Russian companies 2018), such barriers as the following ones were identified: – – – – – –

lack of additional professional competencies (64.1%); lack of highly qualified personnel (60.9%); strategic planning errors (53.2%); fear of change (45.3%); limited funding (39.1%); management attitude (31.3%).

The most demanded modern skills of an employee are the following: synthesis of technical experience and business experience should be 68%, and work experience – 49%, risk management/forecasting – 43%. At the same time, according to statistics, about 30% of employers in the world are unable to fill the vacancy due to the required skills (Kapkaev et al. 2019). In the conditions of digitalization, the company achieves its goals, gets profit, strengthens its position in the market mainly by working with a diverse and large volume of information. Positive aspects of digitization for the enterprise consist in the increase of level of intellectualization of human capital, possibility of remote control, new possibilities of the market, simplification of payment procedure, growth of labor productivity. A number of benefits can also be pointed out for employees: mobility in work performance, focus on career development and status success, lack of attachment to the workplace. But at the same time, an employee is required to have a high degree of organization, digital literacy, communication skills, ability to make complex managerial decisions, a high level of professionalism, and additional professional

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competence in the application of flexible technologies in project offices of egovernment, e-business and e-commerce (Dyatlov 2017). It should be noted that working in a virtual format leads to the loss of interpersonal relationships, lack of a sense of “team spirit” and commitment to the place of work, as well as to the enterprise. Whereas organizational culture used to be very important, now it also makes the transition to virtualization. However, one of the basic requirements for survival remains the development of human resources (Lavrent’eva and Rudenko 2019). There are 4 “nots” that lead to ineffective work of employees: “Can’t” (no knowledge and skills to do the job), “Doesn’t want” (no motivation to do the job well), “Isn’t able” (poor physical or emotional-psychological condition prevents from doing the job well), “Not provided” (no conditions to do the job well) (Krylov 2019). In addition, there are employees in enterprises who do not have the desire and/or ability to change and meet the new conditions resulting from the introduction of digital technology. The analysis of Russian enterprises shows that many employees misunderstand the term “digital culture”. Most employees do not yet have the motivation, skills and competences to participate in the digitalization process. Also, unjustified expectations of rapid and significant growth in financial performance of the company do not cause the desire of staff to transform the organizational culture, including top managers (Gileva 2019). Technological factors lead to significant changes in organizational culture. While there are already many examples of replacing humans with robots that effectively perform monotonous work, these problems should still be considered. In our opinion, they can be eliminated by implementing a knowledge management system and business application of corporate social networks. After all, one of the factors of competitiveness of a “smart” enterprise is the level of intellectualization of work.

2 Methodology Each company has its own unique individual organizational culture, which influences the degree of identification of employees with their company. Key aspects of organizational culture during the digitalization period are the following (Korolev and Butov 2019): – joint work of personnel allows revealing their own potential, increases transparency, trust and motivation; – demonstration of the values of each employee’s individual contribution to the common cause leads to an increase in production indicators; – a comfortable environment within the team and avoidance of conflicts between traditions and innovations as a result of the introduction of digital technologies; – continuous active interaction of personnel aimed at developing flexibility and productivity. The organization of internal communications systems of a “smart” enterprise determines the relationship of employees, which affects its competitiveness and success. Therefore, it is important to implement continuing professional education aimed at continuous improvement of knowledge, skills and competitiveness in the labor market. Business needs to be flexible and be able to quickly adapt to constantly

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changing factors of the environment, while making the most efficient use of internal reserves of the enterprise. These actions are subject to knowledge management as a process of exchanging reliable information and experience of employees (Essawi and Tilchin 2013). Knowledge management can be defined as a systematic and organizationally mandated process of exchanging, transferring, creating, using and preserving employee knowledge to improve organizational performance, taking into account the existence of competition among employees. Organizational knowledge is new knowledge created by groups of employees from different departments of the organization. The intersection area of all three elements of knowledge management “Personnel – Processes – Technologies” is the area of intellectual capital growth, and the intersection areas “Personnel – Technology”, “Personnel – Processes” are the areas of competence. Knowledge management consists from 70% of human factor, 20% of information and 10% of technology. The knowledge accumulated by the enterprise as a result of joint work of employees, as opposed to the obtained knowledge by means of individual work, multiplies and improves the conditions for achieving potential success of the enterprise. There are the following stages in the generalized life cycle of the knowledge management system: diagnostics and analysis (identification of knowledge needs); knowledge acquisition; creation of the knowledge management system; use of the system. Each stage should be manageable. Based on the results of the analysis of literature on the activities of international companies, the following options for organizers and implementers of the knowledge management system are offered (Greenberg and Pleshkova 2018): “Chief Knowledge Officer” (knowledge management leader), “Knowledge Manager” (technology knowledgebase administrator), “Knowledge Leaders” (informal leader), “Knowledge Brokers” (corporate knowledge manager), “Knowledge Synthesizers/Stewards” (specialists responsible for preserving local knowledge, fixing new knowledge and transferring it to a “knowledge base”), “Knowledge Editor”, “Knowledge Analyst”, “Knowledge Transfer Engineer” (organizational engineer), “Knowledge Systems Engineer” (knowledge management expert), “Knowledge Management Process Owner” (specialist who ensures that the knowledge management process in the organization is consistent with the corporate business objectives). We would like to point out the factors forming the main trends of information technologies development supporting the knowledge management system. 1. The efficiency of market relations technologies is continuing to grow under the influence of globalization processes, which means that the quality of information and knowledge processing is determined by the efficiency of customer-oriented communication policy as well as the level of professional competence of employees. 2. The importance of the speed of knowledge turnover is increasing: the flow of information and knowledge must be arranged without delays, as constantly changing consumer preferences require a quick response. 3. Information requirements at all levels of enterprise management have become stricter.

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The introduction of digital technologies will speed up data processing and optimize the quality of information delivery. Thus, a company can only be competitive in the conditions of digitalization if it has a knowledge management system that takes into account the aforementioned trends and promotes effective management decisionmaking. A corporate social network can be seen as a knowledge management tool. Internal users can be top managers, managers and ordinary employees. For example, as employees work on innovation to support their desire for progress, this technology structure is essential because it is designed to support teamwork, create corporate knowledge and facilitate practical development of new ideas and solutions. At the same time, corporate social networks solve the following tasks of knowledge management: 1) centralize, structure and organize all information resources into catalogues and present them in a single space, but in different variations depending on user needs, which significantly reduces the information load; 2) provide shared access to information resources through a single interface, allowing personnel to work together even when they are geographically remote, using realtime collaboration; 3) accumulate and maintain the experience and knowledge of the enterprise. The use of corporate social networks affects a fairly wide range of consumers: the company’s external customers, counterparties, as well as government and controlling entities. Under existing or planned contracts for the provision of services and delivery of goods, business correspondence and coordination of documents is conducted. For the counterparty, access to a specialized section of corporate social networks is organized (or an email gateway is set up for a specific counterparty at its email address so that letters from it get to the working pages of interested people in social networks). The state and other subjects, supervising bodies which the information is exchanged with, also get the access to resources of a network. Organization of access of HRpersonnel to such information will make it possible to offer possible changes in the staff in case of a vacancy. Staff training, internships, training delivery and exchange of experience in positions are carried out much faster. HR issues can be resolved remotely by means of telecommunications. The corporate social network, as well as any information system introduced and used in the organization, can be flexible and directed on different spheres of activity, on different users and accordingly have different interface, and also a way of the organization of access to this or that information. Here are some examples of the most popular social networks in business application. The client social network is considered to be the one of the most important. It is necessary primarily for advertising purposes to attracting new customers and increase loyalty and sales. Advantages of using the client social network: a clear focus of advertising on the target audience, tools for viral marketing, new opportunities for promotions, cost savings, a platform for building a system of loyalty and improving the quality of client service, active interaction of the clients among themselves and with the staff of the enterprise, the ability to exchange views on products and services. The client social network assists in the organization and holding of exhibitions, conferences and presentations, facilitates communication of their participants, providing an

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opportunity to find partners, establish business relations and organize meetings during the event or outside it. Sales are also increased through the use of a partner social network (a network of dealers), which eliminates social and physical barriers among users, which motivates active sales through a bonus and incentive system. This industry-specific social network helps solve the problem by involving industry specialists. It provides an opportunity to cooperate with other market players and monitor changes in competitors’ business. An internal corporate social network is necessary for the formation of an active and motivated team of employees which shares corporate values. Large international enterprises, with large numbers of employees, often face the problem of organizing the exchange of experience across offices in different countries. If the process of exchange of experience and practices with colleagues in different representative offices is not well established, a lot of time is spent on solving the same tasks. The use of corporate social networks can also solve this problem. Internal corporate social networks can introduce a system of motivation, bonuses and incentives for employees. The necessity to introduce into the management of a “smart” enterprise the considered directions of transformation of organizational culture such as knowledge management system and a corporate social network arises as a result of change of generation of employees. Experts predict that already in 2025 ¾ of all employees will represent generation Y – “millennials”, which will have a significant impact on changing the organizational culture of enterprises (Radaev, 2018). This generation has its own characteristics: 1. Work-life balance is important, and therefore flexible working hours become a priority in choosing an employer. 2. The perspective of career growth and professional development is important. 3. The company’s image, convenient and comfortable working conditions and the team are important. 4. The opportunity to make money is very important. 5. It is important for them to be able to fulfill their creative potential, be creative in their work and be independent in solving professional tasks. 6. Technical literacy. In connection with the above, it is necessary to make the following major changes, which in turn will affect the organizational culture of the company, ensure that the management of the company will be able to competently manage employees of different generations (Zhang 2019): 1) replacement of equipment, which will allow computerization of the office and automation of work, it is possible to transfer some of the work of some employees to the “remote” mode; 2) change of work mode and working environment: reduction of office work time, increase of ergonomics of work space; 3) continuous improvement of knowledge and skills of employees; 4) changes in wage indicators and incentive policy: increase in basic salary and bonuses/bonuses for overtime, high-quality work done and work done on time;

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5) changes in the system of staff promotion and in the system of salary evaluation, which will take into account the length of service of employees and the efficiency of their work; 6) employee consultations (including through the use of digital technology), for new employees – introduction of a mentoring system as an element of motivation for results. The better an employee understands the goals and the content of tasks, the less uncertainty they have, and they know exactly what to do, how to do it, and what management expects of them; 7) implementation of the principle of fair treatment of staff members (clarification of the system of performance evaluation and pay rise, promotion system, fair treatment of each staff member, equal opportunities for development); 8) balancing family and work; 9) establishing positive working habits of employees (e.g. time management-trained employees plan their work more efficiently by implementing self-control, which ensures that the work is done on time and with high quality).

3 Results The knowledge management system aims at creating a communication flow in which knowledge is used repeatedly and is available at all levels of the enterprise. As a result of introduction of a corporate social network the enterprise gets an opportunity to use the potential of the collective mind of the personnel to the fullest extent. The results of a survey of enterprise managers conducted by Microsoft made it possible to formulate the main reasons for their interest in corporate social networks: personnel involvement in work tasks, resulting in a reduction in staff turnover – 63%; dissemination and accumulation of corporate knowledge and experience – 50%; adaptation of new employees to the staff, processes in the company, corporate values – 40%; optimization of the decision-making process – 37%; team building, reducing the distance between management and staff, identification of internal problems – 33%; catalyst and exchange of ideas for business development – 17%. The precise definition of the target audience for the solution of the whole variety of tasks of the company will allow structuring and organizing the activity, in such a way that only necessary information is at hand, and the necessary data could be found by simple and accessible actions. According to a study by Harvard University, internal social media can: speed up access to information base by 71%; reduce travel costs by 68%; improve document management 63%; reduce communication costs by 48%; increase employee satisfaction by 56% (Bents 2017). According to the Agency of Internal Communicators, the introduction of social networks can: increase the involvement of employees in the work by 25%, increase the number of proposals submitted by employees by 48%, increase the number of implemented ideas by 25%, decrease the number of dismissals by 7% (Bents 2017).

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Through social networks, the circle of people involved in management decisionmaking goes beyond the artificially created physical limits of the enterprise and includes clients (including potential ones), partners and other participants. The principle of top-down management is replaced by a general dynamic interaction, which involves informing all participants. Thus, a large number of participants are involved in the decision-making process and digital social tools are at the center of this interaction, which make it coherent (Groshev et al. 2019). The advantages of business application of knowledge management system and corporate social network considered in the article provide the possibility of the above changes.

4 Conclusion An enterprise focused on transformation of the organizational culture in the developing digital environment of the city should, first of all, take into account strengthening of consumers’ positions, which means following the trends of their involvement in the process of strategic decision making, actively involve their employees in the management process. The introduction of digital technologies requires the company’s management to consider new ways of uniting employees, customers, partners and business processes using new technologies that would meet the principle of openness to all market participants (Gileva 2019). The requirements to the uniqueness of knowledge required for the generation of new ideas make employees who have creative potential a unique and difficult resource to reproduce, since the creative component of human capital in digital technologies reduces working hours while increasing productivity, which in turn requires increasing employee responsibility, reducing bureaucracy, implementation and development of digital technologies at the enterprise (Ivanov et al. 2020). In the conditions of modern people’s immersion in the virtual world, the introduction of a corporate social network in the enterprise creates a single information space where various services are integrated to perform functional duties. This rational transformation makes it possible to organize a communication space focused on making effective managerial decisions, while bringing employees as close as possible to each other, taking into account their problems and needs. The knowledge obtained and accumulated in the process of joint work of employees and managed with the help of social software, guarantees the growth of intellectual capital, formation of additional professional competences. Therefore, knowledge management as one of the main components of the organizational culture is the basis for the success of the company and maintaining a competitive position in the market. Timely transformed organizational culture helps employees to optimize various business processes, attract new consumers, maintain trusting relationships with partners, and timely modify products and services. The transformation of organizational culture is an important component of the digital economy. It is not enough to introduce digital technology alone; it is also necessary to change the thinking of the entire team. Although the latest technologies

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are being introduced and developed in stages and digital transformation is a long-term strategy, it should not be forgotten that job losses and retraining are inevitable (Korolev and Butov 2019). In connection with introduction of any innovation, first and foremost it is necessary to think over the program of retraining of employees according to which they will be ready to perform other kinds of activity. The given format of introduction of digital innovations will help to keep good emotional and psychological climate of the team, only in this way the organizational culture will become a reliable competitive advantage of the enterprise.

References Kaufman, N.Yu.: Transformatsiia upravleniia znaniiami v usloviiakh razvitiia tsifrovoi ekonomiki [Transforming knowledge management in the digital economy]. J. Creative Econ. 3 (2018). https://cyberleninka.ru/article/n/transformatsiya-upravleniya-znaniyami-v-usloviyahrazvitiya-tsifrovoy-ekonomiki. Accessed 8 Feb 2020 Polese, F., Botti, A., Monda, A., Grimaldi, M.: Smart city as a service system: a framework to improve smart service management. J. Serv. Sci. Manag. 12, 1–16 (2019). https://doi.org/10. 4236/jssm.2019.121001 Radaev, V.V.: Millenialy na fone predshestvuiushchikh pokolenii: empiricheskii analiz [Millenials against the background of previous generations: empirical analysis]. Sociol. Stud. 3, 15–33 (2018) Zhang, Y.: Research on employee pressure and resistance caused by organizational change – a case study of Jingyi network co., Ltd. Open J. Soc. Sci. 7, 72–85 (2019). https://doi.org/10. 4236/jss.2019.75005 Essawi, M., Tilchin, O.: A model of knowledge management culture change. Am. J. Ind. Bus. Manag. 3(5), 467–471 (2013). https://doi.org/10.4236/ajibm.2013.35053 Grinberg, E.Ia, Pleshkova A.Iu.: K voprosu o podgotovke spetsialistov po upravleniiu znaniiami [To the question of knowledge managers’ education]. Open Educ. 2 (2018). https:// cyberleninka.ru/article/n/k-voprosu-o-podgotovke-spetsialistov-po-upravleniyu-znaniyami. Accessed 9 Feb 2020 Krylov, I.A.: “Tsifrovaia” ten’ cheloveka kak nedostaiushchii aspekt tsifrovoi ekonomiki predpriiatiia [The “digital” shadow of man as a missing aspect of an enterprise’s digital economy]. Vestn. Saratov State Socio-Econ. Univ. 2(76), 26–28 (2019) Rudenko, D.S.: Osobennosti organizatsionnoi kul’tury v usloviiakh razvitiia tsifrovoi ekonomiki [External factors influencing the change of organizational culture in the sphere of digital economy]. Bull. Chelyabinks State Univ. 12(422)(63) (2018). https://cyberleninka.ru/article/ n/osobennosti-organizatsionnoy-kultury-v-usloviyah-razvitiya-tsifrovoy-ekonomiki. Accessed 9 Feb 2020 Lavrent’eva, I.V., Rudenko, D.S.: Transformatsiia organizatsionnoi kul’tury v sovremennom mire [Transformation of organizational culture in the modern world]. Bull. Chelyabinks State Univ. 3(425)(64), 153–157 (2019). https://cyberleninka.ru/article/n/transformatsiyaorganizatsionnoy-kultury-v-sovremennom-mire. Accessed 9 Feb 2020 Gileva, T.A.: Tsifrovaia zrelost’ predpriiatiia: metody otsenki i upravleniia [Digital maturity of the enterprise: methods of assessment and management]. Bull. USPTU Sci. Educ. Econ. Ser. Econ. 1(27) (2019). https://cyberleninka.ru/article/n/tsifrovaya-zrelost-predpriyatiya-metodyotsenki-i-upravleniya. Accessed 9 Feb 2020

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CGI Global 1000 Insights from Conversations with Business and IT Executives around the World (2016). https://www.cginederland.nl/sites/default/files/files_nl/articles/cgi-nl_ presentatie_cgi-global-1000.pdf. Accessed 10 Feb 2020 Tsifrovaia transformatsiia v Rossii: analiticheskii otchet na osnove rezul’tatov oprosa rossiiskikh kompanii [Digital transformation in Russia: analytical report based on results of a survey of Russian companies] (2018). https://komanda-a.pro/blog/dtr_2018. Accessed 10 Feb 2020 Korolev, G.V., Butov, A.V.: Organizatsionnaia kul’tura kompanii v epokhu tsifrovizatsii [Organizational culture of the company in the epoch of digitalization]. Bull. Sci. Pract. 5, 276–284 (2019). https://cyberleninka.ru/article/n/organizatsionnaya-kultura-kompanii-vepohu-tsifrovizatsii. Accessed 9 Feb 2020 Groshev, I.V., Zheregelia, A.V., Shkol’nyi, D.V. Menedzhment organizatsionnoi kul’tury v usloviiakh tsifrovizatsii predpriiatii [Management of organizational culture in the conditions of enterprises digitalization]. Upravlenie 2, 33–38 (2019). https://cyberleninka.ru/article/n/ menedzhment-organizatsionnoi-kultury-v-usloviyah-tsifrovizatsii-predpriyatii. Accessed 9 Feb 2020 Dyatlov, S.A.: Setevoi intellektual’nyi kapital v tsifrovoi ekonomike [Network intellectual capital in the digital economy]. Ekonomicheskii rost i prioritety pravovoi politiki [Economic growth and legal policy priorities]. Penza, 17–23 (2017) Order of the Government of the Russian Federation No. 1632-r of 28.07.2017 “On approval of the program “Digital economy of the Russian Federation”. “Collection of Legislation of the Russian Federation”, 07.08.2017, no. 32, article 5138 (2017) Kapkaev, Iu.S., Isaeva, A.S., Leshinina, V.V.: Analiz kachestva chelovecheskogo kapitala v usloviiakh razvitiia tsifrovoi ekonomiki [The analysis quality the human capital in the conditions of digital economy]. Bull. Chelyabinks State Univ. 3(425), 158–167 (2019). https://cyberleninka.ru/article/n/analiz-kachestva-chelovecheskogo-kapitala-v-usloviyahrazvitiya-tsifrovoy-ekonomiki. Accessed 9 Feb 2020 Industriia 4.0 v 20 tsifrakh i faktakh [Industry 4.0 in 20 figures and facts] (2020). https://www. rbc.ru/trends/industry/5daef6429a7947c1bfe43006. Accessed 10 Feb 2020 Ivanov, D.Iu, Suslov, E.Iu, Evdokimova, K.V., Samorukov, V.I.: Razvitie chelovecheskogo kapitala v usloviiakh tsifrovizatsii ekonomiki [Development of human capital in a digitalized economy]. Herald Belgorod Univ. Cooper. Econ. Law 1, 85–93 (2020) Bents, D.: Dlia chego nuzhny korporativnye sotsial’nye seti biznesu i v chem unikal’nost’ produkta [Why do businesses need corporate social networks and what is the uniqueness of the product?]. Interview dated 31.05.2017 (2017). https://www.kp.ru/guide/korporativnyesotsial-nye-seti.html. Accessed 10 Feb 2020

Smart Nation: Scientific Production Associations (NPOs) as the Main Link in Creating an Innovative Product Elena V. Kuptsova1(&) , Viktor G. Antonov1 and Elena S. Petrenko2 1

,

State University of Management, Moscow, Russian Federation [email protected], [email protected] 2 Chamber of Entrepreneurs, Karaganda, Kazakhstan [email protected]

Abstract. The Smart Nations concept – a balanced system of management of transnational social and economic systems – requires the creation of a new infrastructure for innovation in a modern industrial environment. The article analyzes current models of innovative development in the national and world economies. Results: 1. The conclusion is made that in the period of realization of active policy of reindustrialization of the country it is expedient to move away from EuroAtlantic innovation model of economy development and pay attention to another model that takes into account peculiarities of Russian economy state. 2. The conceptual model of management of innovative development of branches of the Russian economy in the period of implementation of the policy of reindustrialization in the conditions of available resource restrictions and presence of external deterrent (sanction) factors is substantiated. The Scientific Production Association (NPO) is considered to be the central link of the model, around which the relevant infrastructure is created, linking scientific development of industry with production on the basis of flexible network structures, cross-sectorial and interregional cooperation with active participation of the state as a venture investor. 3. Functions of planning of scientific and industrial, financial and economic activity are centralized in NPOs, management of scientific-research, project and design works is carried out. At the same time, it is proposed to introduce a different approach to the target function of an NPO: from the implementation of a complex of continuous process “science – production” to a new extended cycle of creation of an innovative product “research – production – commercial disposal on domestic and foreign markets”. A number of issues of NPO activities are considered, which require new management decisions.

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 842–854, 2021. https://doi.org/10.1007/978-3-030-59126-7_94

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The questions considered in the article and the solutions offered, according to the authors, will promote the complex solution of problems of innovative development of branches at minimization of an innovative cycle. Keywords: Scientific Production Associations (NPOs)
Smart industries Innovative products and technologies
Conceptual model of industrial innovation development JEL Code: O10





O20
O30
O40

1 Introduction Ensuring economic growth capable of improving the welfare of the country’s population is inextricably linked to the development and introduction of technological material production, as well as with the restoration of industry in the country’s economy as the basic components of a new technological mode. Reindustrialization should become the main link of economic policy. Two approaches to reindustrialization are considered: creation of new smart industries and industries oriented to the widest possible use of high technologies in the industrial sphere, and modernization of existing industries on the basis of fundamentally new technologies. There are two paths, but the key word is “fundamentally new technologies”.

2 Background and Methodology This article is the result of the authors’ initiative research on the formation of a national system of sectoral innovation development in the digital economy. In the work, the following methods were used: – empirical study, consisting in monitoring trends in the use of instruments of innovative development of economies and the formation of models of their innovative development on the basis of publications in the open press and the Internet; – structural-functional method that allows, based on the results of observations, identifying a set of stable relations in a holistic system that can interact with each other; – desk study, which involves gathering information on ways to build the innovation infrastructure of industries that ensure their effective development on the principles of the Smart Nations Concept. In this study, the authors also draw on their own management experience.

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Every time a problem of innovative development is discussed, the issue of creating new infrastructure to stimulate and service this process is raised: agencies, corporations, associations, working groups, clusters, technoparks, industrial parks, business incubators and other infrastructure objects to support innovation activities are created. We always turn to Western practitioners, copying their innovation infrastructure, because it is believed that the Russian, as well as Euro-Atlantic innovation model, focuses on the full cycle of “research – development”.

3 Discussion and Results At first glance, Russia traditionally, as well as European countries, focuses on the full cycle of “research-development” in its innovation model. That is where the similarities end. The fact that this innovation infrastructure of the Euro-Atlantic innovation model serves commercial industrial structures (industrial companies) with their own R&D (Research & Design) units and/or serious R&D budgets for conducting research and development, having serious resources and a completely different level of development of productive forces based on 4th and 5th technological paradigms, is not taken into account at all. It is large companies and fundamental research that are the sources of most global innovation in economically developed countries. At the same time, the set of tools used for innovation is constantly changing: from internal (classical R&D formats) to external (depending on the context – purchase of companies with necessary competences, use of accelerators, open innovation models (hackathons), incubators). McKinsey experts see the reasons for this in “global trends such as the emergence of breakthrough technologies, the digitalization and acceleration of the product life cycle, leading to radical changes in most industries. Value chains are changing, profitability zones are shifting, and new players are emerging – all of which fundamentally change the balance of power in industries, dramatically accelerating the adoption of new ideas and developments (McKinsey 2018). Furthermore, with the global digitalization of society, the objects of innovation are changing rapidly. Whereas previously innovations were concentrated in the field of a product and concerned mainly with quality, price, and service, today, along with product innovations, process and business model building innovations are required. It should also be noted that the order of interaction between the subjects of innovation activity (industrial business and government) in this model varies from country to country: in Germany this role is played by technoparks, in Great Britain – by centers of innovation technologies, in the USA – by universities) (Slavianov 2015) Experts note that a company is considered to be innovatively active if it offers significantly improved or new products, services, technologies to the market; implements innovative projects together with other projects or individually; performs long-

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term innovative activities, such as: fundamental research and development; makes investments to carry out its own research and development, staff training, acquisition of new knowledge, etc. Experts estimate that the share of innovative companies in many sectors of the American and European economies exceeds 20% and will grow rapidly in the coming years. The situation with innovation activity in the Russian economy is quite different. According to official data, only 9% of Russian enterprises can be considered as innovation-active. According to the data of the Institute of Statistical Research and Knowledge Economy of the National Research University Higher School of Economics, on the whole in the industry only 5% of organizations are engaged in research and development on their own. “The largest expenses for innovations are incurred by large state corporations.” (Bibikova 2016). Innovations require a wide range of competencies and serious financial and other resources, which are often lacking in a single Russian company. Deindustrialization of the Russian economy at the end of the twentieth century led to technological backwardness and technological dependence of industrial enterprises on Western partners-suppliers; catastrophic wear and tear of fixed assets, which makes product and process innovations impossible; destabilization of the financial and economic situation, which does not allow business to form investment budgets and finance research and development; loss of professional skills of the personnel, which makes it difficult to form personnel for innovation and modernization (Antonov et al. 2019). As S.D. Bodrunov notes, “this predetermined the entire further trajectory of Russia’s industrial development – a lag of about one technological level, with an increasing lag in recent decades” (Bodrunov 2013). In addition, the country’s financial market is underdeveloped and investors’ trust in borrowers – commercial enterprises and the financial system as a whole – is insufficient. High-tech and innovative industries, whose innovations have a long payback period, require long credit resources with a reduced funding rate. Meanwhile, medium-term loan rates with payback period of more than 1 year in Russia are considerably higher than rates for companies in the EU or the USA, which significantly limits access of Russian companies to long-term loan resources. The ever-changing business environment hinders the innovative activity of business structures. As a result, innovation and investment activity in the country is still low. According to the Bloomberg Innovation Index (Bloomberg 2019), Russia lost two positions in 2019 and appeared to be 27 out of 60 countries included in the ranking with innovation economy. If we analyze some positions of the ranking in 2019, then in terms of research and development intensity Russia is in 33rd place, in terms of added value of production it is 37th, in terms of total productivity our country is in 51st place, in terms of density of

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high technologies it is in 25th place, in terms of the share of graduates of higher education it is in 10th place (which explains Russia’s rather high position in the ranking in 2019), in terms of concentration of researchers Russia is in 24th place, in terms of patent activity it is in 30th place. The conclusion is drawn that the Western (Euro-Atlantic) innovation model, where the engine of innovation is large enterprises of the industrial commercial sector, and, consequently, the copying of the innovation infrastructure is not applicable to the current Russian conditions. In addition, the goals of reindustrialization of the Russian and European and American economies (due to different starting points) and, consequently, the mechanisms for achieving them are different. It all adds up to one thought: the Western (Euro-Atlantic) innovation model, where the engine of innovation is large enterprises of the industrial commercial sector, and, consequently, the copying of the innovation infrastructure is not applicable to the current Russian conditions. In addition, the goals of reindustrialization of the Russian and European and American economies (due to different starting points) and, consequently, the mechanisms for achieving them are different. It seems expedient that in the period of realization of active policy of reindustrialization of the country, we should pay attention to another model whose driving force of innovations should become research and production facilities with active financial support of the state. The authors consider that, at construction of a conceptual model of sectoral innovation development of economy of the country in the conditions of available resource restrictions and presence of external constraining factors, it is expedient to use the existing scientific production associations (NPOs) as its core, around which it is necessary “to develop “channels” and “lifts” connecting scientific development of the industry with manufacture” (Primakov 2012). The answer to the question “Why should NPOs become the core of the model, and not enterprises (as in the Western model)?” is obvious: the majority of Russian enterprises, as it was shown earlier, do not possess the resources necessary for innovative activity. The NPO has collected a significant scientific potential of the industry, established ties with the scientific world community, monitored promising areas of development of industries and products, conducted fundamental scientific research, preserved staff scientific potential. This is a result of the government’s industrial policy, where NPOs were established on a sectoral basis with a predominant role for R&D units to ensure an innovative technological breakthrough through continuity and acceleration of the “science – production” process. What do Scientific Production Associations represent today? What other issues in their activities require new management solutions?

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Fig. 1. Integrated business model of the NPO (compiled by the authors)

According to their organizational and functional structure, NPOs are an association that includes research units (the main link), production enterprises and pilot plants, various supporting functional units (marketing department, financial, economic and legal services, etc.). The efficiency of NPO functioning depends on the extent to which these different economic units form a system aimed at achieving a single goal – providing technological and product innovations, creation of fundamentally new products and technologies based on the optimization of a new extended cycle of innovative product creation “research – production – commercial disposal in the domestic and foreign markets”. The work of this mechanism is provided by business areas (research units) and functional systems. The potential of NPO allows implementing several innovative orders simultaneously formed in a package. The integrated business model of the NPO is presented in Fig. 1.

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With a competent approach to NPO management, it is possible to provide a comprehensive solution to the issues of innovative development of industries while minimizing the innovation cycle. The end result of the NPO’s activities is of a dual nature and can be classified in the following way: 1) Innovative product and/or technology; 2) Standard product. The crisis in the economy and science has led to an increase in the volume of serial production, which has had a negative impact on scientific research and increased the duration of the scientific and production cycle in industry NPOs. It is necessary to overcome this duality by attracting investments in science, stimulating innovation and reducing (and subsequently eliminating) the share of standard serial products in the structure of the NPO’s output. Innovative product of the NPO (new or improved product/technology), should be created with a market orientation (internal and external), have a completed form for

Table 1. Principally possible types of production value chains for NPOs Principally possible types of production value chains for NPOs Main production value Result chains 1) FR – AR – RD-DEP – Getting an innovative product/service; technology; methods; EXP – PP laboratory sample, R&D report, intellectual property object, design documentation and technology. Technology of smart industries creation on the principles of industry 4.0: modularity, providing flexible adaptation to changing requirements, by replacement or expansion of individual modules; interoperability with people, cyber systems through Internet broadcasting and Internet services; orientation to provide services to consumers through the Internet; virtualization, through the creation of digital models of industrial objects; information security and sufficiency, allowing the system to make decisions independently (in cooperation with developers of branch digital platforms, artificial intelligence, technology of the industrial Internet of Things – IIoT (Industrial Internet of Things)) (Vodianova 2017; Bunze et al. 2016; Pukha 2017) Note: the experience of other countries in the field of industrial digitalization programs is also of interest: China – “Made in China 2025”, Japan – “Connected Factories”, USA – Industrial Internet, etc. (continued)

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Table 1. (continued) Principally possible types of production value chains for NPOs Main production value Result chains 2) AR – RD - DEP Getting an innovative product/service; technology; refined EXP – PP technology, methods, design documentation for a product/service that is in small-scale and/or mass production by order from the market Smart manufacturing technologies based on the principles of industry 4.0: modularity, providing flexible adaptation to changing requirements by replacing or expanding individual modules; interoperability with people, cyber systems through Internet cables and Internet services; orientation to provide services to consumers through the Internet; virtualization, through the creation of digital models of industrial facilities; information security and sufficiency, allowing the system to make decisions independently (in cooperation with developers of branch digital platforms, artificial intelligence, technology of the industrial Internet of things – IIoT (Industrial Internet of Things) 3) FR – AR – RD-DEP1. Creation of a scientific and technical reserve for further EXP development and production of new products and formation of market (demand), new technologies 2. Obtaining results for transfer at both design and engineering level 4) FR - AR 1. Fundamental and applied research aimed at improving industry products. Development of norms and specifications (GOSTs, methods) 2. Creation of innovative scientific and technical reserve for the purpose of further development and production of new products and formation of market (demand), new technologies 5) FR 1. Forecast studies of the development of science, facilities and technology to form the state order for the development of innovative technologies in the industry 2. Fundamental research 3. Creation of innovative scientific and technical reserve for the purpose of further development and production of new products and formation of market (demand), new technologies 6) AR 1. Applied research for product and technology improvement 2. Creation of an innovative scientific and technical reserve for further development and production of new products 7) RD - DEP – EXP 1. Research and development of innovative technologies, bringing their characteristics to the stage of possible practical application 2. Obtaining results for transfer at both design and engineering level (continued)

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Principally possible types of production value chains for NPOs Main production value Result chains 8) DEP – EXP – PP Obtaining results for transfer at the level of design solutions and bringing their characteristics to the stage of possible practical application 9) DEP – EXP Obtaining results for transfer at the design level 10) DEP Creation of an innovative scientific and technical reserve at the level of design solutions 11) EXP - PP Adoption and implementation of innovative products and technologies in development and production practices. Creation of prototypes, organization of serial production 12) EXP Mastering of prototypes, developed technologies in the production process 13) PP Serial, small-scale production and technological support of existing production facilities

Fig. 2. Conceptual model of sectoral innovation development (developed by the authors)

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practical production/use at enterprises of the industry; lead to increased efficiency, competitiveness and as a result – to ensure the system stability of business-structures. Another equally important problem associated with the development of an innovative product is the improvement of the pricing process on the market for scientific and technical products. For NPOs, organizations of external and internal contours act as a customer of a scientific and technical product: 1. a government customer; 2. commercial entities; 3. the NPO itself, as an initiator of search fundamental and applied research. The main problems of pricing for NPO products are related to government orders. Today, in the processes of state procurement product pricing the definition (justification) of the purchase price is in the area of responsibility of the customer, while according to the market distribution of competence of the parties to the contract, only the supplier has all the information needed to reasonably determine the value of the object of purchase (Antonov et al. 2018). Therefore, NPOs cannot always prove to the organizer of the procurement the validity of the price presented and have to reduce it significantly. The price for scientific and technical products should be determined in proportion to the economic effect that the customer will receive for the entire period of production and sale of the innovative product and/or use of new technology/equipment, with regard to the costs of their research, development, implementation and application. In case of a commercial customer, pricing is formed on the basis of contractual prices taking into account planned calculations. The analysis of NPO activities shows that the internal production activities for the creation of the product take place through clearly structured production chains: stages of creation of a new/improved or standard tested product/service. Thirteen principally possible types of production value chains are given in Table 1. References: FR – purely search and focused fundamental research AR – applied research RD – research and development DEP – design and experimental process work EXP – exploration: development of prototypes for industrial development PP – production

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Special attention should be paid to the problem of communication and interaction of NPOs as developers of innovations, innovative companies and potential consumers (it is closely connected with the problem of creating demand for innovations) and the problem of innovation promotion at the global level. The solution of these problems requires the establishment of strategic marketing management of NPO activities.

4 Conclusions Interaction of NPOs with business and other participants of the innovation process should be built using flexible network structures, on cross-sectorial and interregional principles. Funding for NPOs should be oriented towards multi-channel funding (primarily state funding). At the same time, the model of sectoral innovation development should consider the fact that the processes of reindustrialization and innovation development of the country’s economy significantly lag behind these processes in the world economy and it is necessary to overcome this lag quickly. Therefore, it is necessary to acquire licenses for the manufacturing of new products and technologies with their subsequent adaptation and development on their own production base. At the same time, it is important to note that initially the conceptual model of sectoral innovation development in the digital economy should be based on the “principle of techno-social and environmental development” (Kuptsova 2018). There is a need for mechanisms that can ensure a balance among the three leading institutional sectors in the interests of all economic actors: the technosphere (business and scientificeducational structures); the state as an investor; society (in the form of civil society) and the biosphere. Thus, the following conceptual model of sectoral innovation development in the form of “scientific and educational industrial complexes with active participation of the state as the venture investor” with cross-sectorial and interregional cooperation is offered (Fig. 2). Having overcome technological backwardness and having restored at a new level our industrial potential in the process of reindustrialization of the economy, we will be able to pass from the proposed for the current state of economic development model of innovative development of branches in the form of “scientific and educational industrial complexes with the active participation of the state as a venture investor” with cross-sectorial and interregional cooperation to the innovative model in the form of “industrial scientific educational complexes with active participation of the state as a venture investor in fundamental research and co-financing by the state and business of applied research and technological developments”.

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Pukha Iu. Industriia 4,0: sozdanie tsifrovogo predpriiatiia [Industry 4.0: digital enterprise creation] (2017). www.pwc.com/industry40. Accessed 2 Feb 2017 Slavianov, A.S.: Printsipy i podkhody k formirovaniiu modeli innovatsionnogo razvitiia rossiiskoi ekonomiki v usloviiakh aktivizatsii vneshnikh sderzhivaiushchikh faktorov [Principles and approaches to formation of the model of innovative development of the Russian economy in conditions of activation of external constraints]. Natl. Interests Priorities Secur. 43, 16–26 (2015). https://www.fin-izdat.ru/journal/national/detail.php?ID=67457. Accessed 10 Feb 2020

On Development of Smart Competences Yana S. Matkovskaya1,2(&) , Elena S. Petrenko3 and Anna L. Shevyakova4 1

,

V.A. Trapeznikov Institute of Control Sciences, Russian Academy of Sciences, Moscow, Russia [email protected] 2 State University of Management, Research Institute “Management of the Digital Transformation of the Economy”, Moscow, Russia 3 Chamber of Entrepreneurs, Karaganda, Kazakhstan [email protected] 4 PI “Bolashak Academy”, Karaganda, Kazakhstan [email protected]

Abstract. The article analyzes modern trends in the development of digital competences of personnel in conditions of globalization and comprehensive penetration of information technologies in all spheres of economic relations. The article can help managers and employees not only to understand the comprehensive and growing impact of digitalization, it also offers approaches and concepts that they can use to strengthen digital skills of the workforce. Result 1. Three dimensions of digital literacy are presented. It has been described how the company can assess these key competences. From an HR perspective, the objective is to meet the identified needs in the catch-up workforce and to attract and retain new employees with a high degree of digital literacy. Result 2. The EPAM experience is presented and its specific digital training sessions are shown so that both small and large companies can learn from the approaches presented, taking into account their own scope and challenges. Against the background of individual very different structures and capabilities, this guide presents a portfolio of possible forms of digital competence development. Keywords: Digitalization
Digital technologies IT-professionals
Digital competences JEL Code: D83


E-learning



O14
O15
O30

1 Introduction Progressive digitalization is often called the fourth industrial revolution. However, it is not only about the digitalization of the production environment using modern information and communication technologies, but also about the possibilities of digital transformation of business models. This applies not only to the company itself, but also to its direct competitors. Competitive structures can change rapidly almost overnight © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 855–865, 2021. https://doi.org/10.1007/978-3-030-59126-7_95

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and represent organizations with previously unimaginable problems. Companies need to prepare for the fact that tomorrow they may be overtaken by someone who is far from being a competitor today. There are some examples from everyday life that prove it: streaming services are more frequently replacing CD purchases, and online stores are competing with retailers. In addition, there is a huge increase in competition and price transparency. Hardly any area can avoid the direct impact of the digital revolution. This necessitates understanding the impact, differentiating it from other factors such as demographic change or globalization, and ideally realizing it in a profitable way. This transformation through digitalization can only be achieved with the help of competent employees. Companies rely on digital skills in the workforce to anticipate and respond to the consequences of digitalization. Digital competences differ from the general understanding of competence, but are no less relevant. In the medium term, companies depend on digital-competent employees who are open to the transformation processes, who implement digital solutions, and who can anticipate customer opportunities and needs, as well as market and industry prospects.

2 Background and Methodology Digital competences consist of three different aspects that are always interdependent and mutually influential. The concept of competence usually describes a person’s abilities, which are acquired by independently performing certain tasks within the framework of learning in the context of an activity. In the corporate context, this means that employees have a common prerequisite for dealing with work-related requirements in various situations (Das Scrum Team AG 2016). By definition, competences are unstable, valuable, flexible and limited in nature. Against this background, organizations can build their own competences with their staff through targeted training, which can provide crucial competitive advantages (Deterding et al. 2011). Digital competences are (new) skills that enable employees to use digital technologies in the context of their task profile and, in addition, to accelerate the digital transformation of business processes (author’s definition). In terms of content, digital competences are composed of the interaction of three aspects: – digital vocational competences; – digital business competences; – digital trainings and advanced training. The need for the latter is fueled by openness, interest and a desire for change towards digital opportunities. This definition underlies the following considerations that underpin our triad of digital literacy, business skills and digital training. While in practice, all three key competences are mutually reinforcing. We consider them in isolation in favor of more detailed analysis.

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Digital Vocational Competencies

Technical innovations make it possible to change job profiles and modify the requirements for the respective official. The range extends from database access to complex multiple data analysis procedures. The specification is very closely related to the respective employee tasks. There are only a few general digital professional and technical competencies. One of these few general digital competences is information and data literacy. In the process of digitalization, new databases open up and new opportunities for using data arise. This opportunity, however, poses a new challenge to staff: they must evaluate and process large volumes of data. This means that existing competences need to evolve in a new direction. For example, companies must ensure that employees have a basic understanding of the importance and verification of data, and provide opportunities for professional development in order to make additional meaningful selection and prioritization. At the same time, employees must be able to process and create the generated data independently, not only for their own company, but also for stakeholders, and handle it correctly. Legal regulations and data protection requirements must be known to employees so that they can act responsibly. The ability to handle complex tasks confidently and sensibly is thus a crucial criterion for success. Professionals who already have job-specific skills, without taking into account only the digitalization factor, can be identified in dialogue with the relevant specialized departments. HR, as an active developer of digitally competent workforce, is obliged to inform departments about upcoming changes through digitization. Professional assessment of upcoming changes is valuable information that HR should receive in specialized departments, as well as actively and beneficially integrate it into the overall development strategy of the enterprise. In practice, already institutionalized processes of information exchange between HR and specialized departments can be used to train employees in order to raise awareness of changes caused by digitalization. This becomes clear when considering the topic of vacancy announcements: HR must adapt the vacancy announcements to the changing conditions. Another example is the concept of personnel development measures (Deutsche Gesellschaft für Personalführung e. V. 2016). Communication does not have to be oriented in one direction: on the contrary, HR can benefit from keeping information channels open on both sides. By means of internal exchange, HR employees are informed about changes in personnel requirements. The main point is that most of the specific technical requirements for human resources can only be determined through intensive exchanges with those in charge in specialized departments, as well as through multiple external sources such as studies, conferences and expert networks. This is not a one-time inventory. Digitalization is moving so fast that requirements are also constantly changing. Against this background, it is advisable to implement communication process by the rules adapted to the requirements of a particular company. This helps the company to keep its finger on the pulse of time and adapt to changes in the market.

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3 Digital Business Competences Unlike digital literacy, the impact of digital business skills is more generally relevant for the entire workforce. Often these are not entirely new competences, but a shift in the content of the existing competences. Digital business competences are divided into four aspects: personal responsibility, communication skills, networking skills and speed. The following table provides an overview of the understanding of the respective competences of digital business and their possible changes and/or expected shifts in content due to the digitalization factor (Table 1). Table 1. Four aspects of digital business competences and their possible changes due to digitalization Competence

What do we mean by this today?

Personal responsibility

—Active data collection —The right to make decisions under their own responsibility, within a limited framework —Efficient time and resource management and self-monitoring

Communication skills

—Effective internal and external communication —Participation in social networks —Sharing of knowledge and experience —Awareness of the consequences of communication —More proactive communication

Networking skills

—Creation, promotion and support of real and virtual networks —Sharing of knowledge and information —Adoption of various forms of organization —Team unity in virtual teams

Flexibility

—Willingness to change —Revise solutions, develop other approaches —Motivation/commitment

Source: Compiled by the authors

How does competence change under the influence of the digitalization? —Increased work on an ad hoc basis (variability of work tasks) —Acceleration of decision-making processes and decision implementation —Ability to assess the consequences of own actions —More self-management —Parallel use of new channels —Greater transparency and speed of information dissemination —Higher speed of communication processes —Improving global and intercultural communication —Expanding the connection between man and machine —Simplifying networking in time and space —Increasing the intensity and importance of network communication —Amorphous, liquid and hierarchically free design structures —Problem solving through networking and synergy —Frequent and rapid adaptation to new situations and changes —More pronounced ability to learn: more frequent release, willingness to participate in lifelong learning

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The explanation of these four aspects makes it clear that digital business skills are closely linked to digital professional skills. Employees with such business skills can not only collect information through technology, but also use it in accordance with the situation in the company or for specific operational tasks and act competently. 3.1

Digital Trainings and Advanced Training

The impact of digitalization requires a holistic transformation of business and does not focus only on selectively expanding the digital skills of key employees. Not only individual employees should be competent, but theoretically all company employees should have an evolving level of digital literacy. Thus, each area of the company can take advantage of digitalization and create procedures that can be the basis for mediumterm adjustment of the business model in order to increase mobility and adaptability of the company in the market. These core competences include various basic knowledge of technological capabilities and their possible applications. They appear at the moment when employees have to deal with new devices and technologies. The concept is based on interest and openness to technical developments, on the basis of which each person develops a reliable ability to make decisions. By knowing which devices (tools, applications, etc.) are best suited for which tasks, and by supporting and facilitating the workflow, employees can develop the right applications for their business. Here, another aspect of digital training becomes evident: the transition of technical knowledge into everyday, applied activities. This knowledge includes knowledge of the difficulties and challenges that digitalization presents, as well as knowledge of the legal framework for new technologies to be acquired and implemented by data protection professionals. Alongside information law with data protection issues, IT security and data rights, contract law, liability and intellectual property law are important areas in which employees should be fit for work in the future. A relevant example is the topic of data storage. Many businesses have begun to digitally store more and more confidential company data, such as in the Cloud (network clouds). Data protection professionals in these companies need to think about how they can back up and protect this data. They also need to know what the legal framework conditions are. Thus, the ideal image of an employee who is suitable for digital work describes a person who is up-to-date with the technical capabilities and undertakes to use them properly in order to create added value within his or her work project. Thus, digital training is the basis of the strategy for the development of digital competences of staff and includes the following skills of employees: – – – –

Interest and openness to digitalization; Basic knowledge about technical capabilities; Application in own sphere of activity; Sensitivity to changes in the legal framework.

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4 Practice and Results EPAM Systems Inc. (NYSE: EPAM) is today the world’s leading provider of software development services and digital platforms (founded in 1993). In its activities, EPAM leverages its many years of technological experience and expertise in consulting, design and innovation strategies, working closely with its clients to create cutting-edge solutions that turn complex business challenges into real business opportunities. Types of activities: IT consulting, software development, application integration, application porting and migration, software testing, establishment of dedicated development centers based on EPAM Systems and development of digital strategies. Key figures for the entire year 2019 Revenues rose to $2.29 billion, which is $450.9 million or 24.5% in annual terms, while on a constant currency basis revenues rose by 25.8% in annual terms. GAAP revenues from operating activities amounted to $302.9 million, an increase of $57.1 million, or 23.2%, compared to $245.8 million in 2018. Non-GAAP operating income was $389.2 million, an increase of $74.0 million, or 23.5%, compared to $315.1 million in 2018. Total GAAP earnings per share were $4.53, compared to $4.24 in 2018, and nonGAAP earnings per share were $5.42, up $1.04, or 23.7%, compared to $4.38 in 2018. Cash from operating activities amounted to $124.6 million in the fourth quarter of 2019, an increase from $123.1 million in the previous quarter. Monetary assets, cash equivalents and cash balances amounted to $937.7 million as of December 31, 2019, representing an increase of $166.0 million. As at 31 December 2019, the total number of staff was approximately 36,700. This number included approximately 32,600 delivery specialists, an increase of 21.7% compared to 31 December 2018. The company expects that: revenue growth in 2020 will exceed 22% both under GAAP and in constant currency; GAAP revenues from operating activities will range from 13% to 14% of revenues, and non-GAAP revenues from operating activities will range from 16% to 17% of revenues; effective tax rate for GAAP will be about 14%, and for non-GAAP – about 23%; Total earnings per share under GAAP will be at least $5.56 for the full year and earnings per share excluding GAAP will be at least $6.30 for the full year. The company expects the weighted average number of shares outstanding during the year to be 58.8 million. EPAM global teams serve customers in more than 30 countries in North America, Europe, Asia and Australia. As the recognized market leader in many categories among the world’s leading independent research agencies, EPAM was one of only four technology companies to be published annually on Forbes 25 Fastest Growing Public Tech Companies list since 2013, and the only IT services company to be listed on Fortune magazine’s 2019 Top 100 Fastest Growing Companies list is in the “CNews100: Russia’s Largest IT Companies 2018”.

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In 2019, EPAM was awarded the BIG Innovation Awards for TelescopeAI product development, won the Global SDG Awards in the Quality Education category, 12 employees were recognized by Sitecore Most Valuable Professionals (MVPs), and was included in the list of 100 significant knowledge management companies published by KMWorld Magazine. EPAM Systems has created opportunities for career growth in the areas of technical expertise, project management, building complex systems architecture, consulting and management of development, testing and support teams and departments. In the course of work, business trips to major Russian and foreign customers are common. EPAM CDP is a team of EPAM Systems’ training center, with its help the company successfully implements the Career Development Program – a consistent process of training young professionals, allowing the theory to consolidate practice in the subject area. Participation in CDP creates an opportunity to accelerate the acquisition of necessary experience and build a successful career. EPAM has been working in Kazakhstan since 2008. Projects are being implemented in cities such as Nur-Sultan, Karaganda, Almaty (where offices are located) and Atyrau. Let’s look at the dynamics of the trainings, which form different competencies of EPAM Kazakhstan staff in 2015–2017 (Fig. 1).

Fig. 1. EPAM Kazakhstan training courses Source: Compiled by the authors

It can be noted that most of the trainings on competence building at EPAM Kazakhstan are held online, i.e. employees are basically ready to accept new information. F2F (face-to-face) training is mainly English language courses that employees can attend free of charge to improve their digital business competences. 90% of these courses are aimed at programmers and testers working in the company and only 10% for functional staff.

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Figure 2 shows data on EPAM Kazakhstan staff training in basic digital skills on average for 2015–2017.

Fig. 2. Structure of EPAM Kazakhstan staff training in basic digital skills, % Source: Compiled by the authors

The most demanded areas of training are: – functional testing (22%) – one of the main EPAM activities; – JAVA (20%) – a programming language and computing platform that was first released by Sun Microsystems in 1995. – .NET (13%) – .NET Framework is a software platform released by Microsoft in 2002; – JavaScript (8%) – a multi-paradigm programming language developed in 2010, usually used as a built-in language for program access to application objects. – automated testing (7%). Based on the specifics of the company, it is digital training that prevails. Figure 3 shows the distribution of digital trainings by category, on average, for the years 2015–2017. Software development accounts for the largest share (26%), followed by maintenance and support (10%) and 9% each for Soft Skills and EPAM Internal processes and tools. The EPAM CDP data for 2017 is shown in Fig. 4.

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Fig. 3. Structure of EPAM Kazakhstan digital training courses, % Source: Compiled by the authors

Fig. 4. Participation in the EPAM Kazakhstan Mentoring Program for Key Digital Skills for 2017 Source: Compiled by the authors

Interestingly, only 3 directions have local mentors from Kazakhstan: – the English language; – DevOps – technology of active interaction of development specialists with specialists in information technology services and mutual integration of their work processes into each other to ensure product quality (taking into account the specifics of the Kazakhstan market);

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– ASP.NET MVC Framework – a framework for creating web applications, which implements the template Model-view-controller (again, mainly for Kazakhstan). In most projects, mentors can be from any of EPAM’s 25 global offices. This proves the effectiveness of EPAM CDP in Kazakhstan.

5 Conclusion Regardless of the direction that digitalization will take in the coming months and years, it will still be necessary to continuously adjust the business parameters. Employees are the most important resource of any organization and must therefore be equipped with the appropriate skills to successfully meet the challenges ahead. Companies need to keep a close eye on their individual skill needs and manage their staff for the future. HR already has a large number of effective tools and processes that now need to be honed in relation to digitalization. This article provides the first indications on the key adjustment screws and changes in digital competences. How it will look in a particular project of each company is related to internal and external requirements and specifics. The awareness of the entire company that employees must keep up with the progress in digitalization, that demand profiles will change and that sooner or later new positions will emerge is the basis for further strategic organizational development. EPAM benefits from a dialogue with interested employees and the consideration of different points of view in the company and from this point of view the experience of Kazakhstan’s EPAM is applicable practically not only to IT companies. The open exchange of ideas and suggestions can include suggestions for changes and possible fears, and a platform other than the EPAM CDP (or an upgrade of an existing one) should be created to promote positive change towards a digital organization.

References Boronenko, V., Lavrinenko, O.: Territorial development of Iceland: case study of social and economic interactions within global context. In: Social Sciences for Regional Development in 2015: Proceedings of the X International Scientific Conference, 16–17 October 2015. Daugavpils University, Latvia (2015) Brynjolfsson, E., Kahin, B.: Understanding the Digital Economy. The MIT Press, London (2000) Das Scrum Team AG (2016). Scrum, verfügbar über: http://www.dasscrumteam.com/scrum. Stand 16 Nov 2015 Deterding, S., Khaled, R., Nacke, L.E., Dixon, D.: Gamification: Toward a definition. In: CHI 2011 (2011) Deutsche Gesellschaft für Personalführung e. V. (DGFP): Agile Unternehmen – Agiles Personalmanagement. PraxisPapier, 1 (2016) Dobrovolskienė, N., Tvaronavičienė M., Tamošiūnienė R.: Tackling projects on sustainability: a Lithuanian case study. Entrepreneurship Sustain. Issues 4(4), 477–488 (2017). https://doi.org/ 10.9770/jesi.2017.4.4(6) EPAM. Reports Results for Fourth Quarter and Full Year 2019 (2019). https://investors.epam. com/news-releases/news-release-details/epam-reports-results-fourth-quarter-and-full-year2019

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Platforma EPAM. TelescopeAI udostoena nagrady BIG INNOVATION AWARD 2019. EPAM (2019). https://www.epam-group.ru/about/newsroom/press-releases/2019/epam-wins-2019big-innovation-award-for-telescopeai KMWorld. 100 Companies That Matter in Knowledge Management 2019 (2019). https://www. kmworld.com/Articles/Editorial/Features/KMWorld-100-Companies-That-Matter-inKnowledge-Management-2019-129903.aspx Keshelava, A.V.: “Introduction to the “Digital” economy” Geo-systems All-Union Scientific Research Institute, Moscow, 2017, p. 28 (2017). http://spkurdyumov.ru/uploads/2017/07/ vvedenie-v-cifrovuyu-ekonomiku-na-poroge-cifrovogo-budushhego.pdf. Accessed 27 Nov 2017 Meņšikovs, V., Ignatjeva, S., Stankevičs, A.: Higher education’s contribution into economic performance and innovativeness of Latvia: exploratory research (2014). http://www.ekof.bg. ac.rs/wp-content/uploads/2014/04/01.pdf Olefirenko, O., Petrenko, E., Shevyakova, A., Zhartay, Z.: Towards economic security through diversification: case of Kazakhstan. Entrepreneurship Sustain. Issues 5(4), 509–518 (2016). http://dx.doi.org/10.9770/jssi.2016.5.4(6) Tvaronavičienė, M., Grybaitė, V., Tvaronavičienė, A.: If institutional performance matters: development comparisons of Lithuania, Latvia and Estonia. J. Bus. Econ. Manag. 10(3), 271– 278 (2009). http://dx.doi.org/10.3846/1611-1699.2009.10.271-278 WIPO. France, Law #2004-575 dated 21.06.2004 “On building confidence in the digital economy” (2018). http://www.wipo.int/wipolex/ru/details.jsp?id=15802. Accessed 12 Nov 2018 World bank, “Digital Dividends” From: Business & Information Technology 2017. Issue 03(66) (2016). World Bank, World Development Report 2017. http://bit.samag.ru/archive/article/ 1826/. Accessed 21 Oct 2018

The Human Needs of Smart Nations in the Era of Artificial Intelligence Irina E. Sokolovskaia1(&) 1

2

and Ilia V. Volochkov2

IUPSiBK State University of Management, Dolgoprudny, Russia [email protected] International Academy of Trouble-Hacking (IAT), Perm, Russia [email protected]

Abstract. Understanding how the mechanisms of intellectual development work allows us today to see trends in the impact of digital information and communication tools on cognitive abilities. Digital technologies not only change our lifestyle and give us new ways to communicate, but also redesign the mechanism of our brain, our cognitive abilities. Technologies are improving exponentially, and the Internet is rapidly transforming the intellectual abilities of the average person. Artificial intelligence is capable of surpassing man in many fields of activity already in the XXI century. For many people modern benefits of a civilization turned out to be factors not of development, but degradation. At the same time, due to the spread of the Internet and the general improvement in the comfort of life, there are increasing differences in the levels of development of individuals. New ways of effective thinking for preservation of human brain advantages in its already started competition with artificial intelligence appear as mankind reaction to the current situation. One of such methods is called troublehacking: with its help it is possible to search for the best way to solve a wide range of tasks algorithmically. Trouble-hacker is a perfectionist of systems; the inventor of non-standard ways of the solutions of problems, applying them in practice; a prototype of the person of the future who will have an indisputable superiority over artificial intelligence. Keywords: Trouble-hacking
Artificial intelligence Information and communication technologies JEL Code: A3


Superpowers



M1
Z1

1 Introduction Cumulative knowledge is an integral part of a nation’s development. According to Vivian Balakrishnan: “We live in a world where the way we create values is determined by how we work, how our societies communicate, mobilize and transform. Everything has changed. The time for robots is coming. If we do nothing, there is a danger that the middle class will lose their jobs. So we are talking about the distribution of opportunities. This is why we are so obsessed with education and the acquisition of

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future skills. The point is that with new jobs, we would have people with the right skills. We have to compare our population with the new jobs that have been created.” Our country also understands that in the era of the digital revolution, when new jobs are taken up by robots, there is a need for the middle class to acquire new skills in order to compete with robots and to adapt quickly to changing living conditions. Consequently, there is a need to educate people about new jobs, constantly create new ones, and inform people about the knowledge and skills they will need in the near future. Accordingly, society needs to invest in additional training, organizing education for people who will go to retrain from obsolete occupations to promising occupations. According to Vivian Balakrishnan: “This is hard work. It is not a glamorous job. It’s not a quick solution. But it is a real solution…”

2 Background and Methodology If we talk about the values and needs of Smart Nations, it is enough to refer to the Russian-English dictionary to list the qualities that such a person will have: fast, energetic, smart, fashionable. In the opinion of the youth surveyed, the type of SmartMan is more like a certain intelligent machine that will work quickly (mentally, not physically), immediately make complex decisions and new discoveries. Such a person will have outstanding intellectual abilities, but at the same time they will lack physical functions. The new man will invent robots (including software products) that will do the work for them, but at the same time, difficult work, where it is necessary to use willpower and overcome obstacles, may gradually disappear, but it is this type of work that originally turned a monkey into Homo sapiens. Thus, with increasing comfort of life we launch a vector of intellectual and physical degradation of man as a species, while technology is developing at a fantastic pace. It is likely that in the near future we will be able to watch a huge mass of people who are no longer in demand on the labor market because their physical and intellectual functions are incomparable to robots. Man as a working unit can become unprofitable in many areas, and we need to find an advantage that will give mankind an undeniable superiority over machines. It is already becoming increasingly difficult for a person to compete with modern digital technologies. Humans are beginning to demonstrate inadequate behavior and professional burnout more and more often. Neural networks calling and communicating with customers are currently a perfect example. Just one program can replace hundreds of employees. The program does not have a bad mood, the program has no desire to present the activity in front of the boss, the program does not need rest. It is not difficult to compare the profitability of hundreds of employees who must be paid their salaries every month, and many related problems should also be solved, with one program that was purchased once and does not require significant investment. We see only the beginning of active introduction of artificial intelligence systems, but this already makes us think that in the nearest future people without the unique skills which are not reproduced by machines, will not be in demand on the labor market. In other words, it will be unprofitable to hire these people and they will be left without a source of livelihood. We remember the enormous negative consequences of

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the Great Depression (1922–1933) caused by the world economic crisis. But what if, in the future, we get a new Great Depression caused by the uselessness of man as a working unit? Our children of today will face this, and in order to prevent this, we need to come up with ways of thinking that are not reproduced by machines and that are in demand by the market. But what methods could it be? Simple intellectual abilities like good memory and attention are reproduced by machines, as well as the presence of any knowledge, including in the field of medicine. In our opinion, the only human thinking ability that is not simultaneously reproduced by machines and can make commercial profit is the ability to build new systems, create and improve them. In 2019, a contemporary researcher I.V. Volochkov invented the methodology of improving systems called trouble-hacking and published it in his book “The Realist’s Diary: a book about money, relationships and meaning of life” (Volochkov 2020). Let’s turn to the term trouble-hacking (literally: trouble – problem, unpleasantness, and hacking – searching for loopholes). This is the methodology of improving systems; a set of methods and means aimed at the invention of non-standard ways of solving problems, and their application in practice. Accordingly, a trouble-hacker is a universal inventor of original, creative ways to solve problems that arise in this or that area of life. Trouble-hacking works on the basis of special algorithms and methods, some of which use Soviet engineering technologies and authoring software products. For example, one of the algorithms of trouble-hacking “Vector” allows solving problems in business and life through the use of a special database – “Register of trouble-hacking inventive ideas” (Trouble-hacking technologies 2020). Also, trouble-hacking contains methods of improvement of internal systems of the person, such as system of reception of pleasures that, in turn, triggers a steady vector to self-development in the person. In other words, trouble-hacking is a methodology of algorithmized creativity and self-development that can have significant commercial benefits, which makes trouble-hacking a skill of the man of the future that will strengthen their superiority over machines.

3 Discussion and Results Modern knowledge about the influence of electronic information technologies on cognitive abilities of an individual gives us an opportunity to assume the ability of human brain to change. According to American psychologists G. Small and G. Vorgan, the brain of the modern man is still evolving nowadays. It seems to be adjusting to changes in the world and forms new neural chains: there is an ejection of neurotransmitters, dendrites appear from neurons and new synapses are born. “Perhaps we are witnessing one of the most unexpected, yet most significant, breakthroughs in human history. We can assume that it starter from the moment when cave men managed to ease their life with the trade tools.” The authors of the book take a more cautious stance, asking: “Will the natural mind of man be able to keep up with such a rapidly developing technology?” (Small and Vorgan 2011). The quality of an individual’s interaction with a computer depends on his or her age. For example, in the range from 35 to 50 years old the perception of a person is quite flexible, and people who have a certain level of education and constantly work on

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the computer, have got a good dynamics to the development and assimilation of new knowledge (Sokolovskaia and Volochkov 2019a). People over 60 are called “digital immigrants” by specialists. The thinking formed in pre-computer times, the sluggishness of thought reactions makes their work on the computer ineffective. At the same time they have some advantages – while the brain of such a person perceives the flow of information slowly, its neural networks quickly perceive the “picture” as a whole. The latest research shows that the brain of adult people retains flexibility and efficiency throughout the whole life cycle (Sokolovskaia and Volochkov 2019b). Another fact: spending too much time in front of a computer (games and social networks) has a negative impact on cognitive functions of young children. Long use of the computer leads to the fact that young people do not develop the necessary sections of neural networks, which are essential for the transition to a new level of development, when the brain begins to think not only in specific categories, but also in abstract ones. For example, to experience feelings not only towards oneself but also towards other people, i.e. to show empathy. Unfortunately, there are already statistical data on the underdevelopment of young people’s frontal lobes of the brain, and this means the inability to reason logically, further lag in the development of intelligence, potential immaturity (Gerasimova 2017). However, there are already the first generations of people who have not seen the “pre-computer” world, who have new skills compared to their predecessors. They are very good at electronic technology, are able to manage processing of large arrays of information, can solve several tasks simultaneously. They are used to constant consumption of information, the brain of these people requires a new load all the time. However, life in such an information flow also leads to negative consequences: superficiality of perception develops, there is a tendency to bring up simple topics, to prostration, when large projects are postponed, and small problems are solved instead (Sokolovskaia and Volochkov 2019a; 2019b). The experts of the III International Scientific Forum “Step to the Future: Artificial Intelligence and Digital Economy” came to a common opinion that artificial intelligence today is not only an engineering-mathematical and IT-discipline, but also a complex of technological solutions, which allows simulating the cognitive functions of a person and obtain the results comparable to at least the results of human intellectual activity in the performance of specific tasks. During the discussions held in the section “Education and science – the disharmony of co-evolution” it was noted that the growing specialization in the division of labor leads to the emergence of several types of specialists working in the same field, who have common competencies, but differ from other employees with one unique ability – to collect, systematize and present systematized knowledge for students of specialized educational courses that are preparing to become specialists. This narrow specialization of an employee transforms him/her into another role – an employee of a university or an academic institute. As a rule, such specialists lose understanding of the needs of real production. The situation of co-evolutionary development arises: producers develop knowledge of their production in reality, while specialists in higher education institutions improve their own competencies based on the study of production processes as

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teachers and scientists. Therefore, the problem of universities and academic institutions lies in the parallel development of competencies that often do not meet the needs of society. According to the author of methodology I.V. Volochkov in his book “The Realist’s Diary”, “the key algorithm of trouble-hacking (the algorithm of effective problem solving) is actually able not only to change our psyche and way of thinking, but also solve a lot of problems, from theoretical to purely practical” (Volochkov 2020). Prerequisites for creating trouble-hacking methods The main tool of trouble-hacking for improving external systems is the Algorithm for Effective Problem Solving, created by I.V. Volochkov, which can be considered as an improved method of brainstorming, as well as a development of the theory of solving inventive problems of technical nature, which was used in the Soviet Union more than half a century ago. Here are some important principles of trouble-hacking: the right direction of the thinking vector to get the most rational way to the goal; striving for the ideal final result; definition of the goal core with the minimum cost of resources (time, money, labor, energy, etc.). Trouble-hacking allows inventing and applying methods of problem solving, many of which cannot be invented without knowledge of trouble-hacking methods or theory of inventive problem solving. But, what is most important, such creative process cannot be reproduced by machines. Trouble-hacking allows not only inventing new systems and improving existing ones, but also using resources more efficiently. Thus, a troublehacker can increase the profitability of a business and reduce costs, which guarantees commercial benefits not reproduced by machines. In comparison with traditional methods of defining and solving problems, troublehacking allows doing the same much more effectively. The method of trouble-hacking Algorithm for Effective Problem Solving for this purpose searches for ways to improve the ideality of all systems involved in a particular problem, as well as analysis and elimination of risks, the so-called kernels of interference (Volochkov 2020). In the algorithm of trouble-hacking “Vector” this process is automated at the expense of the software package “Register of trouble-hacking inventive ideas”, in which ideal states of systems and ready-to-use ideas for different spheres of life are set in advance, and on their basis it remains only to come up with concrete scenarios of actions in practice. In addition, the Algorithm for Effective Problem Solving involves dividing the goal, which is set as a result of solving the problem, into sub-targets, i.e. a number of consecutive steps on the way to the desired outcome. Further, the state of ideality is searched already for systems from the sub-targets. Thus, the process of problem solving is simplified, because the problem is broken down into a number of small ones, whose solutions at each stage will lead to the final goal, not to mention the fact that the domino effect may work – having made one of the steps, we immediately, bypassing the other sub-targets, will come to the result (Volochkov 2020). Mastering the skills of trouble-hacking enables a person to solve tasks according to a single algorithm. Mathematically verified thinking order performs the function of software, where each subsequent step follows the previous one. The questions asked when moving towards the sub-targets are broken down into sub-questions, formatted

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and grouped into a clear system with further elaboration of each component with a clearly projected result. Remembering the ideas of the great philosophers of the past – Aristotle, Descartes and La Mettrie – that man is a machine, we can imagine a modern individual as a bio-cyborg capable of finding the most rational solutions to any problem. According to a study by Science magazine, “the Internet has become the primary form of external or transactional memory where information is stored collectively outside of us”, and consequently our brain has become dependent on the availability of this external source of information. This is all connected with the image of troublehacker as a man of the future, where the individual plays the role of a self-propelled computer with the unlimited Internet instead of limited memory, which almost makes them a superhuman thanks to such a superstructure over the mind. Thus, we can conclude that trouble-hacking is a new way of thinking that can give humanity superiority over artificial intelligence.

4 Conclusions Today we live in a new reality, where the successful development of a country is determined not by its geographic location and the availability of sufficient fossil resources, but by the quality of the intellectual potential of the population. It is human capital that today forms the key trends in the development of national economies of the world. Accordingly, it is not the ability to work routinely that comes first, but creative thinking. Unfortunately, the conveniences of the modern world are not conducive to the development of human intellectual abilities. People live in phones and computers, wasting time on the consumption of useless Internet content. Against the background of the general development of artificial intelligence systems and robotics, the children of today may in the future be commercially unprofitable, which may lead to mass unemployment and global social upheaval. Considering this danger, we need to develop those features of thinking in the society that cannot be reproduced by machines in the foreseeable future. Trouble-hacking may be one of the solutions to this problem. Acknowledgments. The authors are grateful to the relatives and friends who supported us during the work on this manuscript. I would like to express special gratitude to B.P. Sokolovskii, A.A Gin and O. E. Schnitkovskii for their understanding and emotional support.

References Volochkov, I.V.: Dnevnik Realista: kniga pro den’gi, otnosheniia i smysl zhizni [The Realist’s Diary: A Book About Money, Relationships and Meaning of Life]. Science, Moscow (2020) Small, G.: The memory bible. In: AST, 2007, p. 101 (2007). Accessed 15 Feb 2020 Small, G., Vorgan, G.I.: Surviving the technological alteration of the modern mind. KoLibri, Azbuka-Attikus, Moscow (2011)

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Gerasimova, I.A.: Tsifrovaia epokha i virtualizatsiia soznaniia. Problemy i riski inzhenernogo obrazovaniia v XXI veke [The digital age and the virtualization of consciousness. Problems and risks of engineering education in the 21st century], pp. 76–109. Universitetskaia kniga, Moscow (2017) Sokolovskaia, I.E., Shcherbakova, O.I., Vasiakin, B.S.: Informatsionno-psikhologicheskaia bezopasnost’ lichnosti kak psikhotekhnologiia zashchity manipuliatsii soznaniem molodezhi [Information-psychological safety of personality as a psychotechnology of protection from manipulations of consciousness of youth]. Kommunikalogiia 7(2), 154–164 (2019) Sokolovskaia, I.E., Volochkov, I.V.: Sotsial’no-psikhologicheskie aspekty razvitiia sverkhsposobnostei cheloveka metodologiei « Trablkhaking » (psikhologicheskii analiz metodologii) [Socio-psychological aspects of the development of human superpowers by the Trouble-hacking methodology (psychological analysis of the methodology)]. Azimut nauchnykh issledovanii: pedagogika i psikhologiia 8(4(29)), 363–366 (2019a) Sokolovskaia, I.E., Volochkov, I.V.: Cognitive body-oriented psychotherapy of subconsciousness. Psychol. Hist.-Crit. Rev. Curr. Res. 8(5A), 127–134 (2019b). Accessed 15 Feb 2020. https://doi.org/10.34670/ar.2020.46.5.014

The Application of Digital Marketing Technologies for Improvement of Customer Communications Alan Abaev1(&), Feliks Sharkov2, and Vera Aleshnikova3 1

Russian State University for the Humanities, Moscow, Russian Federation [email protected] 2 MGIMO University, Moscow, Russian Federation [email protected] 3 State University of Management, Moscow, Russian Federation [email protected]

Abstract. The article discusses the key changes related to the advent of digital technology in the field of marketing communications. It has been revealed that today the result at almost all communication stages is increasingly influenced by digital technologies, surely foremost in the Internet environment. However, it has been specified that digital technologies have already stepped beyond the Internet space, and they are now proactively used in an offline environment, which sets the limits of digital marketing. In marketing communications, it is hard to separate online and offline advertising channels. The communication with the consumer is effected through all possible communication channels based on his preferences. Though the number of communication channels is great, and consumer demands are getting ever diversified. Keeping up with the situation and taking advantage of it is ever hard, if not an impossible task, for companies. Rather, it will be impossible if they don’t use modern techniques. One of these solutions, which has significantly changed the entire advertising market, is algorithmic (programmatic) advertising. It allows for the best possible customization of advertising communications with consumers. Keywords: Digital marketing
Marketing communications advertising
Consumer
Personification
Targeting JEL Code: M31


Programmatic


M37

1 Introduction Changes in the economy are associated with both globalization and competition, as much as digitalization. Digital technology has become an integral part of the marketing activities of any company around the world. Competition is stiffening, the consumer is facing a difficult choice among a huge offer of goods and services. Often, he is not ready to make a reasonable choice in favor of a particular brand (company). The need to help a consumer to take a decisive step by sending him advertising in the ineligible © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 873–880, 2021. https://doi.org/10.1007/978-3-030-59126-7_97

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and acceptable form via a communication channel that is convenient for him became strong. But getting knowledge of it takes targeting of communication, which is possible thanks to modern digital solutions, especially algorithmic advertising.

2 Background and Methodology The authors employed the universal scientific methods, including analysis and synthesis, idealization, and formalization, as well as experimental research methods of observation, modeling, abstraction, and comparison. As a methodological background, the authors took the works by Russian and foreign authors on digital marketing communications (Abaev et al. 2017; Arkhipova and Gurieva 2018; Baxendale et al. 2015; Hossain et al. 2017), and algorithmic advertising (Dementij 2018; Malthouse et al. 2018). The information background was laid by analytical materials of marketing and consulting firms, expert estimates, and the findings of selective surveys (Kamaletdinov 2019; Mazanov 2019; How programmatic advertising works 2019; Algorithmic procurement in China 2020). Marketing communications have always been an essential tool for the success of any company. At the same time, communication tools are very diverse and getting more sophisticated over time. The advent of the Internet and later digital technologies (which soon moved beyond the limits of the World Wide Web) allowed building a new paradigm of consumer communication, which is based on the maximum personification and targeted interaction.

3 Discussion and Findings Modern digital technologies (along with other factors) have dramatically changed the principles and ways of customer communication. Thus, the estimation of consumer features and identification of motives and factors of decision making has become more accurate and the speed of communication of information on the product to the customer has significantly increased. Surely, this foremost relates to the online environment, but now many communication technologies go offline. Along with technologies, the quality of assessing consumer needs and furnishing relevant information to him has substantially improved in the offline environment. Therefore, it’s not quite right to talk only about Internet technologies in marketing, it’s much more appropriate to imply digital marketing technologies that work online and offline at the same time, which emphasizes the higher integration of modern marketing communications. With that, it should be noted that the latter is accompanied by the personalization of communications for almost every single customer or their group. So, the technique for predicting the term of the sale of goods depending on price, previous demand, offers from other sellers, becomes popular among large Internet intermediaries, including Russian ones. But, one of the Russian services offering such a technique, informs only about the terms-price ratio. Is this the deficiency of the

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technique or do they hide the possibilities? The answer is yet a commercial secret. But the technological development will necessarily lead to consideration of many indicators (not only the price) by the service. Now, this function is aimed at sellers to whom it provides sale services. But it should be understood that for a company providing a site for sale, sellers are customers using the service. Thus, the service makes an individual offer to customers, which can also be transformed when some terms are changed. Of course, this technique causes a risk that consumers of this service (namely consumers of the service, i.e. sellers of goods, and not ultimate buyers of goods sold at this service platform) will get a less advantageous offer. But this is not likely, since the Internet service, as a rule, gains a percentage of the sale amount, that is, it is not directly interested in price reduction. One Russian coffee house chain is launching a highly intelligent service (neural network) with a personified approach to customers. So, a coffee house may offer a client coffee and/or other drinks, depending on his previous preferences, as well as right-now mood. According to the company manager and representatives of the developer of this technical solution, these and other parameters will assess the neural network of each coffee house. It will recognize the customer’s emotions and send them to the kitchen. The developers also assure that the neural network will be learning to recognize emotions automatically. The more often a client comes, the more information about the service will have and continuously update the data. As a result, the best possible personalization of customer preferences will be achieved, which will heighten the demand. This approach is cost-saving since there is an opportunity to predict the demand for drinks and distribute resources in a more even way. Economies can be also associated with that the neural network will predict the number of visitors depending on the weather, day of the week, nearby events, and other factors. The developers intend to implement another interesting function of this service when the visitors will be able to track the product path from the plantation to the coffee house by scanning the QR code on the cup and choosing the most favorite product. Thus, the consumer has a feeling of being chosen and important to the company. The commitment to ever higher personalization of customer communication has led to the emergence of technical solutions streamlining this process. Currently, algorithmizing of the ads’ placement is getting a more relevant digital solution for communication rearrangement. Algorithmic (programmatic) advertising is not, in common sense, an advertisement of goods or services. Programmatic advertising refers to the algorithmic purchase and sale of advertising space in real time. During this process, the software is employed for automation of the purchase, placement, and optimization of media inventory through a tender system. Automation means that the process can be performed in real time almost regardless of human influence. Programmatic advertising has become a new factor in the online environment and has much transformed the principles of consumer communication. The program monitors user activity on the Internet, including purchases, interests, sites visited, and the mass media used. This data is processed and applied for making up a digital profile of people. Information is collected not only when they buy goods and/or use services, but even when they only express interest in them. Further, information about these people is classified into large samples (tens of thousands of people or more) to create a

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statistically significant profile based on any variable, such as sex, age, geographical location, income, and so on. Market experts can now write algorithms that automatically buy and target ads via the Internet using these criteria instead of paying for a certain number of ads in conventional advertising. Besides, during the advertising campaign, these algorithms can estimate what works best in terms of geographic location, time of day, market segmentation, which helps market experts identify the target audience for right now in order to pay only for highly-efficient ads. Today, algorithmic advertising has turned into an essential tool for marketing communications. According to the Magna Global report, as of 2019 programmatic advertising accounted for 50% of all ads (Fig. 1).

Fig. 1. Dynamic behavior of indicators in programmatic advertising

As we can see from Magna Global diagrams, the share of programmatic advertising is growing annually and the most developed in the USA and Great Britain. Google also said that 60% of the total investment in digital marketing accrues to programmatic advertising.

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Nevertheless, many marketers do not understand the essence and know the basics of programmatic advertising. This especially relates to the understanding of automated software operation and the mechanism of advertising goals attainment. First of all, one should understand that the purchase and sale of advertising are effected through an automated program at the tender in a split second. Programmatic advertising has facilitated this process, it uses algorithms and programs to get the advertising space. One of the main reasons for the success of programmatic (algorithmic) advertising is in simultaneous performance of several tasks and tracking of advertising costs. For working on the programmatic platform, you need an advertising space on the web page that is already configured for programmatic advertising. When a user enters (as a result of a targeted search, switch from another page, etc.) to this advertising space (place), this page sends a message to the advertising platform where the bidding will take place. The bidding has the following stages: 1. The visitor enters the site of an ad network stakeholder. 2. The network offers to show ads to the user and transfers data about him to the buying platform. 3. The buying platform automatically processes the data (maybe it’s the topic of the site, demographic and behavioral details of the user, etc.). 4. Relying on the data analysis, the buying platform selects an advertisement that can be displayed to a particular person. 5. Using real-time bidding, the ad network chooses the ads with the highest bid and displays them to the user. At this bidding, various advertisers interested in displaying their ads to a particular customer will compete, and after bidding, the one who offers the highest price for an ad display to this customer wins and his ad will be displayed to the user in loading the page. Since the entire process is automated, it takes milliseconds. Program advertising is totally based on algorithms and programs, but human management is still required to ensure its appropriate performance. Besides, still there is the problem of ad pop-up in the wrong places, which is related to an inaccurate assessment of people’s actions. For example, a person randomly visited a page, and the program thinks that he showed interest in the subject and start producing ads that are not interesting to him at all. But the technical capabilities of programmatic advertisements are continuously being refined and the target accuracy of ads is growing. An advertiser can target an audience both using key phrases in the search and demographic and social features, preferences and interests, etc. Targeting makes important sex, age, income, marital status, children, occupation, hobby, and much more. The advertiser can switch the condition of ad display to key phrases. In this situation, the audience will be targeted by the topics of the sites. Leaders in the automated purchase of advertising in the Russian market are Google, Yandex, Facebook, VKontakte, Instagram, myTarget, and other platforms. Most likely, they will be the leaders and drivers of the programmatic buying market in the future. In the first instance, they have huge audiences numbering hundreds of millions of users. They also have weighty financial resources, the trust of advertisers, and developed advertising networks. If one studies the evolution of services such as Yandex and

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Google, it becomes obvious that they are aimed in their advertising at the further automation and higher accuracy of targeting on the back of algorithms. The presented charts for ads purchase (Figs. 2, 3 and 4) clearly demonstrate the differences in the conventional and programmatic methods. The interfaces and software algorithms that capture signals from the demand side (DSP – Demand-Side Platform) are key to algorithmic advertising. Having received a signal (it takes a split second), the programmatic platform sends a request to advertising exchanges where DSPs are received. DSP systems are potential customers that represent the advertisers’ interests. The SSP program puts up for sale a lot at the demand market place.

Fig. 2. Conventional media-buying system

The system itself selects the consumers who have shown interest in the product/service and also the data about the topics that are most interesting to users. Thanks to this, the system identifies the user’s preferences and places its programmatic advertising on the relevant web pages, as well as uses specific cookies and other data sets. Owing to the above, the demand for specific products is growing drastically. However, today, the key to success is the utilization of various advertising forms. For example, a famous company that used a programmatic advertising campaign in Google first showed several videos in real time on the Internet and then launched programmatic advertising through AdWords (now Google Ads). This granted to the company targeted sales growth over a very short term.

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Fig. 3. Algorithmic media-buying system.

Fig. 4. Programmatic buying at all marketing stages.

4 Conclusions The advent of digital technology has allowed pushing the limits of marketing communications with consumers and adjusting ads (and other communication tools) to consumer needs and possibilities as far as possible.

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As a consequence, the cost of contact with consumers is reducing, the time required for delivery of an advertising message is lowering, the targeting of communications is increasing. Thus, it is obvious that modern digital technologies help streamline marketing communications and promote their efficiency.

References Abaev, A.L., Arkhipova N.I., Gurieva M.T. Cifrovye tehnologii kak faktor razvitija sovremennogo marketinga [Digital technologies as a factor in the development of modern marketing]. In: Advances in Economics, Business, and Management Research, Tretja mezhdunarodnaja konferencija po jekonomike, menedzhmentu, pravu i obrazovaniju, vol. 32, pp. 30–33. Atlantis Press (2017) Arkhipova, N.I., Gurieva, M.T.: Sovremennye tendencii razvitija cifrovogo marketinga [Modern trends in the development of digital marketing]. Vestnik Rossijskogo gosudarstvennogo gumanitarnogo universiteta. Serija Jekonomika, upravlenie i pravo 1(11), 9–21 (2018) Baxendale, S., Macdonald, E.K., Wilson, H.N.: The Impact of different touchpoints on brand consideration. J. Retail. 91(2), 235–253 (2015) Dementij, D.: Programmnaja reklama – modnyj termin ili budushhee reklamnogo rynka [Programmatic advertising is a fashionable term or the future of the advertising market] (2018). https://texterra.ru/blog/programmatik-reklama-modnyy-termin-ili-budushcheereklamnogo-rynka.html. Accessed 12 Feb 2020 Hossain, M., Kabir, S., Rezvi, R.I.: Influence of the integrated marketing communication on brand orientation and market orientation: a literature review. Aust. J. Bus. Sci. Des. Lit. 10(1), 1–12 (2017) Marketing Communication in Omnichannel Reality – a Model Approach (2017). https://www. researchgate.net/publication/323019809_Marketing_Communication_in_Omnichannel_ Reality_-_a_Model_Approach. Accessed 12 Feb 2020 Kamaletdinov, D.V.: V Peterburge zapustjat pervuju v Rossii kofejnju s nejrosetjami i mashinnym obucheniem [The first coffee house in Russia with neural networks and machine learning will be launched in St. Petersburg] (2019). https://tjournal.ru/tech/91588-vpeterburge-zapustyat-pervuyu-v-rossii-kofeynyu-s-neyrosetyami-i-mashinnym-obucheniem. Accessed 12 Feb 2020 Mazanov, A.: Jula stala prognozirovat’ srok prodazhi tovara v zavisimosti ot ego ceny [Yula is now predicting the term for the sale of goods with regard to its price] (2019). https://tjournal. ru/news/133238-yula-stala-prognozirovat-srok-prodazhi-tovara-v-zavisimosti-ot-ego-ceny. 27 dekabrya 2019. Accessed 12 Feb 2020 Malthouse, E.C., Maslowska, E., Franks, J.E.: Understanding programmatic TV advertising (2018). https://www.researchgate.net/publication/325048869_Understanding_programmatic_ TV_advertising. Accessed 12 Feb 2020 Kak rabotaet programmatik-reklama [How programmatic advertising works] (2019). https:// www.e-xecutive.ru/management/marketing/1990697-kak-rabotaet-programmatik-reklama. Accessed 12 Feb 2020 Algoritmicheskikh zakupok bojatsja, I v jetom net nichego strannogo [They are afraid of algorithmic procurement and this is not strange] (2020). http://rtbinsight.ru/articles/ algoritmicheskix-zakupok-boyatsya-i-v-etom-net-nichego-strannogo.html. Accessed 12 Feb 2020

Digital Technologies in the Educational Process of Higher School Galina N. Ryazanova1(&)

and Liudmila E. Surkova2

1

2

State University of Management, Moscow, Russia [email protected] National Research Moscow State University of Civil Engineering, Moscow, Russia [email protected]

Abstract. The article describes the transformation of the global economic space at all levels of socio-economic eco-systems, which is caused by the digitalization of all spheres of public life. The level of transformation of world civilization is commensurate with the revolution of including new ways of energy supply for industry and people’s lives, bright discoveries that change the space due to the achievements of scientific and technological progress. The problems of introduction of digital technologies in higher education are identified associated with poor training of faculty and students in the use of computer technologies, technical problems and changes in the purpose of educational activities in General. Empirically revealed are the results of the introduction of digital technology elements in the technological process of teaching students basic disciplines on the example of microeconomics. The result of the study is a real improvement in the assimilation of theoretical material using digital technologies, a better understanding of it and the possibility of its application in professional activities. It is concluded that it is necessary to include elements of digital technologies in the educational process of Higher School, they provide new opportunities for teachers to increase the interest and involvement of students in the studied disciplines, they are useful for students to realize their creative and intellectual potential, obtain deeper knowledge and skills in demand. For the national economy, digitalization of education is an opportunity to get managers and specialists of the future who can ensure stable economic growth and social development of the nation. Keywords: Digital technologies
Educational process
Higher school transformation of educational tools
Visualization
Modeling JEL Code: A22


The


Y10

1 Introduction Changes in the economic and social space of recent decades have affected all spheres of human social life. Technologies in the field of production and services are changing rapidly, adapting to modern dynamic transformations. The main characteristic of the © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 881–892, 2021. https://doi.org/10.1007/978-3-030-59126-7_98

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XXI century is a high degree of uncertainty, which is reflected at all levels of the components of the socio-economic eco-system (Sazanova et al. 2019). One of the key reasons for the high dynamics of changes in all segments of the economy is the introduction of digital technologies in everyday and professional life. Scientific progress and technical changes increase labor productivity in all areas of the economy, which brings serious and long-term positive results for the world economy. The modern technological revolution is a revolution like the creation of a steam engine, an electric generator, and a printing press, replacing millions of people who were engaged in unproductive labor and creating millions of new jobs for a new generation. In production, digital technologies can optimize business processes, reduce the risks of organizations when they are correctly evaluated, in particular, using the network modeling method (Surkova 2019), which has a positive effect on the company’s costs and reducing the cost per unit of output, as well as in terms of simplifying the development of digital international business. In the service sector, this is an opportunity to meet the customer’s needs more efficiently and in a shorter time. The sphere of education in general, and higher education in particular, cannot stay away from global trends, since it is an important part of the socio-economic eco-system and has to adapt to the institutional conditions characteristic of the current state of society. Educational structures form social skills, rules of behavior in the socio-economic space, the involvement of citizens in the social life of the country and the definition of their place in it. Today, the development of educational software in the world is at a very early stage. In all countries, there is a problem of professional staff who can independently write individual programs to ensure the educational process (Kramer 2015). The inflexibility of the educational system of higher education, along with the insufficient training of the teaching staff of most educational institutions of the world’s Higher education in the field of new technologies, makes it difficult to introduce new computer applications into the educational process (Heyman 2016). Key orientations of higher School are aimed at obtaining the final specialization in a certain area chosen by the student. Employers are also interested in professional employees with high competencies in their field (Richter et al. 2019). In our country the problem is largely related to the mentality of citizens. During the Soviet period Higher education had the goal not only to give a profession to graduates, but also to form universal consciousness aimed at creative humanistic and ethical work, at the implementation of the basic concept of human-society or human for society, society for human. The teacher acted not only as an actor of knowledge, but also consistently introduced a certain system of values and forms of personal development into the consciousness. Currently, the role of the teacher has been transformed due to changes in the global space. Some Russian teachers who cannot or do not want to change blame the youth of laziness. The traditional interpretation of modern students from their position looks worse in the format every year. In fact they are not worse, but better than our generation, they are just different. Young people easily assimilate innovative software products offered by the market the digital world is a natural environment for them. Generation Z-individuals for whom it is important to understand: “Why do I study this discipline? What practical benefit will I derive from the material I am studying? How can I use this knowledge in practical life?” (Kim et al. 2017, p. 3). They are really not interested in the dry

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theoretical layouts of the lecturer, represented by the monotonous voice of the teacher. Therefore, traditional methods of training. The methods, which gave results a few years ago, do not work today. Students are bored with long one-and-a-half-hour lectures and monotonous practical classes. They need a drive, a wow effect, fragmentary attention shifts, game elements. The modern period is a challenge for teachers, because it requires a change in the teaching paradigm, changing attitudes, and working on yourself. The teaching profession is science and art, depth and theatrical images. Today, a student is not an object of influence, but a client who needs not only to train and implement the necessary knowledge and skills in its creation, but to attract, infect, and impress. The key point is an adequate perception of the culture of the new youth, creating an atmosphere of trust and respect between the teacher and the audience. A lecturer and a seminarian should become an innovator, just like entrepreneurs, an empath, just like psychologists, a chief, just like managers. It is especially difficult to achieve this goal when teaching theoretical subjects, to find tools that would help to overcome the formalization and saturation of basic mathematics subjects, to integrate Orthodox approaches with innovative teaching methods. This cannot be done without including digitization technologies in the training process (Cascio 2019). The use of digital technologies causes inclusion and involvement in the learning process, respect for the subject and for the teacher. This is where digitalization can help combine these two approaches (theoretical and practical) for a deep understanding of the economic laws and laws of economic theory in general and of a particular discipline in particular. For example, if you explain the basics of economic theory as in the past, listeners will perceive them as an unreal imaginary world based on complex mathematical models. Of course, when studying economic processes, the teacher cannot do without mathematical and statistical methods. At the same time, an analytical approach based on logic is much more important than cold calculations (Puel 2004). In addition, as noted S. Laguerodi and N. Thibault, no model fully meets the needs of economic practice and demonstrates general patterns, without giving recipes for solving economic problems. If we do not focus on the relationship of economic models with the real world, students may get the impression that they are useless in practical life and unable to explain the real facts that occur in the economic space (Laguerodie and Thibault 2001). At the same time, the inability to integrate modern teaching tools into lectures and practical classes with students devalues the level of professional competence of the lecturer and seminarian. New technologies facilitate communication between the teacher and students, and easily facilitate the use of economic data and real-world applications to improve theory teaching. The important role of digital tools in the educational process is undeniable, and this means not only the introduction of a new vision at all levels of learning, but also the development of a new dimension in educational technologies (Benedek and Nyíri 2014). In other words, it is worth exploring how to use the potential of digitalization in learning, since these methods are organic for modern students.

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2 Methodology Since education policy needs to be adapted to the vanguard information e-space more dynamically, it is necessary to use innovative teaching methods in order to provide students with the skills that will be in demand in a dynamically changing economy. These innovations are necessary for all levels of the educational hierarchy but require a differentiated approach at each level of educational programs. In a broad sense, for both undergraduate and graduate students, the use of digital technologies in the development of educational programs is associated with problems in the field of digitization, multimedia editing and interactive publishing. With the existing metadata structure, converting content to a format that includes interactive and personalized elements that can integrate multiple functions as the most effective ways to stimulate students interest in learning material is very difficult. You need to start with simple digitization elements that are available for structuring the training material and are available for students to understand, because this gives the possibility of collective use of digital technologies, which develops the skill of working in a team and prepares students for project thesis work; expansion of flexible forms of training, switching attention from offline to online work, which increases the productivity of children; transparency of obtaining (measuring) the estimate, understanding the algorithm of its formation; improvement of digital competencies of both teachers and students, skills of working with computer programs, which increases the demand for future graduates of the University among employers; strengthening the skills of the methodology of teaching higher education, the possibility of developing additional textbooks; interactive participation of students in the formation of new methodological training materials, participation in their digitization. Methods of digital technologies that can be used in teaching students differ in a huge variety: 1. Use of recordings of lectures on a CD-ROM, where the student can get basic knowledge of the discipline when viewing materials at a convenient pace and rhythm, at a convenient time of day. Since the material is divided into thematic blocks, it is convenient to master it in parts. 2. Formation of reference CDs addressed to students who want to get acquainted with the key provisions of each topic in a limited time, containing in a concise form reference materials-concepts, definitions, basic theoretical provisions of the sections of the discipline. 3. Using the capabilities of electronic bookmarks, notes, which are additional tools for obtaining knowledge. 4. Control of knowledge, in the form of a file containing questions and tasks of open and closed types, which check the understanding of the theory; and tasks that check understanding of the content to practical and computational level, the answers to which are evaluated and synchronized program in various aspects in practical assignments and multiple choice, where students must choose one of five possible answers, and jobs for filling in the blanks (text with missing words) and tables (with missing numbers). Other forms of control can also be applied.

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Digital technologies can also be used in seminars, working in computer classes or on laptops owned by students. Using the capabilities of Microsoft excel in teaching microeconomics, bachelors gain practical skills in working with the program, which is extremely useful for the employer (Frey 2017).

3 Results Let’s analyze several of these models using the example of a seminar session on the topic “a Firm in the market of perfect competition”. The firm have to analyze its financial performance to function successfully on the market, create, maintain and strengthen its competitive advantages (Ksenofontov et al. 2019). It is the basis for budgeting and building the financial strategy of the enterprise (Rogulenko et al. 2016). Let us analyze the costs and revenues graphically using the example of a company producing stools. Let’s build TR and MR graphs from table indicators (Table 1) (Fig. 1). Table 1. Values of all economic indicators for creating economic models of firm behavior in perfect competition. Q TC = FC+VC FC = TC−VC VC = TC−FC MC = dTC/dQ AFC = FC/Q AVC = VC/Q P TR = Q*P MR = d TR/dQ AR = TR/Q Pf = TR−TC Compiled by the

0 1200 1200 0 0 1200 0 1400 0 1400 0 0 author

1 2 3 4 2400 3100 3600 4300 1200 1200 1200 1200 1200 1900 2400 3100 1600,0 700,0 500,0 700,0 1200,0 600,0 400,0 300,0 1200 950 800 775 1400 1400 1400 1400 1400 2800 4200 5600 1400 1400 1400 1400 1400 1400 1400 1400 −1000 −300 600 1300 based on research materials.

5 5400 1200 4200 1100,0 240,0 840 1400 7000 1400 1400 1600

6 7100 1200 5900 1700,0 200,0 983,3 1400 8400 1400 1400 1300

7 9200 1200 8000 2100,0 171,4 1142,9 1400 9800 1400 1400 600

8 12200 1200 11000 3000,0 150,0 1375 1400 11200 1400 1400 −1000

In our example, we can state the fact that for a firm that produces stools, the breakeven point occurs already on the first batch of products. Based on the data in the table, we will build graphs of the company’s costs in conditions of perfect competition. To do this, select the rows that reflect data on total, constant and variable costs and use the algorithm specified above to build a graph with the format we need (Fig. 2). When students build a graph on their own, they actually see the actual shape of the TC and VC curves, understanding the reasons for changing the curves and motion vectors of the General and fixed cost graphs, and repeating the VC shape of the TC curve in conjunction with the FC amount.

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TR, MR Revenue

15000 10000 5000 0 1 2 3 4 5 6 7 8 9

Quantity of product (party) TR=Q*P

MR=d TR/dQ

Fig. 1. Graphical representation of TR and MR. Compiled by the author based on research materials.

TC, FC, VC Costs

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Fig. 2. Schedule of total, fixed and variable costs. Compiled by the author based on research materials.

To form an understanding of the regularities of plotting and interaction of graphs related to costs per unit (batch) of products, we will build three graphs: ATC, AFC, and AVC (Fig. 3). It is clear from both the table data and the graph forms that fixed costs, distributed over the entire manufactured batch of products, have a downward slope, while variable and total costs per unit of production (per batch of stools) first decrease, and then, after reaching the minimum point, grow. This happens at the moment when they cross the marginal cost graph. to demonstrate this, we will add it to the ATC and AVC graphs (Fig. 4). The graph allows you to analyze the minimum costs for a batch of stools. It is easy to determine that the minimum total cost for this technology is approximately the fifth batch, and the variable cost is approximately the 4th batch, which allows us to say that production between 4 and 5 batches of stools is the most

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profitable in terms of cost savings. Let’s define the type of our company in the context of stools in terms of cost coverage and create a graph (Fig. 5).

ATC, AFC, AVC Costs

2150.0 1150.0 150.0 1

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Fig. 3. Graphs of costs per batch (party) of products: general, constant, variables. Compiled by the author based on research materials.

Costs

ATC, AVC, MC 3000.0 2500.0 2000.0 1500.0 1000.0 500.0 1

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ATC=TC/Q

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Fig. 4. Graphs of variable and fixed costs per unit (party) of products and a schedule of marginal costs. Compiled by the author based on research materials.

A graphic representation of the situation related to the position of the studied firm in the perfect market tells us about its stability. It not only covers all costs, but also receives a high profit, which reaches the highest point in the interval between the 4th and 5th batch of production of stools. From the point of view of economic theory, a firm belongs to a certain type of firm with a high profit (super profit). Naturally, this

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Tipe of the firm Pice, Costs

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Fig. 5. The type of firm under study using product stools as an example to cover company costs. Compiled by the author based on research materials.

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Fig. 6. Graphical demonstration of threshold income points and maximum profits. Compiled by the author based on research materials.

situation can only be short-term, since entry into the market of perfect competition has no barriers and free profitable niches are quickly filled by new manufacturers. Let’s define graphically the points of threshold production and the points of maximum profit based on the combination of income and expense graphs (Fig. 6). The TC-TR graph shows the firm’s threshold revenue points for the “stools” product. It makes economic sense to produce stools from about 2.3 units (lots) to 7.3 units. The maximum economic efficiency of production of stools is reached approximately about 5 batches. Thus, we can recommend that this company produce 5 batches

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of stools, as well as at least 2.3 and no more than 7.3 batches of product. It is not profitable to produce stools above and below the threshold income points (it is unprofitable). Let’s confirm the results obtained on the graph of the visual profit curve of the enterprise (Fig. 7)

Pf=TR-TC 2000 1500

Profit

1000 500 0 -500

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Fig. 7. Schedule of profit of the enterprise in conditions of perfect competition. Compiled by the author based on research materials.

MC,MR

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4000.0 3000.0 2000.0 1000.0 0.0 1

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Quantity of product (party) MC=dTC/dQ

MR=d TR/dQ

Fig. 8. A graphical representation of the optimal production at the enterprise. Compiled by the author based on research materials.

The parabola Pf confirms the arguments of the previous graph. The intersection of zero profit occurs at points 2.3–2.4 units (lots) and approximately 7.5 units (lots), and the point of the highest profit is shown in the graph at the level of 5 units (lots). The profit graph again emphasizes the correctness of the statements about optimal output. Let’s check the statement of optimal production volume by combining the graphs of marginal revenue and marginal costs. Economic theory States that production should

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Costs, reveneu

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Pf=TR-TC

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Quantity of product (party) Fig. 9. TC, TR, MC, MR, Rf. Compiled by the author based on research materials.

continue until the marginal cost schedule crosses the marginal revenue schedule. In perfect competition, MR is a straight line parallel to the abscissa axis, since P const., and the demand curve takes the form characteristic of d infinite elasticity (Fig. 8). The interaction of limit values argues for previously defined indicators, although slightly higher than 5 units (party), about 5.5 units. Given the limitations of microeconomic models and their imperfect accuracy, such small deviations are acceptable. Placing three graphs that characterize the optimal volume of production of stools, you can visually see the patterns and interdependence of economic models, and a demonstration of real indicators for a real company (Fig. 9). Conducting an independent analysis using digital technologies, students develop a deep understanding of the theoretical aspects of microeconomic models, the mutual

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influence of indicators, and, most importantly, an awareness of the relationship with the real indicators of a real enterprise. Students get the skills to work with the Microsoft Excel program in terms of carrying out algebraic calculations and plotting, which they can use in further training at the University, and working at the enterprise after graduation. The level of interest in microeconomics when digitalization elements are included in the educational process increases significantly, students are included in the lesson and do not” drop out” during the entire seminar. The quality of knowledge of groups working in computer classes or on their own laptops is much higher than that of colleagues who were trained using the traditional method. Problems are solved more dynamically and the theory is absorbed more deeply. Training with computer technologies is also more effective in terms of getting points, since even students with low productivity are forced to get involved in the process and create it “with their own hands”, which has a positive effect on the overall amount of knowledge. According to the conducted surveys, students in the absolute majority prefer classes with the inclusion of digital elements in comparison with traditional lecture and practical classes. Therefore, it is necessary to expand the involvement of modern avant-garde trends in the presentation of educational disciplines to students, and to work thoughtfully and profoundly to further transform the teaching of economic disciplines with increasing dominance of digital methods over traditional ones in order to improve the quality of bachelor’s education in Russia.

4 Conclusions By conducting independent analysis using digital technologies, students develop a deep understanding of the theoretical aspects of microeconomic models, the interaction of indicators and, most importantly, an understanding of the relationship with the real indicators of a real enterprise. Students gain skills in working with the Microsoft Excel program in terms of performing algebraic calculations and plotting, which they can use during their further studies at the University, as well as when working at the enterprise after graduation. The level of interest in microeconomics when digitalization elements are included in the educational process increases significantly, students are included in the lesson and do not “drop out” during the entire seminar. The quality of knowledge of groups working in computer classes or on their own laptops is significantly higher than that of colleagues who have been trained using traditional methods. Problems are solved more dynamically and the theory is absorbed more deeply. Training using computer technologies is also more effective in terms of getting points, since even students with low productivity are forced to get involved in the process and create it “with their own hands”, which has a positive effect on the total amount of knowledge. According to the conducted surveys, students in the absolute majority prefer classes with the inclusion of digital elements in comparison with traditional lecture and practical classes. Therefore, it is necessary to expand the involvement of modern avant-garde trends in the presentation of academic disciplines to students, as well as to work thoughtfully and deeply to further transform the teaching of economic disciplines with the

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increasing dominance of digital methods over traditional ones in order to improve the quality of bachelor’s training in Russia.

Referenses Benedek, A.K., Nyíri, K. (eds.): The Power of the Image: Emotion, Expression, Explanation. Series Visual Learning, vol. 4, p. 287. Peter Lang, Frankfurt/M (2014) Cascio, W.F.: Training trends: macro, micro, and policy issues. Hum. Res. Manag. Rev. 29(2), 284–297 (2019) Frey, C.B., Osborne, M.A.: The future of employment: how susceptible are jobs to computerisation? Technol. Forecast. Soc. Chang. 114, 254–280 (2017) Heyman, F.: Job polarization, job tasks and the role of firms. Econ. Lett. 145, 246–251 (2016). https://doi.org/10.1016/j.econlet.2016.06.032 Kim, Y.J., Kim, K., Lee, S.K.: The rise of technological unemployment and its implications on the future macroeconomic landscape. Futures 87, 1–9 (2017). https://doi.org/10.1016/j. futures.2017.01.003 Kramer, B.: The second machine age: work, progress, and prosperity in a time of brilliant technologies. Technovation, 71 (2015). https://dx.doi.org/10.1016/j.technovation Ksenofontov, A.A., Ksenofontov, A.S., Kirpicheva, M.A., Trifonov, P.V.: The use of modern management technology to improve business efficiency. In: IOP Conference Series: Materials Science and Engineering, vol. 012114, pp. 1–4. IOP Publishing Ltd, Bristol (2019) Laguerodie, S., Thibault, N.: Facs d`aco: le debat s`esti-il dessous dans les maths? In: L`Economie Politique, no. 9, pp. 66–76, 68–69. Alternatives Economiques, Paris (2001). ISBN 2-9515264-2-3 Puel, H.: Economie et Humaniste dans le movement de la modernite, p. 235. Les Editions du Cerf, Paris (2004). ISBN 2–204-07370-9 Richter, C., Kraus, S., Durst, S., Giselbrecht, C.: Digital entrepreneurship: innovative business models for the sharing economy. Creativity Innov. Manag. 26(3), 300–310 (2019) Rogulenko, T., Bodiaco, A., Zelenov, V., Ponomareva, S., Mironenko, V.: Budgeting-based organization of internal control. Int. J. Environ. Sci. Educ. 11(11), 4104–4117 (2016) Sazanova, S.L., Sharipov, F.F., Dyakonova, M.A.: Spatial economics, geopolitics, and marxism. Marx and modernity: a political and economic analysis of social systems management. A collective monograph. In: Marina, L., Alpidovskaya, E.G., Popkova, A. (eds.) Volume in Advances in Research on Russian Business, pp. 279–288. Information Age Publishing Inc., Moscow (2019) Surkova, L.E.: Assessment of housing construction dynamics in Russia on the basis of neural network modeling. In: Advances in Economics, Business and Management Research, 1st International Scientific and Practical Conference on Digital Economy (ISCDE 2019), vol. 105, pp. 270–274 (2019). https://doi.org/10.2991/iscde-19.2019.51

Smart Technologies in Foreign Language Teaching Yulia Kulichenko(&) , Lyudmila Medvedeva and Yulia Dzyubenko

,

Volgograd State University, Volgograd, Russia {kulichenko,milamed,dz_julie}@volsu.ru

Abstract. Purpose: This article aims to describe the specificity, opportunities and benefits of the application of smart technologies in education and particularly in foreign language teaching at the university in order to achieve more effective results in the development of the communication skills and professional competence of the students. Methodology: The methods of this research include both theoretical (the analysis of the experience, analysis, synthesis, comparison, generalization) and empirical ones (observation and discussion). The authors have analysed the contemporary studies on pedagogy and linguodidactics, defined the current educational trends and described the opportunities and principles of the application of smart technologies at the university. Findings: On the basis of the comparison of different theories, analysis of their own pedagogical experience and data received by empirical methods, the authors have defined the principles, specificity and benefits of the application of smart technologies at the university and offered the appropriate foreign language teaching techniques. Value: The ways of the application of smart technologies and teaching techniques described in this article can be used in the educational process, especially in the foreign language teaching at the university. They aim at the increase of the effectiveness of different types of educational activity while teaching foreign languages at the university in order to develop and improve the communication skills and professional competence of the students. Keywords: Smart technologies
Interactive whiteboard
Foreign language teaching
Communication skills
Foreign language competence
Digital competence JEL Code: I20


I21
I23
I25

1 Introduction The purpose of foreign language teaching at the university is to develop and improve foreign language competence necessary for the effective intercultural professional communication. The skills required for the specialists include different types of knowledge and ability to search information and communicate in the foreign language, as well as the ability to solve professional problems with foreign partners taking into © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 893–899, 2021. https://doi.org/10.1007/978-3-030-59126-7_99

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account the specificity of intercultural communication (Kalugina et al. 2018). Different methods of foreign language teaching are used at schools and universities, however, the principles of authenticity and interactivity of the communication are prioritized as well as the language learning in the cultural context (Konovalova 2008). New approaches and techniques based on the application of information technologies are opposed to the traditional method of foreign language teaching. Digitalization affects all spheres of life including education that leads to the transformation of the role of the teacher from the knowledge holder to the guide who has to help learners deal with different knowledge data bases (Kozlova 2019). Students’ learning experience is prioritized and the teacher’s role is to monitor their progress. The class should become more digital, interactive, project-based and cooperative (Gallo et al. 2015). The students growing in modern technological society are no more passive information consumers but they become the active producers of knowledge (Guan and Yamamoto 2011). That is why the inclusion of new information technologies in education is compulsory. E-learning becomes a promising trend in the educational process because it meets the requirements of modern society that has to deal with large quantities of data in electronic format and analyse them quickly (Chernyshkova 2018).

2 Methods In this research we have employed both theoretical and empirical methods. The analysis of the pedagogical experience is the main method used in our study. We have studied the large number of scientific papers on pedagogy and linguodidactics including articles, conference proceedings, textbooks, manuals, methodological recommendations, etc. We have analysed different teaching materials related to foreign language acquisition. The employment of other theoretical methods such as analysis, synthesis, comparison, and generalization has provided the necessary basis for the research. One of the most important methods used in our study is observation. It is goaloriented, complex, integrative and consistent. The employment of this method gave us a lot of opportunities to understand and assess different aspects of educational process in practice. Discussion is another method that was used in our research and enabled us to clarify and evaluate data received as a result of the observations and make necessary conclusions after the analysis of the certain facts and phenomena.

3 Results 3.1

Employment of Smart Technologies in Education

The main goal of modernization of the education is to increase its quality, accessibility and effectiveness (Slobodyanyuk 2012). The researchers have identified the basic principles necessary for the effective educational process based on the employment of the information technologies such as openness and flexibility of education that requires the favourable conditions for all students, person-oriented approach (course content should conform to the student’s level of knowledge); the principle of interactivity

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contributing to the effective interaction between students and their teacher as well as among students within the same group (Danchenok and Nevostruyev 2014). Besides openness and accessibility of learning resources, the employment of smart technologies has a lot of other advantages because it gives a student the opportunity to choose the sequence of actions in the educational process and participate in the discussion of the professional topics on the Internet forums or by Skype that enables to achieve required positive results (Ardashkin 2019). Modern society of information technologies leads us to a new educational trend with an interactive whiteboard as one of its basic tool. The Internet and smart technologies provide the foundation for the opportunity to create favourable and effective conditions at schools and universities in order to achieve educational goals. According to different researches, the employment of smart technologies leads to the consistent renovation of teaching techniques (Altun 2015; Bodholdt and Nielsen 2012; Graells 2006; Makarova and Makarova 2018; Mukusheva 2017; Murado Bouso 2012; Sala 2002; Solovov and Menshikova 2015). The use of smart technologies provides various types of learning activities increasing interest and motivation of the students. As a result they become successful autonomous learners who are responsible, independent and capable of self-reflection and critical thinking (Matusevich 2015). Students raise their level of concentration, motivation and positive attitudes towards the learning process (Campregher 2011). It also has a positive effect on the development of teachers’ competence that is crucial for the quality of teaching (Bodholdt and Nielsen 2012). It contributes to the development of teaching methods that leads to the improvement of the professional skills and self-esteem of the teachers. Interactive whiteboards also known as Smart boards are common tools that gradually demonstrate their numerous advantages and provide opportunities to examine and evaluate new teaching techniques contributing to the development of the educational system. 3.2

Benefits of Interactive Whiteboards for Education

An interactive whiteboard has a lot of benefits for education: • It is a flexible resource that can adapt to different teaching methods (from traditional to innovative ones) and learning approaches. • The use of interactive boards does not require high level of technical skills, so everyone can use it without problems. It motivates teachers, increases their professional competence and self-esteem. • The access to the Internet provides both students and their teachers with a large amount of various resources and enormous learning opportunities. • Interactive whiteboards enable to project the images from different devices on the large screen (including digital video cameras, documentation viewers, scanners, etc.) that increases types of learning activities. • An Internet connection and a projection system allow using long distance communication through audio and video (for example, video conferencing) as an educational resource in the classroom. This feature permits to expand the boundaries of the audience.

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• An interactive whiteboard allows using many existing stuff created by both teachers and third parties, such as the administration of education or publishers: presentations, static documents, web pages, graphics, photographs, illustrations, posters, animation, diagrams, videos, movies, etc. In many cases, teachers can project materials of such quality and complexity on the board that could not be used with other conventional means. • An interactive whiteboard makes it possible to apply materials for revision in training, and also provides for the possibility of recording classes for its replay. • Students can use the benefits of interactive whiteboards in all kinds of tasks: exhibitions, interactive exercises, presentation and evaluation of their work, debates, etc. • This type of technology enables cost savings compared to traditional computer classes in which a computer is required for each student. 3.3

Using an Interactive Whiteboard in Teaching a Foreign Language

An interactive whiteboard is a technological system consisting of a computer connected to the Internet and a video projector that presents information displayed on a computer monitor or a large screen. It allows the collective use of telematic communication channels. This is an inexhaustible source of multimedia and interactive information available directly in the classroom and having the following advantages: • it is very easy to use as access to information is immediate; • this technology allows you to make classes more “lively”, dynamic, interesting and interactive; • the students become more attentive and work more actively in the classroom with an interactive whiteboard; the level of their interest, concentration and motivation increases; • the interactive whiteboard is a visual tool that can help students perceive and understand information more fully; • during the lesson, the students see the learning materials on the screen, and then study them in detail at home and find additional information on the subject; • the teachers using an interactive whiteboard improve their digital competence, pedagogical skills and enhance their professional self-esteem. We have identified some tools, platforms, and applications used on the interactive board for learning a foreign language. 1. Authentic materials such as different videos, flash animations, web quests, webcasts, etc. 2. Web applications and software for phonetics, grammar, phrase analysis, letter recognition and interactive exercises. 3. Virtual learning environments that facilitate communication between student and teacher, such as email, social networks, or video conferencing. Chats and video conferencing develop in a student a variety of skills: from reading comprehension to grammar, as well as speaking using a microphone. Software such as Skype or any

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other video conferencing tool encourages the development of students’ oral speech skills in studying foreign languages. 4. Gamification increases students’ interest and motivation to learn a foreign language. 5. Work in the “cloud”. Google Drive or Dropbox allows the teacher to share all types of files with students. This increases the efficiency of student’ activity and allows to create flexible collective educational spaces. Application of Smart Exchange and Promethean Planet has been very popular in recent years. Notebook or Activinspire are the most commonly downloaded formats for creating and conducting classes on interactive panels (Jerez Montoya 2017). Smart Exchange has over five hundred digital board resources available for downloading. You can also view Notebook files without installing them on Smart Express on any mobile device. So, for example, having collected students’ tasks in these formats but without access to a computer with installed software, you can later check them both in the audience and beyond it. Effective use of all web resources of the two main brands of manufacturers of interactive whiteboards contributes to the development of educational competence in the field of ICT. The challenge facing foreign language teachers is the ability to use multimedia elements and web applications on an interactive whiteboard for developing students’ complex skills. 3.4

Learning Models Related to the Use of the Interactive Whiteboards

Model No. 1: Addition to the teacher’s explanations. Teachers can use the interactive board as a visual support for their explanations, projecting web pages and other electronic (digital) materials: images, charts, videos, opinions, presentations, stories, games, etc. Of course, they can also project supporting CD-ROMs, DVDs, and television programs. The teacher, discovered new web pages related to the subject, can use them together with his or her notes and traditional resources. Presenting topics to students through an interactive whiteboard, he or she provides an abundance of up-todate examples and references. Such a variety of multimedia resources motivates students and supports their attention, meets their interests, facilitating mutual understanding. Model No. 2: Presentation of exercises and various resources. A large number of resources enables the teacher to answer a particular question better, as well as comment on the assignment, taking into account the individuality of each student (for one student clearly, the other abstractly, etc.). On the other hand, the teacher may present students web pages and other audiovisual or multimedia materials to perform group or individual consolidating or knowledge extending exercises. Model No. 3: Students’ presentations. The teacher pre-instructs students to prepare a presentation on a given topic. Students find the necessary materials on the Internet (information, programs, resources, games, etc.) and present them in the classroom. Thus, students work out various activities that facilitate learning. In addition to finding information on the Internet on the problems being studied, as well as reading,

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understanding, evaluating and selecting this information, students have the opportunity to present and explain the problems they studied to their group mates. The task of the teacher is to listen to, collaborate and, if necessary, correct or supplement the explanations of students. Model No. 4: Presentation of group work. Students work together on a web page or in a multimedia presentation format. Such work allows students to research, exchange ideas, develop social skills, knowledge, etc. Model No. 5: Basis for the debates between the teacher and students. An interactive whiteboard can be used to present and comment on information, as well as to perform collective tasks. For example, for previously prepared debates, any facts were found on the Internet to support the arguments. A digital whiteboard will facilitate group interaction and discussion in the classroom. Model No. 6: Online video conferencing and group chats. Using a whiteboard, students can connect via email, chat or video conference with other learners, teachers or experts from anywhere in the world. The entire audience can participate, see and hear sent and received messages. Model No. 7: Doing exercises and other teamwork. The teacher can design interactive multimedia exercises and offer students collective work. It is also possible to subdivide the group and ask everyone to complete the task. Verification of tasks can be done after deriving the correct answers on the interactive whiteboard. Such tasks should be organized quickly, not allowing students to relax, waiting in line.

4 Conclusion The use of innovative methods in the field of education is necessary for university graduates to meet modern requirements for specialists in the labour market. Information technologies make it possible to modernize the educational process, diversify the types of educational activities, and expand the possibilities of searching for information and applying the acquired knowledge in practice. The use of smart technologies in teaching foreign languages contributes to a more effective educational process, makes classes more diverse, increases students’ motivation and interest during classes, improves the quality of students’ independent work, which leads to the achievement of the assigned goals – the formation and development of foreign language communicative competence necessary for the successful implementation of the professional activities of future specialists.

References Altun, M.: The integration of technology into foreign language teaching. Int. J. New Trends Educ. Implications 6(1) (2015). http://www.ijonte.org/FileUpload/ks63207/File/03a.altun.pdf. Accessed 10 Feb 2020

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Ardaskin, I.B., Surovtsev, V.A.: Revisiting the issue of smart technologies epistemology and visualization: does smart education lead to smart epistemology? Praxema J. Vis. Semiot. 4 (22), 9–35 (2019) Bodholdt, J., Nielsen, F.: The global classroom. In: International Conference “ICT for language learning”, 5th ed. (2012). https://conference.pixel-online.net/conferences/ICT4LL2012/ common/download/Paper_pdf/322-ELS11-FP-Bodholdt-ICT2012.pdf. Accessed 10 Feb 2020 Campregher, S.: The interactive whiteboard for language learning. In: International Conference “ICT for language learning”, 4th ed. (2011). https://conference.pixel-online.net/conferences/ ICT4LL2011/common/download/Paper_pdf/IBL65-419-FP-Campregher-ICT4LL2011.pdf. Accessed 10 Feb 2020 Chernyshkova, N.V.: SMART technologies in foreign language teaching. Philol. Sci. Issues Theory Pract. 2(80), 211–214 (2018). Part 1 Danchenok, L.A., Nevostruyev, PYu.: SMART training: basic principles of organizing education process. Open Educ. 1(102), 70–74 (2014) Gallo, A., Marin, T., Sartor E.: A multi-platform for a better learning and teaching experience. In: International Conference “ICT for language learning”, 8th ed. (2015). https://conference.pixelonline.net/ICT4LL/files/ict4ll/ed0008/FP/2173-ICL1401-FP-ICT4LL8.pdf. Accessed 10 Feb 2020 Graells, P.M.: La pizarra digital en el aula de clase, pp. 15–24. Edebé Editorial, Barcelona (2006) Guan, S., Yamamoto, T.: Technologies and techniques for effective language learning. In: International Conference “ICT for language learning”, 4th ed. (2011). https://conference.pixelonline.net/conferences/ICT4LL2011/common/download/Paper_pdf/IBL62-275-FP-GuanICT4LL2011.pdf. Accessed 10 Feb 2020 Jerez Montoya, T.: Uso de la pizarra digital interactiva en centros bilingües: claves para el diseño de un itinerario formativo integrado. UCO Press, Córdoba (2017) Kalugina, O.A., Vasbieva, D.G., Shaidullina, A.R., Sokolova, N.L., Grudtsina, L.Yu.: ESP blended learning based on the use of smart coursebook. Xlinguae 11(2), 445–454 (2018) Konovalova, Z.B.: Potential of the use of SMART board in foreign language teaching at school. Curr. Issues Philol. Pedagogical Linguist. 10, 313–320 (2008) Kozlova, N.S.: Digital technologies in education. Bull. Maikop State Technol. Univ. 1, 83–91 (2019) Makarova, E.A., Makarova, E.L.: Blending pedagogy and digital technology to transform educational environment. Int. J. Cogn. Res. Sci. Eng. Educ. 6(2), 57–66 (2018) Matusevich, I.: Teaching english for academic purposes online. In: International Conference “ICT for language learning”, 8th ed. (2015). https://conference.pixel-online.net/ICT4LL/files/ ict4ll/ed0008/FP/2060-ETL1311-FP-ICT4LL8.pdf. Accessed 10Feb 2020 Mukusheva, M.A.: Smart-education in the professional development system within the framework of education content updating. Mod. Sci. 4–2, 75–77 (2017) Murado Bouso, J.L.: Pizarra Digital. Herramienta metodológica integral en el contexto del aula del siglo XXI. Ideas propias Editorial, Vigo (2012) Sala, R.: La pizarra electrónica, dos experiencias y su contexto. Actas del III Encuentro de Inspectores de Educación, Barcelona (2002) Slobodyanyuk, V.I.: SMART Notebook as a way to form metadisciplinary competence. Siberian Pedagogical J. 7, 197–199 (2012) Solovov, A.V., Menshikova, A.A.: E-learning: development vector. High. Educ. Russia 11, 66– 75 (2015)

“Smart” Technologies in Public Administration and Law, as Well as the Experience in Development of e-government

The Information Aspect of State Management in the Context of Formation of the Global Innovation System Nikolai A. Omelchenko(&), Elena P. Kazban, and Oleg N. Drobotenko State University of Management, Moscow, Russia [email protected], [email protected], [email protected]

Abstract. The article is devoted to the research of the information aspect of state management. At present, cultural, social, and economic modernization reflects the global trends of the innovation development, and the perspective of social and economic development depends on using knowledge, information, and the new technologies based on the networking cross-platform and crosscluster social interactions. The authors use the structural and functional methods to identify the specific of impact processes of political and economy convergence on compliment structure and functional links of the elements of emerging the information society to allow for a deeper examination the content of the information aspect of state management in the context of global innovation system forming. Scientific novelty of the work consists in the fact that in the context of searching for the effective approaches to state management of innovation development the authors propose creating the cross-cluster networks aimed not only at optimization and aggregation of theoretic and application knowledge but also creating cross-platform networks. To increase the capability of data processing, the authors propose integrating the existing information-analytical systems in state management in the context of network technologies and artificial intelligence development. The logic of the new technological stage calls for coordination of social activities, which is becoming the essential factor of positive socio-political transformation and increasing the effectiveness of political management. Keywords: Information and communication technologies
State information policy
State management
Innovation
Sovereignty
Security

1 Introduction Information sphere is the systemic factor of the modern society’s functioning and one of the most important objects of state management. Its special value is predetermined by the fact that knowledge and information become a strategic resource, which is equal to natural, intellectual, and financial resources, and information processes become a part of economic and political processes. © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 903–909, 2021. https://doi.org/10.1007/978-3-030-59126-7_100

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Government has the leading role in development of the spheres of information industry, creation of information society, coordination of its subjects’ activities, and safe and smart integration of human into the innovative technological space – which sets special requirements to state management. In these conditions, the perspectives of socio-economic development of countries are connected to use of knowledge, information, and new technologies. The knowledge industry acquires a special role as the innovative basis of modernization, and evaluation of the level of its development directly depends on the level of mastering of the information and communication technologies and flows. Search, processing, analysis, and effective use of information are actualized in the context of development of strategic state decisions in almost all spheres: from economy and social sphere to defense and security. Besides, in the conditions of transition to the information society, underrun in the sphere of knowledge and processing of information leads to a loss of status and authority in the world economy and politics.

2 Methodology The theoretical and methodological basis of the research includes the inter-disciplinary and problem-oriented approaches, systemic analysis, and the classical and modern theoretical provisions of the theory of international relations, world economics, and political and social sciences. The institutional and neo-institutional approaches were used within this analysis, which allowed considering society not only as a certain institutional structure, which is based on organizational entities – e.g., state, but also analyzing the system of the existing laws, relations, traditions, connections, and way of thinking. Considering state as an institution and organizational system, which implements certain policy, we take into account the neo-institutional approach, within which state is considered not only as an institution that is created by people but also as a subject that influences society and is also influenced by it. Application of the structural and functional method of the research allows determining the specifics of the influence of the processes of political and economic convergence on the complementary structure and functional ties of the elements of the emerging information society and, thus, studying the information aspect of state management in the context of formation of the global innovative system, Garant (2020), Akopov (2013), Kovalev (2016), Kulakova (2011), Nikolaychuk (2015), Tavokin (2002, 2012), Sherstobitov (2011), WIPO (2019).

3 Results The process of development of information technologies allows determining the level of influence of scientific inventions on the political sphere and, as a result, on the sphere of state management. Since the moment of their emergence, information technologies were applied in a narrow sphere; however, in the course of their ubiquitous

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implementation in almost all spheres of human activities and as a result of appearance of the global cyber space, their influence grew substantially. However, as the global experience shows, information technologies could be used also for destructive purposes. Absence of smart and effective regulation of the information flows leads to serious threats and risks that hinder the development of civil society and create barriers for political socialization, causing radicalization of public moods and creating a favorable environment for the propaganda of aggression and violence and manipulation of public opinion for achieving short-term advantages by various subjects of the political process. For the purpose of preventing or minimizing the negative information influences on the Russian society, the most important task of the state policy in the information sphere is improvement of the existing legal, organizational, and economic basis of information society based on the ideas of social justice or human dignity. Analysis of the global innovative processes shows that ubiquitous implementation of information technologies cannot ensure successful and stable development of the social system of information society, which is largely predetermined by incompleteness of the research of influence of new ICT on human consciousness, physical and mental health, and the social conditions of realization of these programs and human’s readiness for deep social changes that accompany quick development of technologies. A lot of scholars insist that one should be very careful when applying different innovations – this is especially true for children and teenagers. Thus, there is a necessity for deep and comprehensive scientific analysis and evaluation of the consequences of ubiquitous implementation of technologies – including in the educational sphere. As the leading role in development of the information policy and provision of security belongs to government, the main responsibility for strategic decisions in this sphere is also set on government. It seems that state stimulation of development of the sphere of ICT, in combination with control over the contents of the information resources and products could ensure growth of innovative potential of country, lead to development of economy, stimulate the positive socio-cultural and political transformations, prevent social conflicts, and ensure smart integration in the global innovative system by the terms of equal partnership and mutual respect. It should be noted that these problems are partially shown in the National program “Information society”, according to which in the national information space will see in the increase of the share of information that is oriented at healthy life, socially responsible behavior, interest in education and professional growth, and traditional, cultural, moral, and family values, which conform to the priorities of development of the social policy of the state. It is obvious that state should have the key role in provision of high level of authenticity and reliability of the contents of internal and external information channels, which would allow for significant increase of effectiveness of managerial decisions. It seems that this task should be solved with the help of consistent implementation of the national interests in the information sphere and provision of a wise balance between free access to information and strengthening of information sovereignty and security.

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Accordingly, the top-priority direction of development of the national digital economy and infrastructure is quick import substitution in the sphere of telecommunications, which is reflected in the Doctrine of information security and other basic documents. At the same time, there is an obvious fact that Russia is behind the leading countries of the world by the level of innovative activity, occupying the 46th position in the Global Innovation Index. Besides, the share of foreign technologies in the internal market exceeds the share of the domestic ones. The same is true for the contents of information products and software. In this context, the top-priority task of the national policy within development of the information society is increase of effectiveness of state management and interaction of public authorities with citizens and business based on the use of information and telecommunication technologies. In the context of implementation of the above National program, it is planned to create – until 2024 and on the whole territory of the Russian Federation – the modern information and telecommunication infrastructure, which would ensure accessible and high-quality communication and broadband Internet for at least 95% of population and to provide a high level of integration of the Russian Federation in the global information space. Thus, there appears a necessity for government support for domestic manufacturers of micro-electronics and components, including through direct subsidies and subsidized crediting of companies of the hi-tech sphere – which will allow ensuring the demand for the products of the domestic innovative production. The processes of innovative development are accompanied by transition to the Sixth technological mode, which is characterized by emergence of computational machines that are able of super quick processing of large arrays of data – which allows increasing labor efficiency and raising the living standards of technologically developed countries. This is the basis of their innovative potential, increasing the effectiveness of state management. In the context of improvement of the system of state management, a perspective innovation is a grid network – a system that is a “virtual computer”, which is organized in the form of clusters, unified in a single information network and synchronized for execution of a large number of operations. It should be noted that the USA already has such information infrastructure, which is used for processing, storing, distribution, and management of information that is required for strategic decisions in the political and military spheres. It seems that in the context of the search for effective means and mechanisms of innovative management the creation of an inter-cluster network of such form has large perspectives not only as an information aggregator of theoretical and applied knowledge but also as information of the strategic and defense value. It should be noted that the project on creation of the infrastructure of the Russian grid network has not been implemented – though it is an organic part of scientific research adopted by the decree of the Government of the Russian Federation “Regarding adoption of the Program of fundamental research of national academies of sciences for 2013–2020”. The top-priority direction of innovative development of the system of state management could be development of AI that is able to perform monitoring of Internet and to determine – by certain signs (meetings, conversations, manner of speaking, views of

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radical websites, social networks, games, etc.) – subjects that are potentially dangerous for society and government. In this context, it is necessary to note the Russian information and analytical systems PRIZMA, Semantic Archive 4.0, and TRAL. These systems take several seconds to scan tens of millions of messages of the Russian media resources, determining the attitudes and views of the population regarding the most urgent problems and issues. It is possible to suppose that these intellectual systems will continue to develop and might be integrated into innovations within the National strategy of development of AI until 2030. According to a lot of Russian experts, the bets in the game on weakening of Russia with the help of efforts to destabilize its social and political situation or even to provoke its dissolution based on the USSR model are very high. The expert of the Russian Institute for Strategic Studies I.A. Nikolaychuk believes that “countering such threats is impossible without implementation of a complex of measures on increase of the potential of information and analytical intelligence by means of development of the systems of monitoring and accumulation of materials on Russia and without creation of a special contour of operative analysis of the corresponding quantitative and qualitative data”. Thus, it is obvious that the global processes of innovative development stimulated democratization and increase of the number of participants of political processes and increase of activity and effectiveness of participation in them. At the same time, increase of investment attractiveness of the sphere of ICT led to an inflow of large capital, which influence on the political and information agenda grew. This led to pressure on the democratic processes or their movement in destructive directions – e.g., color revolution or overthrow of “authoritarian” regimes. All this leads to growth of the number of conflicts in politics and the social sphere. According to A.A. Kovalev, this all led to “transfer of the right to form a strategy of development of the global information space and to determining the priorities in the global information policy to the World Trade Organization, which task has always been to serve the interests of industrially developed countries”. Besides, this led not only to increase of the “electronic and digital” gap between developed and developing countries but also to emergence of so called information neo-colonialism. It is possible to state that the basis of “accession” of so called “uncivilized” countries (according to Western countries, Russia is one of them) to the globalized world is refusal from national identity and historical and geo-political independence. According to the Russian experts, “these countries should be integrated in so called “open society” as a source of resources (natural and intellectual) for provision of the existence and functioning of the “golden billion”. Implementation of the above scenario is not fully impossible – in the conditions of aggravation of the socio-economic situation in Russia, decrease of population, and brain drain, which are among the direct threats to security, as envisaged in the basic strategic documents of the Russian Federation. The basis of sustainable development of society – in the global and domestic political processes – includes the activity of the civil society in the information sphere. At the same time, one must take into account that civil activity could be mistaken for anti-social activities and attempts of destabilization of the socio-political situation, which happens very often in the conditions of the modern open and democratic society.

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According to E.P. Tavokin, “the process of development of civil society in Russia is accompanied by deep transformation of the social structure, impoverishment and marginalization of the population, and fuzziness and underdevelopment of the interests of various social groups”. We think that the above should be supplemented with the gradually growing crisis of the neo-liberal ideology and its inadequacy as to the logic and tendencies of development of Russia, which strives for protection of its sovereignty in all spheres, including the information sphere.

4 Conclusions/Recommendations Thus, it is possible to conclude that the most destabilizing factors of innovative development are unilateral management of the developing global innovative system and attempts to preserve leadership by the center of global development. The logic of the new technological mode dictates the necessity for coordination of social activity, which becomes a decisive factor of transformation of the social and political structure and increase of effectiveness of political management. Therefore, it is necessary to generate new approaches to regulating the scientific and technological sphere that would reflect the changes in the modern politics in the context of complication of the global innovative system. Thus, domestic cultural, social, and economic modernization of country is the most important factor of competitiveness and a condition for a “spurt” in the innovative development. It seems that this task could be solved with the help of consistent implementation of the national interests in the information sphere and provision of a smart balance between free access to information and increase of information sovereignty and security.

References Garant: Natsionalnaya strategiya razvitiya iskusstvennogo intellekta na period do 2030 goda (2020). https://www.garant.ru/products/ipo/prime/doc/72738946/#1000. Accessed 15 Jan 2020 Akopov, G.L.: Internet I politika. Modernizacia politicheskoi sistemi na osnove innivacionnih internet-technologii. Knorus, Moscow (2013) Kovalev, A.A.: Teoreticheskii analiz informatsionnoi politiki. Molodoi uchenii 14, 496–501 (2016) Kulakova, T.A.: Setevoi analiz processa virabotki i realizacii poloticheskih reshenii i program. Vestnik FGUP “CNII “Centr” 4, 45–50 (2011) Nikolaychuk, I.A. (ed.): Politicheskaya mediametriya. Zarubezhnie SMI I bezopasnost Rossii: Monogr. RISS, Moscow (2015) Tavokin, E.P.: Massovaya kommunikatsiya: Sushnost i sostoyanie v sovremennoi Rossii. URSS, Moscow (2012) Tavokin, E.P.: Massovie informatsionnie processi v sovremennoi Rossii Ocherki. Izd-vo RAGS, Moscow (2002)

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Sherstobitov, A.S.: Transformacia mechanizmov vzaimodeistvia gosudarstva i negosudarstvennih actorov v processe perehoda k koordinacionnomu gosudarstvu. Vestnik SanktPeterburgskogo universiteta. Seria 6: Filosofia Kulturologia. Politologia. Pravo. Mezhdunarodnie otnoshenia vol. 4, pp. 97–103 (2011) WIPO: Global Innovation Index 2019. Creating healthy lives–the future of medical innovation (2019). https://www.wipo.int/publications/en/details.jsp?id=4434. Accessed 20 Jan 2020

Interactions of Import Substitution and Public Procurement Based on Industrial Policy Angelina E. Gukasova(&) State University of Management, Moscow, Russian Federation [email protected]

Abstract. This paper is devoted to perspectives of import substitution of the industrial policy. This topic is important due to the sanctions imposed by the EA and the USA, which aim at negative influence on the development of Russia. Actualization of the national economy becomes the top-priority task for the Russian government. At present, there is an opportunity to accelerate import substitution at the government level. Import substitution is primarily connected to solving one of the main tasks of the Russian economy – diversification. However, attempt at development of a comprehensive policy was performed by the government only after the start of the sanctions. The methods of logical and statistical analysis are used for developing the tasks of industrial policy. One of the tools is public procurement, which is the basis of the industrial sector’s development, aimed at provision of import substitution. The author considers and systematizes the problems of import substitution of Russian products, presents statistical data that characterize development of the industrial sphere of economy, and determines the interconnection between industrial policy and procurement through law. The system of public procurement should be correctly organized for development of the Russian economy. The specifics of public procurement consist in the purpose of products – public purposes that are necessary for social measures and the tasks of country’s defense and security. Special attention here is paid to the issues of public procurement. Difficult aspects of reduction of foreign demand for Russian natural resources and the following depreciation of ruble are a window of opportunities for development of the Russian industry and increase of import substitution. Elimination of the problem issues will be a stimulus for development of the Russian industrial complex. In the long-term, dependence on import could be reduced by means of innovations and stimulation of investments in technical spheres and creation of new productions. Keywords: Import substitution development JEL Code: 014


Industrial policy
Eco-oriented innovative


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1 Introduction Economy is a totality of interconnected spheres. Its basis is industry and the connected institutions. Industry has the leading role, which is expressed in provision of various spheres of economy with modern materials, work tools, and innovative technologies. Besides, it is an undisputable factor of technological progress of a country and expanded reproduction on the whole. Law in the sphere of industrial policy is based on the provisions of the Constitution of the Russian Federation, Federal law “On industrial policy in the Russian Federation”, and other federal laws and regulatory acts that are adopted at the federal and regional levels. The measures of stimulation and support for industrial activities are envisaged in federal and municipal programs of industry development. Scientific novelty of the research consists in the following significant results: – drawbacks of national programs are determined based on studying and systematizing the research materials of the industrial sphere; – current problems of functioning of the system of public procurement is determined; – the most important measures for improving the practice of import substitution are outlined; – the contractual system in the sphere of public procurement for provision of state and municipal needs is considered as a tool of development of the industrial sphere of economy.

2 Methodology The information basis of the research includes Federal laws FZ No. 44, FZ No. 223, and FZ No. 488 (Federal law, 2013; Federal law, 2011 Federal law, 2014). The data of the Federal State Statistics Service were used for statistical analysis (Investment in Russia 2020; Index of production 2020; Depreciation of fixed assets 2020; Average service life and age of fixed assets 2020). The theoretical basis of the industrial sphere and public procurement are studied in the following works that predetermined the methodological basis of this research (Vishnyakov and Kiseleva 2017; Semiletova and Kiseleva 2016; Shuvalov 2015; Sidorenko 2020; Tebekin and Zhigulin 2019; Sheshukova 2018; Baltutite and Davudov 2019; Kormishkina and Semenova 2019).

3 Results and Discussion In view of the growing foreign political opposition between Russia, the EU, and the USA, which is caused by the desire of the latter to perform negative influence on Russia’s development and which is expressed in economic sanctions imposed on Russia, actualization of the national economy becomes the top-priority task for Russia’s government. It is necessary to implement measures on transformation of the national economy – primarily, in the issue of import substitution. Here it is necessary to

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implement measures on import substitution in the industrial sector, as it is the main element of the structure of the Russian economy. In the modern dictionary of economics, the term “import substitution” means “reduction or termination of import of a certain commodity through domestic production of the same commodity or similar ones” (Sidorenko 2020). Due to the global multi-sectorial economy and multiple flexible markets, it is not possible to refuse from import completely. At present, the Russian economy cannot fully satisfy the needs of various production spheres with domestic technologies. However, provision of technological independent of Russia – primarily, in the strategic spheres of industry (energy, military, mining, etc.) – is an important element in provision of Russia’s sovereignty at the international arena. Thus, solving the import substitution task is the most important condition of provision of development of the industrial complex and increase of its advantage in external and internal markets. The main drawback of the national program of import substitution is the structure of Russia’s export, which is dominated by oil, natural gas, fertilizers, etc. It is necessary to create a sustainable system of supply chains in the internal market which would be connected to the processing industry. However, this transition is hindered by a range of problems that formed in the course of a long period of stagnation of the industrial sector in the conditions of the market economy. The risks of sustainability in this sphere are justified because of the absence of own developed industry. The vivid problems of implementation of industrial policy are as follows: 1) Lack of financing. In order to raise labor efficiency and industry’s competitiveness, it is necessary to finance production and introduce new technologies. An important aspect of attraction of financing is creation of investment attractiveness. The key indicators during selection of an object of investments are profitability, risks, and period of return of the implemented project. Thus, companies focus on minerals extraction, because it has quick return in the industrial sphere (Investment in Russia 2020). 2) Reduction of production volumes. One of the indicators of the state of the national economy of most countries of the world is the production index, which is ratio of the current volume of production in the financial equivalent to the production volume in the previous or another basic year (Index of production 2020). The index of industrial production was reducing in 2010–2015, and 2015 marked the start of its growth. Growth of the production index, however, is not a guarantee of intensive growth of a country’s economy. Economic growth could be achieved by means of maximum exploitation of old equipment – i.e., the quantitative factors is considered erroneously. Moreover, maximum use of old equipment leads to its failures, reduction of the general cycle of production, and, as a result, to stagnation of the economy. 3) Physical and moral depreciation of the fixed assets. Based on the statistical data, the level of depreciation of fixed assets at companies in 2018 constituted 46.6%. The leading position in the industrial sphere belongs to the sectors of the mining industry, in which depreciation constitutes 55.6%. In the processing industry, this indicator equals 50.6%, in provision of electric energy, natural gas, and air conditioning – 45.6% (Depreciation of fixed assets 2020).

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It is possible to conclude that production capacities are very old. The average age of the existing machines and equipment in the mining industry in 2018 constituted 11 years, in processing productions – 12 years, in the electric energy sector – 15 years (Average service life and age of fixed assets 2020). Absence of the mechanism of regional policy implementation. Each region has its own economic, geographical, natural, demographic, national, and industrial factors. The Russian industry has a lot of companies and enterprises that work in different sectors. The regional aspect is the most vivid during minerals extraction. How should other industrial sectors develop? How is the regional policy in the processing sectors to be formed? These problems are not yet solved. To solve this problem, it is necessary to develop strategic programs at the regional level – in particular, it is necessary to determine and focus on “growth points” of a specific region. There’s a need for a fuller (with the use of scientific approaches) analysis of the state and perspectives of development and functioning of industry of a specific subject of the Russian Federation, as well as the region’s support for all industrialists. Incorrect goal setting; an important indicator is financial profit, not increase of production volumes. The goals do not include the issue of industry’s influence on ecology or perspective ideological settings for the whole socio-economic system of the Russian Federation (Vishnyakov and Kiseleva 2017). The issues of interrelations of human and nature in the process of production of public benefits require more attention and the corresponding regulation by the government (Semiletova and Kiseleva 2016). The issue of import substitution in the aspect of entering the specific markets has not been developed. Thus, it is expedient to introduce bonuses for certain spheres of production, which would stimulate progressive development of the whole Russian economy (creation of “growth points”). The Russian economy could grow by means of the processing industry, service sphere, and the segment of new technologies. Sanctions imposed by the EU and the USA. In the conditions of ongoing antiRussian sanctions, there appears a need for reorientation of economic cooperation towards the countries of the CIS, the EAEU, and BRICS. A strategy of cooperation allows implementing joint projects, exchanging experience, looking for solutions of foreign economic problems, and developing the innovative and digital components of the countries’ economies (Tebekin and Zhigulin 2019). Low innovation activity.

As shown in Fig. 1, the indicator of innovation activity did not change much in 2010–2018. This is primarily due to the risks of uncertainty of the demand. Any innovation envisages certain instability and uncertainty, as well as presence of “raw” aspects which could be determined only in the process of a product’s exploitation. In order to raise labor efficiency and increase industry’s competitiveness it is necessary to invest in companies and implement innovations. Federal law dated December 31, 2014, No. 488 FZ “On industrial policy in the Russian Federation” mentions the following:

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Fig. 1. The share of innovative goods, works, and services in the total volume of goods shipped, works performed, and services provided by organizations, 2020.

Article 12. Stimulation of demand for innovative products, including through norming in the sphere of public procurement for government and municipal needs; Article 18. The measures of stimulation of domestic production have higher priority as compared to industrial products that are manufactured in foreign countries (Federal law 2014). In these conditions, public procurement could be used as a driver of development of the economy’s industrial spheres for implementing the industrial policy on import substitution. Forming an order, government takes into account the needs of a government body, government office, and society on the whole. Besides, public procurement is used for long-term programs, which allows for additional guarantee for the manufacturer and stimulates production. In other words, public procurement allows increasing effective demand, which creates conditions for improving the activities of domestic manufacturers. However, in practice the system of public procurement has certain unsolved problems, which influence the effectiveness of the work of this institution. This calls for reforms – with the help of regulatory transformations and implementation of innovations. Experience of most developed countries shows that public demand and the contractual system are built in the system of tools and mechanisms of implementation of industrial policy, which is oriented at innovative & technological development of national industry (Shuvalov 2015). Effective functioning of the system of procurement sets the basis of socio-economic development by means of stimulating Russian manufacturers and keeping the necessary balance between public need and financial resources that are required for their satisfaction (Sheshukova 2018).

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Based on the purposes of industrial policy, it is experience to strive for creation of innovative and competitive industrial sector, which would ensure the transition from the export type of economy to the eco-oriented and innovative types (Vishnyakov and Kiseleva 2017). Let us consider the problems of public procurement that directly influence the solutions to the import substitution problems. Importance of the choice of resources’ supplier is explained by the reliability criterion. Supplier has to be a reliable partner of the customer. Unfair actions of suppliers in the market hinder the effective functioning of the whole system of procurement. Deliberate reduction of prices by unfair suppliers – for the purpose of receiving a contract at all price – leads to disruption of terms and problems with quality. At the same time, a customer cannot have an insurance from an unfair supplier (contractor). Putting a supplier in the “black list” does not solve the problem, as this procedure is long, fines are low, and it is possible to register a new company and continue working under a new name. Most of the problems during selection of a supplier are connected to specific features of the Russian economy and doing business. Very often, even a good reputation and long history of activities of a supplier in the market cannot guarantee a good result. Among the methods of purchases, the most popular ones are purchase from sole provider and auction. Online auction is a way of reducing the initial (maximum) price of the contract [122, 3]. Federal law 223 FZ should envisage which purchases shall be performed with the help of tendering procedure. It is necessary to establish a balance of actions (price is the selection criterion) and tenders (selection criteria include a complex of characteristics, including price). It is possible to state that determination of an auction winner is rather transparent, while a tender’s winner could be a bid with not the lowest price but with a higher indicator of reliability of the supplier company or better service terms – this depends on the subjective decision of the tender committee. Federal laws FZ 44 and FZ 223 do not contain a notion of purchase’ effectiveness. Thus, the question of evaluating the purchases’ effectiveness arises. During several years, evaluation of public procurement in the Russian practice has been performing based on difference between the initial maximum price of contract and the contract price. Auction is the dominating method among competitive methods of purchases. Online auction is conducted by reducing the initial (maximum) price of contract (Federal law 2011, 2013). The following bear operation is a non-market mechanism and a reason of conspiracy between government customers and the “favored” participants of the action. Another important problem is absence of the regulatory consensus in solving the practical issues. Customers and suppliers go to forums on which their colleagues on the contractual activities explain laws and share their experience (Baltutite and Davudov 2019). However, anyone could register and post on the forum, so believing everything that is posted there could lead to administrative and even criminal responsibility. Thus, there is a necessity for an official body that would have the authorities to explain the practical issues in the contractual system. Public procurement is the most important aspect of implementing the policy of import substitution in the industrial sector of economy. This means that such processes

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as transformation of the structure of industrial complex by means of transition to ecooriented production of science-intensive and innovative products and development of the system of execution and control over execution are imposed on government institutions. Without interaction with the private sector it would be impossible to implement the effective transformations. Thus, there should be a dialog between government and business, which would be effectively manifested in the notion “publicprivate partnership” and “protection of investments”. An important problem in Russia is ratio of the share of foreign and domestic capital in the industrial sector. Until recently, the share of imported goods in the Russian industrial sector was much higher that the share of domestic goods. This led to national companies’ losing profit and interest and striving for re-orientation of the production (Kormishkina and Semenova 2019). This influences not only Russian companies but also the Russian budget, which receives insufficient taxes and revenues. An important aspect is absence of specific explanations and treatments on a range of important issues in the regulatory basis. Thus, the problems during consideration of disputes appear – which slows down the work. For solving these problems, it is necessary to perform interconnected actions on the following main directions: – – – –

simplifying the mechanism of purchases’ planning; optimizing the purchases’ procedures; expanding the authorities of controlling bodies in the sphere of purchases; expanding the functions of the unified information system in the sphere of purchases; – creating a unified electronic register of bank guarantees, which would allow checking and controlling them online; – introduction of responsibility for unfair suppliers according to the Civil Code.

One of the principles of public procurement is customer’s professionalism. Based on this, it is necessary to conduct advanced training – as each year brings new amendments to the existing laws. A large advantage would be the introduction of a new specialty in universities – “economist of contractual service”. Import substitution in procurement activities is a blurry notion. There are no clear mechanisms. Besides, the Ministry of Finance does not have the correct statistics on domestic products that are purchased within public procurement. One of the reasons of this is “deliberate dumping” from foreign manufacturers and higher cost of Russian products, customer’s setting short deadlines, deliberate setting of technical characteristics of the purchases’ objects for a foreign manufacturer’s equipment, and unification of several lots into one (manipulation with lots). Another problem is that most purchases are conducted without advance payments, which is profitable for large companies.

4 Conclusions Solving the set tasks by means of development of industrial policy with the use of the modernized mechanism of public procurement will allow the following:

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1. Performing a structural transformation of the national complex of industry by means of “growth points”; 2. Increasing the level of competition during procurement in Russia; 3. Increasing the production volume due to growth of purchases from Russian manufacturers; 4. Raising the growth of population’s well-being, reducing unemployment, and improving ecology 5. Bringing Russian industrial products to the world market, which will allow solving the problem of the industrial complex’s underrun.

References Sidorenko, A.P.: Import substitution in the field of public procurement. Zhurnal Vestnik nauki i obrazovaniya 3–3(81) (2020). https://cyberleninka.ru/article/n/importozameschenie-v-sferegosudarstvennyh-zakupok/viewer. Accessed 12 Jan 2020 Vishnyakov, Ya.D., Kiseleva, S.P.: National ideology is the basis of social and technological development in Russia. Ekologo-orientirovannoe upravlenie riskami i obespechenie bezopasnosti social’no-ekonomicheskih i obshchestvenno-politicheskih sistem i prirodnotekhnogennyh kompleksov. Sbornik materialov kruglogo stola Gosudarstvennyj universitet upravleniya, pp. 41–46. Science, Moscow (2017) Semiletova, E.V., Kiseleva, S.P.: State environmental policy of Russia: history of development, current state and efficiency assessment (2016). https://elibrary.ru/item.asp?id=32241923. Accessed 6 Jan 2020 Tebekin, A.V., Zhigulin, V.G.: O perspektivah razvitiya sistemy gosudarstvennyh i municipal’nyh zakupok stran-uchastnic evrazijskogo ekonomicheskogo soyuza. Zhurnal issledovanij po upravleniyu 5(3), 52–60 (2019) The share of innovative goods, works, and services in the total volume of goods shipped, works performed, and services provided by organizations. http://old.gks.ru/wps/wcm/connect/ rosstat_main/rosstat/ru/statistics/science_and_innovations/science/. Accessed 6 Jan 2020 Shuvalov, S.S.: Public procurement as a mechanism for stimulating the modernization of the Russian economy (2015). https://inecon.org/docs/Shuvalov_20151110.pdf. Accessed 6 Jan 2020 Sheshukova, T.G.: Efficiency of public procurement in budgetary institutions: methodological aspect. Zhurnal Buhgalterskij uchet v byudzhetnyh i nekommercheskih organizaciyah. 21/2 (2018). https://cyberleninka.ru/article/n/effektivnost-osuschestvleniya-gosudarstvennyhzakupok-v-byudzhetnyh-uchrezhdeniyah-metodicheskiy-aspekt-1. Accessed 6 Jan 2020 Baltutite, I.V., Davudov, D.A.: Modern problems in the sphere of contract system of state and municipal procurement. Zhurnal Legal Concept (2019). https://cyberleninka.ru/article/n/ sovremennye-problemy-v-sfere-kontraktnoy-sistemy-gosudarstvennyh-i-munitsipalnyhzakupok/viewer. Accessed 6 Jan 2020 Kormishkina, L.A., Semenova, N.N.: Import substitution is the most important strategic task for the development of the Russian agro-industrial complex. Zhurnal Natsional’nyye interesy: prioritety i bezopasnost’(2019). https://cyberleninka.ru/article/n/importozameschenievazhneyshaya-strategicheskaya-zadacha-razvitiya-agropromyshlennogo-kompleksa-rossii-1. Accessed 6 Jan 2020

Comparative Analysis of Success Factors for the Implementation of Public Digital Procurement Platforms: Domestic and World Experience Olga M. Pisareva(&) , Svetlana A. Suyazova and Anna I. Denisova

,

State University of Management, Moscow, Russia [email protected], [email protected], [email protected]

Abstract. The aim of the work was to study the status and development potential of a single digital platform for public procurement in Russian Federation and its comparison with similar foreign platforms. The research methodology is based on a systematic approach to the study of socio-cybernetic systems and processes based on the methods of semantic, logical, statistical, content, expert and comparative analysis. The following scientific results were obtained from a study of domestic and foreign experience: representative statistical material was collected on the volumes, cost and conditions of public procurement on Russian and European digital trading floors; summarized the effective practices of introducing electronic public procurement systems in the countries of the European Union and the Russian Federation, identified critical factors for the success of the implementation of technologies and electronic procurement systems, and also metrics for their assessment, identified problem areas in the formation of public procurement platform solutions and recommendations were given to eliminate problem areas. In particular the need was noted for the development of guidelines governing work within the digital platform; use of information from feedback channels, public oversight of procurement procedures; the possibility of preliminary consultations on target markets, providing access to analytics in the state register of contracts; introduction of a system of stimulating innovation through a public procurement system; maintaining a national database of errors and irregularities detected by the results of the public procurement audit; ensuring interoperability of the electronic system of public procurement and other state databases, etc. Keywords: Digital platform
Information and communication technology Public procurement
Public administration JEL Code: H57


L86

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 918–929, 2021. https://doi.org/10.1007/978-3-030-59126-7_102




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1 Introduction Achieving national goals and solving strategic tasks of sustainable and effective socioeconomic development of the Russian Federation require the implementation of largescale investment projects in various spheres of economy and spheres of the social sphere. This is connected to large volumes of purchase of goods and services for public and municipal needs. The created digital platform of state management provides a set of organizational and technological solutions, which ensure effectiveness of using the government’s resources, which are financed from the sources from all levels of the Russian budget system. Performing the ambitious tasks of formation of a fully functional system of information & analytical provision of public management in the Russian Federation, including in the sphere of support for public procurement, is the most important vector of practical implementation of the Decree of the President of the Russian Federation No. 204 dated May 7, 2018 “Regarding the national goals and strategic tasks of development of the Russian Federation until 2024” and the measures of the national program “Digital economy of the Russian Federation” (the program’s passport was established by the presidium of the Council with the President of the Russian Federation on strategic development and national projects (protocol dated December 24, 2018, No. 16)). The purpose of this paper is to study the organizational & methodological state and potential of development of the unified digital platform of public procurement (hereinafter – public procurement) in the sphere of public management. In this context, the authors solve the following research tasks: studying the accumulated experience in the sphere of informatization and automatization of the process of public procurement in the Russian Federation, as well as the best foreign practices in this sphere; determining the critical factors of success of the process of implementing the technologies and eprocurement systems; generalizing the effective practices of implementing the system of public e-procurement in countries of the EU and the Russian Federation; determining the problem areas of the organizational & methodological character during formation of platform solutions in the sphere of public procurement and developing recommendations for improving them. The information sources of the research include open data bases, analytical and legal information of Russian and international organizations – the OECD (Organization for Economic Co-operation and Development, http://www.oecd.org), the International Bank for Reconstruction and Development (http://www.siteresources.worldbank.org), the European Commission (http://ec.europa.eu), Federal State Statistics Service (http:// www.gks.ru), the Ministry of Economic Development (http://www.economy.gov.ru), the State Automatized Information System “Upravlenie” (http://gasu.gov.ru/ stratplanning), the Unified Information System of Public Procurement (http:// zakupki.gov.ru), data bases of the regulatory acts of open online legal systems ConsultantPlus and Garant, and scientific publications of Russia and foreign scholars. This research is based on the systemic approach to studying physical and socio-cybernetic systems and processes with the use of the methods of semantic, logical, statistical, content, expert, and comparative analysis.

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2 Methodological Basis of the Research The methodological basis of this research includes scientific works of Russian and foreign scholars, experts, and specialists in the sphere of public management, contracting, and strategic development of information systems, as well as modeling of processes and systems. The problem of organizational & methodological provision of the processes of provision of procurement and contracting in the sphere of state and public management is considered in the works (Degtev 2013; Detelj et al. 2016; Kozyrev 2019; Popkova 2019; Vaidya et al. 2006). The issues of methodology and practice of design of cybernetic systems in the sphere of state management are studied in the works (Babkin et al. 2018; Chigasova 2010; Dvinskih et al. 2019; Niu et al. 2019). Experience of design, support, and evaluation of functioning of electronic systems in the sphere of procurement activities is considered in the works (Di Maio 2017; Popkova et al. 2019; European Commission 2019a; United Nations 2019). Activities in the sphere of public procurement in the Russian Federation are regulated by Federal laws dated April 5, 2013 No. 44-FZ “On the contract system in the sphere of purchases of products, work or services for state and municipal needs” (hereinafter - 44-FZ) and No. 223-FZ “On purchasing goods, works, and services by certain types of legal entities” (hereinafter - 223-FZ). The aggregate volume of contracts on 44-FZ in 2017 constituted RUB 7,081,519.8 million (3,160,721 notifications), which is a little higher than the volume of tenders placed in 2017 by France (44,314 notifications for EUR 99.33 billion). The Unified Information System registered 3,538,970 concluded contracts for RUB 6,324,337 million, which equals 6.9% of GDP (the same indicator in the UK equaled 6% in 2017, and in Poland – 7.2%). The number of applications in the Unified Information System has been growing, but the aggregate sum of contracts reduced in 2016 and 2017; 2018 showed growth of RUB 921 million. A range of consistent measures on improving the digital platform of public procurement is implemented in Russia. Transferring the process of procurement into the “digital” form seeks certain purposes, which include monitoring of effectiveness of the system of purchases and generalization of experience in this sphere. The first step has been made: zakupki.gov.ru posted documents on procurement regulated by Federal laws No. 44 and No. 223. Further improvement of information and communication technologies would simplify and accelerate the procurement process, automatize a substantial part of agreements, optimize the parameters of deals, etc. However, it is necessary to think about evaluation of the system.

3 Research Results The indicator of effectiveness of any procurement system is the level of buyer and supplier’s satisfaction with the result. However, in case of public procurement satisfaction of society is also very important, as it is influenced by the final result of work of public entities. Based on the information from the sources (European Commission 2019a; The Institute for Public-Private Partnerships 2009; Vaidya et al. 2006), we have

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generalized the list of critical factors of success of the process of e-procurement systems implementation (Table 1). It is necessary to understand their current state (column 3), as well as the vector of transformation that is set in the digitization program (column 4). The factors that are not vividly influenced by the program (gap in column 4) belong rather to the sphere of internal management of companies and are not connected to creation of the digital infrastructure. The issues of generalization and dissemination of the best practices of the systems of public e-procurement are in the focus of the profile commission of the EU: best experiences are systemized in the unified electronic library. Together with regulatory acts and instructions, it contains monitoring of cases since 2017. For the purpose of comparison of evaluation of the public procurement systems, it is necessary to form the unified metrics of analysis of achievability of critical success factors. For this, a list of thirty criteria is offered, which include infrastructural and institutional ones. According to the documents (European Commission 2019a, b; World Bank 2017), they include the following criteria: 1. Unified online information resource in the form of “one window”, which provides methodological materials and access to various support services, as well as channels of communication with operators and regulators. 2. Targeted thematic guides and materials: documents and videos aimed at provision of practical information on the procurement-related issues. 3. Feedback channels for economic operators, including anonymous ones, for participants to leave messages on violation and offers on improvements for parties that make decision. 4. Voluntary control over the procurement procedures by a third party, as per agreement with procurement participants. 5. Use of framework agreements between trading participants, which envisage the main and important terms of supply for a certain period, which allows reducing the expenditures for recurrent purchases. 6. Preliminary consultations for customer’s research of the structure of the market (information source – experts of the sphere and potential suppliers). 7. State register of agreements (online and open access) for all public and municipal procurement. 8. Online action for small standard purchases. 9. Transparent platforms that provide open online access to the aggregate statistics of public procurement. 10. Stimulation of innovations through public procurement (two types of procurement are distinguished: orders for R&D services and purchases of innovative products (implementation of innovative developments), which are present in the market but are not very popular). 11. Customer support in the form of a hot line, for consultations on the operational issues of procurement. 12. Certification of specialists on public procurement. 13. Independent group of consulting experts on public procurement.

Critical factor

2 Training of final users

Attraction of suppliers

Economic justification and project management

Systemic integration

No.

1 1

2

3

4

Digital literacy of suppliers, plan of communication with suppliers, demonstration of advantages, best practices in content and catalog management Identification of business drivers, evaluation of business processes, profit on investments, total cost of possession, risk management, pilot projects Verification of information compliance, information exchange with other information systems in real time, online trade with suppliers

3 Involvement, support, training of users

Attributes

Creation of the basic center of data processing in each federal district; federal law on regulation of the status Solved individually within the interaction “company’s information system – online trade platform”

(continued)

–

Plan of development according to the program “Digital economy” (until 2024) 5 Training of bachelors in IT specialties (120,000 people), online programs of development of digital literacy (10 million people), implementation of the model “Digital university” in 100% state-funded universities, grant support for educational establishments and students of specialties “Mathematics”, “IT”, and “Technologies” –

Isolated evaluation of each participant of procurement

Educational work of online trade platforms, isolated individual strategies of procurement participants

4 Courses of further vocational education of commercial and statefunded educational establishments

Status of implementation

Table 1. Critical factors of success of the process of implementing the system of public e-procurement.

922 O. M. Pisareva et al.

Critical factor

Security and authentication

Process reengineering

Efficiency management

Supporting the highest level of management

No.

5

6

7

8

In the isolated manner with customer/supplier, within the existing practice of accounting and control In the isolated manner with customer/supplier, within the existing practice of strategic and tactical management

In the isolated manner with customer/supplier, within the existing ERP systems

Increase of transparency, automatic invoices, compliance with procurement procedures and standards

Goals, key performance indicators, comparison with the basis, monitoring of progress Involvement of managers, investments in organizational changes

Simple, encrypted non-certified digital signature, encrypted certified digital signature, verified certificates of registered trading participants

Status of implementation

Table 1. (continued)

Infrastructure of authentication and identification, confidentiality and integrity

Attributes

(continued)

Federal law on optimization of VAT on services provided in the digital form (July 2019)

Plan of development according to the program “Digital economy” (until 2024) of written (electronic) deals and automatized agreements Federal laws: on unification of requirements to identification, expansion of possibilities and means of identification; mechanisms of formation and use of “cloud” digital signature; on unified requirements to the unified encrypted digital signature, on visualization of digital signature in a digital document (July 2019) Federal laws on unification of the rules of application of complaints in the digital form to federal arbitrary courts and general jurisdiction courts, justices of the peace (June 2019) –

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Management of changes

Strategy of implementing e-procurement

9

10

Identification and management of stakeholders, evaluation of the influence of e-procurement, potential barriers for implementation, organizational opposition Reliable practices of procurement, opportunities for aggregation, consistent approach to procurement, connections with industry and small business Technical standards, procedural standards, coordination and compatibility

Attributes

Departmental instructions for government establishments, practical communities and journals for business representatives

In the isolated manner with customer/supplier, within the existing practice of strategic management

Status of implementation

–

Plan of development according to the program “Digital economy” (until 2024) –

11

Technological standards

Clear position of the Russian Standardization of requirements to Federation on the issues that description of procurement objects is stimulate development of the digital envisaged by 44-FZ and 223-FZ; economy and harmonization of since July 2016, it has been approaches in this sphere in the mandatory for companies with public EAEU (December 2019). participation. There are all-Russian A complex of measures for improving classifiers and standards of the mechanisms of standardization is organizations, including technical to be implemented (December 2020) conditions. Source: adaptation (European Commission 2019a; Vaidya et al. 2006), columns 4, 5 – developed by the authors.

Critical factor

No.

Table 1. (continued)

924 O. M. Pisareva et al.

Austria (8) Belgium (6) Bulgaria (6) UK (12) Hungary (5) Germany (7) Greece (3) Denmark (8) Ireland (8) Spain (6) Italy (11) Cyprus (4) Latvia (6) Lithuania (7) Luxembourg (3) Malta (1) Netherlands (10) Poland (12) Portugal (5) Romania (10) Slovakia (10) Slovenia (3) Finland (8) France (11)

+

+

+ +

+ +

+

+ +

+

+ +

+ +

+ + + +

+

+ +

+ +

+

+

+ + +

+ +

+ +

+

+ +

+

+

+

+

+

+

+

+ + + + + + + + + + +

+

+ +

+

+

+ + + +

+ +

+ +

+ + + + + + + + +

+ + + + + + + + + + +

+ + +

+

+

+

+ + +

+

+

+

+

+

+

+

+

+ +

+

+

+

+ +

+

+ +

+ + + +

+

+ + + + + +

+

+

+ + +

+

+

+

+ +

+ + +

+ +

+

+

+

+ + + +

+

+

+

23 24 25

+ + + + +

+

21 22

+ +

EU country (number of practices) No. of the criterion of evaluation of public procurement effectiveness 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

+

+

+

+

+

+

+

(continued)

+

+

+

+

+

+

26 27 28 29 30

Table 2. Comparison of experience of implementing the public e-procurement systems in countries of the EU and the Russian Federation.

Comparative Analysis of Success Factors 925

+ +

+

+ + + + + + + + + + + + + + 12 13 3 10 7 1 16 7 5 26 10 3 + + + +/– +/– + + +/– + +

+

3

1

6

+ +

Source: compiled by the authors based on (European Commission 2019a, b; World Bank 2017).

Croatia (10) Czech Republic (8) Sweden (7) Estonia (10) Total countries Russian Federation (10) + 9

+ 15 1 +

+ +

6

+

14 4 +/– +

8

+ 2

+ 3

4

+

4

+

26 27 28 29 30 +

2 4 +/– +

23 24 25

+ + + +

21 22

+ 2 4 +/–

EU country (number of practices) No. of the criterion of evaluation of public procurement effectiveness 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Table 2. (continued)

926 O. M. Pisareva et al.

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14. Division of duties by the stages of preparation and assigning for preventing errors and excluding conflict of interests. 15. Development of the tools for evaluating procurement risks. 16. Detailed and up-to-date methodological guide. 17. Specialized courses on procurement for judges. 18. Optimization of the public procurement procedures. 19. Division of technical and financial offers – a so called “two envelopes system”, which is to ensure an independent evaluation of cost and technical criteria. 20. Formation of community of practitioners (platforms, forum, social network, etc.) for experience exchange and interaction on the joint projects. 21. Regular update and analysis of precedent law. 22. Standardized tender documents. 23. National data bases of mistakes and violations of audit of public procurement. 24. Support for timely payments between economic operators. 25. Teaching tender procedures for small and medium organizations. 26. Publication of annual plans of public procurement. 27. Organization of mediation between customers and economic operators in case of dispute regulation. 28. Provision of functional compatibility between procurement systems and other public data bases. 29. Use of the tools for life cycle evaluation. 30. Library of the criteria of strategic procurement. Based on the above criteria, it is possible to perform a comparative analysis of the current Russian system of public procurement with experience of the application of similar systems in the EU (Table 2). It is shown that by the number the best applied practices the leaders are the UK and Poland (12 each). Seven countries implement 10 + best practices: Italy, France, the Netherlands, Romania, Slovakia, Croatia, and Estonia. Digitization of the public procurement systems of the EU countries started in October 2010, and its results should have been manifested by now. The above data show that the Russian Federation has a sufficient experience – as compared to the best practices of the EU countries – in effective implementation of the public e-procurement system.

4 Conclusions and Further Research Directions Thus, we have determined a list of critical factors of success of the public procurement system, which should be taken into account during design and formation of a fully functional Russian digital platform of public procurement. It includes the following measures: training of final users; provision of systemic integration; provision of security and authentication; reengineering and optimization of the processes of public procurement; provision of support for activities from top management; formation and observation of technological standards. Among the best European practices in the sphere of public procurement, the most effective and perspectives ones for Russian developers to use are the following:

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– development and provision of access to targeted thematic materials and guides, which regulate the work within the digital platform; – use of information from feedback channels; – public control over the procurement procedures; – preliminary consultations regarding targeted markets; – formation and provision of access to analytics on the state register of agreements; – implementation of the system of innovation activities stimulation with the help of the public procurement system; – division of duties according to the stages of preparation and assigning government contracts; – development of the tools of evaluation of procurement risks; – division and consideration of technical and financial investments on procurement; – formation of a unified community of the system practitioners; – national data base of mistakes and violations shown by the audit of public procurement; – provision of functional compatibility between the procurement systems and other government data bases; – creation and development of a library of criteria of the strategic procurement sphere. Comparative analysis of the European and Russian systems of public procurement allows – based on the determined aspects and criteria – identifying the potential gaps and determining the perspective directions of development in the sphere of organizational mechanisms and IT for support for planning, implementation, and control of competition procedures. This will help justifying the decisions on adaptation and development of a system of e-procurement in Russia, moving it towards a fully functional and integrated form of a digital platform. Acknowledgments. The paper was prepared with financial support from the Russian Fund for Fundamental Research (project No. 18-010-01151, “Development of the methodology and tools of strategic planning in the conditions of formation of the digital economy”).

References Babkin, A., Geliskhanov, I., Yudina, T.: Digital platforms in the economy: essence, models, development trends. Econ. Sci. 11(6), 22–36 (2018) Chigasova, P.: E-government in the political administration of the United States. Sociol. Power 5, 187–193 (2010) Degtev, G.: International experience in public procurement. Mod. Prob. Sci. Educ. (6), 1–7 (2013) Detelj, K., Jagric, T., Markovic-Hribernik, T.: Exploration of the effectiveness of public procurement for innovation: panel analysis of EU Countries’ data. Lex Localis 14(1), 93–114 (2016) Di Maio, A.: Introducing the Gartner Digital Government Maturity Model 2.0. Gartner Research, 20 July 2017

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Dvinskih, D., et al.: The digital transformation of government: myths and reality. In: Dmitrieva, N., (ed.) International Scientific Conference on the Problems of Economic and Social Development, Moscow, 9–12 April, Under total, p. 43. HSE (2019) European Commission: E-library of public procurement good practices (2019a). https://ec. europa.eu/regional_policy/en/policy/how/improving-investment/public-procurement/e-library . Accessed 16 Nov 2019 European Commission: Public procurement indicators 2017 (2019b). https://ec.europa.eu/ docsroom/documents/38003. Accessed 20 Nov 2019 Kozyrev, A.: Digital economy and digitalization in historical retrospective. Digit. Econ. 1(1), 5– 19 (2019) Niu, J., Goh, L., Zhao, M., Kaiser, K.: Taking the pulse of digital government in China Governance for Development (2019). https://blogs.worldbank.org/governance/taking-pulsedigital-government-china. Accessed 20 Nov 2019 Popkova, E., Ostrovskaya, V.: Perspectives on the Use of New Information and Communication Technology (ICT) in the Modern Economy, p. 1178. Springer International Publishing AG, Cham (2019). https://doi.org/10.1007/978-3-319-90835-9 The Institute for Public-Private Partnerships: Public-Private Partnerships in E-Government: Handbook. World Bank, Washington, D.C. (2009) Vaidya, K., Sajeev, A., Callender, G.: Critical factors that influence e-procurement implementation success in the public sector. J. Public Procurement 6(1/2), 70–99 (2006) United Nations: Digital Economy Report 2019. Value creation and capture: implication for developing countries, United Nations, New York (2019) World Bank: Benchmarking Public Procurement 2017. Assessing Public Procurement Regulatory Systems in 180 Economies, International Bank for Reconstruction and Development (The World Bank), Washington, D.C. (2017)

Peculiarities of Interaction Between Health Maintenance Organizations and Consumers of Medical Services in the Face of Healthcare Informatization Viktoriya I. Tinyakova1(&) , Tatyana N. Russkikh2 and Tatyana V. Karyagina3

,

1

2

State University of Management, Moscow, Russian Federation [email protected] Oryol State University named after I.S. Turgenev, Oryol, Russian Federation [email protected] 3 Russian State Social University, Moscow, Russian Federation [email protected]

Abstract. Today’s development of information technology affects all sectors of the economy, including healthcare. The works of domestic specialists reveal various aspects of health care informatization. As is known, the country’s leadership has identified the creation of a uniform digital healthcare circuit as a priority area for the development of digital healthcare. This digital circuit is intended to ensure the interaction of medical information systems of all healthcare players, improve the accessibility and quality of medical services to the population of Russian regions. As part of the implementation of the Uniform State Health Information System, creation of medical information systems of health maintenance organizations, various user services are being developed and implemented. These services are mainly focused on improving the availability of healthcare. At the same time, the use of feedback services is often inconsistent. Due to the specified circumstances, the problem of increase of level of information exchange between the insured persons and the public health system players remains relevant and requires the development of corresponding design solutions. This article describes the main directions of development of information technologies in healthcare, analyzes the level of public awareness on the activities of regional healthcare organizations and health maintenance organizations by the example of Oryol region. The empirical results obtained indicate low awareness level among the insured, in particular concerning the activities of insurance representatives institution. User services of medical subsystems, including feedback services are reviewed and the weaknesses of their practical implementation are highlighted. The scientific novelty of the article is to justify the need to expand the existing user services as part of the implementation of patient-oriented approach and to increase the level of information exchange between the participants in the healthcare market in the systems “patient-medical organization,” “patient-health maintenance organization”. The authors proposed design solutions for the creation of a health maintenance organization subsystem that provides effective © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 930–937, 2021. https://doi.org/10.1007/978-3-030-59126-7_103

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communication with the insured and implements the process of monitoring the quality and availability of provided medical services in the region. Development of health maintenance company subsystem in terms of interaction with the insured will provide decision support in the provision of medical care, assessment of its quality and availability. Keywords: Informatization
Digital healthcare medical services
Monitoring JEL Code: I13


User services
Quality of


I15
I18

1 Introduction The process of informatization of Russian healthcare system and compulsory medical insurance (hereinafter CMI) has been on according to plan for several decades. At the initial stages of informatization, the developed medical information systems were primarily focused on workplace automation and creation of electronic medical records and Electronic Registration Office service. At present, automated information systems in health maintenance organizations (hereinafter HMO), information systems of compulsory medical insurance funds and medical information and analytical centers have been created. Medical information systems accumulate large amounts of data, provide their processing, decision support and information exchange between of the healthcare system participants. The structure of information systems, their subsystems, basic functions, requirements and principles of information exchange are defined in the Decree of the Federal Compulsory Medical Insurance Fund No. 79 “On the approval of the general principles of building and functioning of information systems and the procedure for information exchange in the field of compulsory medical insurance”, dated 04/07/2011. One of the priority areas in informatization of Russian healthcare system is the introduction of digital technologies. The use of such technologies makes it possible to automate the process of information exchange between all participants in the medical services market, integrate information systems of various levels, increase the availability and quality of medical care provided to the population, and provide support for the adoption of both medical and managerial decisions. The most important project for the development of digital health care in the Russian Federation is the Uniform State Health Information System (USHIS). Introduction of USHIS into the practice of healthcare organization makes it possible to integrate medical information systems of all organizations, put the use of integrated medical records into practice, ensure public access to medical services in electronic form and implement other user services. Federal project on creation of a uniform digital healthcare circuit was identified as the priority project for 2019–2024. Uniform digital circuit will allow the interaction of medical information systems of healthcare professionals, including medical organizations of different levels and health authorities (Boyko 2018). The authors’ works center around various problems and aspects of informatization, development of digital healthcare in the regions, in particular, the problems of

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introducing electronic document management (Vasyuta and Vasyuta 2019; Tuganova et al. 2019), automated disease diagnostics and telemedicine consultation system (Vasyuta and Vasyuta 2019; Gorodnova et al. 2019; Kantemirova and Alikova 2019; Myzrova and Tuganova 2018; Egorova 2018; Karpov et al. 2017), e-appointments (Tuganova et al. 2019). Some articles analyze the territorial differentiation of the level of regional inclusion in the digital health system (Batrakova 2019; Egorova 2018). The purpose of this study is to review and analyze user services of medical information systems, formulate proposals on the increase of the level of information exchange between the medical services market participants in terms of design solutions.

2 Background and Methodology The paper uses analysis and comparison methods, methods of organizing and conducting sociological surveys, business processes description methods. The healthcare system informatization process expands the scope of information technology in the implementation of various business processes. Development of digital healthcare should ensure the solution of tasks not only in the digital economy, but also the implementation of approaches and concepts for the development of healthcare and medical insurance systems, both in the regions and in Russia as a whole. The key tasks posed to the health care system by digital economy, as noted above, can be as follows: introduction of electronic document management, integrated medical records, telemedicine and application of intellectual medical data processing methods. One of the approaches to the organization of medical care processes is the patientoriented approach. Within the framework of this approach, it is necessary to ensure the expansion of user services, to increase the level of information exchange between the participants of medical services market in the systems “patient - medical organization” and “patient - HMO”. Uniform digital healthcare circuit project involves the implementation of user services such as: – electronic appointment to doctor at selected facility; – provision of information on the medical services rendered and their cost for the selected period; – applying for the compulsory medical insurance policy; – provision of access to electronic medical documents; – assessment of the quality of work of a medical organization by patients, etc. (Boyko 2018). However, today in most regions only certain services are implemented, namely: the Electronic Registration Office service, the user service “assessment of the quality of work of a medical organization by patients” was not implemented. Introduction of user services is primarily aimed at increasing the availability of medical services. The use of feedback services in the HMO and medical organizations subsystems is often disjointed. As a result, the problem of increasing the level of information

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exchange between the population and health care providers remains in practice, and the development of appropriate design solutions is required.

3 Discussion and Results The processes of information interaction of insured persons in the systems “patient medical organization” and “patient - HMO” include the processing of applications (feedback service availability), an independent assessment of the quality and accessibility of medical services, decision support for the ensured persons and HMO through provision of regulatory, reference and analytical information. Moreover, the automation of information exchange processes should be systemic. Application processing (feedback service), medical services quality independent assessment processes, placement of regulatory, and reference information in the HMO and medical organizations subsystems (on the organizations’ websites) have been implemented. The institution of insurance representatives was created in Russia in order to increase the level of information exchange, and consequently the quality and accessibility of medical services. Insurance representatives of the three levels provide information support to the insured in the CMI system at all stages of medical care (Starchenko and Tarasova 2018; Burov and Krupnova 2019). However, the introduction of a three-tier system of interaction with the insured in the first stages of compulsory health insurance did not fully solve the problems. Thus, the results of a sociological survey of the insured population of the Oryol region indicated low awareness regarding HMO activities. The sociological survey was conducted in June–December 2018 using an electronic questionnaire. 353 respondents took part in the survey. According to the survey, 95 people (26.9% of respondents) found it difficult to answer the question with which health maintenance organization they are insured. 258 respondents out of 353 (73.1% of the respondents) did not know about the work and functions of insurance representatives in health maintenance organizations of the region. Only 22 respondents contacted insurance representatives with questions (6.2% of respondents). At the same time, 10 respondents (2.8% of those surveyed) in 2016– 2018 filed complaints with MHO about the quality of service in a medical organization. According to the Decree of the Federal Compulsory Medical Insurance Fund No. 79 “On the approval of the general principles of building and functioning of information systems and the procedure for information exchange in the field of compulsory medical insurance”, dated 04/07/2011, medical information systems of the HMO must ensure that citizens’ submissions taken into account and citizens are informed. Processing of citizens’ appeals is carried out by CMI insurance representatives, as well as by the experts of the Territorial Fund of CMI–contact center administrator, operators of two levels. Information exchange between participants of the healthcare system is carried out based on an information resource organized by the Territorial Fund of Compulsory Medical Insurance. The appeals of insured persons are registered in the electronic

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appeal log. At the same time, the following types of appeals are distinguished: application, consultation, complaint and proposal. The function of dealing with complaints of insured persons, including the organization health care quality evaluation, is under the responsibility of HMO insurance representatives, being the subject matter experts. One of the forms of appeal is electronic appeal. Thus, feedback service has been implemented on all HMO websites (Oryol branches of the LLC “Health Maintenance Company RESO-Med”, LLC “VTB Medical Insurance”, JSC “Insurance Company SOGAZ-Med”, JSC “Insurance Group Spassky Vorota-M”), operating in the Oryol region. The insured person is required to complete an electronic appeal form, usually containing the following fields: Name, e-mail, compulsory medical insurance policy number, region, type of appeal, reason for appeal (assignment to a medical organization; issuance of medical insurance policies, organization and availability of medical care, quality of medical care, etc.). Further interaction with the insured is carried out by phone or e-mail. The processes implemented do not provide for the creation of such user service as the personal account of the insured person, where the user would have access to information about the status and stages of processing of all registered appeals. In the context of implementation of patient-oriented approach, an important service is the questionnaire survey of population on the issues of assessing the quality and accessibility of medical services. For the insured population of the Oryol region, the electronic questionnaire survey service was implemented on the websites of medical organizations in the region and on individual websites of insurance companies. In most cases, on the websites of medical organizations, when choosing a questionnaire, one is redirected to the website of the Ministry of Health of the Russian Federation to fill out the questionnaire “Independent assessment of the quality of services provided by medical organizations”. This is a unified questionnaire for conducting a sociological survey in all regions of the Russian Federation. However, the user does not have access to the results of monitoring the quality of services in the context of medical organizations in the region by various criteria. On the web site of JSC “Insurance Company SOGAZ-Med”, one is invited to fill out the form “Your opinion on medical care”. Upon completion of the survey, the user is presented with an analytical report on the results of the survey using visualization methods. However, the content of the questions of the questionnaire is not informative for the insured in the context of decision support in choosing a medical organization. On the web site of JSC “Insurance Group Spassky Vorota-M”, the user can undergo an electronic questionnaire survey “Are you satisfied with the work of medical organizations” for three types of institutions: hospital, day hospital, outpatient clinic. However, this service is not available for insured persons in certain regions, including Oryol region. Despite the availability of electronic questionnaire services, this process, as noted above, is non-systemic. Users do not have free access to the results of monitoring the quality and accessibility of medical services. This, in turn, fails to provide adequate decision support to insured persons in choosing a medical organization, or a specific specialist of the organization. Information support for decision-making by consumers

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of medical services is provided by other services available in information retrieval systems. The above actualizes the need to create a HMO subsystem in terms of information exchange with the insured persons in order to increase the level of information exchange, and as a result, the quality and accessibility of medical services. As part of the pre-project analysis of the automation object, it is necessary, first of all, to determine the business requirements for the subsystem. The main business requirements include: – obtaining of reference, regulatory information, analytical information on the results of monitoring the quality and accessibility of medical services by the insured persons through the formation of a single information platform; – questionnaire survey of the insured persons for evaluation of quality and availability of medical services for different types of health care organizations; – organizing information exchange between insurance representatives and insured persons to resolve issues related to health care delivery in terms of processing of appeals; – monitoring the satisfaction of insured persons with the quality and accessibility of health services; – forming a ranking of medical organizations operating in the region’s CMI system; – forming a rating of specialists based on the results of an independent assessment of the quality of services; – control of the quality and availability of medical services provided to insured persons. The formulated requirements determine the functionality of the system for the main parties–the insured person and the insurance representative. The insured person must have access to his/her personal account. In the personal account, the user can track all stages of processing the case, view the status of the case. The service of assessing the quality and accessibility of medical services should be implemented here. Based on the questionnaire survey data, the results of monitoring the satisfaction of insured persons according to the main criteria, depending on the parameters entered by the user, should be generated. In this way, the user will be able to view the ratings of both individual professionals and medical organizations in the region. The most important business process in the subsystem is the monitoring of satisfaction of insured persons with the quality of medical services. Authors’ methodology for monitoring consumer satisfaction with the quality and accessibility of medical services based on linguistic, point assessment and fuzzy mathematics toolkit can be used for implementation of questionnaire survey

4 Conclusions The priority areas for the development of Russian healthcare system today are the introduction of electronic document management, integrated medical records, telemedicine and the use of intelligent medical data processing methods.

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Despite the widespread introduction of information technologies in practice, the problem of increasing the level of information exchange with the insured remains. As shown by the results of a sociological survey of the population of Oryol region, a large proportion of the insured do not have information about the work of the insurance representatives institution. User services review showed a lack of systematic approach to a comprehensive assessment of the quality and accessibility of medical services in the region. The development of a health maintenance organization subsystem will allow for the establishment of effective interaction between health insurance companies and insured persons. The implementation of the monitoring module to assess the quality and accessibility of medical services provides decision support both for insured persons and for the heads of medical organizations and their structural divisions.

References Batrakova, L.G.: The development of the digital economy in the regions of Russia. Soc.-Polit. Res. 1, 51–64 (2019) Boyko, E.L.: Creating a single digital circuit in healthcare. Qual. Manage. Healthc. 4, 4–7 (2018) Burov, D.S., Krupnova, M.V.: The role of insurance representatives in assessing patient satisfaction with the quality of medical care in the system of compulsory health insurance. Head Phys. 8, 65–73 (2019) Vasyuta, E.A., Vasyuta, L.A.: The principles and features of the formation of domestic health care as one of the directions of development of the “smart city” in the digital economy. Econ. Yesterday Today Tomorrow 9(1A), 290–298 (2019) Gorodnova, N.V., Klevtsov, V.V., Ovchinnikov, E.N.: Prospects for the development of telemedicine in the context of digitalization of the Russian economy. Innovation Econ. Issues 9(3), 1049–1066 (2019) Egorova, A.V.: Digitalization of the regional healthcare system in the digital economy. Sci. Yearb. Cent. Anal. Forecast. 2, 256–261 (2018) Kantemirova, M.A., Alikova, Z.R.: Digital economy: the development of digitalization of medicine in the region. Bull. North Ossetian State Univ. named after K.L Khetagurova 1, 92– 95 (2019) Karpov, O.E., et al.: Digital healthcare. Necessity and prerequisites. Doct. Inf. Technol. 3, 6–22 (2017) Myzrova, K.A., Tuganova, E.A.: Digitalization of healthcare as a promising direction of development of the Russian Federation. Issues Innovative Econ. 8(3), 479–486 (2018) Order of the FFOMS dated 07.04.2011 N 79. On the approval of the General principles for the construction and functioning of information systems and the procedure for information interaction in the field of compulsory medical insurance. https://rulaws.ru/acts/PrikazFFOMS-ot04/07/2011-N-79/. Accessed 16 Jan 2020 Order of the FFOMS of June 11, 2015 No. 103. On approval of guidelines for conducting sociological surveys (questioning) of insured persons in the field of compulsory medical insurance. https://oreltfoms.ru/index.php/anketirovanie. Accessed 27 Jan 2020 Order of the Ministry of Health of the Russian Federation of February 28, 2019 No. 108n. On approval of the Rules of compulsory medical insurance. http://www.consultant.ru/document/ cons_doc_LAW_324740/0dfd2b328d795a0af6ec76c18ce3aa713c6abb00/. Accessed 15 Jan 2020

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Russian, T.N., Tinyakova, V.I.: Monitoring customer satisfaction with the quality and accessibility of medical services in the market segments of free and paid medicine. Sci. Rep. BelSU 45(4), 666–676 (2018) Russian, T.N., Tinyakova, V.I.: Evaluation of the implementation of a patient-oriented approach to the provision of medical services in the region. Reg. Probl. Econ. Transform. 1(99), 59–67 (2019) Starchenko, A.A., Tarasova, O.V.: Insurance representative of the insurance company: the necessary legal regulation and principles of its activities in relation to insured persons of preretirement age. Health Manager 9, 62–69 (2018) Tuganova, E.A., Gerkina, E.A., Popov, M.L.: Informatization is the trajectory of the development of the healthcare system in the context of the formation of a digital economy using the example of the Republic of Tatarstan. Bull. Altai Acad. Econ. Law 1–2, 161–165 (2019)

Virtualization of Educational Environment in a Modern Tertiary School Anastasiya V. Shishkova(&) , Larisa V. Kozhevnikova and Irina E. Starovoytova

,

State University of Management, Moscow, Russia [email protected], [email protected], [email protected]

Abstract. The article is concentrated on the study of urgent problems of digitalization of education. The authors, based on the study of actual changes in the educational environment of a higher education institution in the face of digitalization, attempted to apply systematic approach to the review of technology and information ethics in the virtual educational environment, while usually these factors are considered separately. The authors believe that the virtual environment is a holistic system, which requires ethical review, evaluation, etc. within the framework of information ethics. Results: 1. Global educational trends were named: promoting a culture of innovation; expansion of cooperation between educational, scientific and business organizations; digital university model development; development of cooperative pedagogy; continuity of education; creation of individual educational trajectories. 2. Risks of virtualization of educational environment in a higher education institution identified: student identification problems, insufficiency of motivation in contactless education, infringement of communication privacy, asymmetry in information distribution, digital discrimination. 3. The authors pay special attention to the study of the educational environment individualization process, which includes three stages: management of educational content, management of educational process and emergence of personal educational environments. The authors conclude that in the complex space of virtual education, an effective means of ensuring information security is the formation of information literacy that provides for the possession of certain information skills and suggests such information behavior that would counteract the real and potential dangers of digitalization. The results of the paper can be used in further studies of ethical issues of dissemination of digital communication technologies in education, in the development of proposals and recommendations to managers in the education system to be used in practice. Keywords: Digital ethics
Personalization of educational environment
Individual educational trajectory
Humanization of education
Discriminatory risks in education JEL code: J240


I230
I260
O360

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 938–946, 2021. https://doi.org/10.1007/978-3-030-59126-7_104

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1 Introduction In the era of digitalization, innovative computer technologies permeate every sector of society. Seeing the commercial and humanitarian prospects for the spread of innovative technologies in the educational process, the authors reflect on the problems of digital ethics. The novelty of the view is that usually modern educational technologies are considered within the framework of information technology, or the ethical aspect of the spread of these technologies is analyzed. In the opinion of the authors, virtual educational environment is an integral concept that allows forming a systematic view of current transformations of educational environment in higher education institution in the context of digitalization.

2 Methodology Methods used in the study: generalization, analogy, abstraction, analysis and synthesis, philosophical method of rising from the abstract to the concrete. The authors also used logical and epistemological analysis to introduce the concepts necessary for the study, such as ongoing education (lifelong education), open education (education without academic requirements for admission, giving the student an opportunity to independently choose the time, place and individual learning path), individual educational trajectory (an educational program tailored to an individual student in accordance with his capabilities and educational needs). Digital Ethics is a branch of applied ethics, which addresses issues concerning the production, collection, use and distribution of digital data (including the proliferation of artificial intelligence, robotization, machine learning, etc.), and provides options of ethically justified decisions.

3 Results 3.1

Global Educational Trends and Innovative Technologies in the Educational Environment of a Russian University

NMC Horizon reports for 2017–2019 (this global research project covers about 200 countries and highlights the trends, challenges and new technologies in education) suggest that education becomes high-tech, open and continuous. The authors of the reports describe the most important developments in the field of educational technologies, name the main challenges that hinder the introduction of new technologies in the educational process and identify the main trends that determine the development of modern education. According to the authors, it is already necessary to actively introduce mobile technologies in education and to be actively engaged in analytics, applying not only descriptive analysis, but also prognostic, personalized analysis of student performance and behavior, carried out with the help of new computer technologies and highly qualified professionals. In the next two or three years, we will be actively using mixed

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(hybrid, augmented) reality in the learning process, which makes it possible to integrate digital technologies into the physical world and create virtual simulations of physical spaces, and artificial intelligence technologies will be developing further. Finally, the authors set aside five years for blockchain technologies and virtual assistants to be used in education. Of course, the increasing digitalization will face (and is already facing) a number of challenges, from familiar and understandable - for example, the need to develop digital literacy - to those that cannot yet be fully described, among them the growing digital divide and rethinking the role of a teacher. Promotion of a culture of innovation, previously designated as a long-term trend (five or more years), in 2019 moved to medium-term (three to five years) trends along with the use of artificial intelligence technologies for measuring students’ academic merits and evaluation of the effectiveness of educative process. Blended education (combination of personal and online presence) and redefining the architecture of educational spaces are listed by the authors among short-term trends (implementation within up to two years). Finally, the authors attributed rethinking the role of higher education in the educational process and the search for a new approach to the development of professions and confirmation of skills of students with the help of diplomas, degrees and other documents to the long-term trends (five years and more). Personalized education trajectories can lead to students acquiring knowledge and skills on a modular basis, and accordingly, the approach to mastering and confirming the knowledge gained must change (Adams Becker et al. 2017, 2018; Alexander et al. 2019). Cooperative pedagogy, oriented towards the personality of the student, proclaiming the slogan “learning instead of teaching”, is being developed in the context of humanization of educational environment and the teacher’s is changing. From the mentor, the teacher becomes a tutor, an assistant, a consultant, “older colleague”, and the student becomes a co-organizer of the educational process, freely choosing his own educational path. The approved Digital Economy of the Russian Federation program, approved on July 28, 2017 introduced the term “digital education” and designated the basic directions of the program, among them - statutory regulation, human resources and education, formation of research competences and technological groundwork, information infrastructure and information security (Digital Economy of the Russian Federation. Program of the Government of the Russian Federation 2017). The Human Resources for Digital Economy program includes the development of models of digital university. These models will include a university management information system, online support for the educational process, and educational process management based on an individual educational trajectory. In addition to the online courses that are becoming common, courses using virtual and augmented reality (VR/AR technologies) will be used to train students. 3.2

Risks of Digitization and Challenges of Information Ethics

The use of digital technology in education is facing a number of challenges. The first one is the problem of student identification. There is no certainty that the testee is

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exactly who he/she claims to be. Solution of this problem requires the introduction of too many complicated and expensive means of identification. The second challenge of e-learning is the lack of motivation of students. It is no secret that application of this educational technology requires student’s perseverance and considerable enthusiasm, and these qualities are rarely combined in a young man. The third problem is the lack of control on the part of the teacher. It becomes obvious that to fully use electronic technology, a student must be a mature person with highly developed self-control. Virtualization of educational environment, application of “big data” collection and processing technologies, algorithms of artificial intelligence are associated with a number of ethical difficulties related to communication privacy, threats to personal data, asymmetry in distribution of information. These topics are the subject of information (digital) ethics, one of the sections of applied ethics. The authors believe that the problems of digital ethics should be considered comprehensively to ensure the development of ethically sound solutions in the field of management of educational organizations (education). Studying practical foreign experience is not only interesting, but also helps to cope with possible conflicts. In Regan and Jesse (2018), the authors list six major concerns related to the collection and use of “big data”: 1. Awareness. A person should be aware that certain data is being collected about him, and the amount of information processed should be minimized, to ensure that only the goal for which the data was collected is achieved. 2. Right to anonymity. People should be able not to disclose their identity and the anonymity at their discretion. 3. Data privacy. Collection of more and more data for analysis is both a consequence and the promoter of constant monitoring of people and their behavior. 4. The risk of discrimination. Predictive analysis based on the collected data can lead to consolidation of the existing social prejudices and stereotypes, and strengthening social stratification. 5. Data ownership. Who owns the data collected about a person – the person or a third party, which stores this information in its database? 6. Private autonomy, Big data analytics challenges people’s ability to manage their lives, influencing the decision making process and changing consumer behavior. For example, algorithms can push people to buy certain things or try new routes. In some ways, this calls into question the very concept of identity, self-determination in a philosophical sense (Regan and Jesse 2018). It is worth noting that there is an opinion, according to which the issue of private autonomy requires the deconstruction of both general discourses on the economic value of big data, and applied discussions about the collection and use of data in healthcare and education. The author of one of the works on this topic explains this by the fact that continuous collection of data about people raises the question of the very concept of freedom. The nature of “big data” as a set of social relations compels us to reason in the context of social values and to recognize that the concept of private freedom and autonomy is associated with mutual social recognition. Hegel wrote that “… freedom consists precisely in still being at one’s own self when being in one’s other, depending

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only on oneself, defining oneself” (Hegel 1929–1959). However, as can one “be at one’s own self”, being constantly exposed to external observation, whether the monitoring by the state or corporations? Thus, it is necessary to decide first whether data collection is generally ethically justified (Couldry et al. 2018). Changes in the educational system in the context of development of information technology affect the information behavior of students. In February 2019, the authors of this paper organized and conducted a sociological study of the peculiarities of the State University of Management students’ and graduates’ attitude to the consequences of the spread of information and communication technologies in the educational environment. According to the results of the study, all respondents are characterized by a high degree of involvement in virtual communications, 100% of respondents use the Internet daily and communicate via social networks regularly. Students and graduates are aware of such negative network phenomena as hacking, flame, trolling, cyberbullying, etc., but do not think that these problems are significant for the educational environment of higher education institution. According to respondents, the greatest digital threat is the leak of personal data (72%), violation of personal space (63%), the dissemination of false information on the Internet (60%), Internet addiction and gambling (51%) (Kozhevnikova et al. 2019). Solving the problems of protecting communication privacy requires the adoption of a set of measures: securing privacy standards in legislation, creating tools to protect users’ information rights, developing computer technologies that ensure privacy, compliance with internal privacy and managing personal data policies in organizations, as well as personal efforts and responsibilities of users interested in the secure use of their personal data. One of the important issues of information ethics is related to how digital data affects the reproduction of existing social inequality, and whether its use is capable of leading to the emergence of new forms of inequality. “Digital divide (digital inequality) refers to unequal access to information and communication technologies, leading to increased economic and social inequalities” (Fomin 2019). All the above limits the ability of the discriminated group to find work, establish social ties, and be involved in cultural exchange and can negatively affect economic efficiency, development and preservation of culture and education level. He, who owns the information, owns the world: collection, analysis and use of “big data” may lead to increased social power and control on the part of those who own necessary algorithms. Researchers point out that we now have to recognize that individuals and social groups are far from being equal during the interaction with the digital data (Selwyn 2015). 3.3

Individualization of Educational Environment

Informatization of educational environment started in the early 80s of XX century. It was implemented on a step-by-step basis: first stage – educational content management (LCMS - Learning Content Management System, course content management system), second stage – educational process management (LMS - Learning Management System, educational management system), third stage – the emergence of personal educational environments (PLE – Personal Learning Environments). Being at first

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convenient “assistants” in education management, digital technologies subsequently led to the inversion of the educational environment: while earlier students had to adapt to the requirements of the educational institution, now the educational environment itself is adapting to the specific student. The main objective of LCMS is the creation of educational content to meet the needs of individual students or groups. It provides authors, designers and experts with digital tools for creating modern learning materials (Bataev 2015). LMS includes a range of video and digital materials that can be accessed from any digital device anywhere in the world. This system conducts planning, educational activities and management. LMS allows combining traditional (classroom) and elearning with virtual classrooms and virtual laboratories. Thus, in the opinion of the authors, this system harmonizes the old and new educational technologies, not allowing any distortion in either direction. Digital technologies do not replace the time-tested off-line learning methods, but they are integrated into them in a “friendly” manner. Furthermore, LMS carry out automated management of information flows that form the educational process. Modern market offers a huge selection of e-learning management systems (LMS) using various approaches and technologies. Over the past decades, the LMS industry has undergone several significant changes, following the customers’ demand for upgraded functionality. However, education according to traditional standards, but with the use of LMS faced the fact that it does not meet many challenges of time. Firstly, such education does not correspond to the modern trend towards ongoing education. A university graduate is faced with the fact that a dynamically changing world requires a continuous increase in knowledge, and often a complete change of qualification. However, the university, the diploma of which the graduate received, cannot help in solving this problem, since it provides field-specific education, and graduate’s request does not fall under its specialization. Today, every person needs channels to increase the level of professional and general education throughout one’s life, regardless of one’s social status or place of residence. Digital technologies should provide the opportunity to use the educational content from all countries of the world community. Secondly, knowledge and information have become the latest factor of production. The nature of work activities has radically changed – many professional jobs are done contactlessly, virtually. There is a rapprochement between education and work, the need for new information arises directly and permanently in the process of work activities. Thirdly, in a knowledge society, an increase in the number of professions and skills leads to their individualization; for new specialties, individual, unique educational programs are needed that give a person the freedom to choose the time, place, pace and trajectory of education. Awareness of these problems, as well as the exponential growth of technology, led to the fact that at the beginning of the XXI century the concept of software shells for personal educational environments (PLE - Personal Learning Environments) emerged. It can be stated that the transition to personal education became a kind of revolution in education. The teaching paradigm (the teacher is in the center of educational process) is

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being replaced by the learning paradigm (student is in the center). While yesterday the student was transported to the sources of knowledge, now, on the contrary, knowledge is delivered to the student at his individual request using digital technology. The authors believe that personalization of educational environment is the most promising educational trend. We are witnessing the transition to personal education, the formation of a personal educational space, the creation of a “cyber personality” of the student in the educational space (Karpenko et al. 2015). The subject of education in the digital age becomes self-planning, self-creating, self-reflecting, self-determining, selfadaptive, etc. (Acмoлoв 2012). But in order to realize one’s own unique educational route, the student needs institutional support from schools, universities, and advanced training institutes (Conceptual Framework of Continuing Education: the Experience of Linguistic and Pedagogical Analysis 2016), which poses new complex challenges for managers in the field of education. One of the promising management tasks in the field of virtualization of educational environment is the distribution of competencies between leading universities (they must undertake the production of knowledge and training of scientific personnel), companies producing finished educational products and global educational platforms (they broadcast, deliver the educational product to the consumer) (Ustyuzhanina and Yevsyukov 2018).

4 Conclusion The world is witnessing the transformation of the educational process associated with the development of information technology. In the Russian Federation, education informatization is one of the most relevant trends of the present: the need for lifelong learning is recognized, personalized educational trajectories are introduced, various elearning tools and distance models are being introduced everywhere, innovative educational methods and forms of teaching are being actively developed and introduced. Unfortunately, the process of digitalization of education poses a number of threats and challenges for all participants in the educational process. When forming an individual educational trajectory of students with the help of artificial intelligence, the possibility of discriminatory practices becomes a real threat in connection with the proliferation of programs that monitor student’s behavior and “sorting” students based on data analysis. It is noted that the use of various technological training systems, personalization of training, in the framework of which progress in learning is monitored and students are selected, can lead to discriminatory practices. Such systems may eliminate the bias of an individual teacher, but at the same time there is a risk of creating a discriminating algorithm that discriminates against individual categories of students because of the bias of the system’s developer or because of factors not taken into account in the development that led to the algorithm becoming discriminating in the process of self-development (Regan and Jesse 2018). It seems extremely important that the potential risks of digital discrimination be taken into account when developing appropriate algorithms for processing students’ data collected.

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One of the tools to prevent unethical behavior is the code of information ethics. The survey among students and postgraduates of the State University of Management showed that the importance of such codes is underestimated by respondents for various reasons. Respondents think that breach of confidentiality and leakage of personal data are serious problems, however, they believe that it is possible to solve the problem using traditional methods such as education within the family, increase in penalties under current control (52%) and personal positive example (54%). Taking into account all the factors discussed above, the authors believe that the most effective means of ensuring information security in education is the formation of an information culture aimed at the development of certain information skills (among which is the ability to assess the risks of confidentiality violations and analyze information) and involving certain information behavior, which can help to adequately respond to modern challenges of the information environment. Modern educational organizations face an important task – to help students and scientific and academic staff in the formation of this information culture. Implementation of new and old challenges facing the modern higher education institutions is possible in a virtual educational environment, designed to integrate all educational resources, authors, and users in a single information space and provides an opportunity to get a quality education. The formation of the virtual educational environment of a modern educational institution is carried out based on modern innovative technologies, modern information resources and software. Providing free and easy access to the learning content, stored in a variety of digital formats, makes it possible to increasingly personalize education. At the same time, the more personalized the educational trajectory becomes, the more the role of the university changes. The university is no longer an organization preparing for the profession and providing diplomas of vocational education and qualification degrees. The system for confirming vocational training of graduates is changing radically, the very approach to understanding what a profession is changing. In the context of disaggregation of educational content and the educational process, the managers in the field of education will soon have to solve fundamentally new problems of confirming the vocational qualification of graduates, while being guided not least by the norms of digital ethics.

References Adams Becker, S., Brown, M., Dahlstrom, E., Davis, A., DePaul, K., Diaz, V., Pomerantz, J.: NMC Horizon Report: 2018 Higher Education Edition, EDUCAUSE, Louisville. https:// library.educause.edu/*/media/files/library/2018/8/2018horizonreport.pdf, Accessed 12 фeвpaля 2019 Adams Becker, S., Cummins, M., Davis, A., Freeman, A., Hall Giesinger, C., Ananthanarayana, V.: NMC Horizon Report: 2017 Higher Education Edition, The New Media Consortium, Austin, Texas (2017). http://cdn.nmc.org/media/2017-nmc-horizon-report-he-EN.pdf, Accessed 12 фeвpaля 2019

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Alexander, B., Ashford-Rowe, K., Barajas-Murphy, N., Dobbin, G., Knott, J., McCormack, M., Pomerantz, J., Seilhamer, R., Weber, N.: EDUCAUSE Horizon Report: 2019 Higher Education Edition, CO: EDUCAUSE, Louisville (2019). https://library.educause.edu/-/media/ files/library/2019/4/2019horizonreport.pdf, Accessed 3 фeвpaля 2020 Couldry, N., Yu, J., Yu, J.: Deconstructing datafication’s brave new world. New Media Soc. 20(12), 4473–4491 (2018) Regan, P.M., Jesse, J.: Ethical challenges of edtech, big data and personalized learning. Twentyfirst century student sorting and tracking. Ethics Inf. Technol. 15(2), 1–13 (2018) Selwyn, N.: Data entry: towards the critical study of digital data and education. Learn. Media Technol. 40(1), 64–82 (2015) Acмoлoв, A.Г.: Optika prosveshcheniya: sotsiokul’turnye perspektivy (Optics of Enlightenment: Socio-Cultural Perspectives). Prosveshchenie, Moscow (2012) Bataev, A.V.: Obzor tekhnologiy elektronnogo obucheniya v inzhenerno-ekonomicheskom obrazovanii (Overview of the technologies of online learning in engineering and economic education). Molodoy ucheniy 16, 272–275 (2015) Karpenko, O.M., Abramova, A.V., Shirokova, M.E., Basov, V.A.: Obzor sredstv organizatsii elektronnogo obucheniya i perspektivy ikh razvitiya (Overview of the means of organization of online learning and perspectives of their development). Distantsionnoe i virtualnoe obuchenie 2, 4–24 (2015) Kozhevnikova, L.V., Starovoytova, I.E., Yatsenko, O.Y.: Transformatsiya dukhovnonravstvennykh tsennostey molodezhi v kontekste globalizatsii (Transformation of the spiritual and moral values of youth in the context of globalization). Vestnik universiteta (GUU) 7, 164–169 (2019) Kontseptosfera nepreryvnogo obrazovaniya: opyt lingvo-pedagogicheskogo analiza: [v 3 ch.]. Ch. 1 In: Kolesnikova, I.A (ed.) (Conceptual framework of life-long learning: experience of linguo-pedagogical analysis, Part 1), PetrSU Publ., Petrozavodsk (2016) Noskova, E.: Nauchat po-novomu. Tsifrovoy universitet budet rabotat’ na vse tselevye auditorii obrazovatel’nogo protsessa (New teaching. Digital university to work for all target audiences of the educational process) Rossiyskaya gazeta, 5 June 2019. https://rg.ru/2019/06/05/vuzyrossii-poluchat-granty-na-razrabotku-modeli-cifrovogo-universiteta.html, Accessed 2 Sep 2019 Ustyuzhanina, E.V., Evsyukov, S.G.: Tsifrovizatsiya obrazovatel’noy sredy: vozmozhnosti i ugrozy (Digitization of the educational environment: opportunities and threats). Bull. Plekhanov Russ. Univ. Econ. 1(97), 3–12 (2018) Fomin, A.A.: Formirovanie informatsionnogo prostranstva v sovremennoĭ Rossii: problemy i perspektivy (Formation of the information space in modern Russia: problems and perspectives), Bulletin of Saratov University. Series Soc. Sci. Polit. Sci. 19(2), 192–195 (2019) Tsifrovaya ekonomika Rossiyskoy Federatsii. Programma Pravitel’stva Rossiyskoy federatsii (Digital economy of the Russian Federaiton. Program of the Government of the Russian Federation) (2017). http://static.government.ru/media/files/9gFM4FHj4PsB79I5v7yLVuPgu 4bvR7M0.pdf, Accessed 10 Mar 2019 Hegel, G.W.F.: Entsiklopediya filosofskikh nauk. Chast’ pervaya. Logika: Sobranie sochineniy v 14 tomakh (Encyclopedia of philosophical sciences. Part I. Logic: Collection of works in 14 volumes), Science of Logic, Izdatel’stvo sotsial’no-ekonomicheskoy literatury (Sotsekgiz), Moscow (1929–1959)

Information and Communication Technologies as a Condition of Effective Political Management Elena S. Karsanova1(&) , Oleg S. Volgin2 and Alexey V. Kolpakov3

,

1

2

State University of Management, Moscow, Russia [email protected] Moscow State Institute of International Relations (MGIMO-University), Moscow, Russia [email protected] 3 University of Nevada, Reno, USA [email protected]

Abstract. The aim of the paper is to investigate correlation between the development of information-communicative technologies and effectiveness of political management. Methodologically the authors based their research on the methods of humanities and social sciences with the axiological bias. They focused their attention on human-centered aspects of social-technological innovations which determine internal links and determinations of different elements of informationcommunicative technologies and their influence on the system of political management. The results of investigation became disclose of the key tendencies of information-communicative technologies, the risks they cause to robust human contacts in society and the degree of their influence on the effectiveness of political processes. Conclusion. The use of information-communicative technologies can bring to different results due to the quality of political institutions and the aims of political elites. The general trend of the process that makes power more open in the condition of unpreparedness of political authorities to lead well-coordinated political management (due to formal coordination of their strategies, the lack of stable feedback with the citizens and undeveloped mechanisms of e-democracy) may have the chance to negatively influence on the effectiveness of political management. Keywords: Keywords information-communicative management
Information-oriented society JEL code: M15


Technologies
Political


M38
M48
O32

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 947–954, 2021. https://doi.org/10.1007/978-3-030-59126-7_105

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1 Introduction The concept of Smart City has been substantially changed over the last decade from the perspective of strategic approaches. Governments of the vast majority of countries have realized that master plans and “top-down” initiatives do not guarantee the achievement of the goals set. Integrated approaches that take into account objective needs of the community, constitute a driving force on the way towards success. In other words, today the term “Smart City” is in literal sense more and more seldom directly associated with the spread of IT technologies: the focus has shifted to the efficient use and development of human capital. New urbanistic technologies are on the agenda, because, as E. Townsend rightfully mentioned, “the current revolution (primarily in the IT field) may well result in gaining control over cities of previously unthinkable size – 10, 20, 50 or even 100 million people” (Townsend 2019). However, if there are opportunities for control, there are also opportunities for governance; therefore, it is safe to say that such giant conglomerates will emerge; in fact, they are already emerging. In these conditions, local innovations are rapidly becoming global these days. We cannot know exactly what kind of form these conglomerates will take: in some places, they will appear as “New Manhattans” in Tokyo, Seoul, or Jakarta style, with extremely high population density, while in other places, on the contrary, they will spread out as single-storey or twostorey mansions in a huge area. One way or another, these cities will be distinguished by a high density of social ties and business activity of the population. This will result in a dramatic change in administrative and political management, creating new opportunities for democratization and transparency of management processes. The primary areas of these changes can be observed even today. The use of electronic technologies is becoming a major trend for political institutions around the world in the current millennium, making it possible to optimize and improve the quality of management activity. The key advantages of the large-scale implementation of information and communication technologies primarily include consistency, rate of exchange of information. Modern networking and digital capabilities multiply the speed of decision-making by times, while simultaneously reducing the time interval from the formulation of the corresponding policy decision to its sociopolitical effect. Modern explosive rates of information field development not only generate significant challenges for political management, but also actualize the issue of the impact of information and communication technologies on efficiency of management activities in general. It is information technologies that have sufficient potential to act as an efficient factor in enabling a “feedback”, cooptation of society in the processes of elaborating and making important social and political decisions.

2 Background and Methodology The empirical base of the research includes the UN yearbooks such as “World Urbanization Prospects”, “World Population Prospects”, papers of foreign authors presented on the international theme-based website “Smart City”, which is daily

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updated with current information on various aspects of creation, functioning and development of smart cities in various regions of the world, as well as Russian websites such as the website of the Government of Moscow, the Ministry of Economic Development and Trade, the Institute for Urban Economics, etc. The theoretical and general methodological basis of the research consists of the works of researchers concerned with regulatory mechanisms of political management: Atamanchuk (1999), Vasilenko (2018), Degtiarev (1996), Shabrov (1998), et al. The next block that deals with the issues of development and potential of the information-oriented society, is represented by the works of Artamonov (2019), Lysenko (2019), Townsend (2019) et al. The system approach has been selected as the main methodological framework for analyzing various aspects of the impact of information and communication technologies on efficiency of political administration. The comparative analysis provided an opportunity to compare the primary significant characteristics of the introduction of information and communication technologies in various countries internationally. Based on these theoretical approaches and sources, the authors set forth their own vision of the relationship between the use of information and communication technologies and the level of efficiency/inefficiency of political management. Taking into account the abstract nature of part of indicators of effectiveness/ineffectiveness of political management, the authors of the research define this term according to two indicators and evaluation criteria: 1. Degree of satisfaction of society with the activity of political institutions, degree of political participation, trust and support for governing actors; 2. Statistical indicators of the standard and quality of living of the population.

3 Results The current international situation, complicated by the coronavirus pandemic, is qualitatively changing the things people expect from Smart City. Today, it is clear that it is not just a city filled with electronic gadgets, not only a comfortable place for people to live in, but a place that guarantees people the maximum security. If a nation/city claims the “smart” status, it must demonstrate a prompt reaction to the fundamental changes and challenges facing contemporary society. In this regard, it may be noted that the same pattern can be observed for many who claim the status of “smart” actors – the need for the maximum democratization of the system of government, the maximum awareness of people with regard to the actions of the authorities, the real situation in health care, economy, education, legal and administrative innovations of the authorities, as well as other essential aspects of urban living. In recent years, before the outbreak of the coronavirus epidemic, there was a widespread belief that electronic means of communication, without which democratic forms of management could not be developed today, could (and certainly would) become the tools for increasing control over society on the part of the authorities, an uncontrolled tool of the “Elder Brother” that will further intensify bureaucratization of governance and reduce the space of personal liberty of citizens; today, however, we can see that recession forces the authorities to be primarily concerned about the personal

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well-being of the people; the authorities demand from citizens to respect the private space of others not only in words, but also in deeds. The demand for the inviolability of private space is not new and, in principle, one cannot imagine a contemporary society, which many call a capitalist and/or consumer and/or human capital society, without it. But in an information-oriented, intelligent society, the principle of the protection of private space acquires some new dimension, since technologies give people the ability to obtain increasingly comprehensive information about their city and its citizens. The essence of this dimension is the demand that was formulated by I. Kant as a sign of a high civic awareness, which, in a crisis mobilization of society, becomes an imperative the authorities themselves directed to citizens: “There is nothing more sacred in the world than the rights of another person” (Kant 2000). Thus, the authorities themselves encourage citizens to protect their fellow citizens. This, whether the authorities want it or not, unfailingly “boosts” the democratization of society, promotes the formation of a socially responsible awareness among people. 700 cities from 146 countries were represented at the International Congress of Smart Cities in Barcelona that was held under the slogan “Together We will Build Cities of Dreams” on November 19–21, 2019. During the Congress, five categories were identified, according to which their success in “smart” urban development was measured: digital transformations, urban environment, mobility, governance and finance, inclusiveness and cooperation. Back then, a few months before March 11, 2020, when the World Health Organization (WHO) announced the coronavirus pandemic, all five categories appeared to be equally important. Today, however, we can objectively assess the quality of the smart living environment of people according to one criterion only, the last one – creation of a legal, economic, information and ecological environment in cities that would ensure the highest level of inclusiveness and cooperation. In point of fact, this last criterion test turned out to be the first criterion, because it was here that the fundamental specifics of a democratic society consisting in the fact that it is a society of contradictions, became fully apparent. It has emerged that the public sphere, the very environment in which the demand for democracy, contradicts to the administrative, political, economic and technological areas of society. These contradictions, given that all parties stick to a rational approach, do not evolve into antagonistic, but still cannot be resolved without some intellectual and moral effort of all parties. And the first contradiction to be brought to notice because of its greatest importance is the contradiction between the public sphere and the administrative authority. We can find examples of this contradiction in any “smart” city. Thus, a perfect example is the “One Atlanta” program, initiated by the Mayor of Atlanta Keisha Lance Bottoms, who believes that Atlanta cannot become a Smart City with a twenty-fold gap in the living standards of its diverse population categories. According to the Mayor of Atlanta, this problem that most of the city residents perceive as a problem of social justice, and thus a problem of effective social cooperation, can only be solved democratically. The “One Atlanta” program combines efforts of public and private sectors with the university community to elaborate a common platform of interaction between public and private sectors. The authorities understand that education is becoming a key condition for the

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participation of various social groups in the economic and social life of the city. In this regard, the Georgia Cyber Centre, costing more than US$ 100 million, was set up as a public-private partnership. In this center, teaching personnel and trainees carry out educational activities dealing with computer knowledge, cybersecurity and digital economy, which are accessible to the widest possible audience of citizens. The issue of the effectiveness of political management in the context of information and communication technologies cannot be considered without reference to categories such as “political participation” and “feedback”, because the presence of a real “operating” “feedback” mechanism between the managing and managed entity is the determining factor of the management activity result. The “feedback” mechanism can act not only as a means of obtaining latest information, but also as a tool for accommodation of interests and prevention of politico-social conflicts. The disregard of current policy needs of the society, the lack of open procedures of accommodation of interests and “feedback” mechanisms in relationship with the authorities largely determined the collapse of the political system of the Soviet Union. Political participation in the context of information and communication technologies shall be understood to mean electronic interaction between public authorities and citizens, aimed at involving them in the process of preparing/making a state decision, finding out the opinion of population on the key vital problems and issues. From the perspective of budget costs, the promotion of political participation and formation of “feedback” channels compared to the maintenance of conventional communication channels, means an increase in operating costs. However, the end result will reveal significant cost and time savings due to the substantial reduction in the cost of maintaining the state/municipal employees who collect and process the data. However, given the formal approach, information and communication technologies are able to preserve the stability of the conventional model of relationships between government agencies and society by inertia. The global experience of the implementation of information and communication technologies demonstrates that sociopolitical, economic and ethnocultural peculiarities of certain countries have an instrumental influence on this process due to specifics of political culture and relations of power, practical implementation of “feedback” models that differ from each other, and electronic participation. The example of Atlanta (United States) is indicative of the increased focus on the potential of the use of mobile devices for closer interaction between public authorities and citizens, as well as for the creation of an extensive network of transparent control over society and provision of information security. The main resources of information and communication technologies in the United States have been mobilized to provide high-quality public services to citizens. The difficulties faced by the authorities in the United States in the process of learning of information and communication technologies by regional authorities, seem to be common to many federal governments due to the specifics of their political and territorial system – these difficulties are associated with the formation of a single platform for interaction between federal subjects and the federal center. Chinese version of the implementation of information and communication technologies is different. It differs in the dominating position of central government, which has all necessary resources for locking access to the technology market for legal entities

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and individuals which generates profit, being inconsistent with the general informational message of the Communist Party of China. China’s political elites are prone to ambivalent assessment of the expanded capabilities of electronic technologies in the interaction between government agencies and society: the realization of a powerful efficiency factor of the information and communication technologies, on the one hand, and the risk of destabilization of the political system in a regulatory environment, on the other hand. The Political Elites of the Celestial Empire, despite their understanding of potential threats and political risks, tend to view information technologies not only as an instrument for the accelerated growth of the country’s economy, but also as a way of reaffirming the legitimacy of the Communist Party, raising the country’s profile in the international community. National and regional projects “Russian Public Initiative”, “Active Citizen”, “Our City”, “Moscow. Smart City-2030” represent a domestic example of the successful practical use of digital technologies, political participation and “operational” feedback mechanism with reference groups. The Capital City Project “Smart City – 2030” focuses on the service components of an urban environment, increasing the efficiency of managing the municipal resources through the widespread introduction of high digital technologies, advanced ideas and engineering solutions. In the format of summary indicators of strategy “Smart City – 2030”, it is proposed to be guided by the quality of life index and urban environment quality index which will enable most objective evaluation of achievements across the six areas of the strategy (urban environment, digital mobility, human and social capital, digital government, security and ecology, urban economy). The Quality of Life Index allows comparing and evaluating the indicators of specific regions from the perspective of the ability of certain cities to meet the objective needs of the population in accordance with accepted standards and norms of living (Danchul 2019). Today, digital technologies are successfully operating in almost all life-supporting areas of the metropolitan area. It is difficult to exaggerate the social effect of the use of open data – accessibility of previously “confidential” state/municipal information enables commercial/non-profit companies and organizations to create various applications for electronic devices, minimizing the time expenditures associated with searching for users of these electronic products. Of course, the facts of the functioning of such information resources in our country can and should be treated as useful and necessary channels for building a dialogue and “feedback” with the society, co-opting citizens to the process of making socially important decisions and policy decisions. However, being the resources for monitoring citizens’ initiatives, these projects, despite the results of electronic votings, provide that only government agencies are entitled to make decisions, since the mechanisms of “edemocracy” are not supported by the legal base. If we comparing domestic and international experiences of the use of information and communication technologies in providing a “feedback” and involving citizens in the process of development of important social decisions, the first thing that draws our attention is the dominance of projects inspired by the State in our country. The practice of foreign States, by contrast, demonstrates the promotion of private projects and initiatives which receive State support in the process of their development. As an

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example, we can cite several projects that are similar to the capital city project “Our City”: the SeeCLikFix project in the United States that became international, the FixMyStreet project in the United Kingdom, several projects in Austria, etc. According to the Report on the results of the implementation of the “Public Government” system and prospects for its development until 2024, the Russian Federation gets ahead of many foreign countries in terms of the number of instruments and mechanisms of openness of the system of public administration. However, it must be emphasized that the organization of the system of provision of government information and the fact that the public authorities are “open” are not identical to the concept of “governance effectiveness”. It appears that it is the extended involvement of civil society and business sector in state/municipal strategic planning, strict adherence to the principle of “feedback” between the authorities and the society, that will allow Russia to strongly compete with the leading world powers. In general, the peculiarity of Russian practical implementation of information and communication technologies is manifested in nuancing of the two technological areas: the provision of open electronic access to open data/metadata, information and consultation portals and resources of the public authorities; provision of public services in electronic form.

4 Conclusion The impact of information and communication technologies on efficiency of management processes is stipulated by a wide range of factors and depends on the goals and forms of their implementation, as well as on the qualitative composition of the political elite and state institutions. Depending on the goals of political management, the active use of information and communications technologies may become an instrument for either increasing or decreasing efficiency of the management process. In the context of public access to information, political elites become the most vulnerable from the perspective of assessment of their activity and criticism on the part of community and opposition, and may opt for a strategy of discretionary access to information. Preferences of political elites with regard to access to information awareness of society may change and be stipulated by the ratio of costs and benefits associated with the access to this information, depending on what is riskier – providing information that compromises public authorities or limiting access to such information. Otherwise, when government agencies and political elites express a common interest in a coordinated policy towards implementation of institutional transformations with simultaneous use of mechanisms of openness of public authorities, information and communication technologies can significantly contribute to the growth of effectiveness of political management.

References Artamonov, Y.U.N.: Analysis and Detection most important indicators of information society development. Bull. Moscow Govern. Univ. 4(46), 21–27 (2019)

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Atamanchuk, G.V.: The Governance: it Always has its Variants. Science, Moscow (1999) Vasilenko, I.A.: Smart City of XXI Century: Opportunities and Risks of Smart-Technologies in City Rebranding. Science, Moscow (2018) Danchul, A.N.: The usage of standards of architecture description for the analysis if the conception of Smart-Cities. Bull. Moscow Govern. Univ. 4(46), 34–43 (2019) Degtiarev, A.A.: Political power as the regulation mechanism of social communication. Polis. Polit. Res. 3, 108 (1996) Kant, I.: The Lectures on Ethic. “Republica” Publishing House, Moscow (2000) Lysenko, E.A.: The development of smart services in the Moscow capital: nowadays and in the future. Bull. Moscow Govern. Univ. 4(46), 3–6 (2019) Tounsend, F.: Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia. Science, Moscow (2019) Shabrov, O.F.: Political Management: The Problems of Stability and Development. Science, Moscow (1998)

Public Policy of the Russian Federation in the Sphere of Smart Technologies Development Elena G. Russkova(&) , Larisa V. Ponomareva and Vasily A. Yakhtin

,

Volgograd State University, Volgograd, Russia {russkovaeg,larisa.cokyr,ea-191_442755}@volsu.ru

Abstract. Purpose: The purpose of this research is to analyze the public policy of the Russian Federation in the sphere of smart technologies development. Methodology: For analyzing the public policy of the Russian Federation in the conditions of digitalization, the authors use the existing scientific methods, official statistical data, and works of Russian and foreign scholars. The provisions and conclusions for determining the influence of public policy in the conditions of smart technologies implementation on certain indicators of the socio-economic system are justified based on the systemic approach, structural & functional and subject-object, logical, statistical, comparative, quantitative, and qualitative analysis, and graphic modeling. Based on the data of the normative & legal acts and materials of studied of Russian and foreign scholars, the authors perform analysis of the influence of the government measures for development and use of smart technologies on certain indicators of the Russian socio-economic system. Results: It is established that public authorities strive to actualize the regulatory basis for its corresponding to the digital agenda. Thus, the national program “Digital economy of the Russian Federation”, which includes six independent federal projects, has been adopted. Real and potential positive effects from implementation of public policy, which is based on development and application of information & communication and “end-to-end” technologies, are determined. Topicality: Importance of the issues of implementation and use of information & communication and “end-to-end” technologies in economic activities is predetermined by the choice of digitalization as the top-priority direction of development of the Russian Federation, as well as the method of achievement of international competitive advantages. Keywords: Smart technologies
End-to-end technologies
Digital economy
Public policy of the Russian Federation
Digital public management
Information platforms JEL code: E61
E65
H54
K24
L86
O32
O33
O35
O38
Q16
Y10

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 955–964, 2021. https://doi.org/10.1007/978-3-030-59126-7_106

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1 Introduction Technological breakthrough defines the directions of economy and society’s development and leads to comprehensive transformation of life. The modern driver of development is so called smart technologies, which are based on digitalization of all spheres of society’s life and change of the methods of interaction with information. Government is usually very interested in studying the influence of such technologies on the socio-economic relations. Transformation of the Russian economy, based on the active use of smart technologies in all spheres, was first outlines in the President’s address to the Federal Assembly on December 1, 2016, in which Vladimir Putin pointed out the necessity to form a completely new, so called web economy, which would stimulate the growth of effectiveness of all spheres of economy with the help of the information & communication and end-to-end technologies.

2 Sources This transformation of the Russian economy was reflected in the Presidential Decree dated May 9, 2017, No. 203 “On the strategy of development of information society in the Russian Federation for 2017–2030”. This document clearly defined a new type of economy organization–so called “digital economy”, which is economic activities which production’s key factor is data in the digital form. Processing of large arrays of digital data and use of the results of the analysis allow–as compared to the traditional economic forms–increasing the effectiveness of various types of production, technologies, equipment, storing, selling, and supply of goods and services. In the adopted definition, the emphasis during transformation of the existing economic relations is made on digitization of information, which is the main means of achieving the state’s competitive advantages. However, the definition of the digital economy does not contain references to specific “smart” technologies and methods of their application for the purpose of increasing the effectiveness–which complicates the study of the essence of a new method of conducting economic activities. The next important stage of state influence on the process of the economic system’s transformation in the conditions of implementation of smart technologies was the Russian Government’s adoption of the Program “Digital economy of the Russian Federation” on July 28, 2017, which was developed for implementing the Strategy and which established three key components of the digital economy that form new socioeconomic interrelations: 1. Markets and spheres of the national economy (spheres of economic activities): transformed relations between various economic subjects; 2. Platforms and technologies: organizational basis for development of markets and spheres of the national economy; 3. Environment that intermediates the interaction of economic subjects in their interrelations with the use of the platform and technologies and that covers legal regulation, information infrastructure, HR, and information security. Besides, the Program adopts the list of “end-to-end” technologies and perspective technologies

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that change the situation in the existing markets or stimulate the formation of new markets in which the modern Russian digital economy is based (Autonomous nonprofit organization “Digital economy” 2020): • • • • • • • • •

big data; neurotechnologies and AI; systems of distributed register; quantum technologies; new production technologies; industrial Internet; components of robotics and sensors; wi-fi technologies; virtual and alternate reality.

Specification of the key components and adoption of the list of “end-to-end” technologies in this Program led to significant additions to the notion “digital economy” in the Strategy of development of information society in the Russian Federation for 2017–2030. The government now has a better understanding of relations in the digital economy–relations between economic subjects in various spheres, implemented based on platforms and smart technologies. The key factor of such relations is various information and communication and “end-to-end” technologies. It should be noted that the Program “Digital economy of the Russian Federation” was terminated due to multiple violations of the procedure and due to its imperfection. However, it became a very important stage in government’s implementation of the essence of economy of the new type. This regulatory act adopted the official definition “digital economy”, its key components, and the terms of its implementation, setting a foundation for further development of its content in the National program. The National program “Digital economy of the Russian Federation” was adopted according to the President’s Decree dated May 7, 2018 “On national goals and strategic tasks of development of the Russian Federation until 2024” and approved at the session of the Presidium of the President’s Council on strategic development and national projects. Creation of the national program moved the digital agenda to the level of national priority. The main goal of the program was increasing Russia’s competitiveness at the global level and protecting Russia’s interests with the help of development of a new mechanism of interaction between business, public authorities, and expert and scientific communities in the conditions of wide implementation of the information & communication and “end-to-end” technologies.

3 Results “Digital economy” became one of the first national programs to receive additional budget financing: total volume of financing in 2019–2014 is to constitute RUB 1,837,696 million, including financing from government non-budget sources–RUB 535,315 million.

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For comparison, let us consider expenditures for the key national projects for 2019– 2024 (Table 1). Aggregate expenditures for digitalization of the economy are fourth largest expenditures among national projects – 8.13%. Aggregate budget of the national project “Digital economy” exceeds the budgets of such socially important projects as “Education” and “Housing and urban environment”. This shows the government’s desire to achieve competitive advantages in the sphere of creation and use of smart technologies and use such technologies as the main factor of sustainable socioeconomic development. Table 1. Structure of expenditures for the national projects of the Russian Federation for 2019– 2024. National project of the Russian Federation

National project’s budget, RUB billion 1,725.9 3,105.2 52.1

Share in aggregate expenditures for the national projects of the Russian Federation, % 7.63 13.73 0.23

Healthcare Demographics Labor efficiency and employment support Safe and high-quality 4,779.7 21.14 highways 3,028.8 13.40 Complex plan for modernization and expansion of trunk infrastructure Ecology 4,041.0 17.87 Housing and urban 1,066.2 4.72 environment Small and medium 481.5 2.13 entrepreneurship Culture 113.5 0.50 Science 635.9 2.81 Digital economy 1,837.7 8.13 International cooperation and 956.8 4.23 export Education 784.5 3.47 Total 22,608.8 100.00 Source: Compiled by the authors based on TASS (2020).

The national program’s structure is comprised of the independent projects of the federal scale: • • • • •

“Statutory regulation of digital environment” “Personnel for digital economy” “Information infrastructure” “Information security” “Digital technologies”

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• “Digital public management” The government aims at liquidation of gaps in the statutory regulation due to wide implementation of the information & communication and “end-to-end” technologies. Thus, according to the national program, the government is to perform statutory regulation of the sphere of electronic civil turnover, use of information technologies in the financial market, and application of digital technologies in court proceedings and notarial system and other spheres related to implementation of information technologies. Creation of financial products with the help of smart platforms and services and their experimental implementation are planned within a special legal regime “regulatory sandbox”, which allows developing organizations to analyze the effectiveness of their products without the risk of bearing losses as a result of violation of the existing law. In the sphere of security provision in view of the implementation of digital technologies, the government is going to achieve the following: full stabilization of the information infrastructure by creating a General scheme of development of communications network of the Russian Federation until 2018–2024, for avoiding the unsanctioned access during storing, processing, or transfer of information; liquidation of dependence of the Russian industry on foreign information technologies, and provision of guarantees of protection of the interests of individual, business, and government during the use of information technologies. Special emphasis is made on increasing the level of protection and stability of Russian information systems and services with the use of the latest, primarily domestic, technologies. According to studies of a private IT company Veeam Software (2019), as a result of stoppage of the key applications and services in 2019 large Russian organizations were suffering losses equaling USD 80,463 per hour, while average duration of unplanned downtime constituted 57 min. The government plans to reduce these indicators, which is reflected in the federal project “Information security” (Table 2). Table 2. Dynamics of indicator “Average downtime of government information systems due to hacker attacks” in 2018–2024. Indicator

Basic value Period, year Value Date 2018 2019 2020 2021 2022 2023 2024 65.00 31.12.2018 65.00 48.00 24.00 18.00 12.00 6.00 1.00

Average downtime of government information systems due to hacker attacks, hours Source: Compiled by the authors based on the passport of the federal project “Information security” (2018).

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Table 3. Dynamics of indicator “Share of top-priority public services and other services that conform to the target model of digital transformation” in 2018–2024, in %. Indicator

Basic value Period, year Value Date 2018 2019 2020 2021 2022 2023 2024 3 31.12.2017 3 6 15 40 60 80 100

Share of top-priority public services and other services that conform to the target model of digital transformation, % Source: Compiled based on the passport of the federal project “Digital public management” (2018).

Thus, based on the planned indicators, adopted by the federal project, it is possible to calculate average downtime for the studied period (Fig. 1).

6000000 5230095

5000000

4000000

3862224

3000000 1931112

2000000

1,448,334 965556

1000000

482778 80463

0 2018

2019

2020

2021

2022

2023

2024

Average damage from downtime of information services and applications, per year, $

Fig. 1. Dynamics of damage to large Russian organizations due to downtime of information services and applications in 2018–2024, USD. Source: Compiled by the authors based on the passport of the federal project “Information security” (2018).

Aggregate damage of large Russian organizations could equal USD 5,230,095 as of 2018. As a result of implementation of the federal project “Information security”, this indicator should reduce by 65 times, constituting USD 80,463 by the end of 2024, according to Veeam Software (2019). Achievement of such result will allow large Russian business to reduce expenditures and increase the activities’ effectiveness. The government also pays a lot of attention to implementing smart technologies in the sector of public management: development of digital and cloud platforms and

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services in the information systems of government establishment and during provision of public services. An example of such digitalization is creation and development of electronic portals of public services, digital signatures and digital profiles at government bodies’ portals, and systems of electronic document turnover for the most effective exchange with the controlling bodies. The share of public services and functions in the digital form – which do not require personal visits to government establishments and other organizations–should increase from the basic value of 3% (31.12.2017) to 100% in 2014, according to the passport of the federal project “Digital public management” (2018) (Table 3). Based on statistical data from the Portal of public services (2020), the aggregate volume of services ordered via the Portal’s official web-site and the mobile app constituted 2.6 billion in 2018. If the positive dynamics of this indicator’s increase preserves and if the factual indicators conform to the indicators envisages by the federal project, the following indicators of the volume of provided services with the help of digital services should be achieved (Fig. 2).

86.7

90 80

69.4

70 60

52

50 34.7

40 30 20 10

13 2.6

5.2

0 2018

2019

2020

2021

2022

2023

2024

Public services provided via the web-site "Gosuslugi" and the mobile app, billion

Fig. 2. Dynamics of the number of public services provided via the web-site “Gosuslugi” (“Public services”) and the mobile app in 2018–2024, billion. Source: Compiled based on statistics of the portal Gosuslugi (2018).

Increase of the number of services that are provided with the help of smart platforms leads to increase of quality of certain aspects of citizens’ life. Thus, the sums of government fees for legal deeds are corrected with the 0.7 coefficient if the electronic portal is used, according to Tax Code of the Russian Federation (part II) (2019). Application of such subsidy allows saving money (30%) as compared to the traditional form of payment – which leads to increase of population’s real disposable incomes.

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The government has adopted a course at implementing information platforms in all main spheres of the national economy. In healthcare, a platform “Smart clinic” is to be developed with application of a complex of solutions of the Internet of Things; this platform is to be started in 50% of medical organizations of the third level by 2024; in agriculture, a platform “Digital agriculture” will allow tracking the volumes of manufactured agricultural products and will simplify selling at digital platforms and markets, including with application of “paperless” technologies. According to the passport of the project “Digital agriculture” (2019), application of smart technologies and platform solutions will allow achieving significant growth of labor efficiency agricultural companies (Table 4).

Table 4. Dynamics of indicator “Coefficient of growth of labor efficiency in agricultural companies” in 2018–2024, %. Indicator

Basic value Value Date 100 01.01.2018

Period, year 2019 2020 105 125

2021 150

2022 175

Coefficient of growth of labor efficiency in agricultural companies, % Source: Compiled based on the passport of the project “Digital agriculture”.

2023 190

2024 200

Based on the data of Rosstat (2020), which record the factual volumes of manufactured agricultural products, it is possible to forecast the growth of the volumes of manufactured products in 2019–2024 due to increase of labor efficiency, caused by application of smart technologies (Table 5). Table 5. Growth of volumes of agricultural products by means of increase of labor efficiency as a result of digitalization in 2019–2024, RUB billion. 2018 2019 2020 2021 2022 Agricultural Growth of 267.44 1337.2 2674.4 4011.6 products products including: crop 2756.1 137.805 689.025 1378.05 2067.075 production cattle 2592.7 129.635 648.175 1296.35 1944.525 breeding 5348.8 Source: Compiled based on the passport of the project “Digital agriculture”

2023 2024 4813.92 5348.8

2480.49 2756.1 2333.43 2592.7

(2019).

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Analysis of the performed calculations and expected target indicators shows the following tendency: by the end of 2024, the volume of agricultural products could grow by 100% as compared to its basic value (RUB 5,348.8 billion in 2018) due to application of the information & communication and “end-to-end” technologies and platform solutions.

4 Conclusions The obtained research results allow for the following conclusions. The digital economy envisages the use of digital data and smart technologies–as the key factor of increase of the national economic activities’ effectiveness. Economy that is based on information & communication and “end-to-end” technologies is the foundation for increasing the competitive advantages of the Russian Federation at the global level. At the current stage, digitization is one of the top-priority directions of public policy at the federal level, which envisages improvement of the regulatory and legal framework and significant transformation of the interrelations between the subjects of the leading spheres of economy with the help of “smart” technologies.

References Veeam Cloud Data Management Report/Kompanii mogut teryat’ ezhegodno $20 millionov iz-za otsutstviya effektivnogo upravleniya dannymi. Companies could lose $20 million annually because of absence of effective data management (2019). https://www.veeam.com/ru/news/ cxo-research-organizations-can-lose-20million-dollars-each-year-due-to-poor-datamanagement.html, Accessed 20 Feb 2020 Autonomous non-profit organization “Digital economy”/Tsifrovye tekhnologii (Digital technologies) (2020). https://data-economy.ru/science. Accessed 19 Feb 2020 TASS Information Agency/Budushchee Rossii. Natsional’nye proekty. (Future of Russia. National projects.) (2020). https://futurerussia.gov.ru/#. Accessed 20 Feb 2020 Tax Code of the Russian Federation (Part II) dated August 5, 2000, No. 117-FZ/Article 333.35. Subsidies for certain categories of individuals and organizations (2019). http://www.cons ultant.ru/document/cons_doc_LAW_28165/0fdf1007e795da6a669717ba6dbcaaf745730dba/. Accessed 20 Feb 2020 Passport of the project “Digital agriculture”, Ministry of Agriculture of the Russian Federation (2019). http://mcx.ru/upload/iblock/900/900863fae06c026826a9ee43e124d058.pdf. Accessed 21 Feb 2020 Passport of the national program “Digital economy of the Russian Federation” (2018). https:// digital.gov.ru/uploaded/files/programma.pdf. Accessed 20 Feb 2020) Passport of the federal project “Information security”, Ministry for Digital Development, Communications and Mass Media (2018). https://digital.gov.ru/uploaded/files/pasportfederalnogo-proektainformatsionnaya-bezopasnost.pdf. Accessed 20 Feb 2020 Passport of the federal project “Digital public management”, Ministry for Digital Development, Communications and Mass Media (2018). https://digital.gov.ru/uploaded/files/pasportfederalnogo-proekta-tsifrovoe-gosudarstvennoe-upravlenie.pdf. Accessed 20 Feb 2020

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Presidential address to the Federal Assembly from December 1, 2016/Web-site of the President of the Russian Federation (2016). http://kremlin.ru/events/president/news/53379. Accessed 19 Feb 2020 Program “Digital economy of the Russian Federation”, adopted by the Decree of the Government of the Russian Federation on July 28, 2017, No. 1632-r/Official web-site of legal information (2017). http://pravo.gov.ru/proxy/ips/?docbody=&nd=102440918. Accessed 19 Feb 2020 Statistics of the web-site Gosuslugi (Public services), Official web-site of public services (2018). https://www.gosuslugi.ru/. Accessed 20 Feb 2020 Decree of the President of the Russian Federation dated May 9, 2017, No. 203 “On the strategy of development of information society in the Russian Federation for 2017–2030”/Web-site of the President of the Russian Federation (2017). http://kremlin.ru/acts/bank/41919. Accessed 19 Feb 2020 Decree of the President of the Russian Federation dated May 7, 2018, No. 204 “On national goals and strategic tasks of development of the Russian Federation until 2024” (2018). https://base. garant.ru/71937200/. Accessed 19 Feb 2020 Rosstat (Federal State Statistics Service/Produktsiya sel’skogo khozyaystva po kategoriyam khozyaystv. (Agricultural products by categories of economic forms) (2020). https://gks.ru/ free_doc/new_site/business/sx/tab-sel1.htm. Accessed 21 Feb 2020

The Role of Information (Smart) Technologies in Improving the Efficiency of Public Administration Olga V. Fetisova(&) , Vladimir V. Kurchenkov Olga A. Golodova , and Julia M. Azmina

,

Volgograd State University, Volgograd, Russia {fetissova,kurchenkov,ogolodova,azmina}@volsu.ru

Abstract. Purpose: The purpose of the study is to generalize the practice of using information technologies in the organizing public administration at the federal and regional levels, as well as to identify their role in improving the efficiency of managerial activities of government bodies. Methodology/Approach: The development of information technologies in the public administration system is aimed at ensuring information accessibility and sociability of government bodies, improving the quality of public and municipal services provision, as well as management decisions taken. Evaluating the quality of public administration should be carried out on the basis of the integral indicator of performance and efficiency of the decisions taken at the regional level. The main directions of the information policy of government bodies should be carried out in accordance with the Development Strategy of the Information Society in the Russian Federation for 2017–2030, the National Program “Digital Economy” and the federal project “Digital Government”. Findings: The efficiency of public administration based on introducing the information technologies was evaluated in the following directions: based on analyzing the correlation dependence of the digitalization indicators of the Southern Federal District regions according to the methodology for calculating the index “Digital Russia”; based on analyzing the growth of information transparency of executive authorities of Volgograd region; based on developing an integral indicator for assessing the performance and efficiency of public administration at the level of the Federation subject according to the results of introducing new information technologies in the management process Originality/Value: The article proposes the author’s methodology for assessing the efficiency of public administration at the regional level on the basis of the integral indicator reflecting the growth of management efficiency in the regions based on introducing new information technologies. Grouping of the regions of the Southern Federal District has been carried out according to this indicator. Keywords: Information technologies
Smart technologies
Digitalization Digital economy
Public administration
Government decision
Public administration efficiency JEL Code: P25


O18
C53
C54

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 965–975, 2021. https://doi.org/10.1007/978-3-030-59126-7_107




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1 Introduction Nowadays creating conditions for improving the efficiency of public administration is impossible without the transparency and controllability of the government bodies and public servants activities to civil society. “Smart technologies” directly affect the quality of central and local government. The introduction of telecommunication technologies has already positively influenced the process of providing public and municipal services to the population, as well as the processes of making and realizing government decisions (Korchagin 1995). Information development of the public administration system is provided in a number of areas defined by the Development Strategy of the Information Society in the Russian Federation for 2017–2030 (The Decree of the President of the Russian Federation No. 203 2017). The strategy determines the possibility of a phased transition of government bodies and local governments to the use of e-government in their work. There is also noticeable trend towards promoting Russian cryptographic algorithms, encryption tools, software, technical equipment during electronic document circulation between authorities and other subjects of these relations. In general, this strategy is aimed at obtaining technical advantages by the state and the population, when using and processing information, as well as in gaining knowledge, developing new markets, also through the processing of large amounts of data, the use of cloud technologies and the Internet of things. The development of information technologies is directly related to the need to create stable and secure information and telecommunications infrastructure, high-speed transmission, processing and storage of large amounts of data available to all organizations and households, which is recorded in the National Program “Digital Economy” (Passport of the National Project 2019), as well as the use of domestic software by government bodies, local authorities and organizations. Modern mechanisms of digitalization in the system of central and local government involve creating the unified secure system of identification and document flow, which should be conducted in the general purpose environment, taking into account the common standards. Due to the constant development of the capabilities of information technologies and some lag in the system of government bodies for implementing technologies in the management process, the research topic seems to be urgent. It is due to the fact that the introduction of new information technologies in the system of central and local government significantly increases its efficiency (Drozhzhinov 2013). Nowadays informatization of public administration is one of the priority tasks, the solution of which allows expanding the practice of providing public services, involving the society in the public administration system, and ensuring the information transparency of public authorities and local governments. Information technologies allow solving problems of socio-economic development and of ensuring security and the public order quickly and efficiently.

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2 Materials and Method The study of using information technologies in the system of central and local government has been carried out within the framework of the e-state concept, formed at the end of the last century, the Development Strategy of the Information Society in the Russian Federation for 2017–2030, the federal project “Digital State Government” and the National Program “Digital Economy” (Decree of the President of the Russian Federation No. 204 2018). The approaches to using information and digital technologies in central and local government, proposed by Russian and foreign scientists (Berman 2012; Dobrolyubova and Alexandrov 2016; Efremov 2018; etc.) have been used in this study. As for the empirical part of the research, methods of statistical and comparative analyzes have been used. In particular, to assess the level of using the digital technology potential in the regions, we have used the methodology developed by the Center of Financial Innovations and Cashless Economy of the Moscow Management School “Skolkovo”. Along with it, the authors have proposed their own methodology for using the integral indicator of the performance and efficiency of central and local government based on the dynamics of realizing information technologies directly in the management process. In general, for the study we have used such general scientific methods as: synthesis, generalization, statistical analysis, system’s analysis, the method of expert assessment and of historical analogies, the graph method, etc.

3 Results and Discussion As has been noted, the creation of modern information and telecommunication infrastructure, the progress of the information society is based on the Development Strategy of the Information Society in the Russian Federation for 2017–2030, the activities of which are the basis for the formation and adjustment of state programs of the Russian Federation, programs of the constituent entities of the Russian Federation. The implementation of the Strategy’s goals and objectives is ensured by the program “Digital Economy of the Russian Federation”. The program is designed to create such conditions in the Russian Federation that would contribute to the full development of the knowledge society, ensure the population’s well-being and improve the quality of citizens’ life, promote high degree of awareness and digital literacy, improve accessibility and the quality of public services for citizens, preventing threats to security within the country and beyond. 3.1

Analysis of the Digitization Level Dynamics of the Regions of the Southern Federal District

The analysis of the efficiency of public administration based on information technologies is closely related to the processes of the digital economy development in the regions. The dynamics of the general digitalization level of all spheres of life in the regions indicates an increase in the use of these technologies in the system of central and local government indirectly.

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In order to reflect the digitalization processes state in the constituent entities of the Russian Federation, to assess the level of digital technologies use in the regions, the Center of Financial Innovations and Cashless Economy of the Moscow Management School “Skolkovo” has developed the expert assessment methodology by means of calculating the index “Digital Russia” (the Methodology of Digital Russia Index Calculation 2018). According to the obtained data of this index, the rating of the constituent entities of the Russian Federation is formed according to the digitalization level in the constituent entities of the Russian Federation. For more accurate assessment using the index “Digital Russia”, studies on seven sub-indices have been added to it, namely: 1) regulatory and administrative indicators of digitalization; 2) specialized personnel and training programs; 3) the presence and formation of research competencies and technological groundwork, including the level of research and development work; 4) information infrastructure; 5) information security; 6) economic indicators of digitalization; 7) the social effect of introducing digitalization. Through these subindexes, the scoring of the index “Digital Russia” is carried out. Based on this methodology, the research at the federal district level has shown that the Southern Federal District ranks 7th, being ahead of only the North Caucasus Federal District. The indicator of the district digitalization index has increased by 25.13% compared to 2017, but in general the Southern Federal District fell one point down, due to the fact that other federal districts have shown a larger increase in this indicator. In 2018, the index of the most lagging North Caucasian Federal District grew most of all, the index increase made up 35.93%. The dynamics of the index values “Digital Russia” across the federal districts of the Russian Federation is prominently positive. The arithmetic mean value of the growth according to the federal districts for 2018 accounted for 27.20% (Methodology of Digital Russia Index Calculation, 2018) (Fig. 1). As for the analysis of this indicator according to separate regions within the federal districts, the distribution here is also uneven. In particular, in the regions of the Southern Federal District, the value of this indicator is presented in Fig. 2. The result of analyzing the index “Digital Russia” in 2018 in the Southern Federal District shows that Rostov Region and Krasnodar Krai have the leading positions. While the republics of Adygea and Crimea still lag behind, although they have significantly improved this indicator in comparison with last year. 3.2

The Influence of Information Technologies on the Growth of Sociability of Central and Local Government in the Regions

It should be noted that one of the important indicators of informatization of the system of central and local government is the degree of sociability of legislative and executive bodies. According to AIS Infometer, Volgograd Region ranks 46 out of 85 in the

The Role of Information (Smart) Technologies

57.17

Urals Federal District

46.93

Volga Federal District

50.05

The Central Federal District

50.9

Northwestern Federal District

41.91

Siberian Federal District

33.37

North Caucasian Federal District 0

10

2017

20

30

40

62.65 62.24 62.02

54.66

43.06

The Southern Federal District

68.34

56

44.2

Far Eastern Federal District

969

53.88

45.36 50

60

70

80

2018

Fig. 1. The Federal Districts ranks according to the results of calculating the digitalization index, 2017–2018. Source: Compiled by the author based on the materials of the Center of Financial Innovations and Cashless Economy of the Moscow Management School “Skolkovo” (2018).

Astrakhan Region

4.15

Volgograd Region

23.05

The town of Sevastopol Krasnodar Krai

47.18

25.02

The Republic of Adygeya

41.08

The Republic of Kalmykia

56.48

The Republic of Crimea

30.18

Rostov Region 0 2017

10

14.68 20 30

2018

40

50

60

70

80

divergence

Fig. 2. The dynamics of the digitalization index in the Russian Federation Subjects of the Southern Federal District, 2017–2018. Source: Compiled by the authors based on the materials of the Center of Financial Innovations and Cashless Economy of the Moscow Management School “Skolkovo” (2018).

sociability of the highest regional authorities rating with the coefficient being 54.16% (The results of annual sociability audits of authorities 2019). However, it should be noted that the degree of information transparency of executive bodies of state power in

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60 50.9

50 40 30

29.59

52.08

54.16

26.78

20 10 0 2007

2008

…

2017

2018

2019

Fig. 3. The dynamics of information transparency of executive bodies of state power in Volgograd region, 2007-2019. Source: Compiled by the authors based on the materials of the Web site AIS Infometer (2019).

Volgograd region is increasing, that is proved by the positive dynamics presented in Fig. 3. If we pay attention to the rating of information transparency of municipal bodies, then in 2018 the Volgograd Administration takes only 96th place out of 168 in the consolidated ranking, with the information transparency coefficient being 10.71%. Moreover, it should be noted that in 2018 there was a sharp drop in the information transparency of the Volgograd Administration compared to 2017, when it took 30th place in the ranking with the coefficient being 65.51%, and compared to 2015, when the Volgograd Administration website took the second place in Russia among regions with the coefficient being 97% (The results of annual sociability audits of authorities 2019). 3.3

An Integral Criterion of the Efficiency of Public Administration Based on Realizing the Information Technologies at the Regional Level

In the scientific literature the problem of assessing the efficiency and performance of public administration at the level of the constituent entity of the Federation, also through the use of information technologies, is well developed nowadays (Super Services and the Digital Transformation of Public Services 2018; Kurchenkov et al. 2017), etc. At the same time, in this case it is necessary to distinguish between the concept of the performance of the adopted state decision and the efficiency of its direct implementation. If performance reflects the completeness of the goals achieved in the strategic decision, then efficiency reflects the ratio of the level of achievement of these goals to costs. In this case, it should be noted that the introduction of new smart

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technologies could significantly improve both the performance indicator and the index of effectiveness (Fig. 4).

The IT introduction in the system of central and local government

Performance

The completeness of the goals achieved

The time period of preparing management decisions and forming strategic goals. The accuracy of determining goals based on relevant information and assessing the results of the made decision.

Efficiency

The level of achieving set goals to costs of resources The economizing of temporary, human and material resources. Decrease in transaction costs for collecting and processing the information, the ability to foresee the consequences of the made decision more precisely.

Fig. 4. The influence of information technologies on the efficiency and performance of central and local government in the region. Source: Compiled by the authors.

In fact, as shown in Fig. 4, the introduction of new smart technologies can economize time significantly, both at the stage of preparing the solution and at the stage of its execution. In general, temporary, human, material and financial resources are economized, the values of such indicators as the time period of decision-making and the accuracy of goals increase significantly. All these facts, of course, increase the efficiency of central and local government at the level of a specific region. For the complete assessment of the public administration efficiency growth precisely due to introducing new digital technologies, it is advisable to use the incremental values of performance, efficiency and adaptability indicators (Fig. 5), with their subsequent integration into a single indicator.

972

O. V. Fetisova et al. Performance (R) the value of the really achieved goals of the state decision (the value of the target indicator) Efficiency (Е) the ratio of the social and economic effects of the made decision to costs of resource Adaptibility (А) the nature of corresponding the consequences of the results of various management decisions and the possibility of obtaining synergetic or compensatory effects

The integrated indicator of performance, efficiency and adaptability (I)

Fig. 5. The system of criteria for assessing the performance, efficiency and adaptability of management decisions at the regional level. Source: Compiled by the authors.

In this case, these indicators should be assessed on the basis of their relative incremental values, which are calculated using the following formulas: DR ¼

R  Rb Rb

ð1Þ

DE ¼

E  Eb Eb

ð2Þ

DA ¼

A  Ab Ab

ð3Þ

;

;

Where: Rb, Eb, Ab – are the basic indicators of performance, efficiency and adaptability, reflecting the initial situation before introducing information technologies in the public administration system; R, E, A – are the actual values of the performance, effectiveness and adaptability of government decisions after introducing information technologies (in full or in part) for the studied period of time. For future comparative analysis these indicators can be combined into a single integral indicator of the increase in performance and efficiency: DI ¼ K1 DR þ K2 DE þ K3 DA

ð4Þ

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Where: ΔI – the integral indicator (index) of the performance, efficiency and adaptability of public administration at the regional level; K1, K2, K3 – correlation coefficients reflecting the weight value of each indicator in the structure of the integral indicator (index). Taking into account the ratio of these indicators, public administration systems at the level of the constituent entities of the Federation can be aggregated into three groups according to the correlation level of performance, effectiveness and adaptability (Table 1).

Table 1. The rating of the regions of the Southern Federal District in 2018-2019 according to the performance and efficiency levels of public administration The level of performance and efficiency of public administration at the regional level

The distribution of regional target programs according to the levels of performance and efficiency

1

The correlation of the performance and efficiency indicators of public administration on the basis of introducing information technologies K1ΔR + K2ΔE +K3ΔA ˃ 1

high

2

K1ΔR + K2ΔE + K3ΔA = 1

average

3

K1ΔR + K2ΔE + K3ΔA ˂ 1

low

Krasnodar Krai, Rostov Region Volgograd Region, Astrakhan Region, The Republic of Kalmykia, The town of Sevastopol The Republic of Crimea, The Republic of Adygeya, Stavropol Territory

No.

Source: Compiled by the authors.

As can be seen from the data of Table 1, the distribution of the regions is very uneven according to the increase in the efficiency of public administration based on introducing new information technologies. At the same time, the digitalization dynamics of the regions as a whole, which was indicated above, does not always coincide with the increase in the share of information technologies in management and realizing the concept of e-government. This can be explained by the following reasons: as a rule, the government authorities initiate the formulation of a regional problem, which does not stimulate the initiative of interested persons and executors of a specific management decision; the weak analytical study of the regional economy condition is used, which leads to ambiguity in determining the basic interests of participants; insufficient funding of activities to implement the strategic decisions; weak control over the results of realizing the strategic decision made.

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4 Conclusion Under current conditions, when the use of innovative information and communication technologies becomes an integral part of public life, when information and information products become the main factor in strengthening the country’s position, ensuring stable economic growth, it is necessary to use this resource more actively in public administration. It will lead to increased efficiency, transparency, targeted activity of the entire system of central and local government bodies (The Order of the Government of the Russian Federation No. 2769-r, 2018). To improve the efficiency of central and local management on the basis of information technologies, the following factors are necessary: the developed information infrastructure that integrates all levels of government and management bodies, the use of effective means of collecting, organizing, classifying, transferring and storing large amounts of information, the introduction of modern technologies for obtaining and data processing, their analysis and modeling (Chugunov 2008). The qualified use of information technologies in the public administration system makes it possible to influence the political process. Information is the main resource of modern information society, connected with the process of its introducing and getting across to the public. Due to this fact, the role of information technologies, “smart” technologies as one of the aspects of realizing public administration is constantly growing. Further processes of digitalization of the government bodies activities should be performed within the framework of the Development Strategy of the Information Society in the Russian Federation for 2017–2030, as well as the federal project “Digital Government Management” (Resolution of the Governor of Volgograd region No. 204 2019). In this regard the need for methodological support for assessing the informatization level of central and local government processes is of great importance. Here, along with the traditional approaches of statistical analysis, it is advisable to use the integral indicator for assessing the public administration performance and efficiency at the level of the constituent entity of the Federation according to the results of introducing new information technologies in the management process, which allows ranking the regions according to the digitization level of the public administration system.

References Decree of the President of the Russian Federation dated 05.09.2017 No. 203 “About the Development Strategy of the Information Society in the Russian Federation for 2017–2030” (2017). https://www.garant.ru/products/ipo/prime/doc/71570570/#review. Accessed 19 Jan 2020 Passport of the National project National Program “Digital Economy of the Russian Federation” (approved by the Presidium of the Presidential Council for Strategic Development and National Projects, official record dated 04.06.2019 No.7) (2019). https://base.garant.ru/ 72296050/. Accessed 01 Feb 2020

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The Order of the Government of the Russian Federation dated December 29, 2014 No. 2769-r (2018) (as amended on October 18, 2018) “About the approval of the Concept of regional informatization” (2018). http://www.consultant.ru/document/cons_doc_LAW_173678/. Accessed 12 Jan 2020 Decree of the Governor of Volgograd Region dated 23.04.2019 No.204 “About the measures of implementing the national program “Digital Economy of the Russian Federation” on the territory of Volgograd Region (2019) and about amending the resolution of the Governor of Volgograd Region dated 10. 09. 2012 No. 832 “About the approval of the Regulation on preparing projects of legal acts of the Governor of Volgograd Region and the Administration of Volgograd Region” (2019). http://publication.pravo.gov.ru/Document/View/ 3400201904240016. Accessed 14 Jan 2020 The methodology for calculating the index “Digital Russia” of the constituent entities of the Russian Federation, Moscow School of Management SKOLKOVO the Center for Financial Innovations and Cashless Economy. Moscow, p. 126 (2018) Decree of the President of the Russian Federation dated 07.05.2018 No. 204 “About the national goals and strategic objectives of developing the Russian Federation for the period until 2024” (2018). http://kremlin.ru/acts/bank/41449. Accessed 13 Jan 2020 The results of the annual audit of the government sociability (2019)/AIS “Infometer” (2019). https://read.infometer.org/ratings. Accessed 09 Jan 2020 Berman, S.J.: Digital transformation: opportunities to create new business models. Strategy Leadersh. 40(2), 16–24 (2012) Dobrolyubova, E., Alexandrov, O. E-government in Russia: meeting growing demand in the era of budget constraints. In: Proceedings of the Conference Digital Transformation and Global Society, Communications in Computer and Information Science, vol. 674. pp. 247–257 (2016) Efremov, A.A.: Assessing the influence of legal regulation on developing information technologies: mechanisms and methods. In: Law, vol. 3, pp. 45–56 (2018) Kurchenkov, V.V., Fetisova, O.V., Orlova, A.A., Gladkaya, E.A.: The importance of the region’s economic activity evaluation in Russia 2012-2016. Revista Galega de Economia 26(3), 33–44 (2017) Super Services and the Digital Transformation of Public Services/Ministry of Digital Development, Telecommunications and Mass Communications of the Russian Federation (2018). https://digital.gov.ru/ru/activity/directions/854/. Accessed 22 Jan 2020 Chugunov, A.V.: E-government: the effectiveness of the policy of introducing information and communication technologies in public administration//Information and communication technologies in education (2008). http://www.ict.edu.ru/lib/index.php?id_res=5716. Accessed 25 Dec 2019 Korchagin, V.V.: Information Technologies in Government/State and IT (1995). http://emag.iis. ru/arc/infosoc/emag.nsf/BPA/aee7650255545e1ec32575c9002cc635. Accessed 15 Feb 2019 Drozhzhinov, V.I.: E-Government of Russia at a Crossroads/State and IT (2013). https://www. itweek.ru/gover/article/detail.php?ID=157690. Accessed 25 Dec 2019

The “Smart Cities” Concept in the European Union and the Russian Federation: From Project to Practical Implementation Elena F. Parubochaya(&) , Nikita V. Piskunov and Elena M. Drinova

,

Volgograd State University, Volgograd, Russia {parubochaya,piskunov,drinova_em}@volsu.ru

Abstract. Purpose: to identify and characterize the functional dynamics of the concept of “smart city” implementation in the Russian Federation and the European Union, trends in concepts and practices in the context of society’s digitalization. Design/Methodology/Approach: we used the principles of a systematic approach and content analysis. Within the framework of the system approach, “smart cities” is analyzed as a complex self-developing innovative system characterized by a high level of tolerance, cultural dynamism, and the presence of a creative middle class that uses digital technologies. The research methodology is based on the idea that “smart cities” includes “smart management”, “smart people”, “smart technologies”. This methodology allowed us to identify differences in the implementation of the “smart city” concept in the EU and the Russian Federation. Findings: it is determined that in the EU, the implementation of the concept of “smart cities” is carried out with the participation of civil activists. The emphasis is made on the development of energy consumption technologies. It is revealed that the project is at the initial stage of development in the Russian Federation, there are difficulties in its implementation. The attention is paid to the digitalization of society, state structures, and the creation of a comfortable living area. It is revealed that projects important for the EU are aimed at rational use of energy and participation in them civil activists. In the Russian Federation the emphasis is focused on creating an effective urban management system and introducing safe and comfortable living conditions. Originality/Value: Empirical markers of the “smart city” concept in the EU include civil activists, cyclical economy, climate adaptation, energy use, air quality, urban mobility; respectively, in the Russian Federation - smart city, space, communication, ecology, business, infrastructure, technology reflect the main lines of development of “Smart Cities” practices at the beginning of the XXI century. Keywords: Smart city
Smart technologies management
Innovation JEL Code: O1


Digitalization
Urban


O2
O4
R1
R2
R3
R5

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 976–986, 2021. https://doi.org/10.1007/978-3-030-59126-7_108

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1 Introduction In 2050, 2/3 of the world’s population will live in cities, so global sustainability depends to a large extent on the policies of cities that can ensure a thriving life based on rational resource use. Population growth leads to an increase in demand for services and resources, and puts a strain on the use of energy, water, and waste. The implementation of such programs as the European innovation partnership for smart cities, the Partnership for digital transition in the framework of the urban agenda for the EU, the H 2020 projects, as well as the work done within the framework of the Green digital Charter, could greatly contribute to solving these urban problems. The idea of building “Smart cities” (or “Smart Cities”) was actively discussed in the scientific community in the mid-2000s, the need for reconstruction and modification of the urban environment was noted. European researchers focus on the development of the concept of «smart city» in terms of human capital, the introduction of information and communication technologies in Western Europe (Garagliu et al. 2009); define its basic principles (Meijer and Bolívar 2016, P. 404); note the role of city administration in the development of “smart technologies” (Alaverdyan et al. 2018, PP. 46–47). M. Angelidou analyzes the main European smart city strategies. The first strategy was implemented in Amsterdam. It is based on cooperation between business, city authorities, scientific and research organizations and activists of the urban population. The second strategy is implemented in Barcelona, where there are departments of the city administration responsible for “smart technologies” implementing in various areas of urban life. The third strategy operates in London, based on the principle of using the Olympic city facilities, saturating them with technical innovations. The fourth is being developed in Stockholm, where urban energy-saving technologies operate, and there is a system for protecting the environment from the harmful effects of industry (Angelidou 2016, PP. 22–27). Integration of these urban development strategies is possible as a prospect of turning Europe into a zone of “smart cities”. According to Russian researchers, the concept of “smart city” is closely interrelated with ensuring the national security of the Russian Federation (Kachanov and Popov 2019; Kupriyanovsky et al. 2016); the development of the digital economy, urban infrastructure (Vidyasova and Kachurina 2018, p. 116), and information technology (Fedotova 2017, p. 220; Maximov 2017). Researchers note that there is the absence of unified Russian standards for the implementation of the Smart City project (Sizov and Medvedeva 2019, p. 578). Accordingly, the approaches of Russian and foreign researchers on the use of information technologies differ in the modern Russian Federation and the countries of the European Union.

2 Design/Methodology/Approach Doing research, we used the principles of a systematic approach (T. Parsons), as well as content analysis. Within the framework of the system approach, «smart cities» is considered that a complex self-developing innovative system characterized by tolerance, high cultural dynamism, and the presence of a creative class that uses digital technologies. The research methodology is based on our idea that “smart cities”

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includes “smart management”, “smart people”, “smart technologies”. Smart governance is an effective interaction between civil society and the state also combines the functioning of digital public administration, mobile public services, and e-government. Smart governance is based on the open, formal/informal, collective/individual expression of institutional and non-institutional actors of civil society and the state. Civil society is closely linked to democratic institutions and is focused on social dialogue with the state. “Smart people”, creative citizens produce new technologies and ideas. The “smart city” is based on the integration of information and communication technologies with the Internet of things”. It includes the interaction of a single network of schools, universities, libraries, hospitals, urban infrastructure, industrial and factory sector and suburban territory. Content analysis was used in the empirical studies “Smart cities” in the Russian Federation: from project to practical implementation” and “The concept of “smart city” in the EU: from project to practical implementation”. For analysis were selected the following documents: the Amsterdam Pact of 30.05.2016, the Final report of the General Assembly of the European innovation partnership for smart cities and cooperation (EIP-SCC); the spatial development Strategy of the Russian Federation for the period up to 2025 (2019); The main directions of the budget, tax, customs and tariff policy of the Russian Federation for 2019 and the planning period of 2020 and 2021 (2019). The documents outlined the ways to implement the smart city concept in the EU and the Russian Federation.

3 Results In the European interpretation, a “smart city” is a place where traditional networks and services operate on the basis of digital and telecommunications technologies (Smart cities. European Commission 2020). The concept of a “smart city” in the European Union is based on a single digital market, the energy sector and a sustainable transport system in cities, characterized by a “rational life”, competent use of resources. The goal of the “smart city” concept is to transform the city, improve the population’ quality of life of, and improve the efficiency of services for all categories of urban residents. In order to increase the use of energy-efficient technologies with a neutral level of emissions, the movement “Join, support” was launched. It was aimed at increasing open, cross-industry, cross-border digital platforms and digital solutions across the European Union. The WiFi4EU initiative, which aims to unite Europe by connecting villages and remote areas to the Internet, has enabled citizens to take advantage of the opportunities offered by digital transformation. In 2014, the European innovation partnership on smart cities and communities (EIP-SCC) program was launched in the EU, bringing together city administrations, industry, small businesses, banks, researchers, etc. (About the European innovation partnership on Smart Cities and Communities (EIP-SCC) brings together cities, industry, SMEs, banks, research and other smart city actors 2020). The program is aimed at improving the life of the city by solving problems in the field of energy, mobility, transport and information and communication technologies.

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The European Commission’s website indicated the partnership’s priorities: sustainable urban mobility, built environment and integrated infrastructure, processes in energy and information and communication technologies, transport, civic orientation and integrated planning and management. “Creating a smart city: best practices across Europe”, a concept presented by the European Commission, demonstrates the success stories and challenges of transforming into smart cities. Among the 80 European cities in 19 European countries that implemented the “smart city” concept, the majority of projects are related to sustainable urban planning, the creation of buildings with low energy consumption, and a large-scale energy system for urban heating. The main direction of the projects is based on stimulating of energy’s rational use. We can highlight the success of cities such as Barcelona, Cologne, Munich, Milan, Genoa, Lecce, Florence, Lyon, Amsterdam and Rotterdam (Creating a smart city: best practices across Europe 2017). Europe is still an effective geographical area with 12 cities ranked as the 25 smartest cities in the IESE Cities in Motion research platform index (IESE Cities in Motion Index 2017 2017). It is estimated that the market for smart city projects will exceed $ 2 trillion by 2025. It seems that Europe will have the largest number of investments in smart city projects in the world (Knowledge for policies. Smart cities 2019). The development of the “smart city” concept in the European Union was promoted by the research program “Horizon 2020”. Three areas were identified: the development of basic science (information and communication technologies, nanotechnology, biotechnology, space) with a budget of 24 billion euros., industrial leadership (health, demographic change, energy, transport, climate and environment, transport and security) with a total of $ 14 billion. and the third, aimed at solving social and economic problems (Horizon 2020, 2018). In May 2015, in Berlin signed a Memorandum of understanding to create open platforms for smart cities objectives: the creation of a single EU market for open platforms for smart cities by 2018, and by 2025, nearly 300 million EU citizens through the services of open platforms for smart cities. Within the framework of the European program “Horizon 2020”, the mission “smart and climate-neutral cities” was initiated. Among the latest events in this direction is the meeting on December 9, 2019, where the issues of mobility and citizens’ residence in cities were discussed (Smart Cities – Smart Living 2019). It recommended rational use of urban networks, improvement of water supply systems, waste disposal, effective ways of lighting and heating buildings, including a safe public space that would meet the needs of an aging population. In Russia, the concept of a “smart city” has been actively promoted in the past few years. Initially, these were discussions on various platforms and forums, the purpose of these events is to discuss the prospects for cities’ innovative development. The idea of digitalizing the urban economy of a smart city has been implemented in Russia within the framework of the national project “Housing and urban environment” and the national program “Digital economy”. The project is aimed at improving the competitiveness of Russian cities, creating an effective urban management system, and creating safe and comfortable living conditions for citizens (Ministry of Construction of the Russian Federation 2020). A tool for the implementing the smart city concept in the Russian Federation is the large-scale use of digital and engineering solutions in urban and municipal infrastructure. The development and implementation of new

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technologies, digitalization of the city and urban economy was assigned to the competence of Center of the Smart city project. The art of the Russian Ministry of Construction “on the establishment of a passport for the Digitization of urban economy “smart city” was approved on October 31, 2018. The concept of “smart city” in the Russian Federation includes urban management, smart housing and utilities, innovations in the urban environment, smart urban transport, intelligent public safety systems, intelligent environmental safety systems, communication network infrastructure, tourism and service. The project implementation dates in Russia were planned for the period from 2019 to 2024. among the approved cities, 18 cities from 15 regions were chosen: Voronezh, Yekaterinburg, Novouralsk, Novosibirsk, Ufa, Perm, Veliky Novgorod, Evpatoria, Izhevsk, Glazov, Tolyatti, Sarov, Magas, etc. It’s important to note that most publications about the implementation of the program report on planned activities for the implementation of the smart cities. We are talking about the initial stage, when individual projects are implemented in different parts of the country. The implementation of the European smart city concept was facilitated by the Amsterdam Pact of 30.05.2016 (hereinafter referred to as the Pact), which defines the ways of sustainable development of European Union cities until 2030 which is the part of the European strategy for the development of “smart cities” implemented by the European Commission. The development plan for the smart city concept focuses on the following aspects: “inclusion of migrants and refugees”, “air quality”, “cyclical economy”, “climate adaptation”, “energy use”, “urban mobility”. It must be emphasized that to conduct the content analysis it is possible to use the above-mentioned categories. This is due to the fact that in the modern European Union, are widely developed environmental protection programs and currently there is a tendency to include them together with digital economy programs in the construction of “smart cities”. Amsterdam Pact dated May 30, 2016. The result of the content analysis of the document showed (see Table 1) that the involvement of the European investment Bank in the development of the “smart city” concept is envisaged, in particular. Special attention is paid to the urban greening program and the creation of additional jobs in urban-type settlements. The Pact provides for the creation of a mechanism for interaction between city authorities in European regions on urban development issues, such as EUROCITIES, in which municipalities can exchange experience on building a “digital city”. The Urban Development Group aims to assist representatives of municipalities responsible for implementing new technologies within their authority. As a part of ICT (information and communication technologies) in the development of “smart cities”, the document uses the phrase “new technologies” once. “Final report of the General Assembly of the European innovation partnership for smart cities and cooperation (EIP-SCC) (June 27–28, 2018)”. Content analysis of the material showed (see Table 2) that the main focus of the EIP-SCC Assembly was on the development of comfortable urban space, the use of new energy-intensive vehicles for “smart cities”, and new means of mobility for urban residents. A special part in the document was devoted to justification of the project in Rome (Italy) - SmartMed Project, aimed at providing emergency medical care to

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Table 1. Content analysis of the Amsterdam Pact dated May 30, 2016. Mention in the text 6 1 11 9 32 27 22 19 26 12

Analysis units: smart city, new technologies, inclusion of migrants and refugees, civil society activists, air quality, cyclical economy, climate adaptation, energy use, urban mobility, medicine Creating a “smart city” The use of new technologies Including migrants and refugees in the life of a “smart city” Civil society activists bring ideas about creating “smart cities” to their municipalities Air quality Cyclical economy Climate adaptation for urban residents Alternative energy sources for urban life Urban mobility Development of mobile medicine

people using digital technologies, monitoring emergency ambulance calls and rapid transportation of people to hospitals. The document emphasizes that in the period 2017–2018, 270 million euros are allocated for urban digitalization projects, while another 500 million euros were planned to be allocated for their implementation by 2020. Special attention is paid to the new EIP-SCC project called “Urban Platform”, which is supposed to help cities develop digital technologies. Analysis of the qualitative composition of the participants of the last Assembly participants showed that 75% of them were representatives of municipalities, scientific and engineering workers, representatives of various levels of government at the EU level. Analysis of Russian federal documents has shown the following: the “Strategy for spatial development of the Russian Federation for the period up to 2025” once uses the concept of “smart city” as an intelligent system for managing urban infrastructure, while a significant place in the Strategy is given to “improvement of public spaces, restoration of cultural heritage for modern use”. When designing a public space, the leading role is played by information and telecommunication means of communication that need to be developed. It is noted that there is a digital inequality in the subjects of the Russian Federation, and it is necessary to eliminate it. It is important to modernize the objects of worn-out municipal infrastructure, however, it is planned to develop its innovative component. When planning the socio-economic development of territories, it is recommended to take into account the interests of the population and business. We focus on the unsatisfactory environmental situation in the basins of the Amur, Volga, and Ob rivers, and note the degradation of unique natural ecosystems in the Altai, Arctic, lake Baikal, Caspian basin, and Crimea Peninsula. Accordingly, it is necessary to develop and implement environmentally friendly technologies. It is important to note that the choice of such categories as “smart city”, “space”, “communication”, “ecology”, “business”, “infrastructure”, “technology” in relation to the analysis of Russian documents on the development of the concept of “smart city” indicates that the

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Table 2. Content analysis of the “Final report of the General Assembly of the European innovation partnership for smart cities and cooperation (EIP-SCC) (June 27–28, 2018)”. Mention in the text 17 5 2 11 29 29 24 27 24 19

Analysis units: smart city, new technologies, inclusion of migrants and refugees, civil society activists, air quality, cyclical economy, climate adaptation, energy use, urban mobility, medicine Creating a “smart city” Incorporation of new technologies in the creation of new urban infrastructure Inclusion of migrants and refugees in the concept of “clean cities” Activities of civil society activists to establish links between municipalities on the creation of a “smart city” Air quality The development of a cyclical economy will help the development of a “smart city” Climate adaptation will become possible and more simplified in the “smart city” Use of alternative energy sources Increasing urban mobility Digital-based urban medical institutions will become more mobile in a “smart city” environment»

prerequisites for the implementation of this concept currently are only developing in Russia, and that it is necessary to prepare its active implementation and development. The results of content analysis are shown in Table 3. “Spatial development strategy of the Russian Federation for the period up to 2025”. “Main directions of budget, tax, customs and tariff policy for 2019 and the planning period of 2020 and 2021”. The “Main directions of budget, tax, customs and tariff policy for 2019 and the planning period of 2020 and 2021” presents the forecast for the national project implementation “Housing and urban environment”, the national program “Digital economy”. It should be noted that the concept of “smart city” is not used in this document. The projects outlined above are aimed at implementing the “smart city” concept (the Main directions of the budget, tax, customs and tariff policy for 2019 and the planning period of 2020 and 2021). A significant place in the document is given to the development of the digital economy, infrastructure, the development of the digital educational environment and public administration. It is noted that business development should be accompanied by a reduction of the administrative burden. The railway, aviation, road, sea and river infrastructure must be upgraded. It is revealed that in large industrial cities there is a high level of environmental hazard. The national project “Ecology” is designed to use effective technologies aimed at eliminating dangerous objects of environmental harm (see Table 4). “Smart city” concept is new for the Russian Federation, its implementation involves the digitalization of urban economy, the functioning of intelligent systems for managing urban infrastructure, the digital economy, the digitalization of the

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Table 3. Content analysis of the document “Spatial development Strategy of the Russian Federation for the period up to 2025”. Mention in the text 1 45, of them in the context of the topic: 1 4 2 37, of them in the context of the topic: 14 9

7, of them in the context of the topic: 1 6 2 1

1 54 11 3 5 5 9 5 26, of them in the context of the topic: 11 1

Analysis units: smart city, space, communication, ecology, business, infrastructure, technology “Smart city” - intelligent systems of management of urban infrastructure (“smart city”) Space Spatial accessibility of services due to the introduction of information and telecommunications technologies Unbalanced spatial development of major urban agglomerations and major urban agglomerations Ensuring sustainable and balanced spatial development of the Russian Federation Communication Development of information and telecommunications infrastructure Elimination of the “digital inequality” of the Russian Federation’s subjects by creating information and telecommunications infrastructure Ecology Unsatisfactory state of the environment in most cities with a population of more than 500 thousand people Ecologically clean technologies Business Taking into account the interests and opinions of the population and business when planning socio-economic development of territories Cooperation of scientific institutions and educational organizations of higher education with business Infrastructure Liquidation of infrastructural restrictions of Federal significance Modernization of municipal infrastructure facilities Innovational infrastructure Intelligent urban infrastructure management systems Infrastructure support for socio-economic development of territories Modernization of transport infrastructure facilities Technologies Digital technologies Introduction of information and telecommunication technologies (continued)

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Mention in the text 1 1 1 7

Analysis units: smart city, space, communication, ecology, business, infrastructure, technology Management of power grids based on digital technology Introduction of energy-saving and energy-efficient technologies Introduction of innovative and environmentally friendly technologies Application of telemedicine technologies

Table 4. Content analysis of the document “Main directions of budget, tax, customs and tariff policy for 2019 and the planning period of 2020 and 2021”. Mention in the text 0 17, of them in the context of the topic: 4 1 1

10, of them in the context of the topic: 1

3 2 1 11 of them in the context of the topic: 1 3 32 13 8 2 3

Analysis units: smart city, space, communication, ecology, business, infrastructure, technology “Smart city” Space Full spatial development Formation of the information space Communication, development of transport communications between administrative centers of the subjects of the Russian Federation and other cities Ecology Ecology, high level of atmospheric air pollution in large industrial centers, poor quality of drinking water, presence of unauthorized dumps in the borders of cities National project “Ecology”, effective management of industrial waste Elimination of the most dangerous objects of accumulated environmental damage Environmental regulation based on the use of the best available technologies Business Reducing the administrative burden on business Business development Infrastructure Access to modern infrastructure The development of digital infrastructure Informational infrastructure Modernization of railway, aviation, road, sea and river infrastructure Technologies (continued)

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Table 4. (continued) Mention in the text 12, of them in the context of the topic: 6 4 1 1

Analysis units: smart city, space, communication, ecology, business, infrastructure, technology

Digital economy Digital technologies The digital learning environment Digital public administration

educational environment, and digital public administration. The implementation of the concept of “smart cities” involves the creation of an environmentally safe environment, as well as the formation of a comfortable environment for the citizens’ life. In modern Russia, “smart city” concept has just been emerged, while there is no initiative from the municipal authorities, which do not have enough money to renovate the entire urban infrastructure.

4 Conclusion In the Russian Federation, national projects focus on the introduction of new technologies in different types of cities, and the renovation of urban infrastructure. The EU authorities documents propose the creation of a new urban infrastructure, involving elements of civil society in the process of its construction, which, unfortunately, is not typical for the Russian Federation. Thus, in terms of building the concept of a “smart city” on the territory of the European Union, a technocratic approach to its implementation prevails, while the Russian Federation is just beginning to move along this path, introducing in cities some technical innovations of “smart cities” concept. For the EU, projects aimed at the rational use of energy and the appearance of buildings with low energy consumption. It is undoubtedly connected with the elimination of possible threats to the environment. In the Russian Federation, the emphasis is made on the creating of an effective urban management system, creating safe and comfortable living conditions for citizens. In general, the EU has made progress in the concept of “smart cities” implementation. At the same time, in the EU’s leading smart cities, attention is focused on the dialogue between the population and the authorities in the format of civil society, in order to promote a strategy for the development of smart cities in the future. In Russia, the first steps are being taken in this direction, but the issue of involving active citizens who are ready for feedback and public control over the decisions and implementation of projects implemented in the urban environment has already been worked out. Acknowledgements. The study was performed under financial support of RFBR and Volgograd region Administration in the framework of scientific project No. 19-411-340006 RA “Sociopolitical design of public space and systems of mass communication in the Russian regions (by the example of Volgograd region)”.

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References Vidyasova, L.A., Kachurina, P.A.: Analysis of models and development scenarios of “smart cities”. In: XXI Century: Results of the Past and Problems of the Present, vol. 7, no. 4 (44), pp. 116 (2018) Kachanov, S.A., Popov, A.P.: About the place of the Safe City hardware-software complex in the Smart City concept, vol. 16, no. 3(61), pp. 4–9 (2019) Kupriyanovskiy, V.P., Bulancha, S.A., Namiot, D.E., Sinyagov, S.A.: Smart police in smart city. Int. J. Open Inf. Technol. 4(3), 21–31 (2016) Maksimov, S.N.: “Smart City”: on the concept and concept. Econ. Prob. Reg. Ind. Complexes 1 (61), 117–120 (2017) The Ministry of Construction of the Russian Federation (2020). https://www.minstroyrf.ru/ trades/gorodskaya-sreda/proekt-tsifrovizatsii-gorodskogo-khozyaystva-umnyy-gorod. Accessed 16 Jan 2020 Main directions of budget, tax, customs and tariff policy for 2019 and the planning period of 2020 and 2021 (2019). http://www.consultant.ru/document/cons_doc_LAW_308390/. Accessed 06 Jan 2020 Sizov, Y.I., Medvedeva, L.N.: The development of a medium-sized city based on a concept: from a “smart home to a smart city”. Sci. Works Free Econ. Soc. Russ. 218(4), 573–580 (2019) Creating a smart city: best practices across Europe (2017). https://smartcitiesinfosystem.eu/sites/ default/files/document/the_making_of_a_smart_city_-_best_practices_across_europe.pdf. Accessed 09 Jan 2020 Spatial development Strategy of the Russian Federation for the period up to 2025 (2019). http:// static.government.ru/media/files/UVAlqUtT08o60RktoOXl22JjAe7irNxc.pdf. Accessed 06 Jan 2020 Fedotova, A.A.: The future is in smart cities: the theory and practice of creating a smart city. In: Integration of Modern Scientific Research and the Development of Society. Collection of materials of the IV International Scientific and Practical Conference, pp. 217–220 (2017) About the European innovation partnership on Smart Cities and Communities (EIP-SCC) brings together cities, industry, SMEs, banks, research and other smart city actors (2020). https://eusmartcities.eu/page/about. Accessed 28 Jan 2020 Alaverdyan, D., Kucera, F., Horak, M.: Implementation of the Smart City concept in the EU: importance of cluster initiatives and best practice cases. Int. J. Entrepreneurial Knowl. 6(1), 30–51 (2018) Angelidou, M.: Four European smart city strategies. Int. J. Soc. Sci. Stud. 4(4), 21 (2016) Garagliu, A., del Bo, C., Nijkamp, P.: Smart cities in Europe. In: 3rd Central European Conference in Regional Science – CERS, pp. 45–59 (2009) IESE Cities in Motion Index 2017 (2017). http://blog.iese.edu/cities-challenges-andmanagement/2017/05/25/164. Accessed 30 Jan 2020 Knowledge for policies. Smart cities. https://ec.europa.eu/knowledge4policy/foresight/topic/ continuing-urbanisation/smart-city-projects-iot-improves-urban-life_en. Accessed 28 Jan 2020 Horizon 2020: European Commission (2020). https://ec.europa.eu/programmes/horizon2020/en/ what-work-programme. Accessed 30 Jan 2020 Meijer, A., Bolívar, M.P.R.: Governing the smart city: a review of the literature on smart urban governance. Int. Rev. Admin. Sci. 82(2), 396 (2016) Smart cities. European Commission (2020). https://ec.europa.eu/info/eu-regional-and-urbandevelopment/topics/cities-and-urban-development/city-initiatives/smart-cities_en. Accessed 01 Feb 2020 Smart Cities – Smart Living (2020). http://ec.europa.eu/digital-agenda/en/smart-cities. Accessed 01 Feb 2020

Digital Transformation of the EAEU Economies: The Impact on Trade Development and Integration Prospects Elena I. Inshakova(&) , Agnessa O. Inshakova and Larisa A. Kochetova

,

Volgograd State University, Volgograd, Russia {inshakovaei,gimchp,kochetova}@volsu.ru

Abstract. Purpose: The paper deals with assessment of the current level of the economy digitalization in the Eurasian Economic Union (EAEU) and its correlation with the trade development and integration processes improvement. Design/Methodology/Approach: The paper provides a comparative analysis of the key digitalization indicators in the EAEU member countries that are divided by the authors into two groups according to the driving forces and vectors of the digital transformation processes. The study confirms the multiplier effect of the digitalization policy implementation and the digital trade development at the Union level in terms of the expected GDP growth. Findings: In the course of the study, the authors have identified the common factors that inhibit digitalization processes and reproduce their catching-up nature in the EAEU economies, in particular insufficient demand of business and individuals for the digital technologies application, and revealed organizational, financial and institutional measures to facilitate the digital trade development in the Union. Originality/Value: The study findings can be applied by the EAEU interstate and state development institutions, organizations and businesses participating in the digital policy implementation to facilitate digital trade development that would help to speed up integration processes aimed at enhancing membercountries competitiveness. Keywords: Digital economy
Eurasian economic union Digital trade ecosystem
Economic integration JEL Code: F15


Trade relations



F42
O32
P52

1 Introduction Economic integration processes in the Post-Soviet Area, that take place at varied pace and in a variety of formats, have controversial nature, which is the result of a number of challenges that arise from dominance of political over economic interests and ever expanding relations with other countries, which often occur to the detriment of mutual cooperation.

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 987–997, 2021. https://doi.org/10.1007/978-3-030-59126-7_109

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This trend is clearly observed in the trade relations between the Eurasian Economic Union (EAEU) member countries, whose share of trade with countries outside the integration union, according to the Eurasian Economic Commission (EEC), amounted to 85.9% in the period between January and October 2019, thus exceeding six-fold the share of trade between the members of this international regional integration association that comprised only 14.1%, which is a slight increase as compared with the same period of 2018 when it accounted only for 13.9% (Analytical review 2019a; Analytical review 2019b). This situation is even more clearly pronounced if we analyse the value of external and internal trade of EAEU countries. Here we will observe a much more significant gap that exceeds 12.2 times the scope of the value trade between EAEU countries. Indeed, in 2019 in value terms the total volume of merchandise trade between EAEU member countries and non-member countries amounted to $ 601.5 billion, which is down by 2.6%, or $ 16.2 billion as compared to the same period in 2018. Export of goods amounted to 378 billion dollars, which is a decrease by 5.7%, or 22.8 billion dollars. Imports reached 223.5 billion dollars, which is an increase by 3%, or $ 6.6 billion. Simultaneously, in 2019 the value of mutual trade in goods between EAEU countries reduced to 49.4 billion US dollars, which is only 98.4% of the total volume as compared to the same period in 2018. In the meantime, it is observed that individual countries of the integration union vary significantly in accordance to the level of involvement into mutual cooperation. In this regard, the share of the Republic of Belarus is the highest at 50.3%, Kyrgyz Republic reached 38.9%, the Republic of Armenia amounted to 29.8%, the Republic of Kazakhstan comprised 21.1%, while the share of the Russian Federation accounted only for 8.7%. Taking into account the importance of mutual trade relations, which, as world practice shows, traditionally account for the predominant share of economic cooperation among members of integration associations, mobilizing factors capable to enhance mutual trade at EAEU, provide new quality of integration interaction and increase competitiveness of the Union and its members under transition to a new technological structure have become of crucial importance. Foreign trade digitalisation in EAEU countries that can be achieved through the creation of effective Eurasian digital trade ecosystem has great potential for foreign trade enhancement (Report 2019). That is why, in accordance with the Main Directions for the Implementation of the EAEU Digital Agenda until 2025 (Navas-Sabater and Petrov 2018), the development of digital trade is regarded as one of the key priorities in the development and implementation of digital initiatives and projects in this integration association. To date research has intensively been done directed at assessing conditions for digital trade ecosystem formation and providing substantiation for the main vectors of digital transformation in trade and economic relations between EAEU countries as well as identifying the key problems and challenges to digital trade development between business entities operating in the domestic market within the integration union and in the markets of third countries. Those are problems that can effectively be solved by harmonizing national regulatory mechanisms, reducing barriers and simplifying bureaucratic procedures that impede mutual trade development, in this way ensuring

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the global competitiveness of the economic systems of EAEU members by, among other factors, reducing risks of redistribution of value added in international trade to non-member countries. Thus, given the importance of the digital component in integration processes, identification of areas promising for the development of the digital transformation mechanism in trade relations of EAEU countries becomes an important theoretical and practical issue.

2 Materials and Methods The works of foreign and Russian scholars (e.g. Calisi 2018; Gohberg 2019; Spiesberger and Schönbeck 2019; Zhang and Chen 2019; Freund and Weinhold 2004; Riker 2014; Tan 2017; Varnavskii 2018; Navas-Sabater and Petrov 2018; Diatlov 2018; etc.) concerning the essence, specific features and development factors of the digital economy, economy and trade digitalization, the correlation between Internet use and international trade, strategic goals and prospects of the EAEU member economies digital transformation shaped the conceptual framework of the research. Statistical data, analytical, legal and regulatory documentation of the European Commission, Eurasian Economic Commission, United Nations Commission on Trade and Development, the World Bank Group, the Asian Development Bank, the Eurasian Development Bank, Russian and Eurasian digital economy development institutions have provided the empirical basis of the study. The systems approach accompanied by structural and functional, temporal and spatial, comparative and documentary analyses has formed the methodological basis for the study.

3 Results The world’s GDP has increased by more than 10% due to the growth of the global data flows (Calisi 2018). As there is no widely accepted definition of the digital economy, estimates of the size of the digital economy range from 4.5 to 15.5% of the world’s GDP, which depends on the definition adopted (Digital economy report 2019; Gohberg 2019). The digital economy shows a rapid growth primarily in the developed and leading developing countries. According to the statistical data provided by the U.S. Bureau of Economic Analysis, the digital economy accounted for 6.9% of the U.S. GDP, or $1.35 trillion, in 2017 (NTIA 2019). Based on the OECD framework, the digital economy definition puts the size of China’s digital economy at 6% of GDP, in 2018, compared to 8–10% in South Korea and Japan, where the IT sector is more developed and dominates in the economy (Zhang and Chen 2019). The EU digital economy exceeded €300 billion in 2016 that represented more than 1.99% of the European Union’s GDP. Favourable policy regulations, legislative frameworks and investments in the information and communication technologies (ICT) are expected to increase the value of the European data economy up to €739 billion by 2020 that will account for 4% of the overall EU GDP (Calisi 2018).

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The United States and China together account for 75% of all patents related to block chain technologies, 50% of global spending on the Internet of Things (IoT), more than 75% of the world market for public cloud computing, and for 90% of the market capitalization value of the world’s 70 largest digital platforms. Europe’s share comprises 4%, while Africa and Latin America together account only for 1% (Digital economy report 2019). Regarding value added in the ICT sector, the U.S. and China together account for almost 40% of the world total. As a share of GDP, however, the ICT sector is the largest in Taiwan Province of China, Ireland and Malaysia (Digital economy report 2019). A significant factor in the accelerated growth of the digital economy is investment attractiveness of digital projects, the return on investment of which exceeds six-fold profitability of non-digital projects (Digital potential 2019). However, the data of the Eurasian Development Bank (EDB) (Digital potential 2019) on the digital economy share in EAEU GGP, which comprises less than 3 per cent, compared to the EU, can be regarded as unjustifiably optimistic. According to the World Bank classification, EAEU member countries are divided into two groups - the emerging digital economies (Kyrgyzstan) and the transition economies (Kazakhstan, Belarus, Russia and Armenia). Experts on the implementation of digital technologies for the development of electronic commerce from Asian Development Bank (ADB) assigned all EAEU countries to the “emerging digital countries” (Tan 2017). According to the Global Innovation Index (GII) (2019), the ranking of 129 countries demonstrates that in EAEU countries the ICT sphere development, exempt certain indicators, showed slight progress with regard to formation of technical, technological and organizational basis for digitalization of the economy in 2018 (Table 1). However, international organizations rightly consider EAEU countries as new promising members in the global digital economy. Since 2000, all the EDB member countries have demonstrated positive dynamics in the development of the basic infrastructure for the digital economy. Indeed, the ICT sector has been one of the fastest growing segments of the Russian economy. According to HSE University, in the period between 2010 and 2017 it grew by 17% that was almost double the rate of GDP growth, and the sector’s share in GDP accounted for 2.7%. According to the HSE experts’ estimates, by the year 2030, more than half of GDP growth will be related to digitalization (1.47% out of 2.75% annual GDP growth) due to enhanced efficiency and competitiveness of all the economy sectors (Gohberg 2019). However, EAEU countries still lag behind the developed countries in terms of the digital economy share in GDP. The main inhibiting factors that are common to EAEU member countries include as follows: – “catching up” nature of scientific and technological development and lack of infrastructure for the digital economy as compared to the leading countries; – insufficient demand for digital technologies on behalf of businesses and citizens that result in slow pace of digitalization; – a significant difference among the economic sectors with regard to adoption of digital business models.

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Table 1. The EAEU member-countries position in the GII 2019 regarding the ICTs sphere development Indicator

Country’s rank out of 129 economies under consideration Armenia Belarus Kazakhstan Kyrgyzstan Russia

ICT infrastructure ICT access* 36 23 41 95 51 ICT use* 70 37 58 91 45 Government’s online 95 57 32 83 25 service* E-participation* 97 33 42 73 23 ICT output 102 93 99 95 45 ICT services imports, % total trade 15 19 115 82 71 ICT services exports, % total trade ICTs and business model 88 n/a 87 124 91 creation** ICTs and organizational 67 n/a 87 120 49 model creation** Note: (*) an index; (**) a survey question. Source: compiled by the authors based on data presented in (The Global Innovation Index 2019).

Despite common features in digital transformation of EAEU national economies, the driving forces, which determine transformation vectors, vary significantly from country to country and are described as follows: – implementation of the top-down government initiatives is characteristic of Kazakhstan and Russia, the countries where the state sector is the main impetus for digitalization; this is confirmed by high values of Digital adoption index in the state sector (0,84 and 0,82, respectively). – bottom-up approach to implementation of economy digitalization is characteristic of Armenia, Belarus and Kyrgyzstan; in these countries the driving force behind the digitalization process is business as it is interested in implementation of digital business-models to enhance business processes and effectively distribute resources in order to gain profit. The present study is focused on the analysis of digital transformation in trade relations between economic entities of EAEU countries taking into account the positive impact of ICT on the development of international trade, with a particular focus on the fact that the Internet can increase exports by reducing transaction costs on communication, information, and coordination (Tan 2017) thereby facilitating firms in conducting international trade operations. Data on the Internet use and trade potential, which are traditionally used in the studies approving positive correlation between Internet use and international trade (e.g. Freund and Weinhold 2004; Riker 2014; Tan 2017), with focusing on the EAEU member-states are represented in the Table 2.

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Economy digitalization has been given considerable attention in the strategic documents adopted by the largest integration associations (Shaping Europe’s digital future 2020) in response to expected digital transformation effects in the trade sector. Implementation of digital technologies in EAEU countries will accelerate creation of value chains, bring together customers and suppliers, thereby, strengthening production and enhancing marketing relations between business participants, including small and medium-sized enterprises and lead to reduction in transaction costs in foreign economic activity. Digital technologies increase efficiency of transactions via simplification, enable their transparency, and reduce corruption risks. Reduction in the costs of non-digital goods shipping and related services (for example, digitalization of customs procedures) will also have a significant economic effect and stimulate the growth of digital trade. All of these factors will boost the volume of mutual trade within an integration union. In turn, trade growth may give a new impetus to the development of the EAEU economy. According to EEC experts, at a 20% level of digitalization, additional growth in retail is projected to reach 0.92% of GDP by 2025 (Draft report 2019). For EAEU member countries, digital transformation processes should be carried out on the level of the entire integration union instead of the level of its individual members. The multiplier effect arising from the implementation of measures to digitalize the economy at the Union level is confirmed by the forecast data on the expected GDP growth in this mega-region by 2025 (Fig. 1). Thus, digital transformation of the mutual trade between EAEU countries becomes a crucial factor both in promotion of sustainable economic growth and deepening of integration in the Eurasian economic space, thus, enhancing EAEU’s competitiveness. In this regard, interstate and state financial and non-financial development institutions of the EAEU countries should set priorities that are directed at implementing organizational, institutional and financial measures to ensure the development of digital trade. 1. Most significant organizational measures should be set as follows: a) in the field of digital services that are necessary for the implementation of foreign trade activities: – ensuring ubiquitous broadband Internet access, especially fixed, to facilitate entry for foreign economic activity participants (especially small and medium-sized enterprises) into new markets; common infrastructure formation can lead to a 1.7% growth of EAEU GDP by 2025; – forming safe and efficient digital platforms compatible with the Eurasian digital infrastructure (similar to the project “Eurasian Network of Industrial Cooperation, Subcontracting and Technology Transfer”) that will provide direct interaction between manufacturers, suppliers and customers, minimizing their transaction costs and increasing joint consumption of goods and services; – creating digital platforms for identification and authentication of foreign economic activity agents in order to increase the reliability of data that are necessary for the implementation of cross-border digital trade, and optimization of the related document flow;

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Table 2. Digital adoption and trade potential of the EAEU member-countries 2019 Indicator

Armenia Belarus

Kazakhstan Kyrgyzstan Russia

ICT adoption, 0–100

62.0

59.0 *

68.0

58.8

Mobile telephone subscriptions per 100 pop.

121.3

124.8 *

142.0

122.6

154.4

Mobile-broadband subscriptions per 100 pop.

75.9

86.1 *

77.6

94.0

87.3

77.0

Fixed-broadband Internet subscriptions per 100 pop.

11.8

33.7 *

13.4

3.8

22.2

Internet users, % of adult population

64.7

75.0 *

78.9

38.0

80.9

Number of Internet hosts **

194,142

295,217 67,464

115,573

14,865,000

Digital skills among active population, 1–7

4.5

n/a

4.7

3.9

4.9

Legal framework’s adaptability to digital business models, 4.0 1–7

n/a

4.0

3.0

3.9

Global Index of Economic Openness, rank among 157 countries

69

89

72

104

81

Trade openness, 0–100

55.2

n/a

56.4

51.8

50.7

Merchandise exports, million dollars*

2412

33,716

60,956

1,765

444,008

Share of the EAEU merchandise exports *, %

0.4

6.2

11.3

0.3

81.8

Merchandise exports annual percentage change**

7.4

15.3

25.7

0.1

25.6

Exports of commercial services, million dollars*

2018

8,700

7,026

822

63,836

Share of the EAEU exports of commercial services *, % 2.4

10.6

8.5

1.0

77.5

Exports of commercial services annual percentage change*

11.3

12.2

0.7

12.3

7.3

Note: (*) data available as of 2018; (**) CIA data available as of 2012. Source: calculated and compiled by the authors based on data presented in (The Global Competitiveness Report 2019; Digital potential 2019; World Trade Statistical Review 2019; Country comparison 2019; Ministry of Communications and Informatization of the Republic of Belarus 2018; Global Index of Economic Openness 2019).

– forming digital cross-border logistics platforms to increase the efficiency of interaction between carriers and cargo owners both from EAEU countries and other countries; ensuring its integration with global transport and logistics platforms; – creating a system of accessible and compatible basic registers that comprise key official information on business systems and businesses in EAEU countries as the basis for digital transformation of the trade sector; b) in the field of non-digital goods and services: – adopting electronic declaration of goods in all EAEU countries in accordance with the provisions of the EAEU Customs Code, which came into effect on January 1, 2018; aligning the level of development of electronic declaration of the Member States of the Customs Union; unifying the structure and formats of customs documents submitted in electronic form; – creating Eurasian networks of high-quality logistics infrastructure, which can significantly enhance the effect of digital trade by forming new relationships between producers and consumers throughout the Eurasian megaregion and between all the sectors of the EAEU economy, thus, facilitating efficient implementation of trade operations for small and medium enterprises.

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2. Prior financial measures that should be implemented are defined as follows: a) Stimulating demand for digital technology: – introducing tax and insurance benefits: accelerated depreciation, tax credit for investments in information technology should be introduced for companies that use digital technologies (Gohberg 2019); reducing transport rates, land tax, organization property tax for companies in the ICT sector; exemption from VAT and reduced premium rates should be introduced for manufacturers of digital equipment, providing financial support for digital transformation of small and medium-sized businesses: soft loans for the purchase of digital products and services; – introducing innovative vouchers for payment for research organizations, similar to European practice (Spiesberger and Schönbeck 2019); – developing public-private partnerships directed at creation of basic digital infrastructure, implementing regional public-private and concession projects for the development of digital technologies in Russia and other EAEU countries; b) creating secure and compatible payment systems that will increase the availability of financial services. 3. Measures that are aimed at creating the institutional framework for digital transformation of trade are as follows: – developing and harmonizing regulatory framework for the introduction of digital methods of interaction between B2B, B2G, G2B in EAEU countries, that is necessary to create a common barrier-free digital trade space; – harmonizing regulatory framework for the ICT sector operating in order to create a single market for EAEU telecommunications services, reducing barriers that inhibit entry into the market and ensuring equal competitive conditions for its participants; – developing regulatory framework (including guidelines and clarifications) and introducing amendments to legal acts that are necessary to simplify signing publicprivate and concession agreements in the field of ICT and remove certain barriers; – harmonizing legislation in the field of personal data protection, including their cross-border transfer to EAEU; – creating a centralized system for standardizing digital technologies, certification of goods and services of the digital economy, adopting relevant international technical standards related to digital equipment and digital services; – forming state and interstate institutions that regulate and coordinate policies in the field of trade digitalization, as well as providing security for new digital ecosystem; – developing digital skills in entrepreneurs and citizens and bridging the digital gap between the association member countries. In Russia, the development of the national mechanism for the coordinated policy of EAEU member states to embrace digital economy is entrusted to the EAEU Center for Digital Transformation Competencies, established in December 2019 on the basis of the Analytical Center under the Government of the Russian Federation. The establishment of institutional structures with similar functions in other EAEU countries will help accelerate the convergence of national policies in this area and enable the development of integration processes.

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1.7

2 1.5 1

995

0.66

0.9

0.55

0.88 0.44

0.5 0 Internet bandwidth growth

Broadband E-commerce access growth growth

Country's scenario, %

EAEU scenario, %

Fig. 1. GDP growth related to the digital economy development in the period between 2018 and 2025. Source: Compiled by the authors based on the data presented in (Navas-Sabater and Petrov 2018)

4 Conclusion Emerging digital transformation of the economy in EAEU countries is in line with global trends in world economic development. Digitalization of the international trade relations between EAEU member states will enhance trade in the integration association, which, in turn, can give a new impetus to the development of the EAEU economy. To obtain a multiplier effect (additional GDP growth) for EAEU countries, it is preferable to conduct digitalization of the economy in the format of the entire integration association. This is important given the catch-up nature of digitalization and the asymmetric starting positions of EAEU countries in this process. The digital scenario for the development of trade relations between EAEU countries requires a systematic application of three discernible set of measures, which can be classified into separate categories as follows: organizational, institutional and financial. The first set of measures is directed at creating the required digital infrastructure and new digital business models; development, approbation and implementation of ready-made digital solutions by international trade participants, by small and mediumsized businesses, in particular. The second set of measures aims at providing legal consolidation of various aspects of the implementation and use of digital technologies in international trade. Finally, initiatives in financial sphere, that are viewed as having a high multiplier effect, are aimed at stimulating mass demand for digital technologies among business and citizens. These are recommendations with far reaching consequences that will accelerate digital transformation of the EAEU trade relations, therefore, deepening integration processes with a view to enhancing regional and global competitiveness of the member countries.

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Acknowledgments. The reported study was funded by RFBR according to the research project No. 18-29-16132 “Priorities for the legal development of digital technologies of foreign trade activities in the context of international economic integration”.

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Shaping Europe’s digital future: European Commission press corner, 19 February 2020. https:// ec.europa.eu/commission/presscorner/detail/en/fs_20_278. Accessed 20 Feb 2020 Spiesberger, M., Schönbeck, J.: Innovation vouchers for the transition of energy and innovation systems. Foresight STI Gov. 13(1), 70–76 (2019). https://doi.org/10.17323/2500-2597.2019. 1.70.76 Tan, W.S.: Digital Trade in Europe and Central Asia, ADBI Working Paper 751, Asian Development Bank Institute, Tokyo, Japan (2017). https://www.adb.org/sites/default/files/ publication/324996/adbi-wp751.pdf. Accessed 21 Jan 2020 Schwab, K. (ed.): The Global Competitiveness Report. World Economic Forum, Geneva, Switzerland (2019) The Global Innovation Index: Creating Healthy Lives – The Future of Medical Innovation. Cornell University, INSEAD, and the World Intellectual Property Organization, Geneva, Switzerland (2019) Varnavskii, V.G.: International trade in value added terms: methodological issues. World Econ. Int. Relat. 62(1), 5–15 (2018) World trade statistical review: World Trade Organization, UK (2019) Zhang, L., Chen, S.: China’s Digital Economy: Opportunities and Risks. IMF Working Paper WP/19/16, Asia Pacific Department, International Monetary Fund (2019)

Development of Rural Areas by Means of “Smart Village” Concept Tatiana V. Klenova(&) , Alexey S. Ivanov and Daria A. Koneva

,

Volgograd State University, Volgograd, Russia {babichtv,ivanov-a78,dakoneva}@volsu.ru

Abstract. Purpose: The purpose of the article is to formulate a set of theoretical and methodological recommendations for the development of rural territories by means of “Smart Village” concept. Methodology: This article emphasizes the prospects for the development of rural areas from the point of view of digital economy development. By means of use of digital technologies, “Smart Village” concept can act as one of effective means of the solution of numerous problems of rural areas, the presence of which is confirmed by the analysis and presented statistics. Results: The results of the study which are presented in the article, imply in the search for a solution, which could be the best option for the potential’s use of the Smart Village concept, and which could have a serious positive effect on the development of rural economies and social and economic development of rural areas. Conclusions/Recommendations: The paper presents the facts that necessitate the digitalization of national villages, which consists in the issues of transition to a new, more efficient way of agricultural production development, improvement of the quality of life of rural population. The limitations on the wide use of digital technologies, at least in the short term period, are connected with possible negative consequences which are manifested in the loss of a number of existing jobs and the emergence of new jobs, change in contractual relations between farms, and the need to preserve the originality of Russian villages. It is proved that the traditional way of solution of the problems of rural development which is analyzed is based on an accelerated intensification of agricultural production, including information and communication technologies, it requires the improvement from the point of view of prevention of serious economic, social and environmental contradictions in rural areas. Keywords: Rural territories
“Smart village” concept Development
Self-government JEL Code: O18


Digitalization



O32
P25
Q18

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 998–1006, 2021. https://doi.org/10.1007/978-3-030-59126-7_110

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1 Introduction An important aspect of the current agrarian policy in Russia is the creation of conditions needed for a sustainable development of rural areas, one of which is the digitalization of agriculture. The interest in this issue is displayed both from the authorities and the scientists’ community. It is caused by a number of factors and in the context of this study, they include functional features; problems of territorial integrity of the country; significant technical and technological underdevelopment; significant resource potential of rural areas. The formation of the foundations of digital economy, including in the real sector of economy, led to the creation of “Smart Village” concept. Rural areas today perform a set of important national economic functions, possess significant natural, demographic, economic, historical and cultural potential and they lack a modern technology that would contribute to their sustainable social and economic development. The statistics confirm a lower percentage of Internet use in rural areas compared with urban areas. The main reasons for this situation are a significant share of elderly people who do not have the appropriate education and necessary equipment, low incomes of rural population, communication interests, insufficient level of development of the corresponding infrastructure of rural areas; poor awareness of the participants in the agricultural production about advanced technologies. The digitalization of villages is an urgent task that needs to be solved, for the reason that it will radically change the conditions of the functioning of agricultural firms, increase the number of citizens using online public services, provide access to distance education for rural population, provide wide technical opportunities for remote work, etc. At the same time the development of a digital economy in this area necessitates the development and application of a set of measures that allow not only to ensure a technological breakthrough in the Russian agriculture, but also to solve many social problems in rural areas, to preserve the uniqueness of the Russian village, “Each rural settlement is a self-sufficient community, micro-civilization, a healthy and productive unit of society…” (The Way of Russia 2015).

2 Methodology The study was carried out on the basis of statistical data analysis showing the main trends typical of rural areas’ development of the country for the period from the beginning of agricultural reforms to the present moment; issues manifested both in the economic and in the social sphere; expert data confirming the role of rural areas in the life of society by means of the main production function. Key features of rural digitalization were studied from the point of view of a systematic approach. The use of this approach made it possible to establish the legal framework for the digital transformation of the Russian economy, including the agricultural sector. The starting point for the digital transformation can become the beginning of the Digital Economy Program of the Russian Federation, which is a governmental project for 2019–2024 and includes the sub program “Digital Agriculture”. The approach mentioned above also allowed identifying the characteristic features of “mart village” concept; showing organizational, economic, technical, technological

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and institutional conditions for the creation of “Smart Villages”; revealing the advantages, as well as the use limitations of digital technologies in this area. The research methodology is based on the analysis of various points of view regarding the prospects for the implementation of “Smart Village” concept which basically relies on digital technology. A number of authors, justifying the need for a comprehensive digitalization of villages, consider these technologies to be promising from the point of view of social and economic development of rural territories (Kudryashova 2019; Voronin et al. 2019). On the other hand, the opinions and assessments of researchers were studied, which determine the need for significant efforts, both on the part of state and local authorities, and on the part of the academic community, as well as the implementation of an integrated approach allowing to achieve the goals of digital technologies’ introduction in social and economic sphere of national villages (Akhmetov and Galikeev 2019). The identification of the methodological prerequisites for the emergence of the concept also includes the study of key factors that contributed to the spread of the ideas of “Smart Village” in world practice. So, the experience of the development of this concept in a broader historical way is studied. The political and economic ideas of creating “smart villages” are revealed, their connection with a wider range of problems of territorial development using the example of India and the countries of the European Union is established. Thus, an analysis of the scientific literature made it possible to focus on the need to recognize the fact of the implementation of Smart Village concept, using a comprehensive approach which presents in the best way of digitalization potential for the development of rural areas.

3 Results A rapid digitalization can be observed today not only in the sector of IT technologies, retail, financial organizations and social networks. The real sector of economy including agriculture is being actively digitized. One of the concepts which reflects the idea of the future development of rural territories and the ways to solve the issues connected with their development by means of informational and communication technologies, is “Smart Village” concept. The emergence of “smart rural settlements” is intended not only to ensure the efficient use of the resource potential of agricultural and industrial complex and rural territories, but also to predict the behavior of rural residents in order to ensure their competitive and secure development, as well as to reduce the number of conflicts and their consequences inside the village (Semenov and Aliev 2019). The “Smart Village” concept is not as widespread as the “Smart City” idea and today only a few examples of its practice can be found. It is a design for the construction of a “Smart Village” in Atbasar district of Akmola region which was developed and is being implemented. In the Republic of Ingushetia, it was suggested to implement the innovative project “Smart Village”. The implementation of a significant number of diverse functions beginning from the production one, aimed at the provision of the food security of the country, to the

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cultural and ethnic funcitons, allows us to conclude that the key purpose of rural areas, which, according to leading sociologists and political scientists, is to deliver many benefits that cannot be subject to cost assessment (Khagurov 2009). In most literary sources, the main function is the production. In average for 2014– 2018 in the structure of GDP, the agriculture is was about 3.4% (Bulletin of current trends in the Russian economy 2019). Despite the fact that the amount of production which the agriculture contributed to Russia’s GDP from 2014 to 2018 decreased by 0.3%, it continues to be the main source of food products for citizens and raw materials for various industries. So, it becomes obvious that the primacy of the production function of rural areas can be explained by several facts. Firstly, the agriculture is the main source of income for rural residents. Secondly, for a long period of time, the main approach to the development of rural territories remained sectoral, which was focused on the sustainable development of agricultural production. Thirdly, the growing interest in the implementation of this function of the village arose as a result of sanctions imposed by the European Union, the USA, Australia and other countries on Russia, what made the issue of food security of our country more relevant. These facts are not only reflected in the modern agrarian policy of Russia, which is based on a complex of basic legal acts that determine the vector of development of national agricultural production. These laws are as follows: Doctrine of Food Security of the Russian Federation, National Security Strategy of the Russian Federation until 2020, Federal Law “On the Development of Agriculture”, Strategy for the Development of Food and Processing Industry of the Russian Federation for the Period until 2020, State Program “Development of Agriculture and Regulation of Agricultural Products, Raw Materials and Foods for 2013–2020” (Batmanova et al. 2019). The facts mentioned above also prove the emergence of a significant number of programs and projects (“Digital Economy of the Russian Federation” Program, departmental project “Digital Agriculture”, etc.), theoretical and practical developments (automatically autopiloted vehicles, robot tractors, specific software for agricultural activities, etc.) designed specifically for the digitalization of agriculture, which represents the economic basis for the development of rural territories (Darkov 2019). By 2024, as a result of digitalization, it is planned to double the labor productivity in agricultural enterprises. It is expected to reduce 1.5 times unit costs for the administration of agricultural business. It is planned to reduce by more than 20% the share of expenditures in the cost of a unit of agricultural output. The total economic effect of the digitalization of the industry will amount to 4.8 trillion rubles per year (Akhmetov and Galikeev 2019). However, today the traditional way of the solution of development issues, which consists in an accelerated intensification of production of the agriculture, is still under analysis and it needs to be improved. This approach should be supplemented by the tools focused on the integrated development of rural areas for the achievement of the main goal – improvement of the life quality of rural population. This situation is associated with the fact that the planned increase in agricultural production indicators largely depends on the current demographic situation, and it also depends on the standard of living, material security of citizens living in the village, and the state of infrastructure (both engineering and social).

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According to statistics, on January 1, 2019, the rural population amounted to 37.6 million people, or 25.3% of the total population of the Russian Federation (Real time 2019). Since the 1990s, when the rural population was 38.9 million from the total population of the Russian Federation, there is a strong tendency for decrease, indicating that the rate of depopulation of rural territories in our country is large-scale. The long lasting transformation of the entire agricultural complex ultimately led to a significant reduction in agricultural production. At the beginning of the transition period, the share of agriculture in the GDP of the Russian Federation was 16.4%, but according to official statistics, only from 1990 to 2000 the decline in total agricultural production amounted to more than 61%, and the share of agriculture in employment from 1995 to 2012 decreased 1.9 times (Svatosh et al. 2015). In the villages, negative social phenomena such as rural poverty, mass unemployment, began to develop at a significant pace, which ultimately today led to the loss of a significant part of the labor potential of rural territories presented by young people and more qualified personnel. The fact of the crisis which is observed today in rural areas is confirmed by official statistics. It reflects rural poverty in all its manifestations, proving that its scale is a serious problem. In the period from 2011 to 2016 the ratio of the average monthly nominal wages of agricultural workers to the average wages value for the economy was in the range of 53–56% (Federal State Statistics Service 2017). The low level of wages of most of the people employed in agriculture, provides them with a living standard for their families most often with difficulty, without mentioning the lack of confidence in the welfare and availability of a job in the long term. In addition, many cultural and communal services became inaccessible to the inhabitants of villages, and government services continue to be inaccessible, by contrast with the urban population. It is well known that healthcare remains a weak point among other social services. The lack of healthcare in rural areas is one of the main reasons for the constant deterioration in the quality of life of rural residents and, as a result, the degradation of the social sphere of villages. According to information provided by the head of the Accounts Chamber of the Russian Federation, out of 130 thousand settlements, only 45 thousand have some form of medical care. Rural medical institutions significantly lag behind urban healthcare centers in terms of modern medical equipment and qualified personnel (Kozyreva 2018). When studying “Smart Village” concept it is impossible not to pay attention to the historical and political prerequisites for its occurrence. We could emphasize two main factors contributing to the active development of this idea. The first one is historically determined and associated with attempts to solve the problem of economic and infrastructural underdevelopment of rural territories of different countries, the need to expand their political rights on the basis of local self-government. The second factor is purely technological. His representation in public debate is closely connected with ideas about the so-called Fourth Industrial Revolution and its capabilities: Internet of things, big data technologies, development of networks with artificial intelligence, etc. It should be noted that most often this factor to a greater extent is covered in the scientific literature. We find it necessary to dwell on the first aspect. One of the first countries which suggested the idea of a “Smart Village” (“smart rural area”) was India. About 70% of

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the country’s population lives in rural areas. The ideas suggested by Mahatma Gandhi “Adarash Gram” (ideal village) and “Swaraj” (self-government, political decentralization and democracy of participation) made the basis of the already modern program of the Prime Minister of India Narendra Modi (2014) involving the development of rural districts, expanding opportunities for social mobility of the population of rural communities (Boda 2018). In particular, each Member of Parliament is invited to coordinate a separate settlement project, creating an exemplary smart village. It is noteworthy that this program unites a lot of public organizations. The Indian EcoNeeds Foundation is working to preserve the environment, in particular it is searching the issues with drinking water, hygiene, and the development of international river policies. As for the creation of “smart villages”, it is aimed at the solution of the problems of at least a partial access of the population to the services available to the urban population, the concept is connected with the ideas of urbanization, that is, the extension of urban forms and living conditions to rural areas. Here we would like to emphasize two trends that may be conflicting. The first one consists in the fact that on the basis of the democratic representation of rural communities in national legislative chambers and in international structures such as the European Parliament, it is possible to solve the problems of the standard of living growth, infrastructural provision of the population of rural areas and villages, access to education, health care, social and cultural benefits. The second implies essentially a new vision of the policy of suburbanization, when rural territories, being in a subordinate position in contrast to large megacities, serve the purpose of infrastructure pressure relief. Undoubtedly, this is also an urgent task which however, should not be replaced by “Smart Village” concept by creating new comfortable conditions for wealthy citizens working in large cities. The experience of European countries in the “smart” use of “Smart Village” concept is interesting. The National Rural Transport Program in Ireland has been implemented since 2002 and it helped local communities to receive targeted transport mobility services in rural areas of the country. 17 transport coordination points under the LocalLink brand operate throughout Ireland, providing a range of services: public transport responding to demand, special transport routes for vulnerable groups of the population. In the country local non-profit organizations for mobility services planning are being created. In 2018, the National Transport Authority allocates 14.3 million Euros for these purposes (European Network for Rural Development 2019). Naturally, the possibilities of targeted transport assistance expand with the use of artificial intelligence technology, the use of mobile applications that allow you to respond quickly to local requests. At the international level, the activity of the European Rural Parliament contributes to the active development of “Smart Village” concept. Its main goal is to help hear the rural population in Europe by means of partnerships with civil society and governments. The most important aspect of declared policy is the launch of the “reverse spiral”, which allows overcoming the decreased viability of rural communities connected with the outflow of the population and weakening of local production. The task of community partnerships’ creation for the connection of territorial planning programs (which is largely subordinate to the interests of large cities and most often continues to

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expand highly urbanized territories) and rural development (European Rural Parliament 2015) is proclaimed. In particular, the Smart Village Network is being created, which includes village groups and associations on a voluntary basis. A program of European transnational cooperation for cities and towns (URBACT) is being implemented. Since 2017, under the aegis of the European Commission, a consortium of companies has been implementing the pilot project “Smart Eco-Social Villages” (Smart Villages Pilot Project 2017). They will be included in the EU policy, which implies the funding in the amount of 2.4 billion Euros for the equipment of “smart villages” in Europe and 14.5 billion Euros for the development of rural regions. Digital technologies within the framework of this program are not a prerequisite for a settlement to become a “smart village”, but they are a tool that allows a rural settlement to become more attractive, improve the quality of life using the Internet of things, big data and other solutions (Rurener 2019). The second factor mentioned above for the creation and implementation of “Smart Village” concept is technological one and most often it is put forward in discussions, and this factor is usually said to be the main one. The ill use of information and communication technologies can lead to a distortion of the ideas described in this paper, when specific political and economic preconditions of the concept were revealed. In this case, the emphasis shifts to the technology of digital representation of rural settlements. So, in the case of Indian smart villages, there are such tools as management of citizens’ diet, notifications’ management, taxes and, for example, coordination of dairy farms based on the collection of milk, its sales and payment (Hegade 2016). Naturally, it is linked to the existing distribution systems in the country on the basis of identity cards, and with the differentiation according to the poverty level of the population. A shift in emphasis to this aspect of the concept may increase the interest of international companies - suppliers of equipment and software, increase the supply of payment system operators and increase bureaucratization in the coordination of the functioning of such settlements. In addition, the unification of the territories in social and cultural terms can take place, the disappearance of historical and religious differences may appear.

4 Conclusion The summary of the many points of view on “smart village” concept allows us drawing a number of conclusions. In our opinion, an integrated approach to the interpretation and practical implementation of the concept should be based on the following ideas. The introduction of the concept can be based on new technological solutions in the field of information and communication technologies, the possibilities of the Fourth Industrial Revolution. At the same time, they should not become a goal in itself for specific decisions, but should serve as tools for improvement of social and economic decisions in territorial planning. The ideas of “Smart Village” should use the principles of territorial selfgovernment, which would increase the social and political status of rural residents, in particular, in the planning and economic use of local territories, respecting the primacy

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of the interests of local communities over the interests of business, including environmental security. In this regard, you can use the experience of eco-villages in European countries. These solutions include such as renewable energy production (primarily biomass, wind and solar energy) and distribution (district networks, underground electrical wiring, etc.), short supply chains, including new markets for bioeconomy; forest infrastructure, cost-effective public irrigation, treatment and supply systems. The last statement implies that the ideas of “Smart Village” may mean the provision of a certain economic and energy autonomy of rural settlements. In this regard, the solution to fundamental problems of infrastructure, housing, and communal security should precede the introduction of information and communication solutions, which in this sense play the role of a superstructure in the model. The provision of comfortable housing, roads and quick connections with cities and other settlements, the availability of schools, hospitals and quick access to emergency medical care should be the first in the priorities of territorial administration at the level of regional authorities, districts and municipalities. The objectives of the integrated development of rural areas should be linked with long-term objectives of agricultural policy in such a way that the determination of the vectors for the development of agricultural production, involvement of land in circulation, new construction should be regulated at the local level of administration together with the maintenance of traditional specialization of the territories and maximal potential of local employment. The interests of settlements should be a priority in relation to the interests of large agricultural holding structures. Similar priorities should be developed in relation to the possibilities of touristic use of the territories. The development of public services in rural areas, increase of the efficiency of general and targeted transport services can be based on modern digital solutions, expanding investment attractiveness for rural areas. Broadband Internet connection in rural development should receive significant support from state authorities and use multi-channel financing mechanisms from various stakeholders. At the same time, their use should have a subordinate role in relation to the provision of rural residents with a basic set of social services, transport mobility, ability to communicate quickly in neighboring territories and close communication with cities. Model development of individual rural territories and the creation of exemplary “smart villages” could become the basis for specific initiatives of regional authorities which include depressed regions of the country and it could help both overcome the outflow of the population from rural areas, and increase the efficiency of these territories” use, stimulate the development of local infrastructure, to renew the situation with housing construction in the village.

References Path of Russia: Concept of development of the Russian village (2015). https://putrossii.ru/selo/ kontseptsiya_resheniya_selskogo_voprosa_v_rossii.php. Accessed 20 Dec 2019 Kudryashova, Y.: Digital Technology Comes to Agriculture, Development of Agriculture in the Digital Economy: A Collection of Scientific Papers, pp. 41–44. RIO Sam GAU, Kinel (2019)

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Voronin, B.A., Loretz, O.G., Mitin, A.N., Chupina, I.P., Voronina, Y.V.: On the issue of digitalization of Russian agriculture (a review of information materials). Agrarian Bull. Urals 2(181), 46–52 (2019) Akhmetov, V.Y., Galikeev, R.N.: Prospects for social and economic development of rural areas in the context of the digitalization of the economy. Bull. Eurasian Sci. 11(6), 1–12 (2019) Semenov, S.N., Aliev, D.M.: Global challenges and limitations in the development of the social space of the agro-industrial complex and rural areas as the most important resource of its competitiveness (2019). http://iagpran.ru/journal.php?tid=676. Accessed 14 Jan 2020 Khagurov, A.A.: Some methodological aspects of the study of the Russian village. Sociol. Res. 2, 95–101 (2009) Bulletin of Current Trends in the Russian Economy,, vol. 48, p. 28 (2019) Batmanova, V.V., Ivanov, A.S., Kalacheva, D.G., Klenova, T.V., Koneva, D.A.: Role of agrarian policy in the formation of conditions for an efficient implementation of rural areas’ functions of Russian regions. Competitive, Sustainable and Safe Development of the Regional Economy (CSSDRE 2019). Adv. Econ. Bus. Manag. Res. 83, 169–174 (2019). https://doi. org/10.2991/cssdre-19.2019.33 Darkov, A.A.: Civil law aspects of regulation use of digital technologies in the agricultural sector, State Service and Personnel, no.1, pp. 26–32 (2019) Real time: Population of the Russian Federation as of January 1, 2019 is 2019. https:// realnoevremya.ru/attachments/1043. Accessed 10 Dec 2019 Svatosh, M., Smutka, L., Inshukova, N.: Agricultural development of the Russian Federation over the past twenty years. Sci. J. NRU ITMO Ser. Econ. Environ. Manag. 3, 393–413 (2015) Federal State Statistics Service: The statistical collection “Labor and Employment in Russia 2017” (2017). https://www.gks.ru/free_doc/doc_2017/trud_2017.pdf. Accessed 01 Nov. 2019 Kozyreva, P.M., Smirnov, A.I.: Problems of health care in village. Hum. South Russ. 7(4), 33–49 (2018) Boda, R.: Concept of smart village and its impact on urbanization. Int. J. Trend Sci. Res. Devel. (ijtsrd) 2(3), 1948–1950 (2018). ISSN: 2456-6470 European Network for Rural Development: Smart Villages and rural Mobility (2019). https:// enrd.ec.europa.eu/sites/enrd/files/enrd_publications/smart-villages_brief_rural-mobility.pdf. Accessed 13 Jan 2020 European Rural Parliament: European Rural Manifesto approved at the Second European Rural Parliament, November 4–6, Schörding (2019). https://europeanruralparliament.com/index. php/component/phocadownload/category/1. Accessed 14 Jan 2020 Smart Villages Pilot Project: Pilot project of smart eco-social villages, agri-2018-eval-08 (2017). http://www.pilotproject-smartvillages.eu/. Accessed 17 Dec 2019 Rurener: Smart Eco-Social Villages (2019). http://rurener.eu/2019/02/28/smart-eco-socialvillages. Accessed 15 Jan 2020 Hegade, M.R., Kuber, S.R., Sathe, P.P., Mote, R.R., Bhosale, R.R.: Smart village system. IJSTE - Int. J. Sci. Technol. Eng. 3(04), 163–166 (2016). https://www.academia.edu/30826163/ Smart_Village_System. Accessed 14 Jan 2020

The Concept of “Smart Federalism” in Overcoming Spatial Asymmetries in Russia Natalya Yu. Korotina(&) Chelyabinsk Branch of Russian Presidential Academy of National Economy and Public Administration, Chelyabinsk, Russia [email protected]

Abstract. The goal is to formulate and justify the provisions of the concept of “smart federalism” based on the regions’ specializations. Methodology. The research methodology is based on the theoretical principles of spatial and regional economics, the concept of “smart specialization”. The author has suggested and justified the use of the “smart specialization” approach in the system of economic federalism. According to the author, the proposed approach will reduce the spatial asymmetry of Russia, which at present cannot be overcome by arrangements provided by the state federal policy. Results. The study used the general scientific logical method, as well as the method of analysis of economic and statistical information. The paper analyzes the data presented in the public domain on the official websites of the Federal State Statistics Service and the Treasury of Russia. Based on the analysis, it was concluded that there is a higher unevenness of territorial development in the whole country compared with unevenness among groups of regions according to their functional specialization. Such unevenness can be seen in the industrial, budgetary and social components of economic federalism. Conclusion, Recommendations. The theoretical significance of the study is to justify the need to rethink and to change the conceptual approach to the policy of economic federalism to overcome spatial asymmetry. The methodology of “smart federalism” suggested by the author provides for a transition from regional equalization to state regulation of territories based on their specialization. Keywords: Economic federalism
Spatial asymmetry
“Smart specialization”
Specialization of regions
“Smart federalism” JEL Code: R50


R58
H77

1 Introduction The Russian economic space is highly heterogeneous. At present, there is a noticeable increase in regional differentiation, despite the government’s policy aimed at overcoming high interregional differences. This is evidenced by the data of socio-economic development of the regions. In 2005 the gap between subjects with maximum and minimum values of GRP per capita was 22 times, then in 2012 this gap increased to 48 times and in 2016 this gap reached © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1007–1013, 2021. https://doi.org/10.1007/978-3-030-59126-7_111

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55 times. A similar situation is observed in the regions in terms of per capita investments, income of consolidated regional budgets and other socio-economic indicators. Half of the total gross regional product is formed by 9 subjects, half of the total investment - 11 subjects, and 12 regions - half of the total revenue of the consolidated budgets. There is an obvious uneven socio-economic development of the regions, structural disproportion and steady trends in the manifestation and intensification of unevenness, which gives reason to describe the Russian economic space as asymmetric. On the one hand, the reason for this asymmetry, is objective, it is the uneven concentration of the competitive advantages of the territories. The imbalances in economic and social regional indicators are predetermined by the exceptional variety of natural and climatic conditions, resource support, historical, demographic and ethnic characteristics and the territorial and sectoral structure of the country. This objective unevenness is explained by theories of the “cumulative effect” (Myrdal 1957). On the other hand, the increase in spatial asymmetry, in our opinion, is also connected with the policy provided by the federation, which is characterized by a high degree of centralization, entailing a strong dependence of most regions on the federal center and insufficient financial and economic regional independence. In our opinion, the system of relationships between the federal center and the regions implemented in Russia does not allow overcoming the existing spatial asymmetry, which requires rethinking and a change in conceptual approaches to the development of Russian federalism.

2 Methodological Approach to Economic Federalism Based on the Concept of “Smart Specialization” The principles of economic development and economic relationships are part of the relationships of federalism, representing economic federalism. The subject areas of economic federalism are the delimited spending powers of government at different levels, the delineation of revenue sources to ensure the functioning of different levels of government and the establishment of economic mechanisms to eliminate vertical and horizontal (inter-regional) inequality. Economic federalism based on the relationship between the center and the regions contributes to the expansion of production capacities of the regions in the form of growth of industrial, investment, financial potentials of the regions, which leads to the development of territories, contributing to economic growth of both the regions and the country in general. In different periods of the development of federalism in Russia, versatile approaches to its models were used: a cooperative model, a model of “parallel” federalism, a model of “unitary”, a model of “imperative” federalism, and others. The need for a new methodological approach is associated with the inability to find a comprehensive solution to the problem of reducing the asymmetry of regional development in the circumstances of the previously used. The proposed approach is based on the concept of “smart specialization”, introduced in developed countries. This conceptual approach was proposed by European

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scientists (Foray et al. 2009). The concept of “smart specialization” is used to increase the international competitiveness of the countries of the European Union through priority innovative development, improving their management, and involving a wider range of stakeholders. The concept of “smart specialization” is based on the delegation of differentiated economic powers to countries forming the European Union (McCann and OrtegaArgilés 2015). In accordance with “smart specialization”, each country of the European Union should have its own national innovation strategy, which allows finding the strengths of the country’s economy, identifying trends in the development of national business, and securing priority competitive advantages. The country’s national strategy should maximize its specialization, taking into account the unique competitive advantages of the territories. It will allow reaching agreement on market development, to avoid duplication of economic competencies within the single European economic space (Vezzani et al. 2017; Gianelle et al. 2017). Recently, Russian authors have published publications that note the possibility of applying this concept to the regional policy of Russia as an instrument of socioeconomic and industrial development (Filimonenko et al. 2017; Smorodinskaya and Katukov 2017; Chernova and Klimchuk 2019). The application of the “smart specialization” approach to the federalism system allows us to form the main idea of the “smart federalism” concept: each region in the country’s economy has its own specialization reflecting its function in a single federal state. This specialization is determined by the competitive advantages and strengths of the region. In our opinion, the different functions of the regions for economic development, political stability and ensuring the unity of the country are some of the reasons for the asymmetry of regional development. But the asymmetry in this perspective should not be considered as a negative point, but a resource for the development of differentiated support measures from the federal center.

3 Results There are different approaches to the allocation of territories to explain the spatial differences in Russia. Classical species include the allocation of the center and periphery; industrial and agricultural territories; donor regions and recipient regions and others. Many authors have proposed their own classifications. In particular, Trejvish (2019) identified the following types of territories from the point of spatial differences: industrial north and center, agrarian south, old developed west, poorly developed east, Russian regions and republics. In this work, for the purposes of “smart federalism”, we suggest to distinguish territories according to their functional role in a single state based on the approach proposed by the Strategy for Spatial Development of the Russian Federation for the period until 2025. In accordance with the functional role, geostrategic territories, agro-industrial and mineral resource centers as well as territories with conditions for the formation of world-class scientific and educational centers are distinguished within Russia.

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The priority geostrategic Russian territories include subjects characterized by an exclave position, subjects located in the Severnyj Kavkaz, subjects of the Russian Federation located in the Far East and subjects and parts of subjects included in the Arctic zone (City of federal significance Sevastopol; Republics: Crym, Republic of (Sakha) Yakutia, Karachay-Cherkessia, Kabardino-Balkaria, Dagestan, Ingushetia, Severnaya Ossetia, Chechnya, Buryatia, the Republic of Komi; oblast’: Kaliningradskaja, Amurskaja, Magadanskaja, Sakhalinskaja, Murmanskskaja, Arkhangelskskaja; krai: Primorsky, Stavropolsky, Zabaykalsky, Kamchatsky, Khabarovsky, Krasnoyarsky; Evreysky Autonomous Region; autonomous districts: Chukotksky, Nenetsky, Yamalo-Nenetsky). Border geostrategic territories include subjects bordering countries of the European Union and the Eurasian Economic Union, bordering other countries (Republics of Altai, Tyva; oblast’: Leningradskaja, Smolenskaja, Astrakhanskaja, Volgogradskaja, Kurganskaja, Novosibirskaja, Omskaja, Orenburgskaja, Samarskaja, Saratovskaja, Tyumenskaja, Chelyabinskaja, Belgorodskaja, Voronezhskaja, Kurskskaja; Kraj: Altaiskij, Krasnodarskij). Agro-industrial centers specialize in highly efficient agro-industrial production. These include territories where production of various agricultural specialization is located, including livestock, crop production, agricultural processing, food production, etc. (Republics: Bashkortostan, Mordovia, Tatarstan; oblast’: Belgorodskaja, Bryanskaja, Volgogradskaja, Voronezhskaja, Kurskaja, Lipetskaja, Penzinskaja, Rostovskaja, Tambovskaja; Kraj: Altaikij, Stavropolkij, Krasnodarkij). Mineral and resource centers include the territories where mineral deposits are located, they are being developed or planned to be developed using the common existing and planned infrastructure and having a single point of shipment of the extracted raw materials or their enrichment products to the federal transport system or regional transport system (Republics: Komi, Tatarstan, Sakha (Yakutia); oblast’: Tyumenskaja, Kemerovskaja, Sakhalinskaja, Irkutskaja, Amurskaja, Magadanskaja; krai: Krasnoyarskij, Khabarovskij; avtonomniy okrug: Nenetskij, Yamalo-Nenetskij, Khanty-Mansiyskij, Chukotkskij). The Spatial Development Strategy also identifies promising territories where conditions have arisen for the formation of world-class scientific and educational centers (Cities of federal significance: Moscow, St. Petersburg; Republics: Bashkortostan, Tatarstan; oblast’: Moscoskaja, Voronezhskaja, Novgorodskaja, Rostovskaja, Saratovskaja, Samarskaja, Sverdlovskskaja, Tyumenskaja, Chelyabinskaja, Irkutskaja, Novosibirskaja, Tomskaja; krai: Krasnodarskij, Permskij, Krasnoyarskskij, Primorskij). The remaining 20 subjects have not yet determined their own specialization, while in some regions 2 or 3 specializations are simultaneously distinguished. Within the framework of “smart federalism”, these subjects need to determine their function in a single state, to find and realize their economic specialization. The author’s methodology involves assessing the spatial asymmetry of territories based on their specialization. The assessment is carried out in the context of the “components” of economic federalism: industrial, financial (budget), social. Some authors use the terms “industrial federalism” to designate such constituent elements (Dobrynin 2003; Makeeva and Gulyakov 2016; Karapetyan 2001), “social federalism”

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(Elazar 2015; Shilov 2020) and the term “budget federalism” most widely used in Russian literature (Pinskaya and Tikhonova 2017; Dobrynin 2006). To assess the industrial component of federalism for each region, the ratio of investment to GRP is analyzed; to assess the budget component - the volume of gratuitous revenues in the revenues of regional budgets; to assess the social component - social spending (education, health, culture, art, physical education and sports, social security, etc.) in the total expenditures of regional budgets. To assess the asymmetry, the statistical indicator “asymmetry swing” is used, which is defined as the ratio of the maximum to minimum value of regional indicators. Figure 1 graphically presents an assessment of the asymmetry of territories in the context of elements of economic federalism.

Fig. 1. Assessment of the asymmetry of territories in the context of the elements of economic federalism

The analysis showed that the asymmetry swing in each of the groups of territories is lower than in the regions of the country in general for all elements of fiscal federalism. In particular, the group of priority geostrategic territories includes regions with a high level of economic development, such as the Yamalo-Nenets Autonomous Okrug, Krasnoyarskij Krai and regions with a low level of economic development (Republics of Dagestan, Ingushetia, Chechnya, Jewish Autonomous Oblast). The group of border geostrategic territories includes the economically developed Leningradskaja Oblast and the Krasnodarskij Krai and the underdeveloped republics of Tuva and Altai; Mineral resources territories include developed Khanty-Mansijskij Autonomous Okrug and

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Yamal-Nenetskij Autonomous Okrug, and the region with a low level of economic indicators Chukotskij Autonomous Okrug. The data presented in the table indicates less asymmetry within each group than in the country in general, despite the fact that they are included in groups of the same specialization of regions with different levels of development of the regional economy. The results allow us to conclude that the degree of asymmetry in territories with the same specialization is lower than asymmetry in all regions of the country for all the analyzed elements of economic federalism (industrial, budgetary, social).

4 Conclusion In this work, the concept of “smart federalism”, which is based on a differentiated choice of ways of interaction between the federal center and the regions and state support measures, is suggested, taking into account the role of a particular region in the socio-economic development of the country. This approach has been put forward as a strategic response to the limitations of the “single for all” regions model of relations with the federal center and suggests a transition from the existing system of equalizing all regions to state regulation of territories with similar functional specialization. The proposed approach, according to the author, will reduce the severity of the problem of spatial asymmetry in Russia, which at the time cannot be overcome by measures pursued by the state federal policy. The application of the concept of “smart federalism” is aimed towards to ensuring the integrity of the system where the federation does not spend efforts on overcoming the costs of competition between the subjects forming the federation, but regulates activities and provides state economic support to the regions based on their specialization, taking into account the functions performed by them as part of a single state and future potential opportunities.

References Dobrynin, N.M.: Bjudzhetnyj federalizm v Rossii i problemy regional’nogo razvitija: dejstvitel’nost’, zakonomernost’, aktual’nost’ reform [Budget Federalism in Russia and the Problems of Regional Development: Reality, Law, Relevance of Reforms]. Vestnik Novosibirskogo gosudarstvennogo universiteta. Serija: Pravo, vol. 2, no.2, pp. 69–76 (2006) Dobrynin, N.M.: Novyj federalizm. Model’ budushhego gosudarstvennogo ustrojstva Rossijskoj Federacii [New federalism. Model of the future government of the Russian Federation]. Novosibirsk: Nauka (2003) Karapetjan, L.M.: Federativnoe ustrojstvo Rossijskogo gosudarstva [The federal structure of the Russian state]. Moscow Norma (2001) Makeeva, N.V., Guljakov, A.D.: Federalizm kak instrument ustojchivogo razvitija gosudarstvennosti: teoreticheskij analiz [Federalism as a tool for the sustainable development of statehood: a theoretical analysis.]. Vestnik Tambovskogo universiteta. Serija Politicheskie nauki i pravo, Tambov. vol. 2. Vyp. 3(7), pp. 19–27 (2016)

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Pinskaja, M.R., Tihonova, A.V.: Nalogovo-bjudzhetnaja politika Rossijskoj Federacii: otvety na glavnye voprosy [Fiscal policy of the Russian Federation: answers to key questions]. Regional’naja jekonomika: teorija i praktika 15(9), 1689–1709 (2017). https://doi.org/10. 24891/re.15.9.1689 Smorodinskaja, N., Katukov, D.: Raspredelennoe proizvodstvo i «umnaja» povestka nacional’nyh jekonomicheskih strategij [Distributed production and the smart story of national economic strategies]. Jekonomicheskaja politika 12(6), 72–101 (2017). https://doi.org/10. 18288/1994-5124-2017-6-04 Trejvish, A.I.: Neravnomernost’ i strukturnoe raznoobrazie prostranstvennogo razvitija jekonomiki kak nauchnaja problema i rossijskaja real’nost’ [Unevenness and structural diversity of the spatial development of the economy as a scientific problem and Russian reality]. Prostranstvennaja jekonomika - Spat. Econ. 15(4), 13–35 (2019). https://dx.doi.org/ 10.14530/se.2019.4.013-035 Filimonenko, I.V., Vasil’eva, Z.A., Lihacheva, T.P.: Model’ upravlenija razvitiem regionov na osnove koncepcii « umnaja specializacija » [Regional development management model based on the concept of “smart specialization”] In: Babkina, A.V. (ed.) Innovacionnye klastery v cifrovoj jekonomike: teorija i praktika Trudy VIII nauchno-prakticheskoj konferencii s mezhdunarodnym uchastiem, Moscow, Science, pp. 508–526 (2017) Chernova, O.A., Klimuk, V.V.: Koncepcija chetyrehzvennoj spirali v strategijah «Umnoj specializacii» promyshlennogo razvitija [The concept of a four-link spiral in the strategies of “Smart specialization” of industrial development]. Estestvenno-gumanitarnye issledovanija Nat. Humanit. Res. 25(3), 179–184 (2019) Shilov, S.: Federalizm kak sistema vysshih cennostej i real’noe edinstvo rossijskoj grazhdanskoj nacii [Federalism as a system of higher values and the real unity of the Russian civil nation], Chap. 1 (2020). https://russian-idea-in.livejournal.com/48679.html Jelazar, D.: Federalizm kak cel’ i kak sredstvo [Federalism as a goal and as a means]. «Neprikosnovennyj zapas. Debaty o politike i kul’ture» - Emergency ration. Debate on Politics and Culture, no. 1 (2015). https://www.nlobooks.ru/magazines/neprikosnovennyy_ zapas/99_nz_1_2015/ Foray, D., David, P.A., Hall, B.: Smart Specialization: The Concept//Knowledge for Growth. Prospects for Science, Technology, and Innovation: Selected papers from Research Commissioner Janez Potochnk’s Expert Group, November 2009 Gianelle, C., Guzzo, F., Marinelli, E.: Smart Specialisation Evaluation: Setting the Scene – JRC Policy Insights, JRC116110, March 2017. https://www.hsdl.org/?abstract&did=437651 McCann, P., Ortega-Argilés, R.: Smart specialization, regional growth and applications to European Union cohesion policy. Reg. Stud. 49(8), 1291–1302 (2015) Myrdal, G.: Economic Theory and Underdeveloped Regions. Gerald Duckworth, London (1957) Vezzani, A., Baccan, M., Candu, A., Castelli, A., Dosso, M., Gkotsis, P.: Smart Specialisation, Seizing New Industrial Opportunities. JRC Technical Report, European Commission (2017)

On the Concept of Regulatory Sandboxes Vladislav O. Makarov(&)

and Marina L. Davydova

Volgograd State University, Volgograd, Russia [email protected], [email protected], [email protected]

Abstract. Purpose: The purpose of this work is to study the regulatory sandbox concept and distinguish it from related phenomena. Design/Methodology/Approach: This work analyzes current scientific and legislative definitions of regulatory sandboxes and related phenomena. Theoretical comprehension of this subject takes into account the attributes of legal regimes and legal experiments defined by the legal science as independent categories. The analysis of current and proposed legal regulation of experimental legal regimes is provided. Findings: The research has analyzed current scientific and legislative definitions of regulatory sandboxes. Given the attributes typical for legal regimes and legal experiments, as well as available scientific definitions, an all-encompassing theoretical definition of a regulatory sandbox is provided. Potential legal discrepancies related to regulation of experimental legal regimes are demonstrated. Original/Value: The research is aimed at eliminating terminological confusion caused by applying a new legal concept. Besides, it proposes an allencompassing definition of the regulatory sandbox concept than can be applied for further theoretical study of fintech testing regulation as well as for related legislative practice. Keywords: Experimental legal regimes
Regulatory sandboxes
Fintech Digital economy
Digital innovations
Legal experiment
Legal regime JEL Code: K10





K220
K230

1 Introduction The regulatory sandbox phenomenon is relatively new for the global financial system, with first cases appearing only in 2016. Meanwhile, their appearance was caused by the desire to find new drivers for national economy growth. Besides, given the rapid development of IT technologies, artificial intelligence, machine learning and big data analysis, an economic lag that is caused partially by excessive legal regulation and its inability to adapt to new social relations can significantly decrease national competitiveness in comparison to states that are actively implementing technologies in their financial systems. Thus, formulating legal standards for regulatory sandboxes is caused by practical needs for quick response from the authorities. The objective reasons stated above indicate that the theoretical level of adopted legal regulation is underdeveloped. Regulatory sandboxes have been introduced or are © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1014–1020, 2021. https://doi.org/10.1007/978-3-030-59126-7_112

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being introduced in many countries; however, legal science has no proper theoretical studies of their notion, concept and functioning. This underlines the relevance for studying theoretical aspects of regulatory sandboxes. This article proposes a detailed analysis of the regulatory sandbox concept, its terminological specifics and legal codification.

2 Methodology The research methodology is based on formal logics, structural and systemic analysis as well as on comparative legal, legal forecasting and legal interpretation methods. The theoretical basis of the research includes well-known legal science categories, i.e. legal regime and legal experiment, that get a new interpretation due to appearance of the experimental legal regime institute (regulatory sandboxes).

3 Results When we start to analyze the regulatory sandbox concept, we must emphasize that Russian federal legislation provides no regulatory codification of this term. It is used more commonly as a scientific concept than a legal one, while Russian lawmakers would prefer to use another, more stylistically neutral term. The special draft law regulating this concept provides a more formal definition – “experimental legal regimes”. However, this does not undermine the necessity for studying the meaning of this concept and providing its theoretical definition, starting with the overview of existing scientific and practical definitions. V.L. Dostov, P.M. Shoost and E.S. Rybkova define regulatory sandboxes as “a special regime enabling innovating companies to test their products and services in a controlled environment without risking financial law violations” (Dostov et al. 2016). Ivo Jenik and Kate Lauer define regulatory sandbox as a framework set up by a financial sector regulator1 to allow small scale, live testing of innovations by private firms in a controlled environment (operating under a special exemption, allowance, or other limited, time-bound exception) under the regulator’s supervision (Jenik and Lauer 2017). A.A. Alekseenko believes that the regulatory sandbox is a “mechanism for testing innovative financial technologies, products and services in a controlled environment that excludes the risk of financial law violations” (Alekseenko 2018). T.A. Andronova and O.A. Tarasenko specify in their study of the Bank of Russia’s regulatory sandbox that it is understood as a “specially approved regime for making and piloting decisions, including regulatory ones, aimed at defining an efficient model of business processes’ interaction and formation in a new area” (Andronova and Tarasenko 2018). E.A. Kuklina considers regulatory sandboxes to be “a special legal regime that enables legal entities developing new products and services to introduce them experimentally in a limited environment with no risk of a legal violation; an example of “smart” regulation” (Kuklina 2019).

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V.B. Naumov proposes a more generalized concept that encompasses experimental legal regimes, special economic zones and innovative centers – the “breakthrough regulation”. This model can include “1) special legal regimes for investors and other digital economy subjects; 2) temporary and partial limitation of economic law application for “breakthrough regulation” subjects; 3) the right of a special body of authority (the supervisor) to set business regulation standards within its powers; 4) formation of a competence center by horizontal cooperation between the government and the business in order to specify development directions and prepare new standards involving the “breakthrough regulation” (Naumov 2018). Meanwhile, the “breakthrough regulation” is a broader phenomenon than includes other legal and economic experiments. Various definitions are provided not only by legal scientists. National financial regulators of different countries also specify regulatory sandboxes. For example, Monetary Authority of Singapore defines regulatory sandbox as an experiment with innovative financial services in the production environment but within a well-defined space and duration (Monetary Authority of Singapore 2016). We must note that apart from emphasizing experimental nature, this definition also points out space and time limits as a distinctive attribute. Saudi Arabian Monetary Authority describes regulatory sandbox as a regulatory process that acts as a ‘safe space’ in which financial services firms are given facilities to test new digital solutions under a set of conditions and limitations designed to protect consumers, but without being immediately required to comply with all the normal regulatory obligations resulting from engaging in the activity in question (Saudi Arabian Monetary Authority 2019). In India regulatory sandbox refers to live testing of new products or services in a controlled/test regulatory environment for which regulators may (or may not) permit certain regulatory relaxations for the limited purpose of the testing (Department of Banking Regulation of Reserve Bank of India 2019). One of the definitions of regulatory sandbox is a regulatory approach, typically summarized in writing and published, that allows live, time-bound testing of innovations under a regulator’s oversight (UNSGSA 2018). The Eurasian Economic Union in its Resolution No. 12 of October 11, 2017, adopted the following regulatory sandbox definition: a specially approved regime for making and piloting decisions including regulatory ones, in order to design an efficient model of business processes’ interaction and formation in a new area. While studying the analogues of the regulatory sandbox concept, we find it necessary to analyze the draft Federal Law “On experimental regulatory regimes in digital innovations and on amendments to other legislative act of the Russian Federation”, according to which “an experimental regulatory regime is an application (for a certain period of time) of special regulations on digital innovations to the experimental regime participant. The digital innovation areas include development and testing in such areas as medicine, including telemedicine technologies and technologies for collecting data on health status and diagnoses; highly automated vehicles, including certification of their operators; other digital innovations related to vehicles, transportation and logistics services; digital innovations for electronic education and distance learning technologies; digital innovation for the financial market; digital innovations for distant trading of products and services; digital innovations for architectural design, construction,

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capital repairing, renovation and demolition of capital construction objects, operation of buildings and structures; digital innovations for provision of state and municipal services and state and municipal control (supervision); digital innovations for the industry and other areas provisioned by the law”. However, regulatory sandboxes are not limited by the fintech area. Researchers point out that the global practice demonstrates “fintech sandboxes” and universal sandboxes. While the former are involved with financial digital innovations, the latter “are focused on a broader range of digital innovations applied in the real economy – big data technologies, neurotechnology and artificial intelligence, distributed ledger technologies, quantum technologies, new production technologies, industrial Internet, robotic components and haptic technologies, wireless communication technologies, virtual and augmented realities” (Zavyalova et al. 2019). Besides, from the legal theory standpoint, regulatory sandboxes are primarily both a legal regime and a legal experiment. Scientists distinguish the following legal regime attributes: 1) obligatory legal codification; 2) specific purpose; 3) special regulation; 4) creation of favorable (unfavorable) conditions for meeting the legal subject’s demands; 6) complexity; 7) specific structure (Belyaeva 2013). The legal experiment attributes are: 1) legal grounds for conducting a legal experiment; 2) availability of experimental legal regulations; 3) limited application scope of experimental legal regulations; 4) explorative nature; 5) transformative nature; 6) necessity to create specific conditions for eliminating (reducing) an impact of side factors; 7) necessity to impose strict control over the experiment conduction, monitor its results and ensure their accuracy (Eltsov 2009). These attributes are applicable to regulatory sandboxes; this why we consider it appropriate to use them for defining the concept. The purpose of legal experiments distinguished by the law theory also seems coincidental, i.e. to verify the hypothesis on experimental legal regulations’ efficiency and to prevent legislative mistakes and negative consequences. Meanwhile, it is important to distinguish regulatory sandboxes from other legal experiments, e.g. from special economic zones. These zones focus on socioeconomic development of specific territories and implementation of custom or tax benefits. In comparison, the purpose of regulatory sandboxes is to establish a new legal regulation that could be applied nationwide in the future. Monitoring the experiment results is an obligatory attribute, essential for introducing efficient legal regulation. Thus, it is necessary to legally define criteria enabling a reliable assessment. On the other hand, digital innovation startups can be unique and specific (especially in the Russian Federation, where experimental legal regimes are not limited with fintech area only), so it could be problematic to assess their formation and functioning from the regulatory criteria standpoint. This means a detailed project assessment system is required. Such assessment of regulatory sandbox testing results can be preliminary or final. In the first case, projects contending for their inclusion in the sandbox are tested for their conformity with the required criteria. In the second case, the project results are tested for conformity with the project success criteria.

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In the draft federal law on experimental legal regimes Russian lawmakers avoid legal codification of such criteria claiming that procedures for monitoring the experimental regime, efficiency assessment and public discussions of project performance and efficiency must be established by the Government of the Russian Federation. These procedures have not been developed yet. Thus, development and adoption of assessment criteria is currently one of the key prerequisites for effective launching and functioning of experimental legal regimes in the Russian Federation. The main objectives of laws applicable to regulatory sandboxes include innovation support, customer rights protection and financial stability (Hilary J. Allen 2019). The economists suggest to apply such criteria for assessing regulatory decision efficiency as cost effectiveness (lesser application expenses, including alternative expenses), adaptability, flexibility, responsiveness and reliability when applying sandboxes as a macroeconomic policy tool; increase of process cycle efficiency when assessing sandboxes as a business process as well as applying the mapping method (Kuklina 2019). One of the most detailed assessment methods also includes an intermediate stage that assesses current efficiency of the project and can be followed by an early cancellation of the experimental legal regime (Efremov et al. 2020). However, no matter what theoretical approach is used, it is necessary to establish preliminary criteria that would enable to create a common assessment system taking into account digital innovations’ specifics and preventing usage of special legal regimes as a tool to avoid current legislative regulations. An important role in establishing regulatory sandboxes is one specific attribute of legal experiments, i.e. limited application scope of experimental legal regulations. In the US, a law with limited application period is called a sunset provision. However, special experimental regimes are limited not only in time but also in space: exceptional legal regulation is limited by the area of the country or its specific territory (with the exception of international regimes, e.g. within the EAEU framework). For instance, an AI-focused experimental legal regime will be established in Moscow starting July 1, 2020. It is worth mentioning that its legal regulation lies beyond the scope of the abovementioned Federal Law “On experimental regulatory regimes in digital innovations and on amendments to other legislative act of the Russian Federation” – a draft of a special Federal Law, “On conducting an experiment to establish special regulation in order to create the necessary conditions for the development and implementation of artificial intelligence (‘AI’) technologies in Moscow federal city, the Russian Federation subject, and amending Article 6 of the Federal Law “On personal data”. The draft provides the following definition of an experimental legal regime basing on its purposes -–“to apply to experimental regulation participants within a specific time period provisioned by this Federal Law special regulations related to digital innovations, provisioned by regulatory legal acts of Moscow federal city, the Russian Federation subject, in order to create conditions necessary for development and implementation of artificial intelligence technologies in the said Russian Federation subject, as well as for potential usage of implementation results”. The reasons for preparing this draft law seem dubious from the legal standpoint: instead of creating the regulatory basis for establishment and functioning of regularity sandboxes in the Russian Federation, the lawmakers opted for adopting a specific federal law for a specific experimental legal regime. Does this mean that launching and

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testing of each project will require an individual federal law? It is evident that in this case state legislation will demonstrate no flexibility and adaptability to emerging digital innovations. In any case, successful and efficient launching of regulatory sandboxes require common regulation. However, regulation of specific experiments may contradict common regulation, given the equal legal power of adopted federal laws. We believe that the Russian Federation needs to adopt an independent federate law introducing the concept of the regulatory sandbox or the experimental legal regime and providing its definition, general conditions for their conduct and efficiency assessment criteria. Specific projects must be launched within the framework of the common legal regulation.

4 Conclusions Basing on the provided analysis and taking into account legal regime and legal experiment attributes distinguished by the scientists, we propose the following definition of the regulatory sandbox concept. A regulatory sandbox is a special, regulatory provisioned, limited in time and space, national or international experimental legal regime that is aimed at testing digital innovations by providing the regime participants exemptions from the current legal regulation and is controlled by a legally authorized supervisor. This definition can be used in the lawmaking practice for developing and adopting special legislation related to introduction of digital innovation-focused experimental legal regimes to the national legal system. Besides, from the legal standpoint it seems reasonable to launch new testing projects within the framework of the common legal regulation. Adoption of new regulating law related to specific digital innovationfocused legal experiments seems to be an excessive measure that does not meet the “smart” regulation objectives and lowers the state legislation’s ability to adapt to emerging technologies. Acknowledgments. The chapter was prepared with financial support of the Russian Fund for Fundamental Research. Grant of the RFFR 20-011-00583 A.

References Alekseenko, A.A.: Legal status and functioning of the regulatory sandbox of the Central Bank of the Russian Federation. Sci. Pract. Electron. J. Sci. Alley 7(23), 508–512 (2018) Allen, H.J.: Regulatory Sandboxes. Geo. Wash. Law Rev. 87 (2019). Available at SSRN. https:// ssrn.com/abstract=3056993 or http://dx.doi.org/10.2139/ssrn.3056993 Andronova, T.A., Tarasenko, O.A.: Regulatory sandboxes: traditions vs. innovations. Bank. Law 3, 31–36 (2018) Belyaeva, G.S.: Legal regime: general theoretical research. Kursk (2013) Department of Banking Regulation of Reserve Bank of India: Draft Enabling Framework for Regulatory Sandbox (2019). https://rbidocs.rbi.org.in/rdocs//PublicationReport/Pdfs/ EFRARESADC108A0A98E146479C6D39D36EA5A76A.PDF. Accessed 11 Feb 2020

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Dostov, V.L., Shoost, P.M., Ryabkova, E.S.: Institute of “regulatory sandboxes” as a tool to support financial innovation. Money and credit 10, 51–56 (2016) Efremov, A.A., Dobrolubova, E.I., Talapina, E.V., Uzhakov, V.N.: Experimental legal regimes: foreign experience and the Russian start. RANEPA, Moscow (2020) Eltsov, V.N.: Legal experiment in modern Russia: effectiveness issues. Tambov (2009) Jenik, I., Lauer, K.: Regulatory Sandboxes and Financial Inclusion. Working Paper. CGAP, Washington, D.C. (2017) Kuklina, E.A.: On the issue of special legal regimes in the digital economy (“Regulatory Sandboxes”). Adm. Consult. 7, 39–49 (2019) Monetary Authority of Singapore: Fintech regulatory sandbox guidelines (2016). https://www. mas.gov.sg/-/media/MAS/Smart-Financial-Centre/Sandbox/FinTech-Regulatory-SandboxGuidelines-19Feb2018.pdf?la=en&hash= B1D36C055AA641F580058339009448CC19A014F7. Accessed 11 Feb 2020 Naumov, V.B.: Law in the era of digital transformation: searching for solutions. Russ. Law: Educ. Pract. Sci. 6(108), 4–11 (2018) Saudi Arabain Monetary Authority: Regulatory Sandbox Framework (2019). http://www.sama. gov.sa/en-US/Regulatory%20Sandbox/Documents/Regulatory_Sandbox_Framework_En. pdf. Accessed 11 Feb 2020 UNSGSA: Briefing on Regulatory Sandboxes (2018). https://www.unsgsa.org/files/1915/3141/ 8033/Sandbox.pdf. Accessed 11 Feb 2020 Zavyalova, E.B., Krykanov, D.D., Patrunina, K.A.: The mechanism of regulatory sandboxes for introducing digital innovations: the practice of implementing experimental legal regimes at national and supranational levels. J. Law Adm. 4(53), 130–138 (2019)

Evolution of Money Systems or Cashless Economy? Inna V. Mitrofanova1,2(&) , Olga I. Larina3 , Mayya V. Dubovik4 , and Natalia V. Moryzhenkova3 1

Federal Research Centre the Southern Scientific Centre of the Russian Academy of Sciences (SSC RAS), Rostov-on-Don, Russia [email protected] 2 Volgograd State University, Volgograd, Russia 3 State University of Management, Moscow, Russia [email protected], [email protected] 4 Plekhanov Russian University of Economics, Moscow, Russia [email protected]

Abstract. The article shows the importance of the study of nature and function of the electronic and digital money as a consequent form of the money evolution. The aim of this study is to prove the possibility to build money circulation of a country without cash, at the same time the authors show the existing opposite opinions on the future of the paper money in various countries. To prove those facts the article analyses the trends in the development of money circulation in Russia, Sweden and Switzerland. Sweden was chosen for this study as a country that took a course for the refusal of cash in circulation, and Switzerland, on the contrary, as a country, that lately significantly increased the volume of cash in circulation. The authors make conclusions in regard with the possible functioning of the modern economies with complete absence of cash which will bring new risks and problems for the society. Keywords: Money
Electronic money
Cryptocurrency
Monetary circulation
Future of cash
Monetary policy
Cashless economy
Payment systems
Paper money
Cashless money circulation
Money supply JEL Code: E41


E42
E50

1 Introduction Money is, undoubtedly, the most important institute of a society. As it was stated yet in the ancient times (by Aristotle (384–322 B.C.)), money lets people exchange their results of labor and, thus, makes it possible for the society to exist (Miller and Van-Huz 2000). The evolution of this institute (depending upon its physical form) can be traced rather clearly: starting from commodity money to metal coins, from metal coins to banknotes, from banknotes to electronic money. At the same time the human beings spent most time of their evolution using money of full value (commodity and metal money). A modern trend in development is the digital money (digital currencies and cryptocurrencies). It should be noted that the first digital (and still the most popular) © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1021–1032, 2021. https://doi.org/10.1007/978-3-030-59126-7_113

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cryptocurrency – bitcoin – emerged only 10 years ago (in 2009), and, actually, discussions are underway on the possible large-scale use of cryptocurrencies, and there are projects aimed at introduction of the state digital currencies. The development of the field in question is logical, and the structure of payments and finances will continue to evolve towards the use and distribution of electronic assets, including digital assets. Thus, the logical question is “Will the financial system of a country reach the point of a complete refuse of the cash circulation?” For instance, G. Luntovsky, first deputy chairman of the Central Bank of Russia, in 2018 predicted that Russia would bid farewell to the paper money not earlier than in ten years and may be even later (Timoshenko 2018; Mitrofanova et al. 2019). The struggle continues for the first rank in the number of non-cash transactions per inhabitant between the USA and the Scandinavian countries. It is the first time that Sweden has become a leader with 461.5 non-cash transactions per inhabitant. In the USA the number reached 459.6 transactions per inhabitant (Capgemini and BNP Paribas 2018). Many specialists point out that, as the use of electronic money grows widely popular, transactions can be performed with the minimum need of cash (Bachas et al. 2017). According to some other points of view, in the nearest future cash will disappear from circulation, and we will face a situation when even a street musician will get a reward from passers-by by means of e-wallets on smartphones (Dobrovidova 2018). For instance, South Korea plans to abandon cash circulation by 2020. Many countries are withdrawing from circulation banknotes of certain denomination and limit the maximum amount of payment in cash. However, the supporters of cash refusal have serious and reasoned opponents. For instance, after performing an interesting and substantiated study that analyzes the place and the role of cash in the economy of the Scandinavian countries that are more active to declare their transition to a “cashless society”, and of other developed countries, the author concludes that despite all the talks about allegedly forthcoming “death” of cash, the leading economies continue to vigorously develop cash circulation….. And in the long run it will remain one of the main and most secure means of payment co-existing with cashless forms of payment and complementing one another (Ionov 2016). David Wolman, the American writer and journalist, while writing his book “The End of Money”, conducted an experiment in order to understand what the future can be like without cash, he tried to live without cash for one year. The first problem emerged with the necessity to pay a train fare when he had not been able to buy a ticket beforehand. However, the main trial in this experiment became a trip to Delhi. Despite the fact that the developing countries embarked upon the path of the digital economy, it will take a significant amount of time to refuse of cash everywhere. In that trip, in order to take a taxi, to hire a translator or to buy a bottle of water, David Wolman needed a huge amount of cash. The author found out that cash still had serious power partly because it had so firmly entered in our cultures, to live a year using cash only is also quite impossible. However, on author’s opinion, the technological and monetary innovations shall lead to disappearance of cash, it’s a question of time (Wolman 2017).

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In their study C. Jobst and H. Stix make a point that in the period from 2007 till 2017 the amount of cash in circulation grew significantly in the USA, in the Eurozone, in Switzerland and Japan, which is not in line with the growing use of technology of contactless payments in the industrialized economies. At the same time, the amount of cash in circulation in 76 countries (that is about 96% of the world’s GDP) grew as well. In their study, they distinguish possible reasons of growth of demand on cash: lower interest rates and banking crisis associated with the growing uncertainty even in the countries that did not suffer banking crisis of 2007–2008. Besides, the banking crisis influences the behavior of the consumers who prefer cash money to bank deposits. At the same time, they didn’t find significant dependence of cash growth in circulation on the changes in the shadow economy, and the influence of lower growth rate of GDP on the demand on cash was insignificant. C. Jobst and H. Stix conclude that the statement about disappearing cash is not correct, at least, at the present time (Jobst and Stix 2017). To conclude the brief review of articles aimed at underlining the presence of directly opposite points of view on the matter, the authors would like to mention a study in which the author comes to the conclusion about the complexity and diversity of monetary practices. Thus, in all countries of the world the trends of using electronic and digital payment systems are clearly evident. The authors of this article use this example to emphasize that the high variety and uniqueness are a possible and correct way, for the financial and money state systems as well. Thus, all over the world, there are clearly noticeable trends of using the electronic and digital payment means. At the same time, the country that most “loudly” declared its refusal of cash circulation a year ago was Sweden. However, there are countries with rather significant cash circulation for the moment being (for instance, Switzerland). It should be noted that Russia holds an intermediate place in regard with this issue while there is a clear trend towards decrease in cash circulation. The results of this study are presented below.

2 Methodology of Study of Structure of Money in Circulation in Russia, Sweden and Switzerland Monthly data were taken for this analysis – from January 1, 2001 till December 31, 2018. In Russia the total amount of money in circulation (monetary aggregate M2) in the last 18 years grew 39 times – from RUB 1,150.6 billion to RUB 44,892.1 billion. At the same time the volume of cash money (monetary aggregate M0) grew 21.4 times, and the volume of non-cash money (difference between monetary aggregates M2 and M0) 49.1 times (Fig. 1).

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Fig. 1. Dynamics of absolute value of money supply in Russia (M2) in 2001–2018. Resource: compiled in the basis of the data of the web-portal Take-profit.org.

The non-cash money prevails in the monetary structure of Russia: as of the end of 2018 its share was 80%, i.e. increased by 16.4% in contrast with the beginning of 2001 (Fig. 2).

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Fig. 2. Dynamics of the structure of the money supply in Russia (M2) in 2001–2018. Resource: compiled in the basis of the data of the web-portal Take-profit.org.

An average annual growth rate of cash from 2000 till 2018 was 21.2%. That is to say that, in fact, we are facing a decrease of the relative share of cash money in the total volume of the monetary stock while its rate in the absolute terms grows annually on average by more than 20% (see Fig. 1, 2). And the average annual growth rate of the cashless money was 27.2% from 2000 till 2018.

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Basing on the diagrams and graphics in Figs. 1 and 2 it is obvious that the share of the cash in the money supply of Russia has a stable trend for decrease. At the same time, according to the Central Bank of the Russian Federation, Russians started to use banking cards to pay for products and services more often than cash only in 2017. Assuming that the current trend for reduction of the share of cash in the money supply will continue, we have constructed an equation of the simple linear regression. The resulting equation allows us to make a forecast of the possible complete nonuse of cash in the Russian Federation in 197 monthly periods, i.e. in 16.4 years – in 2036 (Fig. 3). The value of the coefficient of determination 0.96 shows the acceptability of this model. This forecast shows the probability of this phenomenon that, in the authors’ opinion, is feasible but probably will be delayed for some social reasons. Thus, for instance, Sweden declared its readiness to refuse the cash money, however, it didn’t happen so far.

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In this regard the analysis of the monetary stock and the forecast of disappearance of cash in Sweden is of particular interest. Thus, the Bank of Sweden is counting on the refusal of coins and banknotes not earlier than in 2030 while experts suggest that it could happen as early as 2023. The amount of money in circulation in Sweden generally grew 3.4 times in 2018 – from 992.46 million Swedish krona up to 3,348.95 million Swedish krona. At the same time the volume of the cash (monetary aggregate M0) decreased by 35%, and the volume of the non-cash money grew 3.6 times (Fig. 4).

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Fig. 4. Dynamics of the absolute value of the money supply in Sweden (M2) in 2001–2018. Resource: compiled in the basis of the data of the web-portal Take-profit.org.

In the structure of the monetary stock in Sweden, the cash is only 1.7% as of the end of 2018 (Fig. 5).

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Fig. 5. Dynamics of the structure of the money supply in Sweden (M2) in 2001–2018. Resource: compiled in the basis of the data of the web-portal Take-profit.org.

The derived equation of regression (of dynamics of the cash rate in the money supply in Sweden) allows making a forecast on disappearance of cash in 6 years, i.e. in 2025 (Fig. 6). The value of the coefficient of determination 0,98 shows the high degree of accuracy of the derived model.

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y = -0.0004x + 0.093 R² = 0.9847

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An absolutely opposite trend can be seen if we analyze the dynamics and the structure of the monetary stock in Switzerland. We should note the fact that in this country there is a broad discussion of the necessity to fix the presence of the cash money in circulation by the law. The general number of the money in circulation grew in the last 18 years 2.68 times – from 378,424 million Swiss francs to 1,013,146 million Swiss francs. At the same time the volume of the cash (monetary aggregate M0) grew 15.2 times, and the volume of the non-cash money – only 1.35 times (Fig. 7).

Non-cash money (М2-М0), Millions, CHF

Fig. 7. Dynamics of absolute value of the money supply in Switzerland (M2) in 2001–2018. Resource: compiled in the basis of the data of the web-portal Take-profit.org.

And unlike previously analyzed countries, the cash prevails in the structure of the Swiss money supply: as of the end of 2018, its share was 54.5% (Fig. 8).

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100% 80% 60% 40% 20% 0%

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Fig. 8. Dynamics of the structure of the money supply in Switzerland (M2) in 2001–2018. Resource: compiled in the basis of the data of the web-portal Take-profit.org.

The main reason for this is that in the summer of 2011 the Swiss National Bank, for fear of possible inflation, started to increase the number of Swiss francs in circulation in order to lower the attractiveness of its currency for foreign investors. However, this strategy turned out unable to change the situation on the financial market, and on September 6, 2011 the Swiss National Bank introduced the maximum rate 1.20 for the pair euro/franc, promising to print as many francs as it is necessary to keep this currency rate. In this regard, in the graph (Fig. 9) of linear regression there can be seen a trend of growth (with some slowdown and even a recent decrease) of the cash in the structure of the money supply in Switzerland.

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Fig. 9. Regression line of share of cash share (M0) in the money supply (M2) in Switzerland.

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The ForexBonuses conducted a study of 20 world economics and their payment culture on the basis of six indicators: number of credit cards per person; number of debit cards per person; number of cards issued with a contactless technology of payments; increase of non-cash payments for 5 years; number of transactions by means of non-cash methods; number of people aware of possibilities of mobile payments. The top 10 countries that are closer to the future without cash money are: 1. Canada; 2. Sweden; 3. Great Britain; 4. France; 5. USA; 6. China; 7. Australia; 8. Germany; 9. Japan; 10. Russia. In this regard we can make a conclusion that the results received by the authors are reliable.

3 Conclusion The societies and the economies all over the world have significantly changed and are still changing as a result of the development of the digital technologies that leads to the changes in the payment and settlement systems as well. Thus, the results of a survey of financially well-off millennials (people born between 1980 and 2000) in the United States, conducted by Edelman, showed that 25% of them already own cryptocurrency, and a YouGov study in early 2018 revealed that about 80% of the US residents heard about cryptocurrencies (Larina and Moryzhenkova 2018). It should be noted that Russia holds the 9th place in the rating of the entities that perform operations with cryptocurrencies (the leader is the USA, Singapore closes the top ten), which is a relatively high rate. The following observation results shall be considered as the main features of the monetary circulation development aimed at the refusal of cash: 1. The reduction of the cash share in the structure of the money supply in Sweden is down to 1.7%, as a result of the state course to the economy without cash with the support of the population. 2. Despite the significant growth of the money supply in Russia for the period in question, the structural changes took place towards the reduction of the cash share from 36% to 20%. One of the possible reasons for that is the rapid development of e-commerce which stimulates people to use non-cash ways of payment to buy goods and services at better prices. 3. The course taken by the Swiss National Bank towards the weakening of its own currency caused the growth of the cash share in the money supply from 10% to 55% for the period in question. The following facts are in favor of further use of the cash: 1. Possible large-scale power cut that will make non-cash payments impossible The failure of the Moscow energetic system on May 25, 2005 led to the fact that half of sales points stopped their transactions with bank cards, some problems with ATM arose, and many banks had to stop their work in some offices and branches. The mobile providers had some failure in communication, and the biggest part of the Russian internet had serious issues.

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It should be noted that in such situations the cash is not panacea since in case of power cut the sales points will have to stop accepting the cash because of the impossibility to use the cash-register machines. 2. Possible failures in the electronic payment systems As a rule, the payment systems pay special attention to their uninterrupted operation which lead to some short errors with the use of bank cards. In this case the consumers can mitigate a part of risks by diversification – by owning several banking cards of various payment systems. 3. Anonymity of payments unlike wire transfers A substitution of the cash with regard to the anonymity can serve the digital currencies. 4. People’s habit to save for a rainy day and keep cash in US dollars The attitude towards the digital currencies, in particular, Bitcoin, in Russia is more negative against the US dollar which can be explained right at the moment by the low understanding of the essence of cryptocurrencies (Gagarina and Vlasenkova 2018). Rapid expansion and growth of popularity of cryptocurrencies will increase the necessity of population to get the knowledge about these instruments which should lead to the growing confidence towards the digital currencies. 5. Psychological difference in perception of cash and electronic money 6. Sense of security and safety associated with the cash In this case sense of security has the other side of the coin – the possibility of thefts and robbery, as well as physical threat. 7. Cost of infrastructure development necessary to accept electronic and digital payments Higher incomings and lower cost of use of the electronic and digital payments will repay such investments both for banks and for the state. 8. High cost of acquiring (in Russia) It should be noted that when Diners Club for the first time presented credit cards in the 1960’s the cost of acquiring for the sales points was 6% and more. In the early days of duopoly of Visa and MasterCard in the 1970’s the cost of transactions lowered to 2.5% for credit cards and 1,5% for debit cards which triggered the development of the industry of payment cards (Anderson and Murdoch 2014). Thus, the lowering cost of acquiring, probably, is just a matter of time. 9. Difficulty of adaptation for various groups of population (seniors, migrants, disabled people) to the new formats of payment The process of transferring of bank clients to the services provided through online banking and self-service ATM was rather difficult, however, with the course of time these efforts bore their fruit for banks with regard to the lower expenses – closure of a part of offices and branches, reduction of personnel.

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10. Cybercrime The development of new technologies and payment means inevitably brings new risks. However, at the same time, the instruments of risk management are evolving as well. 11. The tendency of people to spend more when paying with a bank card than when paying in cash 12. Low financial awareness of people Thus, it can be notes that the evolution of the money systems will occur with various degree of intensity which, first of all, depends on the regulatory state influence. Thus, the Swedish experience demonstrates quite a “transparent” financial system with a high level of participation and a serious role of the state regulation which makes it possible to introduce completely cashless circulation in the near future. However, the country authorities consciously postpone this decision due to a category of citizens that do not use or are unwilling to use the electronic payments. Those are senior citizens as well as persons that do not have sufficient education and earnings (the poor and a part of migrants). However, technological revolutions logically cause changes in the generations of people that actively apply various technological innovations. Modern young people (a so-called “Generation Y”), unlike older people, freely use new technologies, and later, on their transition to the category of pensioners, they can become the basis of a society with no cash in circulation. It is already technically possible at the current stage of development. At the same time modern people think that the cash is tangible wealth which is out of danger of technological and man-caused failures and risks. Thus, the main issue or dilemma regarding the choice between the cash and the non-cash payment systems is the conservatism of the main consumers or their desire to keep with certain traditions. However, in case of further evolution, the refusal of the digital assets, finances and instruments will be impossible. Some time ago, even a banking card belonged to a fantastic book, and was not so popular (Kumar 1987). In our opinion, the use of the digital finances will increase as the issues of their application get solved. As for the main point of this study, the authors think that in the following 10 years the world will see some countries with no use of cash, and for Russia such a phenomenon will become possible in a longer period of time. At the same time, the possibility of new rapidly growing technologies that will significantly reduce the time needed to cancel the cash from the money circulation, is not excluded. Acknowledgments. The publication was prepared as part of the implementation of the State Assignment of the Southern Scientific Centre of the Russian Academy of Sciences, No. of state registration of the project AAAA-A19-119011190184-2.

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References Anderson, R., Murdoch, S.J.: Inside risks EMV: why payment systems fail. Commun. ACM 57 (6), 24–28 (2014) Bachas, P., Gertler, P., Higgins, S., Seira, E.: Banking on Trust: How Debit Cards Enable the Poor to Save More. NBER Working Papers 23252, National Bureau of Economic Research, Inc. (2017) Capgemini and BNP Paribas. World Payments Report 2018 (2018). https://worldpaymentsreport. com/wp-content/uploads/sites/5/2018/10/World-Payments-Report-2018.pdf. Accessed Dobrovidova, O.: Swedish money: farewell to paper (2018). https://ru.sweden.se/ljudi/dengi-etobumaga-tolko-ne-v-shvecii/. Accessed Gagarina, M.A., Vlasenkova, E.A.: What personality traits determine the willingness of Russians to invest in cryptocurrency? Humanitarian sciences. Bull. Financ. Univ. 5, 66–76 (2018) Ionov, V.M.: On the place and role of cash in the global economy (will cash disappear?). Money Credit 10, 43–50 (2016) Jobst, C., Stix, H.: Doomed to disappear? The surprising return of cash across time and across countries. C.E.P.R. Discussion Papers (2017). https://www.researchgate.net/profile/Clemens_ Jobst/publication/320183259_Doomed_to_disappear_The_surprising_return_of_cash_ across_time_and_across_countries/links/59d3569c4585150177f93098/Doomed-to-disappearThe-surprising-return-of-cash-across-time-and-across-countries.pdf. Accessed Kumar, K.: Utopia and Anti-Utopia in Modern Times, 506 p. Blackwell, Oxford, New York (1987) Larina, O.I., Moryzhenkova, N.V.: Digital currencies: advantages and disadvantages and the possibilities of their use in Russia. In: Step into the Future: Artificial Intelligence and Digital Economy: Proceedings of the 1st International Scientific and Practical Conference, vol. 3, pp. 137–142. State University of Management Publ., Moscow (2018) Miller, R.L., Van-Huz, D.D.: Modern Money and Banking, 865 p. INFRA-M Publ., Moscow (2000) Mitrofanova, I.V., Larina, O.I., Ivanov, N.P., Adzhikova, A.S.: Banking crises in Russia: problems and strategies of resolution. In: Popkova, E. (eds.) Ubiquitous Computing and the Internet of Things: Prerequisites for the Development of ICT. SCI, vol. 826, pp. 1043–1057. Springer, Cham (2019). https://doi.org/10.1007/978-3-030-13397-9_108 Timoshenko, M.: When will cash disappear in Russia. Forbes.ru (2018). http://www.forbes.ru/ finansy-i-investicii/368865-kogda-v-rossii-ischeznut-nalichnye-dengi. Accessed Wolman, D.: The End of Money (2017). https://spectrum.ieee.org/geek-life/profiles/my-yeartrying-to-live-cash-free. Accessed

Information Technology Impact Analysis on the Structural Changes Dynamics in the Regional Economy Elena A. Petrova(&) , Agnessa O. Inshakova and Vera V. Kalinina

,

Volgograd State University, Volgograd, Russia [email protected], [email protected], [email protected]

Abstract. Purpose: The purpose of this article is to quantify the structural changes dynamics in the regional economy and to identify the relationship between economic development and the use of convergent technologies in Russian economy and at the regional level, which allows for the conclusion about economic processes implementation effectiveness in territorial aspect. Methods: The study is based on a dynamic structural analysis of economic systems. To quantify structural shifts we apply the K. Gatev’ and V. Ryabtsev’s coefficients, which allows us to identify structural changes based on the intensity and effectiveness of structural shifts. The empirical base of the study is presented by statistical materials on the sectoral composition of gross value added and types of costs for information and communication technologies for the period from 2005 to 2019. The sectoral composition of gross value added is represented by 15 types of economic activity, the costs of information and communication technologies include 6 types of costs. Findings: We obtained a quantification of the structural shift dynamics for the K. Gatev’ and V. Ryabtsev’s coefficients by sectoral composition of gross value added in Russia and in certain regions of the Russian Federation. We conducted the comparability analysis of economical structural changes and the costs on information and communication technologies implication. Originality: The obtained results of the structural changes quantification by the sectoral composition of gross value added show structural changes inconsistency occurring in the country’s economy and at its regional level. We as well obtained the quantification results for the relationship between economic structural dynamics in the economy and in the field of ICT. Keywords: Structural changes in the economy
Convergent technologies Economic growth
Information and communication technology JEL Code: O11


O47
R12

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1033–1044, 2021. https://doi.org/10.1007/978-3-030-59126-7_114




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1 Introduction At the present stage of the active expansion of the convergent technologies scope of application, that forms the basis of the economy neo-industrialization, there are fundamentally new factors that have a direct impact on the change in the rate of economic growth at the regional level. The quantification of structural changes in the economy, as well as the analysis of the relations to its intensity are of greatest interest in studies of economic growth rates and they are particularly apparent in periods that are crucial for the country’s economic development. One of such moments in the economy can be the expansion of the implementation of convergent technologies that are based on information and communication technologies (ICT). Thus ones of the most relevant studies quantify the presence and intensity of the impact of ICTs on the economic growth, which will determine its new goals and directions of development. A quantification of the structural changes occurring in the regional economy was studied in the works of Suharev (2013), Lyakin (2013), Stroeva and Gorelova (2018), Kudaev (2009), Gasanov (2010). Fundamental researches of structural changes in the economy are reflected in the works of Kazinec (1963, 1981), Krasil’nikov (2000), Suharev (2012). The indices the most widely used in the studies are the indices of Kazinec (1981), Gatev and Ryabtsev (2001). Modern regional development is characterized by the existence of challenging problems (Petrova et al. 2017), as well as the heterogeneity of the Russian economic space, which in turn negatively affects structural changes in the regional economy.

2 Materials and Method The research information base consists of the official data of the Federal State Statistics Service (Rosstat) statistical publications “Regions of Russia. Socio-economic indicators”, “Russia in numbers”, “Regions of Russia. The main characteristics of the Russian Federation constituent entities” for the period from 2005 to 2018. To assess the structural changes dynamics in this study, we use: • K. Gatev’s integral coefficient: ð1Þ where xit is the share of the i-th industry in the gross indicator in the period t, xit–1  0; xit  0; n is the number of structural elements. • V.M. Ryabtsev’s criterion: ð2Þ

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where xit is the share of the i-th industry in the gross indicator in the period t, xit–1  0; xit  0; n is the number of structural elements. These coefficients are based on the principle of the structural changes measurability through the assessment of the specific gravity deviation and the proportion of the corresponding structural element in a given period of time to the previous one. In addition the standard deviation of the difference in specific gravities is calculated in relation to the sum of specific gravities (1) and (2). The values of the obtained indices can vary from 0 and higher, the larger the index value, the more radical shifts occur in the complex structure; at a zero value of the indices the structure remains unchanged. The above methods for assessing structural shifts do not give qualitative characteristics of the ongoing processes; they show only the intensity of the ongoing shifts, reflecting their dynamics in the economy. The main problem in calculating the coefficients characterizing structural changes is the determination of the set of indicators and the regional economy sectors used for calculating, which directly depends on the available statistical database, measuring methods and grouping of indicators for the period under consideration. In the proposed study, we study the values of structural shift coefficients by the shares of the sectoral composition of gross value added, which includes 15 economy sectors (according to official statistics) and information and communication technology costs by type of ICT costs from 2006 to 2018. As a spatial distribution, the coefficients are calculated for the Russian economy as a whole, as well as for representatives of enlarged groups of regions obtained by cluster analysis methods. Cluster analysis reflects the grouping of regions of the Russian Federation according to indicators assessing the general economic conditions for the functioning of constituent entities of the Russian Federation, taking into account the influence of NBIC technologies, 4 groups of regions are identified on its basis: “leaders”, “developed”, “developing”, and “unstable” (Petrova et al. 2019). The following regions were respectively identified as representatives of each group: the Republic of Tatarstan (1st group), Rostov Region (2nd group), Tambov Region (3rd group) and the Republic of Adygeya (4th group). Due to the strong regions differentiation according to indicators of socio-economic development (in particular per capita gross regional product), we consider it appropriate to conduct a dynamic analysis of the most homogeneous identified groups.

3 Results Structural changes dynamics of in the sectoral composition of gross value added in Russia for the period from 2006 to 2017 shows a heterogeneous trend, the turning points are especially noticeable during the economic crisis in 2008 and in 2017 (see Fig. 1).

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Fig. 1. Dynamics of K. Gatev’ and V.M. Ryabtsev’s structural shift coefficients on the sectoral composition of Russia’s gross value added. Source: Compiled by the authors based on Federal State Statistics Service (2019a, b, c).

Both coefficients show a consistent change, which suggests that regardless of the exact calculated indicator, the intensity of structural changes in the economy has almost the same estimate. The presented dynamics for the period under review reflects certain changes within the economic sector of the Russian Federation by its constituent branches; at some periods of insignificant changes in structural changes, they could be balanced out, which is observed from 2010 to 2016. However, similar research on selected regions representing large economic development groups may show a different trend. Of particular interest is the analysis of structural changes in periods of crisis. Figure 2 shows the dynamics of Russia’s GDP (in% over the previous year) and the Gatev’s structural shifts coefficient (in terms of the share of value added by industry branches). The above graph shows that the main changes in the economy structure during the crisis of 2008–2009 reflect a sharp structural leap, similar changes in the dynamics of GDP occur during this period, but with a delay of one period, which indicates the adaptability of the economy, i.e. economic growth follows after the positive structural changes dynamics. In 2017, a sharp change in the economy structure is also noticeable, which in the future should positively contribute to economic growth. Let us analyze similar trends in a regional context (Fig. 3, 4, 5 and 6).

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Gatev's coefficient

2012

2013

2014

2015

2016

2017

GDP dynamics

Fig. 2. Dynamics of Russia’s GDP (in % over the previous year) and Gatev’s structural shift coefficient (in terms of the share of value added by industry branches) Source: Compiled by the authors based on Federal State Statistics Service (2019a, b, c).

In the Republic of Tatarstan, which belongs to the group of “leaders”, as well as in the Rostov region (the region from the “developed” group), the decline in economic growth in 2009 did not lead to a decrease in the dynamics of the structural changes index during the crisis period of 2008–2009 in this region, which confirms the great economic stability in the regions of these groups. 1.2000 1.0000 0.8000 0.6000 0.4000 0.2000 0.0000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Gatev's coefficient

GDP dynamics

Fig. 3. GRP dynamics in the Republic of Tatarstan (in% to the previous year) and Gatev’s structural shift coefficient (in terms of the share of value added by industry branches) Source: Compiled by the authors based on Federal State Statistics Service (2019a, b, c).

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1.2000 1.0000 0.8000 0.6000 0.4000 0.2000 0.0000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Gatev's coefficient

GDP dynamics

Fig. 4. The GRP dynamics of the Rostov region (in % to the previous year) and the Gatev’s structural shift coefficient (in terms of the share of value added by industry branches) Source: Compiled by the authors based on Federal State Statistics Service (2019a, b, c).

In developing regions, which are represented by the Tambov region, there is an alteration in structural changes throughout the entire period under review; a similar change is also noted in the dynamics of GRP with a delay of one period until 2015.

1.2000 1.0000 0.8000 0.6000 0.4000 0.2000 0.0000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Gatev's coefficient GDP dynamics

Fig. 5. The dynamics of the GRP of the Tambov region (in % to the previous year) and the Gatev’s structural changes coefficient (in terms of the share of value added by industry branches) Source: Compiled by the authors based on Federal State Statistics Service (2019a, b, c).

In the Republic of Adygeya, which belongs to the “unstable” regions, the structural index has been falling in general since 2010 and similar trends have been also observed in the economy. Positive dynamics of the index during the crisis of 2008–2010 did not contribute to economic growth, which indicates the unstable development of the regions of this group.

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1.4000 1.2000 1.0000 0.8000 0.6000 0.4000 0.2000 0.0000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Gatev's coefficient

GDP dynamics

Fig. 6. The GRP dynamics of the Republic of Adygeya (in % to the previous year) and Gatev’s structural shift coefficient (in terms of the share of value added by industry branches) Source: Compiled by the authors based on Federal State Statistics Service (2019a, b, c).

The analysis altogether confirmed the hypothesis of the territorial division of economic entities on the basis of cluster analysis on similar trends in the economic development of territories. Also of particular interest is the analysis of the Gatev’s structural shift coefficient according to the sectoral composition of gross value added for the regions representing the selected groups. In the regional level (Fig. 7), the structural changes dynamics is more unstable than in Russia in general (Fig. 1). This is much in evidence for the three following regions: the Republic of Tatarstan (1st group of “leaders”), Rostov Region (2nd group of “developed”), the Republic of Adygea (4th group of “unstable”). At the same time, the Tambov region that belongs to the 3rd group of developing territories shows a tendency of structural shifts that is most consistent with similar processes in the national economy. By 2017, this trend becomes more equable across all territorial sections, which may indicate the achievement of uniform development of the sectoral composition of the economy. Let us analyze a comparison of indicators of structural changes in the sectoral composition of gross value added and the types of costs for information and communication technologies (Fig. 8). As shown in the graph, investments in information and communication technologies generally correspond to the dynamics of structural changes, however, in 2012, 2013 there is a sharp positive trend, and in 2014, 2015 there is a sharp decline contrasted with the stable dynamics of the sectoral composition

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0.1800 0.1600 0.1400 0.1200 0.1000 0.0800 0.0600 0.0400 0.0200 0.0000 2006

2007 2008 2009 2010 Republic of Tatarstan Tambov region

2011

2012

2013 2014 2015 Rostov region Republic of Adygeya

2016

2017

Fig. 7. Dynamics of the Gatev’s structural shift coefficient according to the sectoral composition of gross value added for the regions representing the selected groups. Source: Compiled by the authors based on Federal State Statistics Service (2019a, b, c).

0.3500 0.3000 0.2500 0.2000 0.1500 0.1000 0.0500 0.0000 2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

sectoral composition of gross value added, % costs for information and communication technologies, in millions of roubles (by types of costs for ICT)

Fig. 8. Dynamics of the Gatev’s structural changes coefficient according to the sectoral composition of gross value added and shifts in ICT in the Russian Federation. Source: Compiled by the authors based on Federal State Statistics Service (2019a, b, c).

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of the gross value added. In 2017, a significant multidirectional change was observed both in the economy structure and in the field of ICT in the Russian Federation, which may indicate a redistribution of ICT costs in accordance with the interests of the sectoral economy. A comparison of structural change indicators for the sectoral composition of gross value added and for the types of ICT costs in the four selected territories is shown in Fig. 9, 10, 11 and 12. The spatial distribution in the ICT sector has a strong unevenness, in almost all regions there is no positive growth trend throughout the entire period. At the same time, the structure of the branch economy of the regions of the Russian Federation for the same period does not undergo significant changes, with the exception of the region from the group of leaders (Republic of Tatarstan in 2017). The dynamics of changes in the structure of ICTs is very heterogeneous in the regions of groups 1 and 2. Groups 3 and 4 reflect a similar trend. Thus, the study showed a significant structural change in the field of ICT, the structure of gross value added changes to a lesser extent in the regional aspect.

Gatev's coefficient for the 1st group (Republic of Tatarstan)) 0.4500 0.4000 0.3500 0.3000 0.2500 0.2000 0.1500 0.1000 0.0500 0.0000 2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

sectoral composi on of gross value added, % costs for informa on and communica on technologies, in millions of roubles (by types of costs for ICT)

Fig. 9. Dynamics of the Gatev’s structural changes coefficient according to the sectoral composition of gross value added and shifts in ICT in the Republic of Tatarstan. Source: Compiled by the authors based on Federal State Statistics Service (2019a, b, c).

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Gatev's coefficient for the 2nd group (Rostov region) 0.4000 0.3500 0.3000 0.2500 0.2000 0.1500 0.1000 0.0500 0.0000 2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

sectoral composi on of gross value added, % costs for informa on and communica on technologies, in millions of roubles (by types of costs for ICT)

Fig. 10. Dynamics of the Gatev’s structural changes coefficient according to the sectoral composition of gross value added and shifts in ICT in the Rostov Region. Source: Compiled by the authors based on Federal State Statistics Service (2019a, b, c).

Gatev's coefficient for the 3rd group (Tambov region) 0.8000 0.7000 0.6000 0.5000 0.4000 0.3000 0.2000 0.1000 0.0000 2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

sectoral composi on of gross value added, % costs for informa on and communica on technologies, in millions of roubles (by types of costs for ICT)

Fig. 11. Dynamics of the Gatev’s structural changes coefficient according to the sectoral composition of gross value added and shifts in ICT in the Tambov Region. Source: Compiled by the authors based on Federal State Statistics Service (2019a, b, c).

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Gatev's coefficient for the 4th group (Republic of Adygeya) 0.9000 0.8000 0.7000 0.6000 0.5000 0.4000 0.3000 0.2000 0.1000 0.0000 2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

sectoral composition of gross value added, % costs for information and communication technologies, in millions of roubles (by types of costs for ICT)

Fig. 12. Dynamics of the Gatev’s structural changes coefficient according to the sectoral composition of gross value added and shifts in ICT in the Republic of Adygeya. Source: Compiled by the authors based on Federal State Statistics Service (2019a, b, c).

4 Conclusion The study of structural changes quantification in the sectoral composition of gross value added finds discordance between structural changes occurring in the country’s economy and at its regional level. There is also no correlation between structural dynamics in the economy and in the field of ICT, which indicates the inefficiency of the ongoing processes in the field of convergent technologies over a long period of time. However, since 2016, there has been a positive trend in both areas, therefore, it can be concluded that the activities carried out as part of the socio-economic policy implemented at the federal and regional level (except for the regions of group 4) have a positive effect. First of all, it is worth noting the implementation of the State Program “Information Society” (2011–2020), which was aimed at improving the availability and quality of public services, developing digital literacy of all segments of the population, sustainable economic growth of the country using modern information, telecommunications and digital technology. Acknowledgments. The reported study was funded by Russian Foundation for Basic Research and the government of Volgograd region according to the research project «Improvement of mechanisms and instruments of economic growth in Russian regions in terms of development of convergent technologies», project No. 19-410-340014 p_a.

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References Federal State Statistics Service. Regions of Russia. Main characteristics of the constituent entities of the Russian Federation (2019a). https://gks.ru/bgd/regl/b19_14s/Main.htm. Accessed 20 Feb 2020 Federal State Statistics Service. Regions of Russia: socio-economic indicators (2019b). https:// gks.ru/storage/mediabank/Region_Pokaz_2019.pdf. Accessed 20 Feb 2020 Federal State Statistics Service. Russia in figures (2019c). https://gks.ru/storage/mediabank/ rus19.pdf. Accessed 20 Feb 2020 Gasanov, M.A.: Structural shifts in the global and Russian economies based on innovation. J. Tomsk State Univ. 237, 135–139 (2010) Kazinec, L.S.: Theory of Indexes. Gosstatizdat, Moscow (1963) Kazinec, L.S.: Growth Rates and Structural Shifts in the Economy. Economy, Moscow (1981) Krasil’nikov, O.Ju: Structural Shifts in the Economy of Modern Russia. Publishing House Scientific Book, Saratov (2000) Kudaev B.M.: Structural shifts in the region’s economy: trends and prospects. Works Cuban State Agrarian Univ. Sci. J. (2), 40–43 (2009) Lyakin, A.N.: Structural shifts in the Russian economy and industrial policy. J. SPbSU 5(1), 39– 52 (2013) Petrova, E.A., Fokina, E.A., Trukhlyaeva, A.A., Kalinina, V.V.: Modeling of the process of influence of convergent technologies on economic growth of regions of the Russian Federation. Reg. Econ. Manage. Electron. Sci. J. 4(60) (2019). https://eee-region.ru/article/ 6014/. Accessed 20 Feb 2020 Petrova, E.A., Kalinina, V.V., Shevandrin, A.V.: Effectiveness of state territorial administration in provision of sustainable economic growth of the region. In: Integration and Clustering for Sustainable Economic Growth. Contributions to Economics. Special Issue, pp. 383–399 (2017) Rjabcev, V.M., Chudilin, G.I.: Regional Statistics. MID, Moscow (2001) Stroeva, G.N., Gorelova, A.D.: Assessment of shifts and differences in employment of the subjects of DFO. J. TOGU 2(49), 63–72 (2018) Suharev, O.S.: Structural Analysis of Economy. Finance and Statistics, Moscow (2012) Suharev, O.S.: To develop a comprehensive methodology of analysis of structural changes in the national economy. Nat. Interests Priorities Secur. 13(202), 56–64 (2013)

Financial Monitoring of Financial Stability and Digitalization in Federal Districts Nadezhda I. Yashina1(&), Oksana I. Kashina1 , Nataliya N. Pronchatova-Rubtsova1, Sergey N. Yashin1 and Victor P. Kuznetsov2 1

,

Lobachevsky State University of Nizhny Novgorod, Nizhny Novgorod, Russia [email protected], [email protected], [email protected], [email protected] 2 Minin Nizhny Novgorod State Pedagogical University, Nizhny Novgorod, Russia [email protected]

Abstract. The aim of the study is to develop methodological approaches and practical methods for implementing financial monitoring of financial stability and digitalization in federal districts. Also, the object of the study is the regional budget included in the federal districts of the Russian Federation. In addition, the subject is a set of theoretical and methodological issues of financial monitoring of financial stability and digitalization of federal districts in the context of digital transformation of public administration. Methodology. A distinctive feature is the financial monitoring of the financial stability in federal districts, taking into account indicators including financial independence and the efficiency of public resources spending. Result: As a result of this study there are methods for monitoring of financial stability and digitalization of federal districts, ranking districts in order to evaluate digitalization processes for making effective management decisions related to formation of a single financial and economic space in Russia. Conclusion. The information infrastructure of the Ministry of Finance of the Russian Federation opens up wide opportunities for financial monitoring of financial stability and digitalization of federal districts based on an automated calculation of reliability indicators of monitoring objects and visualization of corresponding ratings. The results contribute to development of financial management, aimed at ensuring the financial stability of the territories, and taking into account the need for digitalization of their economy. Keywords: Financial monitoring
Analysis of the budget system
Digitalization of public finances
Budget sustainability of regions
Budget management JEL Code: C51


H61
O21

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1045–1051, 2021. https://doi.org/10.1007/978-3-030-59126-7_115

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1 Introduction In conditions of financial reform, the budget system of the Russian Federation should be able to maintain stability and balance on the basis of management efficiency, and at same time realizing possibilities of digital public finance. The government sets an important benchmark, which is one of the nation’s development goals - to ensure the implementation of digital technologies in the economy and social sphere. Digitalization of public finances is one of the basic development trends included in the list of national priorities, which allows implementing state-run budgeting programs that are focused on results and introducing targeted working methods. Consequently, digitalization and sustainable development of public finances are the priority tasks of the government for the rapid development of the Russian Federation in order to improve the population welfare.

2 Materials and Method A financial condition of regions was analyzed by Russian and foreign scientists and practitioners. High elasticity of the government budget system to changes in the macroeconomic situation was noted in works by Yashin and Emelyanova (2008), Polyak (2013), Bogolib (2015). In this regard, the main forces of the government should be aimed at achieving its sustainable growth and development, as well as eliminating the socio-economic imbalances in development of regions. Also, it is increasing the well-being and welfare of the population (Kornilov et al. (2017)). Research and development of approaches to the analysis of financial stability of regional financial systems are studied by Vlasov et al. (2013), Galukhin (2015). Study of the stability factors in formation of municipal budgets and their special role in ensuring the stability of the consolidated budget noted by Korotina (2014) and Ivanov (2016). Methodological approaches to determining the financial stability of territories using integrated indicators formed taking into account the assessment of various socioeconomic aspects of regional development based on a risk-based approach are considered in the works of Yashina et al. (2020). Moreover, the role of government fiscal policy in ensuring the financial sustainability of territories was emphasized in the work of Goryunov et al. (2015). It should be noted that the above studies addressed mainly investment aspects, however, the complex issues of financial stability and digitalization of territories have not been studied enough. Formation of federal districts makes it possible to effectively implement nationwide tasks related to the formation of a single financial and economic space of Russia. For this reason, financial monitoring of financial stability and digitalization of federal districts allows federal government control at an intermediate level. Therefore, the subjects are the methods and tools of financial stability in federal districts. In the work, the methods of a systematic approach and economic statistics were used to analyze various aspects of financial stability and digitalization of federal districts in modern conditions. As a research information base, “The Electronic Budget System”, which allows for transparency and accountability of government bodies, and

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the possibility of financial monitoring to improve the quality of budget management through a single information space, information and telecommunication technologies in the field of management. The theoretical significance of the work lies in development of the scientific and theoretical foundations of government financial management in terms of financial stability and digitalization of federal districts. On the other hand, the practical significance lies in the possibility of using methods of financial stability and digitalization of federal districts by government authorities for making effective management decisions. Financial monitoring indicators are formed on the basis of the principle of balanced reference values, or the entered reference values for assessing the financial stability of federal districts are quantitatively related. In addition, for the financial monitoring of federal districts, coefficients are used that are comparable in time and space (Table 1). Table 1. The summary table of the system indicators of financial stability in federal districts № 1

Name of indicator The financial independence ratio (K1) is the ratio of own budget revenues to total revenues

2

Financial stability ratio (K2) - calculated as the ratio of tax income to total income

3

The ratio of own income to financial assistance (K3) - calculated as the ratio of tax and non-tax income to gratuitous transfers Coefficient of provision with own incomes for financing social expenses (K4) - calculated as the ratio of own incomes to expenses for the social sphere (budget sections: healthcare, education, social policy, physical education, culture and cinema) Coefficient of security with own funds for financing industrial sectors (K5) calculated as the ratio of own income and total expenses for the national economy and housing and communal services

4

5

6

Coefficient of financing managerial expenses (K6) - calculated as the ratio of expenses on national issues to total expenses

Interpretation of indicator change Maximization of the indicator, coefficient shows how much the budget depends on the financial assistance of a higher budget, or what proportion falls on its own budget revenues Maximization of the indicator, coefficient shows the share of tax revenues in total budget revenues, i.e. how much tax goes to the budget Maximization of the indicator, the ratio shows the ratio of own funds to financial assistance Maximization of the indicator, coefficient shows how much expenses for the social sphere are covered by the budget’s own income as far as the regional authorities can independently finance the social sphere Maximization of the indicator, coefficient shows how much own revenues can provide financing for manufacturing industries, i.e. as far as the regional authorities can independently finance the production sector Minimization of the indicator, coefficient shows the share of administrative expenses in total budget expenditures, i.e. how much money is allocated to finance the administrative apparatus (continued)

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№ 7

Name of indicator The coefficient of investment in human capital (K7) is calculated as the ratio of social spending to total number

8

Interest expense ratio (K8) - calculated as the ratio of the cost of servicing government and municipal debt to tax revenues Debt burden ratio (K9) - calculated as the ratio of budget debt to tax revenue Total debt ratio (K10) Tax debt ratio (K11)

9 10 11

12

Indicator of potential reserve for financing social expenditures (K12)

Interpretation of indicator change Maximization of the indicator, coefficient shows the share of expenditures on the social sphere in total expenditures, i.e. how much money is spent from the budget to ensure the development of the social sphere Indicator minimization

Minimization of the indicator, the ratio shows the ratio of debt and tax revenue Indicator minimization Minimization of the indicator, coefficient allows you to evaluate the effectiveness of the mechanism for collecting tax debt Maximization of the indicator, characterizes the effectiveness of spending budget funds

Source: compiled by the authors

Then we calibrate indicators to their unified dimension from 0 to 1.

3 Results Application of the developed system of indicators, which is allowing to assess the financial stability of federal districts of the Russian Federation, makes it possible to conduct their ranking (Table 2). As a result, it was found that the Urals Federal District is an oil-producing district with the highest concentration and diversification of large businesses. Stability of the budget is associated with quotas for oil production and global market conditions. An outsider is the North Caucasus Federal District. In order to assess the effectiveness of the digitalization of territories, we used readymade sub-indices indicated in SKOLKOVO research, Digital Russia indexes characterizing the digitalization of districts (Table 3).

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Table 2. The final normalized indicators for assessing the financial stability of the federal districts according to the reporting data for the period 2016–2018 Federal districts Far Eastern Volga district Russian Federation Northwestern North Caucasian Siberian Ural Central South Source: compiled

Kf 2017 4.77 3.89 4.06

Rank Kf 2018 8 4 6

Kf 2018 4.90 3.74 3.92

Rank Kf 2018 8 4 6

Kf for two years 14.21 11.49 12.02

Rank f for two years 8 4 6

3.93 5.89

5 9

3.52 5.57

5 9

11.32 18.12

2 9

3.86 2 3.69 2 11.52 3.20 1 2.81 1 9.18 3.87 3 3.81 3 11.49 4.54 7 4.46 7 13.71 by the authors of the Ministry of Finance (2019).

5 1 3 7

Table 3. Formation of the ranks of digitalization based on the calculation of the Digital Russia index by federal districts for the period 2016–2018 Federal districts Far Eastern Volga district Russian Federation Northwestern North Caucasus District Siberian

Kc 2017 44.20 46.93 45.92

Rank Kc 2018 6 4 5

Kc 2018 54.66 62.65 58.85

Rank Kc 2018 7 2 5

Kc for two years 98.86 109.58 104.77

Rank Kc for two years 6 4 5

50.05 33.37

3 9

62.02 45.36

4 9

112.07 78.73

3 9

41.91

8

6

97.91

7

1 125.51 3 112.29 8 96.94 Finance (2019).

1 2 8

Ural 57.17 1 Central 50.05 2 South 43.06 7 Source: compiled by the authors

56, 00 68.34 62.24 53.88 of the Ministry of

Table 4 illustrates the level of financial stability of federal districts taking into account the level of their digitalization. The most “digitized” is the Ural Federal District. Also, the same district is also financially stable. The Government of the Russian Federation implements the Digital Economy of the Russian Federation Program, which states that the use of the latest technologies should ensure improvement of population life.

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Table 4. Formation of integrated ranks of financial monitoring on financial stability and digitalization by federal districts for the period 2016–2018 Federal districts

Rank c for 2017–2018 Ural 1 Central 2 Northwestern 3 Volga district 4 Russian Federation 5 Far Eastern 6 Siberian 7 South 8 North Caucasian 9 Source: compiled by the authors of the Ministry of

Rank f for 2017–2018 1 3 2 4 6 8 5 7 9 Finance (2019).

Rank fc for 2017–2018 2 5 5 8 11 14 12 15 18

4 Conclusion Proposed methodology for financial monitoring of financial stability and digitalization will help assess the level of development of federal districts for making decisions in government and municipal managment. For the development of information infrastructure, research and organization of personnel, educational activities, maintaining information security, functioning of the city economy, and healthcare regulation. The theoretical significance of the study lies in the development of the scientific and theoretical foundations of government financial management. Taking into account the level of financial stability and digitalization of federal districts. Its practical significance is due to the possibility of using the results by government bodies to increase the effectiveness of budget management. Acknowledgments. The study was carried out within the framework of the basic part of the state assignment of the Ministry of Education and Science of the Russian Federation, project 0729-2020-0056 “Modern methods and models for diagnosing, monitoring, preventing and overcoming crisis phenomena in the economy in the context of digitalization as a way to ensure the economic security of the Russian Federation”.

References Bogolib, T.: Fiscal policy as an instrument of macroeconomic stability. Econ. Ann. XXI 3–4(1), 84–87 (2015) Vlasov, S.A., Deryugin, E.B., Vlasova, Y.A.: A study of the stability of public finances in Russia in the short and long term. Econ. Issues 3, 33–49 (2013) Galukhin, A.V.: Financial stability of the revenue base of regional budgets: condition and assessment of its effectiveness. Federalism 2(78), 151–162 (2015)

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Goryunov, E., Kotlikoff, L., Sinelnikov-Murylev, S.: Fiscal gap: an estimate for Russia. Issues Econ. 7, 5–25 (2015) Ivanova, K.V.: Sustainability of budgets of municipalities: concept, and formation factors. Econ. Soc. 5, 20–26 (2016) Korotina, N.Y.: Tools for assessing the financial state of budgets of municipalities. Bull. Omsk Univ. 1, 158–163 (2014) Kornilov, D., Yashina, N., Pronchatova-Rubtsova, N., Kashina, O.: Research of public financing efficiency of social well-being in the Russian Federations’ regions. In: European Financial Systems 2017. Proceedings of the 14th International Scientific Conference. Masaryk University, Part 1, Brno, pp. 366–374 (2017) The ministry of finance of the Russian Federation (2019). https://www.minfin.ru/ru/ Polyak, G.B.: Innovations in the budget process. Finances 1, 6–9 (2013) Yashina, N.I., Emelyanova, O.V.: Methodology for assessing the consolidated budgets of constituent entities of the Russian Federation based on the definition of a consolidated standardized indicator. Financ. Credit 40(328), 22–35 (2008) Yashina, N.I., Makarova, S.D., Kashina, O.I., Kuznetsov, V.P., Romanovskaya, E.V.: Methodical approaches to analysis of performance of budgetary obligations on the basis of the risk-oriented approach. Lecture Notes in Networks and Systems, vol. 87, pp. 662–669 (2020)

Smart Technologies of the “Smart City” Pavel M. Gureev(&) , Helena N. Dunenkova and Svetlana I. Onishchenko

,

State University of Management, Moscow, Russian Federation {pm_gureev,en_dunenkova,si_onishchenko}@guu.ru

Abstract. The article discusses the intellectualization of modern technologies and their application in the concept of “smart city”. The aim of the work was to clarify the notion of a smart city and identify the key technologies underlying it. Today, the categorical apparatus, which fully reflects the essence and content of the concept of “smart city”, is in the process of formation, while individual approaches both complement and contradict each other. Smart practices were analyzed and six categories of “smart” technologies were identified. Further analysis showed the limited use of smart technologies in energy, water and gas supply, buildings. The reasons for this are the technical and technological stagnation of urban infrastructures, the impossibility of their simultaneous improvement, which is a deterrent to the development of smart cities in Russia and in other developed and developing countries of the world. At the same time, the identification of the smart city primarily with the service to the authors does not seem quite true, since for the development of agglomerations it is also necessary to provide a stable economic basis in the form of the development of the material base - industry and the agro-industrial sector. Therefore, there is a need for parallel development and combination of the concepts of “Smart City” and “Industry 4.0” and, based on the technologies of the fourth industrial revolution, to ensure the inclusion of industrial facilities in a “smart” urban environment. The creation of smart cities is associated with significant costs, so one of the main tasks is the formation of an investment strategy, the definition of promising areas of investment. The analysis showed that, with a high degree of probability, implementing universal approaches to strategic management, smart cities will develop components that are already characterized by high efficiency. A necessary condition for the effectiveness of the concept of “smart city” is a managerial transformation at all hierarchical level, in all parts of the management system. This approach is especially relevant for Russia and can ensure sustainable economic development of the country. Keywords: Smart city
Smart technologies
Industry 4.0
Urban infrastructure
Information and communication technologies JEL Code: O210


O310
O380

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1052–1062, 2021. https://doi.org/10.1007/978-3-030-59126-7_116

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1 Introduction The term “Smart-technology”, which appeared in the field of aerospace research more than 40 years ago, has become widespread quite recently. Analysis of the definitions of the mnemonic abbreviation “SMART” makes it possible to determine the properties that should be inherent in “Smart-technologies”: the ability to interact with the environment (key property); the ability to immediately develop regulatory (control) effects on disturbances in the external environment; ability to adapt to conditions transforming in time; the presence of mechanisms for independent development and control; focus on effective achievement of results. It should be noted that four decades ago, when formulating the above properties of Smart technologies, the level of scientific and technological development of society did not allow them to be implemented in the functioning of socio-economic systems (processes). Modern information and switching technologies (IST) make it possible to form extremely complex systems, which with good reason include the “Smart City”.

2 Methodology The methodological basis of the study is a systematic, integrated approach based on the application of general scientific methods. There were the main research methods: study, generalization, systematization, analysis and synthesis of empirical and theoretical data. We used methods of comparative analysis, statistical, classification, comparison, grouping, structure analysis, graphical interpretation of information. The regulatory framework, including GOSTs, materials of conferences, speeches, reports, analytical reviews and data on monitoring the development of “smart cities” were used as information sources.

3 Results In 2008, IBM launched the Smarter Cities Challenge, an initiative that addresses urban issues in industrialized and developing countries. As part of this initiative, IBM assisted city administrations in tackling such tasks as diversifying regional development by developing the economy and labor resources, creating an ecosystem to support the quality of life of aged citizens, ensuring environmental sustainability, long-term financial and urban planning (IBM Press Release 2012). At the initial stage of the development in the concept of “smart cities” (Smart City 1.0), companies approached the idea of managing the city from the same positions as corporate governance. This approach did not bring sustainable benefits because it was usually based only on a population of technological solutions to ensure control. Subsequently, there was a transition to the concept of “Smart City 2.0” in which the key objectives were to achieve the unique goals of a particular city and focus on the interests of the people (McKinsey & Company 2018).

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At present, the concept of “smart city” is still ambiguous, which leads to a multitude of interpretations and active discussions about its essence (Intellektual’nyye goroda 2020). GOST R ISO 37120-2015. “Sustainable community development. Indicators of urban services and quality of life” a city is defined as a kind of agglomeration that has certain administrative boundaries and is usually referred to as a «municipality» or «city». (GOST R ISO 37120-2015). National standard “Information Technology. Smart city. Indicators” in the published draft, which is currently being publicly discussed, the term “smart city” refers to urban agglomeration that comprehensively implements organizational and technical solutions and activities aimed at achieving the maximum quality of services and resource management to create long-term favorable living (stay) conditions and business activity of residents of present and future generations” (Proyekt PNST 2019) However, in world practice, the concept of “smart city” is considered more broadly than the city itself within clearly defined boundaries - as an agglomeration (metropolis, large city with neighboring settlements). Most definitions of the term “smart city” indicate that it is controlled by data that allows city services to significantly improve the quality of life of the population in many areas, such as security, transport, medicine, education, the environment, utilities, etc. by involving its residents in the management of the city (Data Driven Cities 2010; Kupriyanovskiy et al. 2016). The idea is based on an important modern trend decentralization of management and the introduction of effective and transparent mechanisms for its implementation. The widespread application of this concept was also influenced by the World Economic Forum (WEF) recognition of the Fourth Industrial Revolution, which means the massive introduction of Industry 4.0, serving a variety of human needs through the use of intelligent information and communication technologies. The concept of a smart city is based on the use of the Internet of Things technologies, production automation, computerization of managerial decision-making, analysis and processing of large amounts of information (Big Data) (Komleva et al. 2016). Currently, this concept is being actively introduced in the world, including in Russia, and aims to improve the quality of life and comfort level of the population of megacities through the active use of elements of “artificial intelligence”, which ultimately leads to resource savings. This is especially important with the active process of urbanization which, according to experts, will lead to the fact that almost 70% of the world population will live in cities by 2050. At the same time, there is an understanding that cities and their infrastructure are mandatory participants in the digital transformation of society, since, occupying 2% of the earth’s surface, they produce 70% of world GDP and allow 50% of the world’s population to live. For example, in the Russian Federation 74% of the population already lives in cities today (RIA News 2017). To implement the concept of “Smart City”, it is necessary to fundamentally solve not only issues related to the innovative development of urban infrastructure, energy, healthcare, environmental safety, but also to carry out managerial transformation at all levels of the megalopolis management system. In other words, the basis of a “smart city” is effective open-type management, the basis of which is innovative technologies that residents can use (Drucker 2010) and which provide optimal

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“integration of physical, digital and human systems in an artificially created environment in order to ensure sustainable a prosperous and inclusive future for citizens” (Ivezic 2014). At the same time, the areas in which it is necessary to find solutions within the framework of this concept include public services, energy and the transport network, healthcare, agriculture, water supply and waste disposal. The conceptual model of a “smart city” is shown in Fig. 1. Fully implemented projects of the “smart city” do not exist yet, however, development programs for several hundred cities located around the world are under development or implementation.

Fig. 1. The conceptual model of the “smart city”

According to the open database of world and Russian smart practices, at least 326 foreign projects of “smart cities” are currently being implemented, including: in Singapore - 53, Seoul - 41, New York - 25 and 237 Russian projects as well (Mirovyye praktiki Smart City 2019). Cities using the technologies of the “smart city” concept include New York (USA), Tokyo (Japan), Shanghai (China), Milton Keynes and Southampton (England), Barcelona (Spain), Tel Aviv (Israel), Stockholm (Sweden), Amsterdam (Netherlands), Songdo (South Korea), Singapore (Saunders and Baeck 2015), the eco-city of Tianjin (China - Singapore), Masdar (UAE), Copenhagen (Denmark), etc. The main technologies used in the concept of “smart cities” can be divided into several categories: smart energy, smart water and gas supply, smart transport, smart buildings, smart urban environment, smart government (Fig. 2). The main players in the technology market for the “smart city” are: IBM (USA), Cisco (USA), Schneider Electric (France), Siemens (Germany), Microsoft (USA), Hitachi (Japan), Huawei (China), Ericsson (Sweden), Toshiba (Japan), Oracle (USA) (Popova 2018). The expected amount of investment in these technologies by 2021 should amount to 244.5 billion dollars (ibid).

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Fig. 2. The main technologies of the “smart city” (compiled by the authors taking into account (Funktsional’nyye oblasti proyektov 2020; Data Driven Cities 2016)

The question arises: in which technological categories of a smart city is it most appropriate to invest, on what principles should we build a development strategy for smart cities? A universal approach to strategic development is consolidation of competitive advantages. It can be assumed that cities will develop their “smart” components precisely in those areas where they already have significant achievements. The authors analyzed open data on smart projects in accordance with the ranking of the best cities in the world (IESE Cities in Motion Index 2019; Mirovyye praktiki Smart City 2019) in order to identify the prevailing technologies and determine the basis for the formation of a development strategy. The study was conducted taking into account the features of the rating approach: ratings, rating places were determined not in the whole city, but in certain areas. All twelve cities for which the analysis was conducted were included in the top ten ranking (Table 1). Of the six main categories of “smart city” technologies, the top ten ranking included five of which the Smart Government is the predominant (Fig. 3). Of the six main categories of technologies of the “smart city”, the top ten ranking included five, of which the Smart Government is the predominant (Fig. 3). When expanding the rating range to 40 positions, the leading position of three categories of technologies remains -

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Table 1. The best cities in the world (according to the IESE Cities in Motion Index 2019) Rating Country 1 Singapore United Kingdom USA 2 Netherlands USA 3

4

5

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10

City Singapore London New York Amsterdam New York Los Angeles Japan Tokyo United Kingdom London USA New York Australia Melbourne Singapore Singapore USA Boston United Arab Emirates Dubai USA Los Angeles Chicago Australia Melbourne Japan Tokyo South Korea Seoul USA New York Netherlands Amsterdam United Kingdom London USA Chicago Finland Helsinki United Kingdom London USA New York Japan Tokyo United Kingdom London USA Boston Finland Helsinki Netherlands Amsterdam Singapore Singapore USA Chicago

Smart Government, Smart Environment, Smart Transport (Fig. 4) with a significant increase in the share of Smart Energy. The leading role of the “newest” components — the “smart” government, the “smart” environment, the “smart” transport — is clearly visible, which is explained by the active use of technologies based on the wide use of information and communication technology tools. The relatively small proportion of “smart” buildings is probably due to the lack of common standards for the Internet of things and incomplete compatibility of devices among themselves, as well as the

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Fig. 3. The prevailing categories of “smart” technologies in projects implemented in 2018– 2019. (Mirovyye praktiki Smart City 2019)

difficulty of applying existing technologies to related segments (primarily water, gas and energy), formed decades ago and difficult modifiable. Smart Water & Gas and Smart Energy technologies occupy a small share in ongoing projects, being implemented in fragments, by necessity. Integrated “smart” solutions require restructuring of the traditional supporting infrastructure, upgrading power plants, water supply networks and sewerage. According to the Ministry of Energy of the Russian Federation, “until 2035, total investment in energy and improving the energy efficiency of the economy may amount to more than $ 48 trillion.” (Report 2019), which is necessary to meet the growing demand for electricity and ensure stable operation of energy networks. The International Energy Agency claims that global electricity demand will increase by 70% between 2015 and 2040. (Umnoye budushcheye energetiki 2018), while energy consumption in buildings is ahead of transport and industry (ibid). Therefore, it is necessary to jointly develop smart energy, smart water supply and smart homes. The need to solve this problem, including from the standpoint of saving resources, is confirmed by projects implemented by leading cities, in particular, New York’s first place in the ranking in the direction of Smart Energy, and its active development at the present time. The implementation of Smart technologies covers a wide range of urban activities, is implemented in various projects (Fig. 5) and confirms the relatively weak penetration of smart technologies into the key supporting subsystems of the city. The study showed that “Smart-technology” is an effective tool for implementing the concept of “smart city”. Projects implemented in this direction are capable of achieving the goals of a comfortable environment for a person. At the same time, the analysis of the experience of various countries shows that a significant problem in the development of smart cities is the lack of coordination of “smart” urban technologies with Industry 4.0 and “smart” specialization. “Smart” city considers the development of industries such as banking, tourism, culture, information services, evolving in the context of the post-industrial model “Smart City 3.0”. But agglomerations are faced with issues of

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Fig. 4. Share of the main categories of “smart city” technologies in implemented projects (Mirovyye praktiki Smart City 2019)

modernization of industry, development of the agro-industrial sector, and the introduction of innovative technologies. Existing examples of ongoing projects do not explicitly consider the development of the industry in smart cities. Therefore, there is a need to consider the compatibility of two concepts: a “smart” city and its integrated environment and industrialization. The solution to this problem is especially relevant for countries facing de-industrialization. A smart city should act as a source of intellectual and basic (energy, water, gas, sewage) resources, balanced in volume and progressing in accordance with the requirements and requirements of smart industries. The smart industries themselves are developing in the format of the smart specialization of the region (territory), contributing to the revenues of the smart city (Fig. 6). It should also be noted that we should talk not only about high-tech industries, but also about basic industries with a low degree of innovation at the moment. In Russia, as in other countries, the process of creating smart cities is actively underway, and relevant projects are being implemented in almost all regions. At the moment, Russia is still inferior to the leading economies of the world in introducing smart technologies; ongoing projects are mainly associated with fragmented digitalization and intellectualization of urban services and infrastructures. However, internal assessments of the prospects for the development of the digital economy of Russia confirm the readiness for the implementation of smart city projects As of the beginning of 2019, the amount of funding for smart city projects exceeds 30 billion rubles. Projects of cities that use elements of artificial intelligence to control lighting, traffic control, computerized monitoring systems are being implemented in cities such as Moscow, St. Petersburg, cities of the Yaroslavl, Sverdlovsk, Irkutsk regions, the republics of Tatarstan, Bashkortostan and several other regions of the country (Prioritetnyye napravleniya 2018). The opportunities for the development of smart cities are confirmed by the willingness of the population to digitalize. The population considers the city primarily as a service that ensures the quality of life and work.

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Fig. 5. Directions for the implementation of projects using smart technologies

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Fig. 6. The relationship of smart city and smart industrialization

4 Conclusions/Recommendations The study shows that the processes of formation of smart cities are carried out in all developed and developing countries of the world. Intellectualization brings tangible benefits in the form of reducing the load on the infrastructure, unproductive costs and increasing budget revenues. However, this process is constrained by the weakness of urban infrastructures. In particular, in the Moscow Region, the depreciation of housing and communal infrastructure is above 60%, and the average level of deterioration in construction and housing and communal services in the regions of Russia is 60%. The situation is similar in the leading countries. The second problem is the need to modernize and industrialize industry and agriculture, and Russia aims to develop the manufacturing sector using the technologies of the fourth industrial revolution. This will require « smart » solutions for integrating industrial facilities into a smart urban environment and, above all, the development of Smart Government and Smart Environment. Thus, a multiplier relationship is formed: the development of the “smart city” provides for industrialization, and industrialization pushes for the search for “smart” solutions for industrial cities. This approach is able to ensure sustainable economic development of the country in the near and long term.

References IBM Press Release: IBM nazyvayet laureatov granta Smarter Cities Challenge, napravlennoye na uluchsheniye gorodskoy zhizni, (2012). https://www-03.ibm.com/press/ru/ru/pressrelease/ 39506.wss. Accessed 5 Feb 2020. (in Russian)

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Tekhnologii umnykh gorodov: chto vliyayet na vybor gorozhan? McKinsey & Company (2018). https://www.mckinsey.com/ru/*/me-dia/McKinsey/Industries/Public%20Sector/Our% 20Insights/Smart%20city%20solutions%20What%20drives%20citizen%20adoption% 20around%20the%20globe/smartcitizenbook-rus.ashx. Accessed 5 Feb 2020. (in Russian) Intellektual’nyye goroda. Umnyye goroda. Smart cities (2020). http://www.tadviser.ru/index. php/Cтaтья:Интeллeктyaльныe_гopoдa_(Ум-ныe_гopoдa,_Smart_cities). Accessed 5 Feb 2020. (in Russian) GOST R ISO 37120-2015 «Ustoychivoye razvitiye soobshchestva. Poka-zateli gorodskikh uslug i kachestva zhizni» (Date of introduction 2016-02-01). http://docs.cntd.ru/document/ 1200123370. Accessed 8 Feb 2020. (in Russian) Proyekt PNST Informatsionnyye tekhnologii. Umnyy gorod. Pokazateli, available at: http://docs. cntd.ru/document/563956298. Accessed 8 Feb 2020. (in Russia) Data Driven Cities/—PWC (2016). https://www.pwc.ru/ru/government-and-public-sector/assets/ ddc_rus.pdf. Accessed 5 Feb 2020. (in Russian) Kupriyanovskiy, V.P., Bulancha, S.A., Kononov, V.V., Chernykh, K.YU., Namiot, D.Ye., Dobrynin, A.P.: Umnyye goroda kak « stolitsy » tsifrovoy ekonomiki. Int. J. Open Inf. Technol. 4(2) (2016). http://www.eurasiancommission.org/ru/act/dmi/workgroup/Documents/ Maтepиaлы%20для%20изyчeния/269%20yмныe%20гopoдa%20-%20cтoлицы%20цифp% 20эк-ки.pdf. Accessed 5 Feb 2020. (in Russian) Komleva, N.V., Musatova, ZH.B., Danchenok, L.A.: SMART-tekhnologii v innovatsionnom preobrazovanii obshchestva in Sborniki konferentsiy NITS «Sotsiosfera». In: Materials of the VI International Scientific Conference on September 15–16, 2016 (2016). https://www.rea.ru/ ru/publications/Pages/Komleva201116_1.aspx. Accessed 8 Feb 2020. (in Russian) V Rossii sozdadut kontseptsiyu pervykh 50 «umnykh» gorodov/RIA News, October 18, 2017. https://ria.ru/20171018/1507116497.html. Accessed 8 Feb 2020. (in Russian) Drucker, P.F.: The Practice of Management. Epub ed. (2010) Ivezic, M.: ISO/IEC JTC 1 – Smart Cities – Preliminary Report (2014). https://www.iso.org/files/ live/sites/isoorg/files/developing_standards/docs/en/smart_cities_report-jtc1.pdf. Accessed 5 Feb 2020 Mirovyye praktiki Smart City: otkrytaya baza znaniy (2019). https://ict.moscow/projects/smartcities/?map=russia. Accessed 5 Feb 2020. (in Russian) Saunders, T., Baeck, P.: Rethinking Smart Cities from the Groung up. Nesta, June 2015. http:// www.nesta.org.uk/sites/default/les/rethinking_smart_cities_from_the_ground_up_2015.pdf. Accessed 24 Dec 2019 Popova T. Opyt razvitiya umnykh gorodov vnedryat v Rossii. Nezavi-simaya gazeta, January 26, 2018. http://www.ng.ru/science/2018-01-26/100_smartcity260118.html. Accessed 5 Feb 2020. (in Russian) Funktsional’nyye oblasti proyektov Umnyy gorod (2020). http://www.tadviser.ru/index.php/ Cтaтья:Интeллeктyaльныe_гopoдa_(Умныe_гopoдa,_Smart_cities). Accessed 5 Feb 2020. (in Russian) IESE Cities in Motion Index (2019). http://www.ng.ru/sci-ence/2018-01-26/100_ smartcity260118.html. Accessed 5 Feb 2020 Report ministra energetiki Rossiyskoy Federatsii A.V. Novaka na per-voy vstreche ministrov energetiki stran-uchastnits « Gruppy dvadtsati » (2019). http://www.ng.ru/science/2018-0126/100_smartcity260118.html. Accessed 5 Feb 2020. (in Russian) Umnoye budushcheye energetiki. Kommersant, May 04, 2018. https://www.kommersant.ru/doc/ 3620156. Accessed 5 Feb 2020. (in Russian) Prioritetnyye napravleniya vnedreniya tekhnologiy umnogo goroda rossiyskikh gorodakh. https://www.csr.ru/wp-content/uploads/2018/06/Report-Smart-Cities-WEB.pdf. Accessed 5 Feb 2020. (in Russian)

Smart City Branding Massively Expands Smart Technologies Marina A. Buyanova1(&) , Alla A. Kalinina1 and Maria S. Shiro2

2

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1 Volgograd State University, Volgograd, Russia [email protected], [email protected] Volgograd State Socio-Pedagogical University, Volgograd, Russia [email protected]

Abstract. Purpose: The research is aimed to identify the areas to apply digital technologies in modern cities positioning and to study Russian and foreign experience practice. Design/Methodology/Approach: The research methodology includes a systematic analysis of place branding approaches, as well as the data and analysis of the “smart cities” tools that contribute to the “smart technologies” promotion among the users. Findings: The article studies place branding tools to be used in the “smart technology” expanding. The research methodology includes a systematic analysis of place branding approaches, as well as the data and analysis of the “smart cities” tools that contribute to the “smart technologies” promotion among the users. The study results show that at the present stage of economic science development there is a methodological problem of confusing the marketing concept and its component in place brand building. While place marketing is aimed at increasing the place economic potential (investment, tourism, etc.), place branding is responsible for creating an appropriate territory image in the minds of residents (population, enterprises, state and local authorities) and potential stakeholders (investors, tourists, etc.). In this regard, it is the place branding that allows popularizing certain city, region or the entire country advantages, and it contributes to solving a number of vital socio-economic problems. Thus, building an interaction and participation feeling in the residents’ minds increases their labor motivation, social activity and, consequently, reduces the migration among the working age population. Originality/Value: At the same time, the integral image transmitted by the brand allows non-residents to identify the place and relate it to the solution of important tasks for them. As a result, “smart technologies” places are perceived by both residents and non-residents as comfortable environment for living, visiting and doing business. In addition, digital tools suggest the place “selfpresentation”, which allows reducing the brand image building costs for residents. Keywords: Place branding
Place marketing
Economics digitizing
«Smart city»
Social technology digitizing JEL Code: M310 © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1063–1069, 2021. https://doi.org/10.1007/978-3-030-59126-7_117

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1 Introduction The second half of the previous century made us comprehend a territory potential for investment, tourists and labour resources in the global competition context. For the first time, the term “place marketing” was introduced into science in 1993 by Kotler et al. (2005), and later enhanced by Ward (1998), Moilanen (2009). Mostly often scientific literature understands territorial marketing as a process of planning, coordinating and controlling direct links of territorial management. In the context of building socioeconomic relations, territorial marketing is used as a system of tools to ensure the fact that territorial resources meet the needs of main stakeholders (authorities, population, investors and tourists) (Frunke 1998). At the same time, in the works mentioned above, territories are proposed to be promoted by revising the product marketing tools, while the place subject-object relations are much more complex and dynamic in their structure. In this regard, it is necessary to set apart the concept of place branding, which takes into account the socio-psychological relationships of stakeholders with the local specific. The identity is built on stable communication between the city users, what implies building appropriate information networks within total digitalization.

2 Materials and Method General scientific methods have been used in this research: analysis, synthesis, generalization, systematization. The research is based on the works by foreign and domestic scientists on place marketing and territory branding, as well as on digital tools in this process.

3 Results The term “place branding” was first created by Simon Anholt in 1998. Clarifying the meaning of this tool, the author gives the key interaction spheres with stakeholders, i.e. tourism potential, relations with public authorities, cultural environment, would-be investment and labor resources. S. Anholt claims that branding tools are particularly effective for territories with limited resources, as they allow quickly creating wealth and effectively promoting information (Anholt 2005). In addition, S. Anholt was the first to propose the methodology for territorial brand rating, which is used up today and is considered the fairest. In the digitalizing context, territory branding acquires additional tools that contribute to the appropriate image of a city or region in the minds of direct actors. Since place positioning involves an integrated approach, the communicative component of branding should use tools to rapidly assimilate the broadcast signals to the audience. In these conditions, the use of digital marketing techniques can achieve significant results, which is especially important for “smart cities”. The “smart cities” development involves digital technologies into such socioeconomic areas such as city system management, security, healthcare, education and tourism. Making appropriate management decisions based on various sensor data

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builds an environment which provides high standards of living for stakeholders. (NIITS smart city indicators 2017). At the same time, when the digital city ecosystem is being formed, it increasingly involves the “smart cities” residents and visitors into socio-economic processes, for example, as a feedback on the quality of services provided or any social activity. Today, there are different approaches to indicate the “smart cities” development. According to the report “NIITS Smart cities indicators 2017” (NIITS smart city indicators 2017), several areas of technology implementation should be identified, in particular, the economic development of the territory, urban management system, financial flows, transport, educational and health infrastructure, and the smart technologies training for population. It is significantly important to involve population in socio-economic processes and to create a comfortable and safe environment for living when forming the place image and defining its position. It is facilitated by “smart city” technologies such as: – – – – – –

communication space between the population and state authorities representatives; self-service banking facilities; cashless fare payment for public transport; a system of safe transport infrastructure and automatic traffic violation recording; stable transport service functioning (carsharing, taxi); increasing the residents’ eco-activity and the “green technologies”.

From the view point of the place branding potential, separate “smart technologies” should be identified. In particular, these are technologies that contribute to the territory’s tourism industry development: – online booking systems for temporary accommodation; – creating a database of attractions and a virtual territory map; – guide applications for visitors. In addition, technologies that make it easier to conduct business in the place are of great importance for economic efficiency, for example, such as: – “single electronic window” for doing business; – system of affordable banking services; – information databases on the labor market, etc. Creating “smart cities” is a long and expensive process, so today it is difficult to identify territories that can be such in its full sense of the word. However, the world practice analysis shows that this trend is gaining rapid pace. In 2019, the world “smart cities” database was created (Smart city global practices 2018), and it included 195 projects. Singapore, New-York, Seoul, Stockholm, Shanghai and San Francisco have become the world’s largest centers for implementing smart technologies. In these cities, urban ITs developed by large IT companies have been introduced. The leading position over the past few years is held by Singapore (Why is Singapore the smartest city on the planet? 2017), whose experience is most attractive to adopt in our country. It should be noted that cities are often undergoing digitalization alongside with their branding. Singapore is a perfect example. The history of this city-state marketing development can be divided into two stages: the original brand “YourSingapore” and

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“Future Ready Singapore” (based on the desire to develop and implement modern technologies) and the modern “Passion Made Possible”, which reveals the digital city transformation as a tourist and business center. Singapore’s been acknowledged a “smart business city” image after a number of national projects under the general brand name Smart Nation. Its goal is to improve the interaction between government authorities, businesses and citizens in order to advance productivity together the rational resource consuming (In 2019 Singapore will spend a billion dollars on smart city projects 2019). This approach creates a favorable ecosystem for rapid innovation in the country. To implement the project, the Virtual Singapore system has been created, which allows real-time analysis of the main socioeconomic processes and forecasts of their development (Singapore brings the concept of “smart city” to a new level 2018). Barcelona is a great pattern of combining effective “smart technologies” and simultaneous place branding. The very vision of this city brand is based on a deep transformation. And despite the fact that this principle was formulated during the 1992 Olympics preparation, it still remains relevant. Just like in Singapore, the challenges of smart technologies applying are related to attracting investment and tourists. However, compared to Singapore, Barcelona is a more attractive destination, as it has a rich cultural, historical and sporting heritage. Therefore, the city authorities are developing two main areas for digitalization: a comfortable environment for living and visiting and business comfortable to do. This let Barcelona become the “smartest city” in only a three-year period in 2015, which is a resource for place branding itself. In addition to being a smart and green technologies leader, the city has become a global capital of mobile technology. Every year, Mobile World Congress is held in Barcelona – the world’s largest exhibition and congress for mobile operators, mobile content producers and specialized company owners from all abroad. This is the place where leading mobile companies from all over the planet bring their latest innovations and, consequently, the largest business deals in this industry are made here. The city authorities have achieved significant success in creating mobile applications to make the city more accessible to residents, tourists and investors. The special digital Sentilo system receives data from all city sensors, information about the number of residents in each city block, taxes, accident reports and data from social networks; all these records effectively predict socio-economic processes. The most important smart project in Barcelona attracting the investors’ attention is the pilot project in Poblenou district, where more than 8,800 companies are located. 30% of them work in the field of technology and knowledge, providing jobs for 93,000 people. This is also the place where the Barcelona Urban Lab is sited – a public laboratory where manufacturing companies can test their new products, such as parking systems and sensors for garbage containers, which were mentioned above. The Russian experience is not yet considered advanced, despite the fact that some “smart technologies” are already quite common in our country. The “Digital economy” program launched in 2017 (Rudnykh 2017) assumes to introduce “smart technologies” as the main development direction. Today, most cities have already implemented technologies that contribute to transport system, security, and simplify paper work. However, this is not enough to consider the technology adoption satisfactory because on the territory of Russia, only a few cities (Moscow, Saint Petersburg, Yekaterinburg)

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can state a “smart city” image. The main obstacle to creating genuine “smart cities”, as in other countries, is the need for significant investment. Russians reveal a lack of confidence in growing digitalization rates (Zemskaya and Seregina 2019). In this regard, an important state policy direction is to promote “smart technologies”, it is facilitated by public authorities open and accessible in the virtual space. In the modern media space, an official website acts as the main platform for forming the place image, and it performs two main functions: informational (information expanding) and communicative (feedback from stakeholders). In this context, an official website of local state authorities is a necessary element in the socio-political and socio-economic relations system (Beisembayeva 2009). In addition to the above, using the official site resource in territorial marketing allows to monitor the positioning and reputation of both the entire territory and its individual representatives, to attract tourists and stimulate investment. If the principles of openness are observed, the official resources of the territory can become one of the decisive factors in decision-making by the territory’s stakeholders. In her research, Minayeva (2012) points to the fact that the official resource potential is currently underestimated and underutilized. Information portals that systematically bring information are one of the controlled tools of digital marketing. A potential tourist consumer using such a resource gets all the necessary information to choose a travel direction and makes a complete picture of the place, which is a mandatory element of the territory’s brand. In 2019, the Russian Federation launched the portal “Living heritage” (Living heritage 2020). This is the first resource in the country created for positioning territorial brands. The portal has a public character, that is, residents of territories and tourists themselves bring data that are moderated by administrators. The advantage of the portal is uniform data provided, which allows to systematize information about the place or any matter. On the www.livingheritage.ru you can search for an object or practice not only on the map, but also by the category catalog, and in the regional database you can find a region business card, indicating its main symbols. Any logged user can assess specific territorial brands, mark places they have already visited, and create their own trip map for taken trips and future routes. For this reason, there’s certain necessity to expand personal contact with the place via digital marketing tools to form a territorial brand. The insight which is the result of this interaction will allow the place positioning and achieving the goals set by stakeholders. The digital technologies in branding territories reach maximum efficiency in those areas where decision-making depends on the information concentrated on a single topic, such as investment, tourism or socio-economic potential. The tourism sector achieves greatest result, reasoning that digital marketing tools in this area let tourist sites be promoted through the information consolidated from various sources, including social networks. This allows increasing the audience interest and involving tourists in creating the content during the trip.

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Currently one of the most important resources for promoting places are information portals that systematize information about place brands. According to Pankrukhin (2012), both official Internet resources and commercial portals can become a platform for accumulating up-to-date statistical and sociological information, as well as for conducting talks and discussions, which contributes to the territory development.

4 Conclusion Current trends in creating smart cities require additional resources to promote such approaches, which will attract investment for the further place development. “Smart technologies” make it possible to systematize information flows and create a homogeneous place image for stakeholders. “Smart technologies” in the urban management system involve the population into socio-economic processes, as it allows reducing the outflow among working-age residents, and in the future – to attract new human resources. The openness inherent in sustainable place-brands is stimulated by digital marketing tools and it increases the competition in attracting investment. Thus, “smart cities” branding is a significant task for stakeholders (residents and local governments), and on the other hand, smart technologies make the place marketing processes simpler.

References Anholt, S.: Brand New Justice: How Branding Places and Products Can Help the Developing World (2005) Moilanen, T.: How to Brand Nations, Cities and Destinations: A Planning Book for Place Branding (2009) Ward, S.: Selling Places: The Marketing and Promotion of Towns and Cities 1850–2000 (Planning, History and Environment Series) (1998) Beisembayeva, G.A.: City Website as an information tool, Novosibirsk, pp. 112–114 (2009) In 2019 Singapore will spend a billion dollars on smart city projects (2019). https://www.cio.ru/ news/180219-V-2019-godu-Singapur-naproekty-umnogo-goroda-potratit-milliard-dollarov. Accessed 22 Feb 2020 Zemskaya, Yu.N., Seregina, A.S.: International practice of using websites in promoting place brands (on the example of www sites. visitcopenhagen.com and www.discoverhongkong.com). Communicologia 5(2), 190–199 (2019) NIITS smart city indicators (2017). http://niitc.ru/publications/SmartCities.pdf. Accessed 22 Feb 2020 Kotler, P., Asplund, C., Rein, I., Haider, D.: Marketing places, St.-Petersburg (2005) Minayeva, L.V.: Website as a tool for territory promotion (2012). https://istina.msu.ru/ publications/article/589493/. Accessed 22 Feb 2020 Smart City global practices: an open knowledge base (2018). https://ict.moscow/projects/smartcities/. Accessed 22 Feb 2020 Pankrukhin, A.P.: Russian Marketing reserves for tourist places. Pract. Mark. (8), 4–16 (2012) Living heritage web-site (2020). https://livingheritage.ru/static/about. Accessed 22 Feb 2020 Why is Singapore the smartest city on the planet? (2017). https://econet.ru/articles/121882pochemu-singapur-samyy-umnyy-gorod-planety. Accessed 22 Feb 2020

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Rudnykh, E.S.: Institute for the Internet development. Presentation: “the Digital economy: a course in 2017» (2017). http://polit.ru/article/2013/12/24/ps_as_smartcity/. Accessed 22 Feb 2020 Singapore brings the concept of “smart city” to a new level (2018). https://rb.ru/story/smartnation/. Accessed 22 Feb 2020 Funke, U.: Methodological basis for the development of the urban concept. Evrograd (10), 48–53 (1998)

Smart Technologies and Logistics as Drivers of Development of a Special Economic Zone Ekaterina V. Kryukova(&)

and Diana Sh. Smirnova

Astrakhan State University, Astrakhan, Russia [email protected], [email protected]

Abstract. As you know, a special economic zone (SEZ) is a territory to which the state has granted a special legal status and economic benefits, but without effective logistics and smart technologies, the work of zone residents is not possible. The technology-innovative SEZs are the institutional basis for testing, improving and scaling “smart technologies”. Strategic supply chain management is needed with access to international organizational interaction of both individual participants and the SEZ as a whole. The article discusses the criteria that determine the effectiveness of LPI logistics both at the country level and at the level of individual territories and SEZ. A comparative assessment is carried out and the current situation on the effectiveness of logistics management of the Caspian littoral states is modeled. The analysis of the dynamics of six indicators of the comparative efficiency of logistics. The authors proposed an option to optimize the development of the SEZ. The hypothesis about the possibility of using the LPI modeling system to assess the prospects for the development of the territory of the SEZ is confirmed.

1 Introduction The process of formation and functioning of the mechanism of sustainable development of the economy of any country is impossible without the introduction of innovations of the fourth and fifth technological order. Over the past three decades, developed countries have been actively introducing smart technologies. “Smart technology” is what can ensure global competitiveness. Of particular relevance is the cross-industry technology transfer in high-tech industries. The process of implementing “smart technologies” is complex, requires significant resource investments and is accompanied by a high risk of operations. The costs of the stages of implementation of “smart technologies” are increasing due to the increasing complexity of each subsequent stage and the increasing number of people and financial resources that must be used to carry out the work. The sooner the attractiveness of a particular “smart technology” is assessed, allowing a decision on the feasibility of its implementation, the more efficient the economic system will work. For the practical implementation of the selection, a set of factors affecting the choice of breakthrough “smart technologies”, it is necessary to use the system of Special Economic Zones. How can forecasting the development of a territory or SEZ and as a result give a high probability of a return on investment. The modern world experience of the largest investment organizations, in particular, the © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1070–1080, 2021. https://doi.org/10.1007/978-3-030-59126-7_118

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International Bank for Reconstruction and Development (IBRD), suggests using the Logistics Performance Index (LPI) for these purposes. Statistics for calculating this indicator for countries around the world has been going on since 2007. Technology-innovative zones are referred to the zones of the third generation (70– 80s). They are formed spontaneously (USA) or are created specifically with state support around large scientific centers (Japan, China). They concentrate national and foreign research, design, research and production companies that use a single system of tax and financial benefits. Technical Development Zone (TVZ) - a type of special economic zone for the creation and sale of scientific and technical products, bringing it to industrial use, including the manufacture, testing and implementation of pilot lots, as well as the creation of software products, data collection, processing and transmission systems, distributed computing systems and the provision of services for the implementation and maintenance of such products and systems. The special role of the transport system of the South of Russia was noted by President V.V. Putin, who, at a meeting of the Presidium of the State Council of the Russian Federation, set the task of further developing the transport space of the macroregion of the Southern Federal District and the North Caucasus Federal District, through whose territory the ITC: North-South, connecting the countries of Eastern and Central Europe and Scandinavia with the European part of the Russian Federation and through the Caspian Sea with Azerbaijan, Iran, India, Pakistan; The Transsib connecting Central Europe through Moscow with the Urals, Siberia, the Far East and China, or through the South of Russia with Kazakhstan, Mongolia and Korea. The northern direction can be considered quite formed, since even before the collapse of the USSR, it was the main transit route. As for the southern direction, in modern conditions the Southern Federal District has turned from an internal territory into a border territory, which, due to its geographical position, becomes the main one for the formation of the Southern MTK. International transport corridors of the Lower Volga region historically represents the intersection of the main routes from Asia to Europe and from South to North. Creating a corridor that meets modern requirements of technical, technological and organizational support will not only optimize freight flows within the country, but also ensure the movement of transcontinental cargoes. In modern conditions, the main exchange of goods between Europe and Asia is carried out along ocean routes, around the mainland, and cargo delivery takes from one and a half to two months. The creation of a modern land transport corridor will reduce delivery time to ten days. In 2017, the share of the transport complex of the Southern Federal District and the North-Western Federal District in the total Russian volume of freight transported by public railways amounted to 8% (increased by 0.5% over the past 10 years), by road transport - 3.8% (over the decade, the decline was 2%). The logical result of the problems that have accumulated in the industry are the modest indicators of the transport regional product (TRP) of the Southern macroregion. In terms of TRP, the Southern Federal District is the last but one, and in terms of TRP per capita, it is the last among the federal districts of Russia. A negative factor is the lack of stable positive dynamics of growth of physical volumes of TRP in all subjects of the Southern Federal District.

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The unsatisfactory development of transport infrastructure in the south of Russia is associated with the limited resources allocated for these purposes. In recent decades, there has been a decrease in investment in fixed assets of the transport sector of the economy of the Southern Federal District and the North Caucasus Federal District from 50% of the total investment in the region in 2000 to 27% in 2017. It is completely obvious that the share of the transport component in the sectoral structure of the GRP of the Southern Federal District and North Caucasian Federal District is extremely small. Given the favorable geographical position and potential of the Southern macroregion, as well as the strategic importance of the development of the transport industry to ensure the economic security of the regions of the South and the country as a whole, this situation in the industry can rightly be considered paradoxical. At the end of 2017, the best performance indicators for creating streaming processes were demonstrated by Russian industrial-type SEZs. At the same time, the resident companies did not fully utilize tax incentives in the part credited to the federal budget, and exemptions from customs payments. The Ministry of Economic Development of the Russian Federation and the Government of the Astrakhan Region concluded an additional agreement of August 22, 2017 No. C-131-AЦ/Д14 to the agreement on the transfer of powers to manage SEZs to the Government of the Astrakhan Region dated September 05, 2016 No. C-579-AЦ/Д14, providing for adjustment the planned values of the performance indicators of the SEZ PPT Lotos. The question of the importance of analyzing the relationship between the development of the SEZ and the economy of the territory (city, region, district, country) for the development of the potential of which it has been created is undeniable. In the analysis, we want to find out the degree of influence of individual elements and their synergistic relationship.

2 Methodology If we want to develop the SEZ, it should be integrated into international cooperation and trade not only with domestic producers, but also with representatives of all neighboring countries. The multidimensionality of evaluating the effectiveness of logistics as a supply management system shows the degree of simplification of the procedures for trade, transportation, storage, and also gives an assessment of the quality of the logistics service and transport infrastructure. The LPI index includes six indicators: “Customs” - the efficiency of customs, “Infrastructure” - quality assessment and availability of infrastructure, “International shipments” - the level of competitiveness of transportation prices, “Logistics quality and competence” - the level of competence and quality of logistics providers, “Tracking and tracing” - tracking the movement of goods across the territory, “Timeliness” - the number of deliveries arrived at the destination on time. The LPI is the weighted average of the six indicators shown above. The World Bank publishes a Logistics Performance Index every two years. Table 1 presents the ranking of the top 3 positions in comparison with the five countries of the Caspian community.

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Table 1. 2018 International LPI ranking The country

LPI

Customs Infrastructure International shipments

Logistics competence

Tracking & tracing

Timeliness

Germany Sweden Belgium Iran Kazakhstan The country

4.20 4.05 4.04 2.85 2.81 LPI

4.09 4.05 3.66 2.62 2.66 Customs

4.31 3.98 4.13 2.84 2.58 Logistics competence 2.75 2.31

4.24 3.88 4.05 2.77 2.78 Tracking & tracing 2.65 2.56

4.39 4.28 4.41 3.36 3.53 Timeliness

Russia 2.76 2.42 Turkmenistan 2.41 2.35

4.37 4.24 3.98 2.77 2.55 Infrastructure 2.78 2.23

3.86 3.92 3.99 2.76 2.73 International shipments 2.64 2.29

3.31 2.72

Note: compiled by the authors on the materials of World Bank (2018).

Table 2. Aggregated LPI for 2012–2018 The country

LPI

№

Customs Infrastructure International shipments

Logistics Tracking Timeliness competence & tracing

Germany Sweden Belgium Kazakhstan Iran Russia Azerbaijan Turkmenistan

4,19 4,07 4,05 2,77 2,71 2,69 2,45 2,34

1 3 4 77 81 85 123 142

4.09 3.95 3.74 2.57 2.46 2.25 2.53 2.25

4.26 4.04 4.10 2.60 2.76 2.74 2.14 2.20

4.38 4.22 4.03 2.59 2.67 2.64 2.69 2.23

3.83 3.88 3.97 2.73 2.68 2.59 2.56 2.36

4.22 4.02 4.11 2.81 2.63 2.67 2.18 2.32

4.40 4.32 4.40 3.31 3.07 3.23 2.62 2.63

Note: compiled by the authors on the materials of World Bank (2018).

As can be seen from Table 1, Germany ranks first with an LPI of 4.20, followed by Sweden and Belgium. According to 2018 data, Russia lags behind its neighbors Iran and Kazakhstan in the efficiency of logistics development. The lag behind the leading countries (top 5) in 2018 was about 60% i.e. Logistics of the Caspian littoral states is less efficient. Aggregated LPI combines the last four LPI ratings. The rating results in the 2012, 2014, 2016 and 2018 LPI surveys were used to create a “big picture” to better show the effectiveness of logistics in countries. This approach reduces the random deviation from one LPI survey to another and allows you to compare 167 countries. Points for each year for each component were estimated using the weighted average method. The aggregate index in Table 2 was added as the sum of 6.7% in 2012, 13.3% in 2014, 26.7% in 2016 and 53.3% in 2018. In the aggregated LPI index presented in Table 2, we see that the position of Kazakhstan is higher compared to Table 1, this is due to the fact that Kazakhstan has shown a more stable development of logistics over the past 6 years. The same result of a consistent increase in the comparative efficiency of logistics we see in Table 3.

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E. V. Kryukova and D. Sh. Smirnova Table 3. Aggregated LPI, by place in the world for 2012–2018. №

The country

LPI

Customs Infrastructure International shipments

Germany Sweden Belgium Kazakhstan Iran Russia Azerbaijan Turkmenistan

4,19 1 1 4,07 3 4 4,05 4 13 2,77 77 78 2,71 81 96 2,69 85 131 2,45 123 81 2,34 142 133

1 3 10 79 70 73 66 129

4 2 1 87 94 105 109 135

Logistics Tracking competence & tracing

Timeliness

1 5 3 89 72 73 153 150

1 4 2 65 95 74 146 143

1 11 4 78 95 88 153 137

Note: compiled by the authors on the materials of the World Bank (2018).

Table 3 shows which components the country is experiencing the most problems for. So for Russia, this is the problem of Customs clearance (131 places in the world) and the level of competitiveness of transportation prices (105 places in the world). For Kazakhstan, the undisputed leader of the considered group of the Caspian littoral states in terms of the number of deliveries arriving at their destination on time (65th place in the world) is the problem of the areas of Quality of logistics competencies (89th in the world) and the level of competitiveness of transportation prices (87th in the world). Table 4 presents the dynamics of the Logistics Performance Index (LPI) for the Caspian states. Table 4. Comparative dynamics LPI The country LPI 2007 2010 2012 2014 Russia 2.37 2.61 2.58 2.69 Iran 2.51 2.57 2.49 – Kazakhstan 2.12 2.83 2.69 2.70 Note: compiled by the authors based on

Relative growth 2018 to 2007 (%) 2016 2018 2.57 2.76 16 2.6 2.85 13.5 2.75 2.81 32.5 the World Bank (2018).

Let us conduct a comparative calculation of the Logistics Performance Index (LPI) for the countries of the Caspian community. Kazakhstan is the leader with a relative growth of this indicator 32.5%. Russia shows an unstable index value. Growth in 2010, 2014 and 2018, and respectively a decrease in 2012 and 2016 against the backdrop of political sanctions. As a result, growth for the period 2007–2018 was only 16%. The value of Iran’s LPI index also, as can be seen from Table 4, decreases against the background of unfavorable political events for participation in world trade. The leadership of Iran and Kazakhstan in the group of the Caspian littoral states is quite high and is clearly increasing. The positive dynamics of the indicator as a whole for the group of countries of the Caspian states is a positive trend, but, of course, Russia’s position should be improved. The index allows you to identify critical areas

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Table 5. The dynamics of individual indicators of logistics efficiency in Russia Year

LPI rating from 160 countries

Customs Infrastructure International shipments

Logistics Tracking competence & tracing

Timeline

2018 2016 2014 2012 2010 2007 2018 к 2007 (%)

75 99 90 95 94 99

2.42 2.01 2.20 2.04 2.15 1.94 125

2.75 2.76 2.74 2.65 2.51 2.46 112

3.31 3.15 3.14 3.02 3.23 2.94 113

2.78 2.43 2.59 2.45 2.38 2.23 125

2.64 2.45 2.64 2.59 2.72 2.48 106

2.65 2.62 2.85 2.76 2.60 2.17 122

Note: compiled by the authors based on the Global Rankings Logistics Performance Index.

for logistics and whether SEZ indicators. Consider the example in Tables 5, 6, and 7 in the comparative dynamics by year. Russia takes 75th place in the ranking of 2018, which is a return to a positive trend. In 2018, Russia rose in the world ranking by 24 positions. Twice during the monitoring period in 2007 and 2016, Russia occupied the 99th position. The worst indicator in the structure of the Russian LPI is the indicator of Customs clearance. Despite its high relative growth, this is not enough. The number of deliveries arriving at their destination on time is growing steadily. Consider the dynamics of LPI in Kazakhstan in Table 6. Table 6. Dynamics of individual logistics performance indicators Kazakhstan Year

LPI Mecтo из Customs Infrastructure International 160 cтpaн shipments

Logistics competence

Tracking & tracing

Timeline

2018 2016 2014 2012 2010 2007 2018 к 2007(%)

71 77 88 86 62 133

2.58 2.57 2.72 2.75 2.60 2.05 126

2.78 2.86 2.83 2.83 2.70 2.19 127

3.53 3.06 3.24 2.73 3.25 2.65 133

2.66 2.52 2.33 2.58 2.38 1.91 139

2.55 2.76 2.38 2.60 2.66 1.86 137

2.73 2.75 2.68 2.67 3.29 2.10 130

Note: compiled by the authors based on the Global Rankings Logistics Performance Index.

Kazakhstan ranks 71st in the ranking of 2018, which is an unprecedented increase in the observed period. For the period 2007–2018, Kazakhstan has risen in the world ranking by 62 positions. The worst indicator in the LPI structure of Kazakhstan is the Quality of Infrastructure indicator. The indicators that make up the LPI are more uniform. They demonstrate stable positive dynamics. The indicator of customs clearance is growing steadily. Consider the dynamics of LPI for Iran in Table 7.

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E. V. Kryukova and D. Sh. Smirnova Table 7. Dynamics of selected indicators of logistics efficiency in Iran

Year

LPI Mecтo из Customs Infrastructure International 160 cтpaн shipments

Logistics competence

Tracking & tracing

Timeline

2018 2016 2012 2010 2007 2018 к 2007(%)

64 96 112 103 78

2.84 2.67 2.66 2.65 2.69 106

2.77 2.44 2.49 2.50 2.00 139

3.36 2.81 2.66 3.26 2.80 120

2.62 2.33 2.19 2.22 2.50 105

2.77 2.67 2.42 2.36 2.44 114

2.76 2.67 2.49 2.44 2.59 107

Note: compiled by the authors based on the Global Rankings Logistics Performance Index.

Iran takes 64th place in the ranking of 2018, and is the leader of the Caspian littoral states. For the period 2007–2018, Iran has risen in the world ranking by 14 positions. The indicators that make up the LPI are more uniform. They demonstrate stable positive dynamics at an average of 10%. The most steadily growing indicator is “Tracking the movement of goods across the territory” - 39%. Consider the most problematic LPI element for Russia - Customs clearance in Table 8. Table 8. Comparative dynamics of individual indicators customs Logistics Performance Year Kazakhstan 2018 2.66 2016 2.52 2014 2.33 Year Kazakhstan 2012 2.58 2010 2.38 2007 1.91 Relative growth 2018 to 2007 (%) 39 Absolute growth 2018 to 2007 0.75 Note: compiled by the authors based on the Performance Index.

Iran Russia Max 2.62 2.42 Kazakhstan 2.33 2.01 Kazakhstan – 2.20 Kazakhstan Iran Russia Max 2.19 2.04 Kazakhstan 2.22 2.15 Kazakhstan 2.50 1.94 Iran 5 25 Kazakhstan 0.12 0.48 Kazakhstan Global Rankings Logistics

As can be clearly seen from the table, logistics in Kazakhstan demonstrates absolute leadership among the Caspian littoral states in terms of “Customs clearance”. The key components of modern logistics are the use of innovative technologies such as Logistics Big Data (Digital SCM), RFID, Cloud Services, BlockChain, 3DPrinting, IoT, Mobile app. This is a balanced set of “smart technologies” that a logistics coordinator and (or) a top supply chain manager should have in common. (Sergeev 2018). It should be noted that the countries leaders in the LPI index rating own these “smart technologies” in the most complete volume at the moment.

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An analysis of international experience in the development of senior and middle management, in particular value chain managers, revealed a direct pattern between the development of qualifications and competence in smart technologies in the field of logistics and the improvement of the company’s financial performance (Ellinger and Ellinger 2014). The analysis shows that the most innovative technologies in the field of logistics in the context of individual countries, international unions, professional associations and global international corporations are technologies such as the use of digital doubles of transport to control security and improve reliability of delivery, “smart roads”, “smart transport”, “Robotization of loading and unloading processes” (Winters et al. 2014; Handfield et al. 2013). Of particular relevance is the international experience of digitalization and globalization of logistics systems and supply chain management processes (Hsieh et al. 2014). All these materials made it possible to confirm the direct relationship between the high LPI and the country’s use of modern smart technologies in the field of logistics. Analysis of the state of the transport sector of the economy of the South and North Caucasus of Russia according to the results of 2016–2017. shows that the most complex problems of its development include: 1. a significant lag in the material and technical base of the transport infrastructure from world standards; 2. uneven development of individual industries and territorial complexes of the macroregional transport system; 3. disproportionate placement of infrastructure facilities in the industry; 4. inadequate financing needs of the industry; 5. The imperfection of the mechanisms of its regulation at the federal and regional levels as a consequence of the development of the industry according to the “residual principle”. The SEZ of the industrial-production type “Lotus” began to be created in the Narimanov district of the Astrakhan region in 2015, which was influenced by the active development of the Caspian shelf in recent years. Area specialization: shipbuilding, production of components for shipbuilding and oil and gas equipment; production of crane equipment; instrument making; engineering; metalworking; chemical and light industry. The development period of the SEZ “Lotus” is designed for 2016–2025, at the first stage (2016–2018) the following was implemented: vertical planning, engineering and transport support, entry and customs zones were created, the necessary engineering infrastructure was brought to the sections of the first resident companies. The amount of undeveloped funds (balance) actually allocated from the federal budget for the creation of infrastructure facilities of the SEZ Lotus PPT exceeded 329 million rubles at the end of 2017. In accordance with the Strategy for the development of Russian seaports in the Caspian basin, rail and road approaches to them until 2030 in December 2019, the leadership of the Astrakhan region submitted an application for the creation of a Port Special Economic Zone to the Ministry of Economic Development of Russia. The port SEZ will be created in 2024 in the area of the port of Olya. During the first phase of 2021–2022. the existing infrastructure of the seaport of Olya will be modernized, and at the second stage a new port will be commissioned.

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Considering the fact that total investments of 75 billion rubles are planned in the creation of the port SEZ. The leadership of the Astrakhan region is actively working to attract investors. So in November 2019, an agreement was signed between the Government of the Astrakhan Region and the Caspian port and logistics company on the investment of 15 billion rubles in an intermodal container terminal. Also, in order to create a modern digital supply chain management system, the Government of the Astrakhan region signed agreements with such large enterprises as the State Corporation for the Promotion of the Development, Production and Export of High-Tech Industrial Products Rostec, State Transport Leasing Company (GTLK), Glonass JSC, and the company Murphy Group Holdings UK Ltd., LLC Tekleor, LLC PKF Sarma, etc. A good example of the relationship between these elements is the development dynamics of the Khorgos - Kazakhstan SEZ and the SEZ in Iran. In Iran, there is one innovation cluster - the Pardis technopark. The decision to create the Pardis Technopark was made in 2000. In 2001, the construction plan for the new city and the Pardis technology park was approved. Technopark Pardis is 20 km away. Northeast of Tehran. Currently, construction is ongoing on an area of 800 ha. The Pardis High-Tech Technopark consists of two zones: Pardis Innovation and Pardis Science. The main goals of creating the Pardis High-Tech Technopark are the following: commercialization of research results; accelerating the transition to industrial use of new technologies; accelerating the exchange of scientific knowledge between scientific centers within the country and abroad; Assistance to Iranian companies in establishing international relations and entering global markets; creating opportunities for research in such strategic branches of science as nanotechnology, biotechnology, information technology; establishing direct contacts between research centers and manufacturing enterprises to maximize the use of the country’s scientific potential; assisting in obtaining the necessary funds for scientific research both from Iran’s foreign exchange reserves and by attracting foreign loans; increase in value added in products manufactured and exported by Iran; establishing direct contact between scientists and investors; creation of conditions for the rapid growth of companies operating on the basis of innovative technologies. At present, 71 enterprises are registered in the Pardis technology parks. Of these, 25 enterprises work in the field of information technology and telecommunications, 15 - in the production of electronic and medical equipment, 4 - in the field of nanotechnology, 12 - are engaged in the development of new technologies for mechanization and automation of production, 12 - are engaged in the development of new biological and chemical technologies, 3 - in other industries, such as alternative energy sources and architecture and urban planning. It should be noted that in the Pardis technology park a joint company with Russian participation was registered - ParsRus. This company is working on the development of new medicines.

3 Results As the main elements, we can single out the factor of creating SEZ ready for export products (SEZ as a portal), and readiness of the SEZ for transport and logistics processes (SEZ as an intermodal terminal). On the scale of the territory’s economy, we are

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talking about a regional product and a transport component—a regional transport product (TRP), as well as the level of application of “smart technologies” in logistics processes. According to the results of the state examination of the activities of the SEZ PPT “Lotus” for 2017, the value of the EEZ indicator was 100% (Erez - 162.17%, Rfb 100%, Eou - 102%), and for the period since the beginning of the functioning of the SEZ - 95% (133.47; 92 and 102% respectively). Since the establishment, 8 resident companies have been registered in the zone (2 of them with the participation of foreign capital), in 2017 - 4 (including 1 with the participation of foreign capital). Since 2015, 216 jobs were created in the SEZ PPT “Lotus”, in 2017 - 141; investments, including capital investments, amounted to about 686 million rubles. (111% of the plan), of which only in 2017 they exceeded 650 million rubles; the revenue from the sale of goods, the performance of work, the provision of services minus VAT and (or) the amount of income for the period from the beginning of the operation of the zone amounted to 2,439.82 million rubles. (73% more than the plan), and in 2017 - 1,726.77 million rubles. (147% higher than planned); 8 engineering infrastructure facilities were built and commissioned. From the funds of the regional and local budgets of the Astrakhan region in 2017, about 144 million rubles were allocated to finance the creation of engineering, transport, social, innovative and other infrastructure facilities of the SEZ PPT Lotos. The amount of taxes paid by residents of the zone to budgets of all levels since its inception exceeded 404 million rubles, including more than 385 million rubles in 2017. The volume of customs payments paid by residents amounted to 2.12 million rubles, and the amount of tax benefits used in the part credited to the regional and local budgets exceeded 30 million rubles. In 2017, a bulk carrier of the RSD-49 project of Lotos Shipbuilding Plant JSC was laid in the territory of the zone, and the construction of an electrical equipment manufacturing plant at ATEF RUSS LLC was launched.

4 Conclusion 1. The SEZ will not be able to develop effectively without transport and logistics development. The creation of a logistics infrastructure, in particular, a port SEZ, a dry port of a SEZ, an intermodal container terminal, is an integral element of the synergy of the development of an industrial SEZ and the economy of the region as a whole. 2. It is the quantity and quality of presence of large international players in the transport and logistics market in the SEZ that can serve as an indicator of the speed of its development. 3. The development of the transport and logistics infrastructure of the Astrakhan region in particular ports and the intermodal container terminal will contribute to the transformation of the SEZ “Lotus” and the Astrakhan region as a whole into a large transport hub and in the medium term into a logistics portal. The products of residents of the SEZ “Lotus”, enterprises of the Astrakhan region and enterprises of the Southern Federal District (SFD) will be able to enter the international market. It is recommended to use LPI for calculating the efficiency indicators of the spread of “smart technologies”

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in modern developed and developing countries in the SEZ, in particular in technologyinnovative ones.

References World Bank: Trade logistics in the global economy: the logistics performance index and its indicators. The World Bank (2018). https://lpi.worldbank.org/international/global/2007-2018 Sergeev, V.I.: Logistics and supply chain management - a specialty of the 21st century. Logist. Supply Chain Manage. 6(89), 3–30 (2018) Handfield, R.B., Straube, F., Pfohl, H.-C., Wieland, A.: Trends and Strategies in Logistics and Supply Chain Management: Embracing Global Logistics Complexity to drive Market Advantage. DVV Media Group GmbH, Berlin, Germany (2013) Hsieh, L.-Y., Lu, Y.-J., Lin, H.-S., Lee, Y.-H.: With blended learning information operational system design in response to globalized logistics talent training. In: The 2nd International Workshop on Learning Technology for Education in Cloud, pp. 61–71. Springer, The Netherlands (2014) Aggarwal, A.: SEZs and economic transformation: towards a development approach to SEZs and global experience. Transnatl. Corp. 2(1), 34–49 (2019) Bost, F.: Special economic zones: methodological and definition issues. Transnatl. Corp. 2(1), 56–68 (2019) Kuznetsov, A., Kuznetsova, O.: The success and failure of Russian SEZs: some policy lessons. Transnatl. Corp. 2(1), 89–92 (2019) Farole, T., Akinci, G.: Special Economic Zones: Progress, Emerging Challenges, and Future Directions. The World Bank, New York (2011) Ellinger, A., Ellinger, A.D.: Leveraging human resource development expertise to improve supply chain managers’ skills and competencies. Eur. J. Train. Develop. 38(1/2), 118–135 (2014)

Assessing the Resource Potential of the Territory During the Digital Development of Society Anastasya A. Dzhikiya(&) , Anna V. Shkalenko and Mikhail D. Dzhikiya

,

Volgograd State University, Volgograd, Russia {oponir,oponir,dzhickiamd}@volsu.ru

Abstract. Purpose: The Russian government has designated the transition to a digital scenario for the development of the country as one of the priority areas for the development of the state. In the context of such a transition, modernization processes are impossible without an adequate assessment of the existing natural resource potential of the territories. The authors examined the main approaches to the definition of natural-resource potential, the key methodological approaches to its evaluation and the impact of modern conditions of development of society (the level of technology, accumulated material and technical base, the base of protected intellectual property that are critical for technological modernization of the economy, foreign policy and foreign threats, etc.) on the formation of methods and approaches to assessing the natural resource potential of the territories. Design/Methodology/Approach: The methodological basis of the study was the general scientific principles of a systematic approach, methodological approaches and conceptual provisions of economic theory, the theory of strategic economic management and modernization theory. Findings: The results of the study showed that the Russian Federation has an urgent need to revise the methods and approaches to assessing the natural resource potential of the territories. The modern approach should deal with each type of resource as part of a single whole, considering the comprehensiveness and complexity of the general phenomenon and the synergistic and systemic effects. Originality/Value: In this regard, it is impossible to assess the natural resource potential of the territory without considering the development level of the material and technical base of science and production; the existing scientific and technical reserves, including protected intellectual property that are critical for the technological modernization of the economy in the context of its transition to a new development scenario; foreign policy and foreign economic conditions for the development of the country and import substitution policies. Keywords: Resource potential
Methods for assessing natural resource potential
Technological modernization of the economy
Indicators for assessing intellectual property
Digital transformation
Institutional changes JEL Code: O14


O33

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1081–1091, 2021. https://doi.org/10.1007/978-3-030-59126-7_119

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1 Introduction Digital technologies affect national economies worldwide. They are continuously developing and expanding, opening the doors to a new economy - an intellectual, datadriven and learning economy. Empirical evidence suggests that in most countries the digital sector is less than 10%. However, if we measure it by value-added, income or employment (IMF 2018), we can say that the modern economy is digital in the broad sense since digitalization is part of almost all types of economic activity, and states stimulate the spread of digital technologies at all institutional levels. Government’s capacities and abilities to use the digital revolution for economic development vary from country to country, so technological progress and digitalization affect regional and national economies in different ways. All countries have embarked on the path of the digital economy, but there are still significant gaps between them associated with differences in the resource potential of countries. Digital transformation is the basis of all modernization processes in society and the new economy aimed at ensuring, to a large extent and equitably, the return on development, using the available resource potential of the country and regions. But digital transformations go far beyond developing advanced digital technologies. It also requires investment in institutions and effective economic policy because otherwise, it will lead to the isolation of digitalization’s benefits, despite the widespread use of the Internet. Recently, it has been developed several strategic frameworks to facilitate the construction of digital transformation ecosystems (Hanna and Knight 2012; Hanna 2016). Common interdependent components of ecosystems discussed in the literature include politics and institutions; human capital; ICT services sector; ICT infrastructure and digital conversion applications. Currently, there are no generally accepted methods in the scientific community for assessing the resource potential of a territory that would allow considering the resource availability, their losses, as well as the conditions of their realization and use. Moreover, the lack of unified approaches to the determination of both the resource potential and the natural resources themselves complicates the possibility of allocating the resource potential as an estimated object. The concept of natural resources and resource potential is not fixed at the legislative level, and the scientific community provides different options for formulating these categories. Many Russian and foreign scientists expressed their interpretations of the category of natural resource potential. M.A. Nevskaya and V.L. Trushevsky, for example, consider the natural resource potential as one of the parts of a broader concept - the socio-economic potential of the allocated territory. And they define it as the ability of elements of the natural environment to ensure the livelihoods of the population and their reproduction (Nevskaya and Trushevsky 2010). From geography aspect, Doctor of Geographical Sciences A.G. Emelyanov defines the natural resource potential as the maximum number of resources that, when used, will not lead to the impossibility of further existence and development of society (Emelyanov 2013).

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Representatives of economic geography, for example, A.A. Mintz understands the natural resource potential as a cost expression of a combination of resources valuable to the national economy (Mints 1972). A scientist could sometimes fail to accurately determine the concept of natural resource potential, so the Soviet zoologist, ecologist, doctor of biological sciences N.F. Reimers presents immediately two definitions of the mentioned concept to the scientific community. On the one hand, the natural resource potential is a part of natural resources involved in economic activity, considering external (technical and socioeconomic) conditions for the development of the territory, on the other hand, the resources, conditions and processes of the social and territorial development represent a certain set that acts as the basis of social life which contrasts it with the natural resource potential as an object of anthropogenic impact (Reimers 1994). D.L. Armand correlates the natural resource potential with the availability of funds necessary for the existence of people directly in natural diversity (Armand 1963). A.G. Adyrkhaev refers to the natural resource potential as the totality of natural resources developed by man (Adyrkhaev 2007). For this study, the authors will use the most general interpretation of the natural resource potential as the integrity of the natural resources of the territory, which serve as the basis for its economic development and can be used in the economic activities of the society without threatening its current life and further development. Despite the obvious linking of the natural resource potential to a particular territory, currently, the scientific community more often uses the costly method of assessing the natural resource potential (Nadvornaya et al. 2016) ignoring the influence of an external factor and separating from the territorial affiliation of resources. In the framework of traditional methodologies of the assessment, the main emphasis focuses on accounting for natural potential, human resources, business activity and intangible assets. The set of indicators used in traditional methods is mostly subjective and cannot be quantified, which is a definite drawback of these methods. There is also an assessment of the individual elements of the natural resource potential. Given the above, we can assume that there is a scientific search in the field of determining and evaluating the category of natural resource potential. However, in the technological modernization of the economy during its transition to a new development scenario, the category of natural resource potential should have a broader interpretation than the aggregate of natural resources of the territory since, on the one hand, the natural resource potential includes the natural resources of a territorial unit and on the other hand, it means the growth potential of a territory in the current conditions of its development. Given the above, the most important point in assessing the natural resource potential of the territory is the question of choosing a methodological approach to get the most objective assessment reflecting not only such classical aspects as the ecological state, social conditions and economic development but also the material and technical base science and production; existing scientific and technical backlogs, the state of the legal infrastructure of protected intellectual property objects which are critical for the technological modernization of the economy in the context of its transition to a new development scenario.

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2 Materials and Methods The theoretical and methodological basis of the study was the methodological approaches and conceptual provisions of economic theory, the theory of strategic economic management and modernization theory. From methodology, in solving the problem of assessing the natural resource potential in modern conditions of the development of society, first, we should proceed from the principles of system analysis. It is necessary to consider the world as a single global economic system, while political and economic transformations occur both at the national and global levels, including industrialization, technological regimes, waves of innovation, modernization and sustainable development of territories. The toolkit and methodological apparatus of the study compiled the general scientific principles of a systematic approach, comparative analysis, strategic planning methods, network planning and management technologies, a targeted program approach. The informational and empirical basis of the study is the work of foreign and domestic scientists on the interpretation and content of the natural resource potential and the main options for its assessment; legal regulation of the creation and commercialization of intellectual property, as well as materials from scientific conferences in the field of planning modernization processes, import substitution policies and the digital development of the economy, publications in national and foreign periodicals, as well as information collected by the authors in studying this issue. The legal basis of the study was the WIPO Convention, the Berne Patent Cooperation Treaty, the Civil Code of the Russian Federation and other regulatory legal and program-conceptual documents, as well as reviews of judicial practice and statistics of the Russian authorities.

3 Results The result of assessing the resource potential of the territory in the current conditions of the development of society should be to determine the optimal level of resource potential, which allows assessing: the actual level of the resource potential of the territory, a margin of stable existence and development of society considering the identified reserves (material and technical base of science and production; existing scientific and technical reserves, including protected intellectual property) which are critical for the technological modernization of the economy in the context of its transition to a new development scenario. Currently, the question of resource potential assessment is gaining popularity among the scientific community, which, in turn, gives rise to different points of view on this issue (Frolov et al. 2016). Given the current situation, the very concept of assessing the resource potential requires clarification. For this article, the authors understand the assessing as a way of establishing the significance of an element for the successful functioning and further development of a particular system. In our case, we are talking about assessing the impact of the resource potential on the functioning of the territory in the current conditions of social development.

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If we summarize the whole variety of methods for assessing resource potential, we distinguish four main methodological approaches that underlie them and assess the impact of qualitatively heterogeneous resources on the formation of the main indicators in the development effectiveness of the assessed territories (Table 1). As all methods and approaches, each, in turn, has certain advantages and disadvantages. Table 1. Methodological approaches to assessing the resource potential of the territory Approach Economic assessment

Assessed aspect The assessment requires the calculation of such an indicator as resource availability

Economic and statistical assessment

Assessment requires the calculation of a regression coefficient between production resources and production results

Index assessment

The assessment requires the calculation of the average index of resource supply as an indicator of the level of resource potential in a particular area by dividing the sum of the above indices by their number

Disadvantages The results of the assessment indicate that the degree of development and use of the resource potential of the territory is insufficiently qualitative The share of each type of resource in the formation of the total resource potential is difficult to evaluate. Economic-statistical models provide a picture of the integral indicator of the resource potential indirectly through the calculated level of the effective indicator. The regression estimation methods are correct only within the framework of the aggregate covered by one model; this does not allow for a composite regression assessment It does not reflect the presence of costeffective or reverse trends in determining production efficiency

Features It cannot be applied for heterogeneous objects of assessment, for example, regions with opposite specializations

The results of the assessment indicate that the degree of development and use of the resource potential of the territory is insufficiently qualitative

(continued)

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Approach Monetary assessment

Assessed aspect Disadvantages The summation of The assessment monetary assessments involves the use of two of land, labour main methodological resources, the value of approaches: translation fixed and circulating of production resources production assets, and into value form and other types of resources their summation; the determines the resource principle of potential interchangeability of certain types of resources Source: Made by the authors on Davydkina (2015).

Features Materials of land assessment work are the basis of land resources assessment

As the authors have already described, in the scientific community there are various approaches to determining the concept and composition of the resource potential of a territory. For this article, the authors identified the following main elements of the resource potential that affect the assessment of a territory (Table 2). Table 2. Elements of the territory’s resource potential Group Natural potential

Composition Land, mineral, water, biological, recreational and other reserves Innovation and Investment Protected intellectual property critical for technological Potential (Zimnyakova 2017) modernization of the economy (Gadzhiev et al. 2016) Intellectual potential The scientific and technical backlog accumulated by society and the totality of labour resources (Barsukov 2016). Financial potential Property and financial opportunities Infrastructure potential Information and communication network, institutional base and organizational management structures Entrepreneurial potential Entrepreneurial activity of the population Source: Made by the authors on Kolesnichenko and Nesterova (2013).

Assessing each of the identified elements of the resource potential requires a number of indicators. The ratio of a certain number of territory resources to the total number of resources of a country determines the natural resource potential. High resource potential increases the investment attractiveness of a particular territory. Among private methods for assessing investment attractiveness, we can distinguish both foreign, recognized around the world, and domestic assessment systems (Table 3).

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Table 3. Methods for assessing investment attractiveness and credit ratings Assessing subject Fitch, Moody’s, Standard & Poor’s Expert RA

Assessed aspect They assess separate regions and countries regarding their ability to fulfil their obligations They assess the investment potential and investment risk of the region, which indicates its investment attractiveness Institute of Economics They assess a set of factors: natural resource, demographic, of the RAS economic, level of economic development, economic activity, living standards of the population, state of regional finances, economic reforms, political activity of voters, stability and influence of regional structures, that directly or indirectly affect investment attractiveness Source: Made by the authors on Kolesnichenko and Nesterova (2013).

Assessing heterogeneous indicators for each factor requires to determine its average point score, as well as the weight of each factor. After which there is a total weighted assessment of investment attractiveness: CO ¼

Xk n

cbn  Wn ;

where CO is the total weighted assessment of investment attractiveness; cbn is the average point assessment of the nth factor for the region; Wn - the weight of the nth factor; k is the number of factors. The current conditions of the development of society (the level of technology development, the accumulated material and technical base, the base of protected intellectual property objects that are critical for the technological modernization of the economy, foreign policy and foreign economic threats, etc.) need to revise the methods and approaches to assessing natural-resource potential of the territories. The modern approach should deal with each type of resource as part of a single whole, considering the comprehensiveness and complexity of the general phenomenon and the synergistic and systemic effects. In this regard, it is impossible to assess the natural resource potential of the territory without considering the development level of the material and technical base of science and production; the existing scientific and technical reserves, including protected intellectual property that are critical for the technological modernization of the economy in the context of its transition to a new development scenario; foreign policy and foreign economic conditions for the development of the country and import substitution policies. At the macroeconomic level, all the benefits resulting from the adoption and diffusion of digital technologies increase profits for firms and lead to economic growth and economic development (Anvari and Norouzi 2016; Dimitrova 2002; Dimitrova and Baylock 2005). However, literature typically considers the adoption and diffusion of digital technology separately. According to Mohamad and Ismail (2009), the introduction of electronic commerce is due to some macroeconomic factors, namely:

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1. Individual factors (IT knowledge, management characteristics, management support); 2. Organizational factors: industry type, company size, costs, digital skills; 3. Environmental factors: state support, support of external experts, technological infrastructure, network intensity, communication channel, business location, pressure from clients or business partners; 4. Technological factors: relative advantage, usefulness, compatibility. The above classification does not consider other significant economic factors, such as export intensity, international market intensity (Kula and Tatoglu 2003; Chong 2008), or a country’s wealth as measured by per capita GDP (Wang and Liu 2015). In addition to the empirical understanding, we also found that economic development of countries affects the adoption of digital technologies in the sense that developing countries adopt digital modernization more slowly than developed ones (Migiro 2006). On the contrary, organizational and institutional factors represent the main barrier to the adoption of digital technologies in developing countries, while technological obstacles appear to be specific, especially for developed countries (Kartiwi and MacGregor 2007). A comparative analysis of the main methodological approaches to assess the level of the resource potential of the territory allows the authors to conclude that the methods that use the calculation of the integral indicator as the basis are the most relevant according to the results. They also consider it appropriate to assess some new indicators that have become important in the new conditions of social development influenced by modernization processes of economic development. The innovative and investment potential of the state depends, among other things, on its place in the global intellectual property market (hereafter IP). From a legal point of view, assessing the intellectual resource potential of territory implies the use of some indicators that make it possible to judge the export and import potential of IP, as well as determine the level of development of legal norms (legal procedures) directly related to the intellectual property market. As the main indicators for assessing the resource potential in terms of protected intellectual property, we propose using the followings: 1. Quality of Legislation: the legal norms that meet modern international standards for regulating the turnover of intellectual property. 2. Law Enforcement Practice: effective mechanisms for protecting intellectual property rights, universality (exportability of transactions), as well as the predictability of the judicial system. 3. The presence of independent, especially established jurisdictional bodies that consider disputes related to intellectual property. 4. The number of registered IP objects, their specific gravity, significance for the secondary and tertiary sectors of the economy. 5. Efficiency and transparency of the state supervision and control system. The intellectual potential accumulates the scientific and technical backlog of society and the totality of labour resources in the most promising branches of science and

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practice. Assessment of the resource potential relating to its intellectual component is not possible without considering such indicators as: 1. The number of graduates of educational organizations in specialities related to information and communication technologies. 2. Researchers involved in information and communications technology. The financial potential covers property and financial opportunities. The new conditions of the development of society require to review the volume of financing, as well as the proportions of the distribution of funds to support the most significant and promising areas of technological modernization of the economy. The most important indicators in this case are: 1. Dynamics of changes in the total market volume of high-tech goods and services. 2. The share of financing high-tech industries in the state budget. Infrastructure potential includes an information and communication network, institutional base and organizational management structures, their role in the aggregate value of resource potential will help to assess indicators such as: 1. Territorial provision of the country with high-speed Internet. 2. The number of public services provided to citizens on a remote basis (egovernment). 3. The number of companies creating software products competitive in global IT markets. Entrepreneurial potential implies the entrepreneurial activity of the population, which can be further evaluated considering the following indicators: 1. The share of small and medium-sized enterprises in the GDP of the state. 2. The total volume of individual entrepreneurs in export volume.

4 Conclusion The authors attempted analyzing the need to adjust traditional methods for assessing the resource potential of a territory in the current conditions of social development, considering the material and technical base of science and production, the existing scientific and technical reserves, including protected intellectual property objects that are critical for the technological modernization of the economy in conditions of its transition to a new development scenario. The article described the main approaches to the definition of the concept of natural resource potential, key methodological approaches to its assessment as well as the influence of modern conditions of the social development on the formation of methods and approaches to assessing the natural resource potential of territories. The authors revealed that the most relevant for the results are the methods based on the calculation of the integral indicator. They also consider it appropriate to assess some new indicators that have become important in the new conditions of social development influenced by modernization processes of economic development. In this regard, an adequate assessment of the current resource

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potential comes to the fore and will help the state to develop comprehensive programs for the development of the country in the medium and long term, which would cover not only all stages of the technological re-equipment process but also legal mechanisms aimed at solving problems modernization of all spheres of society. Acknowledgements. The article was prepared with the financial support of the Russian Science Foundation under the science project No. 18-78-10075.

References Adyrkhaev, A.G.: The Natural Resource Potential of the Region and the Effectiveness of its Use in Agriculture: Abstract of the Dissertation for the Degree of Candidate of Economic Sciences. Science, Moscow (2007) Anvari, R.D., Norouzi, D.: The impact of E-commerce and R&D on economic development in some selected countries. Procedia Soc. Behav. Sci. 229, 354–362 (2016) Armand, D.L.: Economic Significance and Basic Principles of the use of Natural Wealth. Science, Moscow (1963) Barsukov, V.N.: Labor activity of the population of retirement age as a factor in socio-economic development of the territory. Econ. Soc. Changes Facts Trends Forecast 1(43), 195–213 (2016). https://doi.org/10.15838/esc/2016.1.43.13 Chong, S.: Success in electronic commerce implementation. J. Enterp. Inf. Manage. 21(5), 468– 492 (2008) Corporation for Enterprise Development: The 1989 Development Report Card for the States. Foundation Center, Washington, D.C. (1989) Dimitrova, D.V.: Internet diffusion in post-communist countries. Medienjournal 26(3), 64–71 (2002). Innovative Approaches to ICT Research Dimitrova, D.V., Beilock R.: Where freedom matters: internet adoption among the former socialist countries. Int. Commun. Gaz. (2005). https://doi.org/10.1177/0016549205050130 Davydkina, O.A.: Comprehensive assessment of the resource potential of the region, pp. 896– 900 (2015). http://e-koncept.ru/2015/85180.htm Emelyanov, A.G.: Fundamentals of Nature Management: Textbook for Students. Higher Prof. Educations. Science, Moscow (2013) EU Regional Competitiveness Index, RCI 2013 [Electronic resource] (2013). https://ec.europa. eu/regional_policy/sources/docgener/studies/pdf/6th_report/rci_2013_report_final.pdf Frolov, S., Samoday, V., Mashyna, Y.: Improvement of the institutional and economic mechanism of the region’s natural resource potential assessment. J. Environ. Manage. Tour. 7(2), 224–230 (2016) Gadzhiev, Y.A., Styrov, M.M., Kolechkov, D.V., Shlyakhtina, N.V.: Analysis of innovation potential of Northern Russian regions. Econ. Soc. Changes Facts Trend. Forecast 6(1), 236– 254 (2016). https://doi.org/10.15838/esc/2016.6.48.13 Hanna, N.: Mastering Digital Transformation. Emerald, London (2016) Hanna, N.K., Knight, P.T.: National Strategies to Harness Information Technology, Innovation, Technology and Knowledge Management. Springer, New York (2012) International Monetary Fund: Measuring the digital economy. New York, IMF Policy Papers (2018) Kartiwi, M., MacGregor, R.C.: Electronic commerce adoption barriers in small to medium-sized enterprises (SMEs) in developed and developing countries: a cross-country comparison. J. Electron. Commer. Organ. (JECO) 5(3), 35–51 (2007)

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Kolesnichenko, E.A., Nesterova, N.N.: Methodological aspects of assessing the resource potential of a region. 6(122) (2013). https://cyberleninka.ru/article/n/metodicheskie-aspektyotsenki-resursnogo-potentsiala-regiona Kula, V., Tatoglu, E.: An exploratory study of Internet adoption by SMEs in an emerging market economy. Eur. Bus. Rev. 15(5), 324–333 (2003) Memorial University of Newfoundland: Regional Economic Capacity Index (2016). http://reci. ucs.mun.ca/about.php Migiro, S.O.: Diffusion of ICTs and e-commerce adoption in manufacturing SMEs in Kenya. S. Afr. J. Libr. Inf. Sci. (2006). https://journals.co.za/content/liasa/72/1/EJC61218 Mohamad, R., Ismail, N.A.: Electronic commerce adoption in SME: the trend of prior studies. J. Internet Bank. Commer. 14, 1 (2009) Mintz A. A.: Economic Valuation of Natural Resources. Scientific and Methodological Problems of Accounting for Geographical Differences in the Efficiency of Use. Science, Moscow (1972) Nadvornaya, G.G., Klimchuk, S.V., Oborin, M.S., Gvarliani, T.E.: Theory and methodology of appraisal of enterprise economic potential. Econ. Soc. Changes Facts Trends Forecast. 6(1), 70–90 (2016). https://doi.org/10.15838/esc/2016.6.48.4 Nevskaya, M.A.: Modern Scientific Approaches to the Study of Natural Resource Potential. Problems of Systemic Modernization of the Russian Economy: Socio-political, Financial, Economic and Environmental Aspects, vol. 9, no. 1, pp. 438–443 (2010). ISBN 978-5-89751045-0 Reimers, M.F.: Ecology: Theories, Laws, Rules, Principles and Hypotheses. Moscow, Science (1994) Wang, X., Liu, L.: Empirical research on the influence factors of e-commerce development in China. Open Cybern. Syst. J. 9, 76–82 (2015) Zimnyakova, T.: The peculiarities of innovative development of resource regions. J. Siberian Fed. Univ. Humanit. Soc. Sci. 10, 1967–1974 (2017). https://doi.org/10.17516/1997-13700198

Concept “SMART” in the Modern Urban Discourse Vera A. Mityagina(&) , Marina Yu. Fadeeva Elina Yu. Novikova , and Irina D. Volkova

,

Volgograd State University, Volgograd, Russia {mityagina,oms,nov-elina,idvolkova}@volsu.ru

Abstract. Purpose: The research is aimed at determining the basic patterns of the nominative process associated with functioning of the concept ‘smart’ in English, German and Russian urban discourse. Design/Methodology/Approach: Linguosemiotic load of the concept ‘smart’ has been specified with regard to the urban discourse. The choice of discourse type is conditioned by the leading role of cities in civilizational movement towards Industry 4.0. Special attention is paid to linguacultural, cognitive and nominative characteristics of the concept, studied in the framework of etymological, conceptual and contextual content analysis. Findings: Analysis of the language means that ensure functioning of the concept ‘smart’ in the urban discourse in the Russian, English and German languages indicates similar nominative processes that represent cities as complex phenomena undergoing information and communication technological modernization in all spheres of life. The verbal representation of the concept ‘smart’ in the urban discourse is primarily associated with the use of the adjective ‘smart’ with names of gadgets and technologies, which implies their ability to perform intelligent actions and manifest intelligence. Originality/Value: Novelty of the research consists in revealing linguistic tools of the urban discourse that express both highly intelligent component of the IT phenomena forming the basis of a ‘smart city’ (Russian – ‘umnyy gorod’) and their high responsibility for residents’ well-being: use of the Russian word ‘umnyy’ (‘smart’, ‘brainy’) instead of transliterated ‘smart’ with the word ‘city’ in the Russian linguaculture emphasizes semantics of “brain-generated” technologies and gadgets. Keywords: Concept ‘smart’
Urban discourse Communicative semiosis
Nominative process JEL Code: Z1


Linguosemiotics



Z3

1 Introduction New trends of civilizational progress are associated with reaching Industry 4.0 by means of tech-drivers that imply:

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1092–1098, 2021. https://doi.org/10.1007/978-3-030-59126-7_120

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– link with data, computing power and information transfer (big data, the Internet of things, machine-2-machine technology, cloud technology); – implementation of analytical tasks (digitalization and automation of scientific work, advanced analytics); – human-machine interaction (new interfaces, virtual, augmented and mixed reality technologies); – transition from the digital world to the physical one (additive manufacturing technologies: industrial 3D printing, robotics, new ways of generating and storing energy) (Kaspersky 2019). The whole innovation paradigm is semantically united by the concept ‘smart’, which has become an anthropogenic concept of interdisciplinary nature that captures the dynamics of axiological meanings of the 21st century and has a variable verbal expression (Yakimovich 2018). One of the most complete sociocultural actualizations of the concept ‘smart’ is related to the urban discourse, which as a communicative continuum reflects the “response” of information and communication technologies to the challenges of current global development. Any city is a complex multilayer and multifacet communicative phenomenon that generates the urban discourse as an interweaving of various communicative spaces (Novikova 2018). The concept ‘smart’ performs an integral function in the urban discourse, since the city becomes a “system of systems” optimized and integrated at all levels – from personal gadgets to institutions, enterprises and communication systems. Development of the concept ‘smart city’ as a model of the image of the future is associated with the use of language tools and mechanisms of linguosemiotics of the urban discourse (Mityagina 2006). Therefore, it seems necessary to present an understanding of the concept ‘smart’ from the viewpoint of discursive linguistics.

2 Materials and Methods The research material is represented with the discourse-determined English, German and Russian explications of the concept ‘smart’. German pioneers of formal sociology Tönnies (Tönnies 2019) and Simmel (Simmel 2014) rightly emphasize the system-forming function of a city in national culture and cities’ ability to transmit urban processes (crisis and decline of modern society, loss of traditional cultural values, globalization, etc.) to society. According to Lyubimova (2011), the discourse of a modern city reflects development and interaction of trends prevailing in various semiotic systems connected with urban life – from architecture and fashion to language. It seems logical to choose the word combination ‘urban discourse’ as an umbrella term, since it reflects its heterogeneity, hybridity and polyphony. Analysis of the phenomenon of urbanism implies the study of institutional and person-centered discursive practices that form such discursive components of the urban metadiscourse as tourism, urban planning, culture, sports, mass media, education, architecture, economics, administration and some others. A city builds its communicative connections by embodying itself in a text, a verbal presentation of thought.

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According to Lotman (2000), a city as a text represents a corpus of texts and heterogeneous codes belonging to different languages and different levels. This is a complex semiotic system of images and representations, reflecting the socio-cultural regionally determined picture of the world. Yakovleva (2001) defines a city-text as all forms of human activity being an element of urban dialogue included in various types of communication. In her later works, the researcher introduces the concept ‘urban text’ and ‘urban studies’ as an independent discipline for the study of urban communicative processes (Yakovleva 2011). The linguosemiotic load of the concept ‘smart’ in the urban discourse is determined through the study of the concept’s linguistic, cognitive and nominative characteristics within the framework of etymological, conceptual and contextual content analysis (Academic 2007; Duden 2020; Merriam Webster 2020; Wikipedia 2020).

3 Results 3.1

Diachrony of the Lexeme ‘Smart’ in English, German and Russian Linguacultures

English has become the starting language for the current stage of civilizational development: communicative semiosis as a process of “production” of iconic units of global discourses uses English even in the nominative processes within local linguacultures. Admittedly, English and German being Germanic languages are characterized by mutual influence, which manifested itself at different stages of their development. The concept ‘smart’ is expressed with the eponymous lexemes having the sense of ‘intelligent’. These lexemes are used for naming artificial intelligence phenomena, such as Smart City, Smart Watch, Smart Phone, Smart House. It should be noted that the German language preserves the original spelling and transcription, while Russian uses transcription (‘smartfon’/‘smart phone’), loan translation (‘umnyy dom’/‘smart house’), and hybrid versions (‘smart chasy’/‘smart watch’). Let us investigate attachment of the sense of ‘smart’ to the semantics of lexemes under study. In the English linguaculture, the adjective ‘smart’ is derived from the old English verb ‘smeortan’, akin to the German ‘schmerzen’/‘to ache, to hurt’ (Lexico), since both verbs belong to one West German language family. The adjective is related to the verb, the original sense (late Old English) being ‘causing sharp pain’; from this arose ‘keen, brisk’, which led to the current senses of ‘mentally sharp’ and ‘neat in a brisk, sharp style’ (Lexico 2020). The modern English dictionary indicates polysemy of the lexeme ‘smart’: such human qualities as ‘brainy’, ‘sensible’, ‘inventive’, ‘quick-witted’ are complemented with the senses of ‘smart use’ and, of course, ‘computer-controlled, automated’ (Longman Dictionary of Contemporary English 2020). The English adjective ‘smart’ was borrowed into German about 150 years ago to name ultimate manifestations of such qualities as ‘smart’, ‘intelligent’, ‘elegant’: smart Adj. ‘intelligent, pfiffig, gewandt, elegant, schick’, Übernahme (19. Jh.) von gleichbed. engl. smart, aengl. smart, aus * smeart ‘schmerzhaft’, Part. Prät von aengl. smeortan (s. %schmerzen Vb.). Die

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Bedeutung entwickelt sich von ‘schmerzhaft’ über (bildlich) ‘peinlich’ weiter zu ‘heftig, derb, scharf’ und ‘schlagfertig, schlau’ bis hin zu ‘flott, schick, sportlich (Pfeifer et al. 1993). The constantly updated Duden online explanatory dictionary provides for an article on the adjective ‘smart’ and describes the semantics of primary borrowed meanings (‘clever’, ‘gewitzt’; ‘fein’) (Duden online). The German-language Wikipedia shares this description and points to the word’s use in many well-known pragmatonyms: Smart and Smart Fortwo (car brands), Smart Export (cigarette brand), Smart Package Manager (software), etc. (Wikipedia). According to an interesting observation by journalist Peter Glaser, only people were ‘smart’ in the past, and now things have become ‘smart’ too: “Erst waren nur Menschen smart, nun wurden es auch die Dinge” (Glaser 2018). He has traced the everyday history of the word and come to conclusion that smart names transform any device into a high-tech gadget from the 1970s American comedy series Get Smart (Mini-Max in German version). The plot is based on the life of secret agent Maxwell Smart, whose clumsiness and an abundance of misses run counter to the charactonym. Numerous spyware smart gadgets (such as a boot phone) have become prototypes for transforming a simple device into a high-tech gadget (Glaser 2018). In the Russian linguaculture, the lexeme “smart” was borrowed as a concept name and has been used to denote technical devices united by information and technological origin. Let us note that the loan word is currently being embedded into the system of the Russian language, as evidenced by the variability of spellings: Russian ‘smart’ and English ‘smart’; together (‘smartfon’/‘smart phone’) and separately (‘smart TV set box’); with a hyphen (‘smart-karta’/‘smart card’). Russian speakers associate the word ‘smart’ with intelligent actions performed by using new technologies. These actions are most commonly not human-mediated. It should be noted that The Newest Explanatory Dictionary of the Russian Language of the 21st Century by E.N. Shagalova claiming the maximum coverage of all “fashionable” Russian words of the early 21st century, which are not yet fixed in other explanatory dictionaries, gives definitions of more than 1,500 words, and only 3 of them are derivatives with the ‘smart’ component: ‘smartbuk’/‘smart book’, ‘smart-karta’/‘smart card’, and ‘smartfon’/‘smart phone’ (Shagalova 2011). The dictionary does not even contain terminological phrases with the word ‘umnyy’/‘smart’ being the most common translated version of the English adjective and having the meaning of ‘brain-generated’, which is associated with something new, trendy, advanced and makes the word very productive. 3.2

Linguistic and Cultural Features of the Concept ‘Smart City’

The abovementioned meanings and associations have become the decisive factor for choosing the name of a new urban phenomenon – ‘umnyy gorod’, or ‘smart city’, though originally this word combination was not related to city planning. The concept ‘smart city’ was introduced by American economist and management analyst Peter Drucker to describe the conditions of effective management. The lexeme ‘smart’ represented a mnemonic abbreviation of five words: specific; measurable; achievable; realistic; timed. The concept was used in the 1980s in the context of Smart Urbanism Movement, which contrasted noisy motorized megalopolises with large “pedestrian”

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cities (Söderström et al. 2014). Some authors used the concept to name cities organized in symbiosis with modern technologies, tracing the “genetic connection” between large cities and up-to-date achievements of science and technology. The today’s use of the concept is based on both these conceptions (Ovchinnikov 2015). Rebirth of the concept ‘smart city’ took place in 2008, during the financial crisis: IT companies claimed that smart cities could help solve the serious economic problems faced by Western countries. IBM, Cisco, Panasonic and other world IT leaders started developing their own projects, since smart cities could become a stable source of profit, as well as benefit for society as a whole. Thus, the smart city discourse had being developed since the late 1990s, while the concept in its current version was introduced in the late 2000s – early 2010s. By this time, the word combination had become widespread in the media and was used in the description of projects representing cities as technocratic utopias having no space free of ICT (Information and Communication Technologies). The term was also used by supporters of the green movement and conscious consumption, who associated a smart city with a healthy city. Thus, a modern smart city smoothly combines both the idea of the ICTs’ key role in all spheres of public life, and the awareness of the need to protect the environment. The analysis of media texts containing contexts of using the word combinations ‘umnyy gorod’ and ‘smart city’ (2018–2020) shows that the interpretation field of the concept include such features as smart mobility (What’s smart about sitting in traffic, missing your train? Urban mobility, however, can be smart, and increasingly it’s the person on the street making the difference. Smart mobility – a good move for the future.), smart environment (Effizient, grün, nachhaltig: Erfolgreiche Smart-CityStrategie), smart living (Intelligentes Wohnen: Smart Home erobert den Massenmarkt), smart economy (Smart factories to add $1.5 trillion to global economy by 2030). Special attention is paid to smart cities’ citizens – smart people (Smart City is looking for Smart Citizens; Smart consumer: the people living in tiny rental spaces and what can be done about it; Smart Nation of Singapore). It should be noted that the means of representing the concept ‘smart city’ include: – Verbs in the future tense and temporal adverbs with the semantics of the future: Automatic tomorrow: Consumption will grow on gadgets; Smart cities will appear in Russia; St. Petersburg will transform into a smart city: Head of the Department of e-Government of St. Petersburg – on the digital economy and urban services; – Forms of imperative as a call for joint action: Smart City Portrait: Seoul – The Power of Citizen Participation; Singapore – Enabling its Citizens to Build a Smarter Nation; – Metaphors: Smart City: Städte werden digitaler; Städte mit Köpfchen; The way houses “become smart”; Cities with “brains”; Russians are in search for a common ground with smart devices; To increase IQ of the Nizhny Novgorod. At the same time, in the German media discourse, ‘smart city’ acquires rather a negative image as a product of technocracy: Smarte Städte: Es ist nicht alles schlau, was leuchtet; Willkommen in der smarten Stadt – wo die Diktatur der Daten herrscht. The evolutionary idea of smart cities causes concern among the population and does not give confidence in improving the living standards of ordinary citizens: Smarte Umwelt, bessere Welt? Hauptsache Technik, dann wird alles gut?; Grüne Energie,

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gute Luft, keine Emissionen? Smart City – das Stadtkonzept der Zukunft oder nur eine Utopie?; Stadtplaner lieben den Begriff, Bürgermeister werben damit für die Modernität ihrer Metropole, und Technologiekonzerne wittern das große Geschäft: Überall auf der Welt werden Städte in Smart Cities verwandelt. Doch steigert die digitale Vernetzung auch die Lebensqualität? Frankfurt. Vom Internet-Vorreiter zum Sorgenkind. Warum soWLAHM? The shift to new technologies and the transformation of urban space seems to be problematic and associated with unnecessary troubles: Wie leicht ist der Smarthome-Einstieg?; Not smart yet.

4 Conclusion The analysis of the concept ‘smart’ in the Russian, English and German urban discourse allows making conclusion on this concept’s significant “linking” function in representing a city as a complex phenomenon subjected to modernization process at all levels of life. Linguosemiotic processes of the urban discourse associated with communicative semiosis in the field of technological development are characterized by similar nominative patterns in the space of the languages under study. The verbal representation of the concept ‘smart’ in the urban discourse is primarily associated with the use of the adjective ‘smart’ with names of gadgets and technologies, which implies their ability to perform intelligent actions and manifest intelligence. Thus, the urban discourse is characterized by a combination of instrumental and creative tools aimed at ontological development of new signs of a city’s semiotics.

References Academic: Dictionary of 2007 (2007). https://words_2007.academic.ru/. Accessed 4 Feb 2020 Duden: Duden online (2020). https://www.duden.de/node/713429/revisions/1380643/view/. Accessed 3 Feb 2020 Glaser, P.: Alles smart? Frecher als klug, sozialer als clever, lässiger als bloß intelligent: Der Begriff smart ist gar nicht so einfach zu fassen (2018). https://www.t-systems.com/de/bestpractice/01-2018/fokus/begriffsgeschichte/was-bedeutet-smart-780562/. Accessed 3 Feb 2020 Kaspersky, E.: Industry 4.0 (2019). http://kaspersky.vedomosti.ru/industrii/industry4. Accessed 20 Jan 2020 Lexico: Lexico (2020). https://www.lexico.com/en/definition/smart. Accessed 4 Feb 2020 Idoceonline: Longman Dictionary of Contemporary English (2020). https://www.ldoceonline. com/dictionary/smart. Accessed 4 Feb 2020 Lotman, Y.: Semiosphere, p. 704. Art-SPB, St. Petersburg (2000) Lyubimova, N.V.: Stable verbal complexes in the space of a big city. Bull. MSLU 18(624) (2011) Merriam Webster: Merriam Webster (2020). https://www.merriam-webster.com/dictionary/smart . Accessed 4 Feb 2020 Mityagina, V.A.: Semiotics of communication as a discursive ontology. Sci. J. Volgograd State Univ. Linguist. 5, 100–104 (2006) Novikova, E.Y.: Linguosemiotics of the city: cross-cultural focus of territorial branding. Bull. Baltic Federal Univ. Named After I. Kant. Ser. Philol. Pedagogy Psychol. 3, 31–38 (2018)

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Ovchinnikov, A.: Introduction to smart city issues. City Tactics 7, 21–39 (2015) Pfeifer, W.: Etymologisches Wörterbuch des Deutschen, digitalisierte und von Wolfgang Pfeifer überarbeitete Version im Digitalen Wörterbuch der deutschen Sprache (1993). https://www. dwds.de/wb/Haus. Accessed 3 Feb 2020 Shagalova, E.N.: The Newest Explanatory Dictionary of the Russian Language of the 21st Century: approx. 1500 words. Astrel, Moscow (2011) Simmel, G.: Die Großstädte und das Geistesleben. Herausgeber der Reihe: Michael Holzinger. Taschenbuch, Berlin (2014) Söderström, O., Paasche, T., Klauser, F.: Smart cities as corporate storytelling. City: analysis of urban trends, culture, theory, policy, action (2014). https://www.tandfonline.com/doi/abs/10. 1080/13604813.2014.906716. Accessed 20 Jan 2020 Tönnies, F.: Gemeinschaft und Gesellschaft. 1880–1935., hrsg. v. Bettina Clausen und Dieter Haselbach. De Gruyter, Berlin (2019) Yakimovich, E.V.: Variability of the linguacultural concept ‘smart’. Humanit. Bull. 4, 34–49 (2018) Yakovleva, E.A.: Leaflet in the aspect of speech communication: genre characteristics. In: Multidimensionality of Languages and Linguistics: Materials of the All-Russian Scientific Conference, pp. 71–73. Science, Moscow (2001) Yakovleva, E.A.: Philological urban studies: new aspects of the study of the city. Bull. Nizhny Novgorod Univ. 6(2), 771–774 (2011) Wikipedia: Smart (2020). https://de.wikipedia.org/wiki/Smart

Improving the Electronic System of Public Procurement in the Provision of Housing and Communal Services Alexander V. Demin(&) , Irina V. Milkina and Sergey P. Kosarin

,

State University of Management, Moscow, Russia [email protected], {iv_milkina,sp_kosarin}@guu.ru

Abstract. The aim of the work is to propose a set of measures for improving the electronic system of state procurement in the provision of housing and communal services. The relevance of the topic is connected with the great importance of the sphere of housing and communal services in our country. More than 70% of the population of Russia live in urban areas, so they use housing and communal services (Khmelchenko and Svetnik 2019). Coordinated and efficient operation of public utilities is the key to social stability. Since 1991, with the start of reforms in the housing and utilities sector, the government has been striving to create a profitable industry. At this point, the industry has many application points for reforms, but changing the procurement system is an unconditional leader in terms of cost-benefit ratio. Increased efficiency in the procurement process can improve profitability throughout the industry. The research methodology consists in analysis and identification of specifics of provision of housing and communal services and implementation of public procurement in the sphere of housing and communal services, including in electronic form, as well as in identification of key problems of functioning of the electronic system of public procurement for housing and communal complex. On the basis of the conducted analysis, the authors proposed reasonable directions for improving the technical and regulatory support of this area. As for technical improvement, the possibility of using new services in the public procurement system is considered: “intellectual sourcing”, which allows to provide online information on prices, and “intellectual contract”, which takes into account the actual and significant conditions of procurement. As for the improvement of the legal framework, the authors propose to develop a new type of contract—an “extendable” one, allowing the participants of public procurement in the sphere of housing and communal services not to renegotiate new contracts, but to extend the already given ones. In addition, taking into account the specifics of providing services in the housing and utilities sector, it is proposed that contracts should consider not only the price of the service, but also its estimated volume. Elimination of contradictions and consideration of the specifics of the housing and utilities sector in the implementation of electronic public procurement will simplify this procedure and allow for high-quality and prompt activities in this area. Keywords: Management
Digitalization
Housing and communal services Public order
Public procurement
Unified Information System © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1099–1107, 2021. https://doi.org/10.1007/978-3-030-59126-7_121




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1 Introduction The public procurement system plays an important role in the Russian economy. Public procurement is a type of economic relations, one of the parties to which is the state represented by its organizations. The purpose of these relationships is to meet the customer’s needs. The modern procurement system was created to improve the efficiency of the public sector, transparency and openness. The fight against corruption was also declared. However, it is too early to say that the system is successfully fulfilling its goals. At present, the implementation of public procurement is a very labour-intensive process, which includes many approvals from contractors, the resolution of disagreements in the area of budget relations, the resolution of conflict issues in the legal sphere, a large number of approvals and confirmations, work with a lot of information systems and others. The modern procurement system is not flexible; there are many unenlightened or contradictory points in the legal field that give rise to disputes among the participants. The problem with corruption has not been solved either (Kulover and Petrina 2017): existing legislation leaves some loopholes for illegal activities. The system obviously needs numerous corrections.

2 Methodology Housing and communal services (HCS) is a complex sector of the economy designed to provide the population with the conditions necessary for normal functioning and livelihood (Kirillova 2016). The sector includes public utility companies, engineering infrastructure, including sanitary and technical enterprises (water supply, sewerage, sanitary purification), external improvement of the city. The products of municipal and urban engineering are housing and communal services (HCS), which by their composition and structure can be divided into two groups: 1) housing services for the maintenance and repair of housing; 2) communal services, i.e. services to provide resources: electricity; gas supply; cold and hot water supply; water disposal; heating. The housing and communal services sector also operates through a public procurement system. There are many state enterprises and natural monopolists in this sector that buy and provide their services through the procurement system. The industry has a lot of problems: worn-out infrastructure, large debtors’ receivables (Golovanov and Latypov 2017). In turn, procurement in the industry has all the shortcomings of the procurement system described above. The whole set of relations between different economic actors within the framework of participation in public tenders is called the Federal Contract System (FCS), which was formed to create equal conditions for ensuring competition among the participants of procurement. The main participants of the Federal Contract System are: regulatory

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authorities; customers; procurement participants, including those recognized as suppliers; specialized organizations; electronic trading platforms. Relations within the FCC are governed by two key laws: “On the contractual system for the procurement of goods, works and services to meet state and municipal needs”. (No. 44-FZ of 05.04.2013), “On procurement of goods, works and services by certain types of legal entities”. (No. 223-FZ of 18.07.2011). These laws regulate the procurement process for different types of public organizations. Law No. 223-FZ regulates procurement for organizations that have their own source of income, in addition to public funds. These include state companies and corporations, entities of natural monopolies in which the state’s share exceeds 50% (Yakovlev 2019). According to Law No. 44-FZ (No. 44-FZ of 05.04.2013, art.3), the state customer is the body, who is authorized on behalf of the Russian Federation or constituent entity of the Russian Federation, to make purchases and accept budgetary obligations (state governing body; governing body of an off-budget fund; unitary enterprises (UP); state and budgetary institutions; state corporations “Rosatom”, “Roskosmos”). One of the key concepts of the state procurement system is state (municipal) procurement, which, in accordance with the legislation (No. 44-FZ of 05.04.2013, art.3), is understood as a set of actions carried out by the customer aimed at ensuring state (municipal) needs. The concepts “procurement” and “tender” are synonyms, but the latter isn’t used in legal documents. The procurement begins with the definition of the supplier (contractor, contractor) and comes to an end with the fulfillment of contract obligations by its parties. The result of the customer and the supplier is a government contract. All information related to public procurement is published in the Unified Information System (UIS) within the terms specified by law. The responsibility for this lies with the state customer. The main purpose of creating such an information system (the UIS has been in operation since 2016) was to increase transparency and public accessibility of public procurement. All information uploaded to the UIS is public (except information containing the classified information), must be complete, accurate and provided free of charge. Subjects of the Russian Federation and municipal entities may create their own regional and municipal information systems integrated with the UIS. The Unified Information System should contain: procurement plans and schedules, as well as information on their implementation, a register of unscrupulous suppliers (contractors, executors), customer reports, regulatory legal acts, and so on. Maximum automation of the public procurement process (Milkina et al. 2013) is the main and fundamental difference between the UIS and all previously used public procurement systems. All data entered into the Unified Information System are processed automatically and reports are generated on the basis of the processed data. The UIS is closely linked with other regional information systems and electronic platforms, creating a single information space. Also an undoubted advantage is that since 2017 all procurement plans and schedules have been placed in the UIS only in a certain machine-readable form. This greatly simplifies the process and increases the possibility of using simple search queries (such as Yandex or Google) to find the necessary information about the procurement.

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3 Results At present, Russia has a working system of state order. It is based on a modern infrastructure using the latest technologies: electronic signatures, electronic trading platforms, the UIS system. It can be stated that from a technological point of view, the domestic contract system is at the top of the world ratings. Many suppliers are included in the system, and despite the existing entry threshold in the form of an extensive legal field to navigate and the extensive technical part of the system, new participants join the system every day. However, there are issues the solution of which would make the system more efficient (Stadolin and Frantsuzova 2018). First, there are shortcomings in legislation. The sphere is regulated by the Civil Code, the Budget Code, laws 44-FZ, 223-FZ, a lot of resolutions of the Government of the Russian Federation, etc. There are places where laws contradict each other or do not cover a certain issue. This results in conflicts between the parties to procurement activities, as well as judicial recourse. All this leads to additional time and financial costs. One of the main shortcomings of the FCS is reported to be the unreliability of suppliers, as most suppliers are determined by electronic auctions, in which the winner is the supplier who offered the lowest price of the contract. Often, the quality of the service provided suffers. Suppliers who do business bypassing taxation have lower costs and therefore have a better chance of winning the auction. Everyone loses: reliable suppliers, the state customer and the whole company, for which the government institutions are working. Procurement in the housing and utilities sector has its own specifics: 1) there are many monopolies in the industry, the interaction with which is called “procurement from a single supplier” within the FCS; 2) the whole society uses the products of the housing and utilities sector, therefore, the quality of services should be high (Kirillova 2019); 3) a significant part of contracts are cyclical, i.e. they are likely to be renegotiated in the next period. This includes, for example, the procurement of resources. The most popular procurement procedure today is an electronic auction, which accounts for more than 70% of all purchases made in Russia. The second most popular way to determine the supplier (about 20% of procedures) is to purchase from a single supplier (Analytical report 2019). Electronic auction (EA) – biding conducted in electronic form on electronic platforms, the winner of which is the person who offered the lowest price of the state (municipal) contract. The algorithm of an electronic auction is largely similar to purchasing from a single supplier. Firstly, the documentation on the electronic auction is developed and approved, then the notice of the electronic auction and documentation are placed in the UIS. After the preparatory part, the electronic auction is launched directly, the purpose of which is to reduce the initial maximum price of the contract (IMPC) by auction participants. The participants registered in the UIS, accredited on site and admitted to such an auction may participate in the EA.

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4 Recommendations We outline the main set of technical and legislative measures proposed by the authors of the study, which allows optimizing electronic procurement in the area of housing and communal services: 1) adaptation of a number of electronic services, which have already used for the public procurement system in the housing sector, taking into account the specifics of the analysis of competitive and monopolistic characteristics of the services provided; 2) the formation of a new type of contract “smart contracts” for the purchase of resources (heat, electricity, water) by government agencies; 3) the possibility of enlarging similar small lots into a single purchase for budget organizations that provide housing services to a large number of consumers; 4) elimination of legislative contradictions that don’t take into account the need to change the terms of contractual relations, the volume of purchases taking into account changes in weather conditions, seasonality, deterioration of the housing stock and other factors. The technical side of automation of the procurement process includes the following aspects: 1) correction and improvement of existing software; 2) introduction of useful innovations that contribute to process automation. Automation involves the use of the most modern technologies in the procurement system. Some innovations, such as electronic signatures, have long been implemented and distributed, while others still have to be tested by the system participants. Modern technologies make it possible to analyze and process Big Data from different sources to predict the behaviour of counterparties. For example, a blockchain provides enormous opportunities to control the supply chain, ensures the safety of data, reduces the cost of settlements between the seller and the buyer. It is possible to create applications using artificial intelligence to manage purchases, which will make instant, accurate decisions. Constant improvement of algorithms provides continuous improvement of the efficiency of labour-intensive operations in the procurement process. As an example, we can name several services that can be used in public procurement in the field of provision of housing and utility services. 1. “Intellectual sourcing” –service which provides online price information. The service collects, pre-processes, cleans the data on the prices of the market of housing and utility services, existing trends to recommend the most appropriate price for the purchase. 2. “Intellectual contracts” is another interesting service. Modern systems are able to form a contract out of the most suitable current trends and type of public procurement contract terms (payment terms, parties’ obligations, contract termination terms, etc.). Big Data is a base for analysis and recommendations. Functions of “trust payment” together with blockchain technology can be used in contracts when receiving confirmation of delivery of goods to the point of order.

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3. Market analysis service designed for the state customer to determine the IMPC for the purchase of goods and services. Prices are automatically collected from open sources, price lists from manufacturing suppliers and others. This service provides transparency and gathers a vast base for making decisions about the procurement price. The most difficult part in terms of the resources and time required is the legislative part. The area of public procurement is regulated by many laws, there are special laws for different participants, for example, for budget organizations and natural monopolies. Removal of contradictions and bringing all normative acts to a single denominator is a task for a large number of highly qualified lawyers and procurement specialists. It is also worth taking into account possible conflicts of interest of the participants in the procurement, as the legislation can be revised with the violation of somebody’s rights. However, the desire for compromise should not be allowed to prevail over the need for amendments and laws. The first thing that is needed to implement legislative measures is “political will” – the desire of those who are in charge to implement reforms. The introduction of measures aimed at forming an automated procurement system implies large-scale changes in legislation. These changes are general in nature and affect the entire procurement system. In the beginning it is necessary to outline the main points around which the proposed procurement system will be built. The existing public procurement system is not adapted to the needs of the housing and utilities sector. The purchase of resources is permanent, because a public institution cannot refuse to purchase water, heat, electricity. It is also very unlikely that the company will go bankrupt and close in a short period of time, which often happens to commercial organizations. Therefore, it is not profitable for both suppliers and state customers to enter into new contracts for the supply of resources every time. The system is set up for one-time acts of economic interaction. For example, the purchase of repair services. Long-term relationships are difficult. A feature of the sphere of housing and utilities is the abundance of natural monopolists. Accordingly, the idea of maintaining competition, which is embedded in the procurement system, only hinders in the housing and utilities sector. But this only applies to the services of natural monopolies, such as water supply and sanitation, heating, electricity. The main points are: the impossibility to change the volume of procurement, the need to renegotiate contracts every year. The solution of these problems will adapt the modern procurement system to the needs of the housing and utilities sector. In a calendar year, there is a period in which procurement activities are most intensive. This occurs in the first and last quarter of the year: the peak months are December and January. The contracts signed in January run out next December, so they need to be renegotiated in January. Most of the time is spent on communication with suppliers and concluding new contracts. To address the problem of constant renegotiation of contracts, it is proposed to develop a new type of contract specifically for the procurement of resources by public institutions. Let’s call this contract “extendable” – this name best reflects its key aspect – the possibility of renewal. In other words, this contract has the so-called “base period” – the period within which the provision of services for resource supply will be carried out. It is advisable to establish a 12-month base period. After 11 months, if the

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parties have no claims to each other (no debts or undelivered services), the contract is automatically extended for a new base period. The contract should also have an opportunity to make changes when increasing tariffs on housing and utility services. Both suppliers and customers will benefit from such contracts. It is more profitable for suppliers to deal with a regular customer with whom they have a long-term contract than with several customers who do not necessarily use their services. There will also be an impressive reduction in transaction costs for the parties, i.e. communication costs, dispute resolution, etc. Let’s now turn to the solution of the problem with changes in volume after the contract: at the suggestion of the customer there is an opportunity to increase the amount of goods, work or services provided under the contract by no more than 10% or reduce the amount of goods supplied under the contract, the volume of work or services provided by no more than 10% [Part 1 of Art. 95 of the Law 44-FZ]. However, under the specifics of housing and communal services it is not very suitable. It is not rare that the resources procured are insufficient. There are two main reasons for this: emergencies and errors in calculations. Worn-out infrastructure in the territory under the jurisdiction of the center is a common cause of accidents. Such accidents are rare, every few years, but the result is a large loss of resources. For instance, in case of a pipe breakage, the volume for 3 months can be spent in 3 days because of the leak. The plan for resource procurement is based on the past period. If the past year was not cold, a reduced amount of resources will be purchased next year. In both cases, the contract has to be terminated and a new one has to be concluded urgently. There is a court practice of definition of actions of the customer when according to the law (No. 44-FZ of 05.04.2013) the price of the contract is invariable, but the final payment under the contract of water supply, sanitation with the subject of a natural monopoly depends on the actual volume of consumption. 1. Court decisions are based on the fact that the customer’s demand to include in the contract the condition, that the price is fixed and determined for the whole term of the contract, is legitimate and based on the provisions of the law [Part 2 of Art. 34 No. 44-FZ]. At the same time it is specified that the inclusion of a fixed price condition in the contract does not release the customer from payment for the actually consumed amount of resources and does not affect the established payment procedure. 2. When concluding a contract with a natural monopoly entity, the customer should specify the price of the contract as well as the price per unit of goods (work, services). It is recommended to specify the price per unit of the resource to be purchased, as well as the estimated volume of its consumption, which can be determined on the basis of actual use indicators for the current period and planned changes (for example, the volume of consumption of housing and utility services will increase as the staff grows). Of the two practices that have been formed, the second one is more appropriate. But it needs the following correction: changing the boundaries of adjustments from 10% to 40%. This should be enough for extremely cold winters. In the event that the limit does not overlap with the increased needs as a result of accidents, an emergency clause can

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be added to increase the change to 50% with the exception of an emergency clause. The problem of discontinuance and renegotiation of contracts would thus be solved. Another area of contract optimization may be the consolidation or consolidation of lots. A logical step would be to unite all small contracts from one organization providing housing and communal services, for similar reasons and a large number of addresses in a single purchase. However, the using of such lots is possible only for the purchase of resources from monopolists. Conflicts often arise between the budget organization serving as the customer and the resource provider during the procurement process. This is due to different interpretations of the law. Monopolists use loopholes in legislation. There are frequent cases of revision of already concluded and executed contracts, when suppliers send a recalculation according to which housing and communal organizations have to pay extra for already completed work (provided services). One of the solutions to this problem is a complex of changes in the legislation, according to which the priority of budget legislation over legislation in the area of natural monopolies in procurement by budget organizations should be in force. Thus, the set of measures, which are proposed by the authors, allows us to take into account the specifics of activities in the field of housing and communal services and increase the profitability of not only organizations in this area, but also the entire Russian economy.

References Federal law No. 44-FZ of 05.04.2013: On the contract system for the procurement of goods, works, and services for state and municipal needs. http://www.consultant.ru/document/cons_ doc_LAW_144624/. Accessed 7 Feb 2020 Federal law No. 223-FZ of 18.07.2011: On purchases of goods, works, and services by certain types of legal entities. http://www.consultant.ru/document/cons_doc_LAW_144624/. Accessed 7 Feb 2020 Voloshin, A.I., Mabiala, Z.: Models of economy and management of housing and communal services and their implementation in regional territorial formations. Innov. Develop. Econ. 2(50), 101–106 (2019) Golovanov, V.I., Latypov, N.A.: Main directions of urban economy development on the basis of digital economy. In: The Collection: “Economic Aspects of Technological Development of Modern Industry”, Materials of the International Scientific and Practical Conference, pp. 42– 48 (2017) Kirillova, A.N.: Mechanism of synchronization of management processes and implementation of digital technologies in housing and communal services. In: The Collection: “The Role of Local Self-government in the Development of the State at the Present Stage”, Materials of the IV International Scientific and Practical Conference, pp. 220–222 (2019) Kirillova, A.N.: Main challenges and directions of strategic development of housing and communal complex. Ind. Civ. Constr. 9, 50–56 (2016) Khmelchenko, E.G., Svetnik, V.M.: Development of the system of providing state and municipal services in Russia. In: The collection: “State and Municipal Management in the Russian Federation: Present and Future”, Collection of Scientific Papers of the Department of State and Municipal Management, State University of Management, Moscow, pp. 222–226 (2019)

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Kulover, R.A., Petrina, O.A.: Improving the fight against corruption by collecting information about civil servants on the Internet. In: The Collection: “Reforms in Russia and Management Problems-2017”, Materials of the 32nd all-Russian Scientific Conference of Young Scientists, p. 71 (2017) Milkina, I.V., Kosarin, S.P., Khodanova, N.A.: The construction of information-analytical system of management of housing and communal complex. Vestnik Universiteta 20, 80–86 (2013) Sadolin, M.E., Frantsuzova, M.V.: Increase of system effectiveness of management of the housing facilities of Moscow: problems and decisions. Municipal Acad. 3, 143–148 (2018) Yakovlev, A.Y.: About features of management of companies with state participation in Russia. In: The Collection: “Institutional Aspects of Improving the Quality of Public Administration in the Context of New Strategic Challenges”, Moscow, pp. 132–140 (2019) Analytical report on the results of monitoring purchases, goods and services for state and municipal needs in accordance with the Federal law of 05.04.2013 No 44-FZ “on the contract system for the procurement of goods, works and services for state and municipal needs” at the end of the third quarter of 2019. https://www.minfin.ru/common/upload/library/2019/10/ main/3_kvartal.pdf. Accessed 7 Feb 2020

Modeling an Electronic Auction Timur M. Gataullin1(&), Sergey T. Gataullin2, and Ksenia V. Ivanova1

2

1 State University of Management, Moscow, Russia [email protected], [email protected] Financial University Under the Government of the Russian Federation, Moscow, Russia [email protected]

Abstract. To begin to reveal the concept of “Electronic auction”, namely, it trading, which are held in electronic form, on the new electronic platform where the only winner is the person who offers the highest price, the information on procurement is reported by the customer to an unlimited circle of persons by posting in the common system of site notices on holding of the auction and documentation about it, to the procurement participants must meet uniform requirements. There are cases when conducting an electronic auction is a mandatory requirement, these include: agricultural goods and services, mining products, clothing, paper, computer equipment, and construction work. In addition, EA is one of the most convenient and respectable tools for ebusiness, which is an important factor for its application in the age of digitalization, when more and more customers and performers are moving to a new level of business relations and more and more need to protect the information of each user. In this paper, we propose a simulation model for organizing an electronic auction in which participants are divided into three groups by the time they think about continuing the auction. Keywords: Electronic auction
Random number sensor
Exponential distribution law
Markov random process
Monte carlo method JEL Code: C57 Econometrics of games and auctions Methods


C02 Mathematical

1 Introduction No one would be surprised now by the fact that any service can be found and purchased thought the Internet, whether it be clothing, medicine or a cleaning service. Also, it is not difficult to conduct any events on-line, specifically an electronic auction, which will be discussed in this work.

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1108–1117, 2021. https://doi.org/10.1007/978-3-030-59126-7_122

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2 Methodology Thematic analysis of articles published in the open press, Internet resources and materials presented in open sources. Parameters of Electronic Auction 1. Duration of the auction - T; 2. The duration of the auction session - t; 3. Auction price step - a; 4. Fee for participation in the continuation of the auction - b; 5. The initial cost of the lot - d; 6. Bidders - m. Other Terms and Symbols 1. The number of the next bet - n; 2. The number of all bets, including the last bet of the winner - N. Output (Calculated) Data 1. Last auction price A = d + (N - 1)*(a + b) þ b; 2. Winner of the auction will pay: B = A; 3. The auction participants will pay in total C = d + (N - 1)*(a + b) ; 4. Income of the organizers: D = C-c.

3 Results As a rule, an electronic auction can be divided mainly into three categories: an English auction, a Dutch auction and a closed bid auction. A traditional English auction is a public auction of an upward price. In this auction, the auctioneer first gives the base price, and then some bidders offer a higher price than the base price. In addition, the next bidder buys the last bidder, and the process continues until no one else offers a higher price. Finally, the product is sold to the highest bidder at the highest bid (Privacypreserving …, 2019). In contrast, a Dutch auction is a public auction at a lower price. The auctioneer in a Dutch auction begins with a high asking price, which is reduced until any bidder agrees to accept the auctioneer’s price. Unlike the previous two auctions, a closed bid auction should protect the confidentiality of bids and ensure fairness among bidders. That is, any eavesdropper can’t receive any personal information about the applications, and the auctioneer can’t help any bidder to win the auction undeservedly (Auction bids decline …, 2019; A network approach, 2019). Closed bid auction is an important tool in modern economic practice, especially in relation to networks. In this moment models are being created to maintain the confidentiality of closed bid auction based on quantum computing. In such schemes, the system assumes the general state in the N-dimensional Hilbert space as a message carrier in which each

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bidder privately marks his bid in an anonymous way, and then uses the Grover search algorithm to search for the current highest bid. Compared to any classical scheme in theory, a quantum scheme gets less communication complexity (Gataullin et al. 2019). Currently, quantum computing and quantum communications are widespread and have many promising achievements, for example, quantum cryptography, quantum teleportation and quantum artificial intelligence (Optimization …, 2019). There is also a double auction environment in which buyers and sellers have interdependent valuations and multidimensional supply and demand. Double auctions are one of the most common forms of economic transactions. They also occupy a central place in economic theory, as the microbase of market ideas in standard microeconomics. Despite their importance, double auction markets aren’t easy to organize or analyze. The most common mechanisms offer a price that equates supply and demand and allows objects to change hands at this price, but such mechanisms don’t always compatible by incentive. That is, participants sometimes have incentives to misinterpret their preferences. Interestingly, incorrect reporting resulting from this can lead to inefficiency of equilibrium results. Then the problem becomes even more complicated, because traders with interdependent values or multidimensional demand or supply are allowed, and these are common features for many double auction areas (Gataullin et al. 2019). Most financial markets, such as the NYSE and NASDAQ, use a double auction. As for society, when people think about online auctions, most of them think about Ebay, because Ebay is really an auction company in a way. Ebay has paved the way for online auctions in the minds of people who are just coming to this new topic for them. In addition, people who have been in this area for a sufficient time have come to “sniper bets”, that means waiting until the last minute to make a bet. However, this method is not so popular now, and the reason is due to the fact that, firstly, the wide coverage of the Internet allows an increasing number of participants in online auctions to participate in them, and secondly, as a result, different Internet speeds make it more than uncomfortable, because if two or more bets were sent simultaneously, in the same second, then a bet with faster internet will overtake a slower bet. Thus, the participant with the fastest Internet will win. There is also a “soft close” - this is what most online auction organizations use today. A “soft close” is when the seconds or minutes of an electronic auction come to the close, and there is a bid right before the close, it will add more seconds or minutes to the hours, allowing more bids to enter the “game”. Buyers are satisfied that they don’t miss the item they need to bid, only because they didn’t have time to make the next bid. The seller, in turn, is satisfied with the soft closing method, because there will never be a missed bid and he will receive the best price for the goods. Now let’s move on to the specific proposed new model of the auction: 1. The participants are divided into “fast”, “neutral”, “slow”; the former is 20% more neutral and slow are also 20% less than neutral. At the beginning, we recall and prove the properties of random variables (hereinafter referred to as RV), which are necessary for us for the future, distributed according to a uniform and exponential law, including the absence of memory property and the Monte Carlo method.

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A continuous random variable n is called uniformly distributed on the segment [a, b] if its density on this segment is constant and outside this segment is 0. The main property of the uniform law is that if the random variable is uniformly distributed on the segment [a, b], then the probability that, as a result, it takes on a value falling on the interval [a, b], which is completely located inside the segment [a, b], is equal to the ratio of the length of the segment [a, b] to the length of the entire segment [a, b] (Fig. 1).

Fig. 1. Main property of uniform law b1 a Pða\n\bÞ ¼

Rb

a fn ð xÞdx

¼ ba ba.

2 ð b a Þ Numerical characteristics of a uniform law: M ½n = a þ2 b ; D ½n = 12 . A continuous random variable n is called exponentially distributed with parameter k [ 0 if its probability density has the following form:


f n ð xÞ ¼

k
ekx ; x  0: 0; x\0

The graph of the distribution density of the exponential RV (Fig. 2). And also recall the distribution function:

Fig. 2. The graph of the distribution density of the exponential RV

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Z Fn ðxÞ ¼

x

1


fn ð xÞdx ¼

0; x\0 1  ekx ; x  0

Rx

Rx Because at x [ 0 1 f n ðxÞdx ¼ 0 kekx dx ¼ ekx j x0 = eex þ 1 ¼ 1  ekx . The graph of the distribution function of the exponentially distributed RV is shown in Fig. 3.

Fig. 3. The graph of the distribution function of the exponentially distributed RV.

The property of lack of memory (illustrated in Figs. 4, 5). The main property of the exponential law: the property of lack of memory. Numerical characteristics of the demonstrative law: M ½n ¼ 1k; D ½n ¼ k12 .

Fig. 4. Illustration of the remaining time out.

Suppose that at point A, the bidder started to think about continuing his participation in the auction. Let him think about whether to continue his participation for a minutes. RV n is the time for deciding on continuing participation in the auction. (n  a) is the remaining waiting time for a decision to continue. Point C is the moment of decision. Let n be an exponential RV with k [ 0. How is the remaining waiting time distributed?

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Fig. 5. Illustration of the absence of memory property of the demonstrative law.

, this makes   Fn ðx þ aÞFn ðaÞ PðABÞ Pða\n\x þ aÞ 1ekðxs þ aÞ 1 þ eka P A ¼ 1  ekx ¼ Fn ð xÞ!. 11 þ eka B ¼ PðBÞ ¼ Pðn [ aÞ ¼ 1En ðaÞ ¼ Thus, the remaining waiting time is completely independent of how long the waiting has already been going on. Random processes that have this amazing property are called Markov processes, which form the basis of the analytical theory of queuing. Recall what a Markov random process is. Let there be some physical system S, which can change its state over time. A random process occurring in a system is called a Markov process or a process without consequences if for each moment of time t0 the probability of any state of the system in the future (i.e., for t [ t0) depends only on the state of the system in the present (t ¼ t0) and does not depend on the way the system came to this state [1]. Let us now give an amazing example from the life of honey bees. The outstanding Australian researcher Anna Maurizio in her famous experiments established the following: neither the time of a previously lived life, nor the nature and intensity of the work they perform directly affects the life expectancy of bees in a family preparing for wintering. Thus, all bees become long-livers and live 5–6 times longer than their sisters. In other words, in the winter club of bees, time seems to stop. This fact can at least be somehow explained by the fact that in the club the gravitational field increases 105 times and, as follows from the theory of relativity, the course of time should slow down. In other words, the winter club of bees is an earthly analogue of the Black Hole, an undeniably amazing object in the universe. Moreover, in the winter club of bees, time flows in the opposite direction and the “age bee”, which entered the club in the fall, miraculously (completely inexplicably for modern science) turns into a “young bee” in spring. And one more connection of the “big space” with the “small space”. More recently, astronomers have found that all the stellar matter in space is pulled together in huge cells that look like a honeycomb. The length of the faces of these cosmic cells is of the order of 2  108 light years [1].

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4 Monte Carlo Method The Monte Carlo method (hereinafter - MMK) is known as a numerical method for solving mathematics problems, based on modeling random variables, its specificity is as follows: 1. The computational algorithm is simple; qffiffiffiffi c , so it’s effective if we are satisfied with 2. The error in the MMC is proportional: N the accuracy of 5–10%. To model or play out a random variable means to obtain its possible values, usually with the help of the so-called standard random variable R. (R is a random variable uniformly distributed over the interval [0,1]) (Fig. 6 and 7).

1 0

1

x

Fig. 6. Illustration of a graph of probability density RV R.

1 1 M½R ¼ ; D½R ¼ ; Pða\R\bÞ ¼ b  a: 2 12 If Fn ðxÞ = Fl ðxÞ, then the number sequence l models RV n. RV modeling will be carried out using numerical sequences. Consider a numerical sequence l ¼ fxk g. The distribution function of the numerical sequence l is determined by the following formula: Fi ðxÞ ¼ lim xðnnÞ, where x(n) is the number of members of the n!1

sequence l whose numbers do not exceed n, and whose value is less than x. Modeling methods for the standard random variable R. 1. The mechanical method (using roulette). 2. The method of “pseudo-random” numbers (modeling by formulas). For example, let e be any irrational number. Then we can use the Weyl formula: l ¼ fn
eg is the fractional part of the n
e, for example, if p = 3.14, then l ¼ f0; 14; 0; 28; 0; 42; 0; 56; 0; 70. . .g. 3. The physical way. 4. Random number sensor. 5. Table of random numbers.

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1 0

1

x

Fig. 7. Graphic illustration of the distribution function RV R.

The time to consider whether to continue the auction for a bidder is RV n distributed according to the exponential law with parameter k. There are certain reasons for this. The main one is the fulfillment of the characteristic property for the exponential distribution: Pðn [ a þ b=n [ bÞ ¼ Pðn [ aÞ ¼ eka , i.e. no matter how much the auction participant has already thought over the continuation of the auction, there is exactly the same uncertainty ahead [1]. We assign k ¼ 2nt, to the neutral ones (so that the mathematical expectation is t/2), 20% more fast (and the mathematical expectation is slightly less than t/2). A slow 20% less (and the mathematical expectation is a little more than t/2). Specific data can be selected during the simulation. The following statement can be proved: Statement. Let the random variable X be uniformly distributed on the segment [0, 1], then RV [4] 1 Y ¼  lnð1  X Þ k

ð1Þ

distributed by demonstrative law with parameter k [ 0. Returning to our auction, a cycle is organized, the exit from which is conditional: the duration of the next session goes beyond the duration of the auction. We describe the general step of the cycle: The n-th session of the auction is being played, so t (n - 1) + t  T is passed. We turn m times in a row to the random number sensor using the numbers ki and formula (1), we find the moments of time ti : ti ¼ 

1 lnð1  ri Þ ki

ð2Þ

In this formula, ri are the possible values of a random variable uniformly distributed over the interval [0,1], obtained, for example, from a good-quality random number sensor. Perhaps it is worth specifically looking for or constructing it yourself. We find the minimum tk, remember k - perhaps this is the future winner, and the next tr. If tk + tr  t, then the next session took place, and if not, then we exit the cycle and the auction modeling is over. Each time we fix or change the corresponding counters. When exiting auction modeling, we fix a single counter N.

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Then we start the counting unit A, B, C, D. Next, fill in the line, for example, in Exel: D, N and find a linear regression of D to N for our auction. (As is well known, linear regression can be found using the least squares method (least squares), look, for example, (Soloviev 2018; Kolemaev 2017; Kolemaev and Kalinina 1997; Pisareva 2003). Then we fill in the Exel line: a, b, c, d, T, t, D and find the regression of D on a, b, c, d, T, t, look for example (Kolemaev 2017; Pisareva 2003).

5 Conclusion An electronic auction is one of the most convenient and respectable tools for electronic business, which is an important factor for its use in the digital age, when more and more customers and contractors are moving to a new level of business relations and more and more it is necessary to protect the information of each user. In this paper, we propose a simulation model of organizing an electronic auction in which participants are divided into three groups according to the time they think about the continuation of the auction. In the context of our country’s transition to a digital and knowledge economy, the state should build such rules of the game in order to ensure effective public-private cooperation for the benefit of the whole society (Gataullin et al. 2019; Yerznkyan et al. 2019; Gataullin and Gataullin, 2018). The results obtained in this paper will help with the real embedding of such rules in our lives. Acknowledgement. The authors thank the leadership of the Institute of Information Systems of the State University of Management, the staff of the Center for Digital Economics of the State University of Management, as well as the Department of Data Analysis, Decision Making and Financial Technologies of the Financial University for their help in preparing the article for publication.

References Gataullin, T., Gataullin, S.: Management of financial flows on transport. In: Proceedings of 12th International Conference of Management of Large-Scale System Development. Science, Moscow (2019) Gataullin, T.M.: Asymptotic behavior of the fundamental solution of an elliptic equation with respect to a complex parameter. In: Mathematical Notes of the Academy of Sciences of the USSR. Science, Moscow (1977) Gataullin, T.M.: Introduction to probability theory. In: Academic Center “Unified Transport Systems”. Science, Moscow (2000) Gataullin, T.M., Gataullin, S.T.: Best economic approaches under conditions of uncertainty. In: Proceedings of 11th International Conference of Management of Large-Scale System Development. Science, Moscow (2018) Gataullin, T.M., Gataullin, S.T, Ivanova, K.V.: Generalized Slutsky equation. In: XVII Russian Scientific and Practical Conference with International Participation “Actual Problems and Prospects of Economic Development”. Science, Moscow (2019)

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Gataullin, T.M., Karasev, M.V.: On the perturbation of the quasilevels of a Schrödinger operator with complex potential. Theor. Math. Phys. 9, 1117–1126 (1971). Science, Moscow Kolemaev, V.A.: Econometrics. INFRA-M, Moscow (2017) Kolemaev, V.A., Kalinina, V.N.: Probability Theory and Mathematical Statistics. INFRA-M, Moscow (1997) Optimization of the placement of interconnected R&D based on a double auction (2019). https:// emm.jes.su/s042473880004026-7-1/. Accessed 17 Dec 2019 Pisareva, O.M.: Methods of Socio-Economic Forecasting. Publishing house of GUU-NFPC, Moscow (2003) Soloviev, V.I.: Data Analysis in the Economy. Probability Theory, Applied Statistics, Data Processing and Visualization in Microsoft Excel. KNORUS, Moscow (2018) Yerznkyan, B., Bychkova, S., Gataullin, T., Gataullin, S.: The sufficiency principle as the ideas quintessence of the club of Rome. Montenegrin J. Econ. 15, 21–29 (2019)

The Use of Modern Digital Technologies in the Implementation of the Rights and Legitimate Interests of Citizens Tatyana K. Krasilnikova(&) , Gennady G. Egorov and Tatyana V. Derkacheva

,

Volzhsky Branch of Volgograd State University, Volzhsky, Russia [email protected], [email protected], [email protected]

Abstract. Purpose: The article is a study of the features of the use of modern digital technologies in the implementation of the law and legitimate interests of citizens in various fields of social interaction between the state and civil society institutions. Design/Methodology/Approach: The methodological basis of the study is a complex of dialectical, historical and legal, systemic, structural and functional methods, with the help of which the methods of introducing modern digital technologies into the mechanism of regulation of legal relations are determined. The authors disclose the mechanisms for introducing modern digital technologies into the activities of state and municipal bodies, with the help of which the rights and legitimate interests of citizens are realized, determine the need to develop new approaches with the help of international experience in ensuring legislative regulation of the procedures for introducing modern digital technologies in various areas of legal regulation of public relations Originality/Value: lately, the dynamics of the introduction of digital technologies in various areas of vital activity of citizens has been noted, while the mechanism of their legislative consolidation has not been determined, which determines the particular relevance of this research yet. Keywords: Digital systems
Digital technologies
Digital innovations
Digital government
Digital environment
Legal reception
National security JEL Code: K 100

1 Introduction Modernization of the state is impossible without modernization of the mechanisms of interaction between citizens and organizations with the state. These mechanisms are unthinkable in isolation from modern information technology. The development of digital resources of the economy and the information society inevitably leads to the transformation of traditional state and municipal institutions, their forms of interaction with citizens, otherwise they will become ineffective (Egorov and Oreshkina 2019). So, for example, if earlier the procedure for applying to citizens © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1118–1125, 2021. https://doi.org/10.1007/978-3-030-59126-7_123

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was a rather complicated bureaucratic procedure, today these processes have been greatly simplified. As civil society develops, the demand for openness of public authority grows, there is a need for effective public control, for updating information on-line. However, it should be remembered that at the same time with the unique capabilities and huge potential of introducing digital innovations, when choosing regulatory models, it is also necessary to take into account the risks and threats associated with these new technologies, we are talking about. first of all, about the difficulties caused by the protection of information (including state, commercial and other secrets protected by law), the security of the information infrastructure itself, which in turn can create a threat to the violation of citizens’ rights in the digital space (Egorov 2018). In such circumstances, the state needs to find a balance between public and private interests. Among the attempts by the Russian state to legislatively determine the direction of the digital environment in various spheres of public life, it is necessary to note the federal projects “Normative regulation of the digital environment” and “Digital public administration” implemented within the framework of the National Program “Digital Economy of the Russian Federation”, unfortunately, this not enough to make full use of electronic resources (Shmeleva 2019). The aim of this work is a comprehensive analysis of the regulatory legal framework and approaches to the regulation of various legal institutions in the digital economy, the identification of legal mechanisms for the use of information technologies, methods of their use.

2 Methodology The methodological basis for the analysis of the role of modern digital technologies in realizing the rights and legitimate interests of citizens, identifying gaps in the regulation of the status of computer technologies used in ensuring the rights and legitimate interests of participants in legal relations, the elimination of which is necessary for the full-fledged activity of both individuals and legal entities in the Russian Federation historical-legal, system-structural and structural-functional methods.

3 Result Awareness of citizens about the activities of government is an important indicator of its democracy. The tasks to ensure the right of citizens to access information resources containing data on the activities of representatives of state and municipal authorities can be attributed (Polyakova 2015): 1) creating access to “open data” on official digital resources of the state and municipal levels;

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2) opening access to data from socially significant registers (for example, the Unified State Register of Legal Entities); 3) publication of information on the activities of federal executive bodies in the field of designing new regulatory legal acts, as well as organizing opportunities for their public discussion; 4) providing data on draft federal constitutional laws, various federal laws, and also other acts of the Federal Assembly of the Russian Federation that are being considered by the State Duma and the Federation Council in the system of publicly available legislative support systems through the state-automated legislative system (Ageev 2016). Unfortunately, to date, there is no legislative regulation of the use of various methods for informing citizens, in practice, there are only norms introduced by departmental regulators (Krasilnikova et al. 2019). So, in the Decree No. 851 of the Government of the Russian Federation of August 25, 2012 No. 851 “On the Procedure for Disclosing by the Federal Executive Bodies of Information on the Preparation of Draft Normative Legal Acts and the Results of Their Public Discussion” a significant circle of exceptions is presented, on the basis of which the representatives of the authorities are not entitled disclose information related to service. Public discussion, regulatory impact assessment, as well as anti-corruption examination of regulatory legal acts, have a significant block of problems inherent in them. Firstly, until now, such two independent procedures as public discussion and interagency coordination do not have a clear relationship between themselves. This entails situations in which the implementation of a public discussion involves the placement of a specific project, while upon direct adoption, its text may include various improvements and adjustments that may entail significant changes in the text from the original version. The noted problem can be resolved through the introduction of interagency coordination containing all the main results of an advisory and informational nature. Secondly, the adopted rules of law following the results of the public discussion procedure, as a rule, do not take into account the need for additional public placement of relevant versions of projects. Thirdly, there are problems in timely informing citizens about new regulatory acts, to the greatest extent this affects departmental acts posted on an electronic resource, for example, on the website regulation.gov.ru. Some of the problems noted were reflected in the uniform requirements for electronic resources of state and municipal authorities introduced by the Federal Law of February 9, 2009 No. 8-FZ “On Providing Access to Information on the Activities of State and Local Governments” and establishing uniform requirements for such information. But at the same time, it is also necessary to provide for a number of commensurate measures of responsibility, both disciplinary and administrative, for authorized persons for such activities for failure to perform or improper performance of their duties related to informing citizens and conducting public discussions on adopted acts. Special attention also deserves the question of proportionality of restrictions in the field of access to official information for different categories of citizens. So, for

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example, questions about the possibility of publicly posting the positions and comments of representatives of government bodies in whose sphere the application of the adopted acts is still not resolved. When considering the draft federal constitutional laws submitted to the State Duma of the Federal Assembly of Russia, as well as federal laws, the above information is publicly available, and under the by-law rulemaking the status of such data is still not defined. We propose introducing a category such as the “presumption of public access”, which allows the authorized body to independently determine the possibility of informing interested parties about their attitude to the relevant project, and only if such information is refused, justification of the reasons for such a decision will be required. But at the same time, information about the fact of the existence of such a position should be made publicly available and the reasons for refusing to publicly post such information should be determined. Noteworthy is the expansion of the procedure for using non-governmental information infrastructure along with the state information resources. Unfortunately, the current tendency to expand the mechanisms and methods of information interaction between the civil sector and government representatives does not correspond to the pace of development of information technologies in the modern world, and therefore many information resources remain unclaimed. In modern conditions, the mechanisms of electronic interaction are actively being introduced into the social environment (Teleshina 2018). However, they have not yet received proper legislative regulation (Boychenko 2017). The unified system of interdepartmental electronic interaction (hereinafter referred to as “SOIE”) operates on the basis of Decree of the Government of the Russian Federation of September 8, 2010 No. 697 “On the Unified System of Interdepartmental Electronic Interaction”. Initially, SOIE was focused on the implementation by the executive authorities of their functions. Now this system has become available for individual civil information systems used in the activities of other bodies and organizations that participate in the provision of state and municipal services, as well as in the activities of state corporations, which, in accordance with federal acts, have a certain set of powers related to the execution of state functions, and the provision of public services in certain areas of state and public life (paragraph 10 of the Regulation on the SOIE). There is a need to intensify work on the introduction of a normatively regulated procedure for the exchange of digital documents, as well as the procedure for recording electronic archival workflow. Of course, the use of modern digital technologies will require solving a number of problems arising from this. For example, if we consider the mechanism of citizens’ appeals to authorities, the following situation can be noted. Along with the classical methods of filing appeals, applications, representatives of state (municipal) bodies accept electronic documents even without identifying applicants, especially if this procedure is not provided for by law, thereby one can note the possibility of contacting unknown persons or persons deliberately posing as other participants in civil the relationship. There may be a reverse situation in which, to the appeal of a citizen previously signed with an electronic signature, the authorities send an answer in electronic form without the actual original signature, while signing with a departmental electronic

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signature, and in some cases the answer is drawn up on an official form and without a signature. In this situation, a citizen is not able to verify the signature status of an authorized person, which creates the prerequisites for violating the rights of citizens. Problems may also arise in the process of providing digital copies of documents received in electronic format from the electronic public services system. For example, by pumping the provided extract from the Unified State Register of Real Estate, the system creates a specific xml file, which requires the presence of specially installed programs on the computer for which it is impossible to familiarize yourself with this extract. A classic problem is the lack of systematization and unification of information available to representatives of government at any level. To reduce problems in this area, it was created on the basis of Decree of the Government of the Russian Federation of June 3, 2019 No. 710 “On conducting an experiment to improve the quality and consistency of data contained in state information resources” and Decree of the Government of the Russian Federation of June 3, 2019 No. 1189-r is a national system for interacting with digital data. But it should be remembered that the status of such systems has not yet been adequately regulated. The aforementioned allows us to conclude that there are no uniform requirements for electronic systems of interaction between state and municipal structures between themselves and directly with representatives of the civil sector, and we should not forget about a number of requirements for the protection of information with limited accessibility, such as state and civilian. Realization of voting rights and the right to participate in a referendum of citizens through information and technological infrastructure (Soldatova 2019). Information technology plays an increasingly important role in the process of exercising citizens’ voting rights. In Russia, periodically in accordance with the current legislation, elections of various kinds are held, from federal, regional, to local elections, in the process of organizing and conducting which, as a rule, a number of problems arise. Such problems include: a certain difficulty in collecting signatures in support of candidates, the lack of acceptable methods for expert analysis of the authenticity of voters’ signatures, the vagueness of measures to hold experts accountable for mistakes made and obvious violations (Cherepanov 2016). A certain difficulty is caused by the methodology for identifying information in subscription documents based on their graphic identifiers available in departmental databases of the Ministry of Internal Affairs of the Russian Federation (Salikhov 2019). The introduction of digital systems would solve a number of the problems noted above, as well as ensure the general accessibility of citizens to the procedure of not only collecting signatures, but also its subsequent processing. Repeatedly, the scientific community, in the public domain on the website www. vedomosti.ru, has come forward with a proposal to legalize the collection of such signatures via the Internet using the Unified Identification and Authentication System. It should be remembered that this model does not exclude the possibility of access to personal data (accounts) from third parties, and at the same time provides the opportunity to ensure “transparency” in the implementation of the procedure for collecting signatures, and more importantly, their subsequent verification, in which the interested person. The right to raise a question about the violation of the liquidity of his signature.

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Such systems do not require additional “manual” authentication of signatures. If successfully tested, this technique can also be used to create a “digital citizen profile”. A derivative question arises of the status of signatures at a subsequent stage, i.e. by direct vote. When collecting signatures, according to the law there is no secret of the will of a citizen, and in the elections themselves (referendum) these requirements are already present. The electronic voting system was tested in September 2019 in accordance with Federal Law of May 29, 2019 No. 102-FZ “On the experiment of voting in digital polling stations established in the city of federal significance Moscow, at the byelection of deputies of the State Duma of the Federal Assembly Of the seventh convocation of the Russian Federation and the election of senior officials of the constituent entities of the Russian Federation (heads of the highest executive bodies of state power of the constituent entities of the Russian Federation ii) held September 8, 2019. “As part of this experiment, an attempt was made to provide the possibility of voting “using special software of the regional portal of state and municipal services of the city of Moscow”. But at the same time, the Federal Law did not specify how the principle of secret voting at electronic polling stations is ensured by electronic voting. In Russian law, the term “electronic voting” does not have a scientifically and technically correct interpretation. The term itself was introduced into the election legislation of Russia in 2002. Based on paragraph 62 of Art. 2 of Federal Law of June 12, 2002 No. 67-FЗ “On Basic Guarantees of Voting Rights and the Right to Participate in a Referendum of Citizens of the Russian Federation”, electronic voting means a form of voting in which ballots made on paper do not use, but digital system of automation GAS “Elections” is applied (Gontar 2019). It should be remembered that the use of such automation “binds” the polling station to specific equipment and software, in fact, this approach reduces user mobility. Foreign experience in conducting electronic voting allows the opportunity to express one’s opinion both from home and from any other place with access to the Internet, which, according to most users, is more convenient (Grigoryev 2020). In addition to the existing GAS “Vybory”, a number of innovations in this area can be noted. So, starting from 2017, in a number of constituent entities of the Russian Federation and from March 2018, the digital system Mobile Voter was used at the federal level (Yusubov and Sizov 2019), which acted as an analogue of the absentee ballot. It should be remembered that voting applications at another polling station can be submitted in three ways: to the election commission, to the multifunctional center, or through the Unified Portal of Public Services. According to the Central Election Commission of Russia, less than a third of voters interested in the established version posted on the website www.cikrf.ru by the Central Election Commission of the Russian Federation were interested in the third option at the last election. Analyzing the generally accepted understanding of electronic (remote) voting, the following interrelated tasks can be noted: 1) the creation of systems to ensure unconditional voter identification and control to vote once to exclude “digital dead souls”; 2) ensuring secrecy of the vote.

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As an example of solving the first problem, we can cite the experience of Estonia, where since 2002 Internet voting has been recognized at the regulatory level using a close analogue of a previously announced digital profile of a citizen. Since that time, an identity card in Estonia has both a tangible medium and a special electronic signature, which is used to identify a specific citizen. Compliance with the basic principles of electoral law, with the widespread use of information technology, allows to reduce both the costs of elections and to increase confidence in them. But the achievement of these tasks becomes possible only with the simultaneous development of both digital systems and electoral law, which is especially important in terms of analyzing the dynamics of growth of public confidence in both elections and related information technologies. Thus, we can conclude that the introduction of modern electronic technologies requires a comprehensive and comprehensive assessment of both technical and legal risks that may arise when using them.

4 Conclusion At the legislative level, the basic legal conditions and ways of using information electronic systems and innovations should be determined. 1. One of the recognized methods for the implementation of information systems may be their introduction for a limited period (up to three years), for testing the test legal regime of digital innovation through a legal experiment (more information about which is available on regulation.gov.ru), and if successful, further legislative consolidation. 2. A mechanism is needed to comprehensively resolve the issue of the holder of state and municipal data, information of limited availability, which is especially important when transferring certain public functions to third parties with the assignment of infrastructure and software to them. 3. A comprehensive review of outdated legislative norms is necessary in order to increase the efficiency of the state mechanism through the introduction of information technology (for example, the rejection of signature lists in elections, followed by manual verification and double-checking in favor of the use of information technologies). Thus, the examples and problems considered in this article illustrate the invaluable potential of implementing information electronic technologies in the modernization of state legal institutions and at the same time point to a number of risks and difficulties associated with their implementation. However, without the introduction of information technology in most areas of state and public life, the intensive development of the state and society in the XXI century. impossible, which means that the state faces complex challenges in the selection of approaches and regulatory models for new technologies.

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References Krasilnikova, T., Egorov, G., Kazachenok, S, Martirosyan, M.: Institute of public discussion of draft regulatory legal acts as one of the mechanisms of e-democracy action and its role in the formation of a civil society in Russia. In: Popkova, E.G. (ed.) Ubiquitous Computing and the Internet of Things: Prerequisites for the Development of ICT. Studies in Computational Intelligence, vol. 826. pp. 17–25. Springer, Berlin (2019) Avdeev, D.: Deliberate democracy at the local level: the possibilities of social networks. Municip. Serv. Legal Issues 4, 7–10 (2019) Ageev, A.: The right to access information held by public authorities Dis. … cand. legal sciences. Science, Moscow (2016) Boychenko, I.: Legal support of electronic interaction in the formation of the information society in Russia. State Power Local Self-gov. 1, 38–44 (2017) Gontar, S.: Electronic voting as a new opportunity for citizens to participate in the formation of government. State Power Local Self-gov. 4, 29–33 (2019) Grigoriev, A.: Implementation of the constitutional right of citizens to manage state affairs in the context of digitalization. J. Russ. Law 2, 45–57 (2020) Egorov, G.: Regulatory Features of the Implementation of Digital Technologies in Russian Justice. Ecology, Economics, Law: A Look into the Future: Collection of Articles, pp. 146– 154. VolSU Publishing House, Volgograd, Russia (2018) Egorov, G., Oreshkina I.: Regulatory features of the introduction of the digital economy in Russia. Legal Concept = Legal Paradigm, vol. 18, No. 3. pp. 13–18 (2019) Polyakova, T.: Information and legal accounting systems of state authorities. Admin. Law Process 10, 23–30 (2015) Salikhov, D.: Use of information technology in the process of modernization of Russian political institutions. Const. Municipal Law 11, 18–26 (2019) Soldatova, V.: Problems of protecting personal data when using digital technologies. Law Econ. 12, 24–34 (2019) Teleshina, N.: Electronic forms of interaction between the population and local authorities. Const. Municipal Law 1, 68–71 (2018) Cherepanov, V.: Modernization of the mechanism for collecting voter signatures in support of the nomination of candidates. Const. Municipal Law 5, 54–58 (2016) Shmeleva, M.: Digital technologies in state and municipal procurements. Actual Probl. Russ. Law 12, 36–42 (2019) Yusubov, E., Sizov, P.: On the need to adopt the Electoral Code of Russia. Const. Municipal Law 4, 29–35 (2019)

Managing a Structural Modernization of the Regional Industrial Complex Mikhail Shchepakin(&) , Eva Khandamova and Tigran Oganesyan

, Viktor Gubin

,

Kuban State Technological University, Krasnodar, Russia [email protected], [email protected], [email protected], [email protected]

Abstract. Purpose: The purpose of the study is to develop to manage the structural modernization of the regional industrial complex by activating the deflator of marketing behavior optimism. Design/Methodology/Approach: During the study, we have employed the methods of theoretical knowledge such as formalization and the hypotheticaldeductive method, general-logic methods (analysis and synthesis, induction and deduction, comparison, generalization, integrated approach, simulation). As for the specific-scientific methods, we have used categorial analysis, factor analysis, semantic analysis and the method of expert assessment. Uniqueness/Value: It is proposed to use a “deflator of marketing behavior optimism” of a manufacturing enterprise in its marketing communication space (MCS) as a tool to manage modernization in the regional industrial complex. Using the value of the marketing behavior optimism index, we will be able to assess the state (quality, nature, scale, importance, etc.) of enterprise’s communications aimed at smart marketing behavior to increase the competitiveness of business enterprises and provide for the efficient restructuring of the regional industrial complex. Keywords: Regional industrial complex
Structural modernization
Innovative value chains
Marketing behavior phenomenon
Deflator of marketing behavior optimism
Competitiveness JEL Classification Codes: R32


L60
L5

1 Introduction The orientation of industrial enterprises in the region towards restructuring and rational structural modernization involves the creation of innovative value chains and balanced distribution of benefits by the initiator of marketing effects on market agents of different levels and different functions. However, in the context of the escalation of contradictions, disagreements, and conflicts between the interacting parties these effects hamper positive changes in the core components of the regional economy and restrain the execution of business development priority tasks. This situation doesn’t allow increasing the gross regional product (GRP) and achieving the desired competitiveness of the regional economy. © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1126–1145, 2021. https://doi.org/10.1007/978-3-030-59126-7_124

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Stronger impact of the external market environment and escalation of internal business problems make the authorities and management of various levels to revise their attitude to the development of a mechanism for managing changes when making modernization, which involves various social actors. Decision-making on forging the communication space between interested market actors concerning modernization is associated with building a rational marketing and behavioral spirit and a favorable moral and psychological climate between various market actors. The economic and behavioral motives of parties are intertwined in the marketing and communication space focused on the efficient involvement and use of various resources that make up for the shortage that restrained the transformations and the accumulation of potential for economic growth. However, market challenges and changing balance of powers in the international community trigger, on the one hand, crises and occurrences in regional economies (and foremost in their industrial segments). On the other hand, they have a significant impact on escalating and unresolved contradictions, disagreements and conflicts in and out of business. On the third hand, ubiquitous digitalization as innovative transformations in the marketing and communication platform insufficiently cover the technical and technological transformations and modernization in the business and various management bodies to ensure economic growth. The one-sided orientation towards digitalization as a cure-all in the situation of backward economic development of the regions slows down economic growth and does not give prerequisites to narrow the production, technological and technical gap between the state of the industry in the national economy and its state in the advanced Western countries and China. The suggested scenario of digitalization, on the one hand, greatly facilitates the communication between people and various bodies (for example, the establishment of multifaceted centers for the provision of state and municipal services), and on the other hand, it paralyzes a man and takes away his ability to think and analyze the things around.

2 Materials and Method The authors use the findings of theoretical-methodological and scientific-applied research conducted by Richard Thaler (Thaler 2008). He integrates ideas that link together the economic and psychological approaches to decision making, which can be embodied in the behavioral models of individual actors and affect the nature of their actions associated with transformations and changes at the enterprise level and in particular areas of society. The interweaving of economic, behavioral and psychological components in decision-making broadens the ideas about interdisciplinary behavioral models of parties. Each of them as an individual can be guided by three psychological features when justifying his choice in an economic decision: a) limited rationality; b) the idea of justice; c) the lack of self-control. Comprehending the behavioral responses of a man working in various business agencies (or government bodies, or social institutions), help to understand how market relations will be built between different actors of the economic space. i.e. relations associated with transformations within enterprises, industries, and the business community. We are talking about the engineering of

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production and technological cycles and platforms on which the modernization and restructuring of core areas of activity in local and national business bodies depend on. Engineering in industrial complexes has become a key link in the forward movement towards a prosperous society. Behavioral economics should clearly show within the frames of the marketing communication space the action of the mechanism for building relations between manufacturers and consumers, between market partners. It should reflect as a mirror the managerial decisions on the structural modernization of the industrial production, arranging business processes with the initiators of marketing communications in the cycles of their transitional effects on target (interested) audience. At the same time, it should not be confined to the behavior of individuals and their personal features, as stated in Richard Thaler’s works (Thaler 2008). The main object in the behavioral economics is the boundaries of the rationality of marketing and other decisions made by economic agents (bodies of different scales and management levels, households, individuals) regarding the production of products (goods) in need of the population, promotion and purchase, their use and establishment of partnership on mutually beneficial terms. Behavioral economics should broaden their understanding of the actors’ motives manifested in the coordination of their actions when solving development problems and the selection of methods to be followed to achieve socioeconomic growth. Based on the analysis of various materials and research methods, the authors came to the conclusion that effective management of the structural modernization or changes in the relations between the actors of specific economic spaces within some territories and within specific periods is feasible if the marketing and other behavior of actors and their employees are arranged in their interests, benefits and moral-ethical embodiment of their principles and ideals declared by those who take the relevant decisions and dictates the game rules in market exchanges.

3 Theoretical and Methodological Findings 3.1

Analysis of the State of the Problem

The research findings cover the theoretical and methodological content of the analysis, as well as the applied one that describes the response of parties to the regulatory effects of the state and the authorities regarding transformations in the key links of the national economy encouraging employees and business to introduce innovative changes of a different nature. Bearing in mind the state of the market, the variability of external sanctions and pressure from the West and national government, business enterprises have to adapt to the regulatory effects of the authorities and make decisions on the rearrangement of business processes and their improvement through the transformation of actors’ marketing behavior and staff’s behavioral responses into various directions. On the one hand, towards satisfaction of the demands for higher customization (Zunde 2009), and on the other hand, towards the improvement of business processes, organizational and functional changes, as well as restructuring and modernization, and on the third hand, towards the drastic cut of production costs due to stiffer and higher unfair competition,

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as well as the orientation of the business on marketing simulation and aggressiveness in promotion of goods and services to a competitive market. The renovation of the industrial production is in the hands of large business leaders which restrains the initiatives of small and medium-sized enterprises since they seek easy money and quick expansion of their capital under minimal investment costs. Small and medium-sized business leaders, in turn, are found themselves in the situation of dynamic response to market challenges and retention of competitive positions in regained market niches. Digitalization as a tool to manage growing diverse target audiences put new demands on both the technical and technological components of innovative production chains of consumer values and business management tools. In contrast, the instability of the economy is accompanied by rising motivation-resource contradictions and discords within in business area, as well as between the state and business, society and business, employees and business owners. A communication space aimed at involving actors with life cycles of diverse and multidirectional communications should be adjusted by the business under the assumption that the generated transitional effects of modernization initiator will increase the motivational capacity of the parties involved in the execution of the indicated and planned changes (productiontechnology, logistic, organization-management, marketing, etc.). Analysis of motivations among parties to private relations showed the scale of the problem concerning ensuring the economic growth of the national economy. It revealed the flaws in the management of structural modernization of core industries, since the mechanism is poorly supported by the real regulatory measures of the state, business, and employees to change their marketing and other behavior for the benefit of society and residents. 3.2

Analyzing the Perception of the Restructuring by Actors

The Russian economy is passing through structural transformation and modernization in key sectors of the national economy. The driver of these changes is incessant pressure of the West together with sanctions of different scale and nature. Crisis events in core sectors of the economy lead to a decrease in its growth rates and economic performances by 4% on average. And this situation affects the population’s income and consumption of vital goods and services by 8–10% on average. The final consumption by market actors as the most important index of their well-being has been declining in recent years, and this figure made up 10.2% in 2016 (Aganbegyan 2019). Russia is exposed to economic pressure from the West and the United States due to imposed sanctions, as well as the aggravation of the economic crisis in key sectors of the economy. Economic performances of the Russian economy dropped by 4% on average, at the same time income and consumption of the population – by 8–10%. The final consumption of households as the main index of the population’s well-being decreased by 10.2% (Aganbegyan 2019). Negative trends in the forward movement of Russia towards a social state are connected with the restrain and inhibition of structural modernization which the competitive positions of small and medium-sized enterprises hinge on (Bodrunov and Porokhovsky 2015; Sigida and Lepina 2019). Despite efforts of businessmen to alleviate crisis events, the economic situation in Russia has changed little, and the

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problems of import substitution have not been resolved to the great extent (without taking into account some progress in the agricultural sector). The real state of transformations in the Russian economy and the inadequate requirements for the pace of structural modernization in the country’s interests leads to the following negative displays: a) lower competence of employees expressed in their misunderstanding of the processes that occur in the minds of customers (partners, various market agents, consumers, etc.) in the marketing communication spaces formed by the initiators of the transformations. In particular, this takes place due to the transition to ubiquitous digitalization covering the whole range of various types of changes and transformations (production-technical, technological, organizational, marketing, etc.); b) neglected impact of current and future domestic technical and technological developments on overcoming the gap in the qualitative economic growth of the country. This situation is explained by the commitment of business and government to the introduction and support of borrowed developments under the preservation of their property rights); c) underestimated influence of motivation-communication and behavioral factors on prerequisites for enhancement of business enterprises’ competitiveness. The internal state of the business environment and staff of business bodies that depend on the staff’s motivation to establish appropriate communication and fruitful exercise of their innovative capacity in the results of the above transformations is not regarded when developing modernization and restructuring programs for business. Manufacturing enterprises, as well as small and medium-sized businesses that develop their strategies under the tasks of industrial structural modernization, ignore the action of those factors that change the internal state of the actors and affect their performance in a changing market. Such factors can include digitalization in various sectors and market segments, business responsiveness to simmering contradictions of a different nature and not always as appropriate to the requirements and demands. Disregarding the need to act and display own marketing behavior, correlating it with own identity in the business medium and according to the resources and opportunities for the establishment of sound communication with different actors of the market space leads to negative consequences. Marketing strategies of industrial entities are characterized by unbalanced management that alters the pattern of structural interactions. Instable internal communications and inconsistent objectives of economic growth shaken the competitive position of the business and they do not lay the groundwork for structural changes in industry segments. On a global scale, enterprises rely on innovative philosophies and theories that can help them achieve growth, competitiveness, and desired labor productivity (Day 2008; Kruger 2017). The economic toolkit in the development of models for the management of structural and other changes should be adjusted and filled with specific substantive content in relation to the conditions of an unstable economy and undermanaged internal contradictions in business. The engagement of the marketing imitation in the creation of innovative value chains should be accompanied by changing a marketing behavior and setting distinct borderlines of the marketing identity for each part of the regional industrial complex.

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The perception of occurring changes in society, a system of economic and social relations, and the moral spirit of people evoke enthusiasm or disappointment in the minds of a working person. For example, an assessment of economic optimism by Russians showed the following results. Only 17% of the population see positive changes in the economy related to the progress of the restructuring and modernization in various fields of society. Thirty-nine percent believe that things are getting worse. A survey of the Public Opinion Foundation states the negative attitude of highlyeducated people and wealthy residents. Less than half of the surveyed (45%) recognize the current situation in the economy satisfactory, 37% answered “it is bad”, and only 8% were undecided. Such an assessment of the state of the economy and modernization speaks about that the state, business, and society must revise the attitude to the tools that should be used and adapted to the goals and objectives of transformation and restructuring of the industrial-production field in particular territories (regions) to accumulate the required potential that would ensure the desired rate of economic growth and cement the socio-economic path of development. 3.3

Discussing Possible Approaches to the Resolution of the Problem on Structural Modernization of Regional Industrial Segment

Business evolution requires new thinking and managerial techniques (methods, skills) (Gibson et al. 2000) when making up business development programs, delivering structural modernizations and restructuring the production and technological platform of the industrial sector. It becomes important to reconsider ideas about the content of restructuring and modernization, organizational and cultural components in the management system. As far as new features in the economic nature of the above categories are distinguished, ideas about processes and phenomena that disrupt the connections between the system parts and shake its competitive position in a changing market are reassessed. Not bolstering business credibility in the eyes of the market and potential partners and neglecting the opinion and inner state of human resources, the owners of capital and resources lose the image, thereby weakening the competitive position of the national economy in general. The owners of business enterprises (and especially in the core sectors of the country’s economy) should appeal the consciousness and ability of their human resources to kick-start exchange in an unstable economic system. It is the human resources that initiate positive structural and other transformations (getting such capacity under the pressure of regulatory marketing effects). Changing the internal state of the business makes possible to identify and cement the positive marketing identity of each actor for the effective management of business processes in a changing market. The desired vector in the management of the various planned transformations and business processes can be fixed by changing the state of the internal environments at the enterprises. These changes should cover the whole relationships between staff of business entities and owners of enterprises (represented by top managers). Communications built between various agents of the market and within the business reflect their contradiction and multivariance when it comes to forms, procedures, motivations, and reaching agreements on the distribution of financial gains and benefits

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between them. The structural links of different management levels participate to a different extent in creating consumer values and developing innovative technicaltechnological and other chains for the production of goods and the provision of services. Particular attention should be paid to the heterogeneity of the functional and executive apparatus when executing measures on the innovation of business marketing and communication platforms and forging internal links of business enterprises. The relations arising between sales and production units, production and innovation departments, management bodies and other intermediaries, servicing and supporting organizations are heterogeneous and multidirectional, which affect the nature of decision-making and effectiveness of offers within developed marketing and other behavior. Endeavors to integrate managerial effects by different market actors with respect to each participant in market and intra-company communications are aimed at enhancing the business competitiveness and gaining a stable market position in a changing marketing space under higher resource constraints. The direction of marketing behavior of the communication participants is contingent, first of all, on two key factors: a) the competitive position of the enterprise in marketing communication space transformed by him (for restructuring purposes); b) available resource pool for the accomplishment of innovative projects and qualitative characteristics of resources involved in the transformations (foremost, the range of developments in the enterprise’s innovative portfolio; the present image, supported by the developed marketing communication network; the creative component of corporate attributes; the innovation of human resources motivated to strengthen the position of the business in an unstable market, etc.). The roles, powers, and functions of different bodies at the level of entities, large corporate structures, and subordinate authorities are interconnected in such a way that their profile and character are adjusted to the goals of structural and other transformations of clear social orientation and civic-humanitarian importance. The restrained development of the socio-economic system and its industrial and production segments is primarily explained by the lack of sound business management and social development models relying on an anthropocentric approach to communications and taking a man creating and materializing different innovative transformations as a key figure. Changing the marketing behavior of business enterprises and correlating it with the stages of both life cycles (from entry into the market to the recession) of the market actors (Shumpeter 1939; Weber 1954) and the stages of the communication life cycles built in their marketing and communication spaces, one can lay conditions for efficient use of resources. The latter integrates resource components of different quality and origin. A manufacturer of goods and services transforming production value chains and intensifying marketing effects on other market actors (consumers, investors, intermediaries, and other market agents) rearrange his marketing behavior to hold the market niche. But industrial business hardly will manage to ensure its competitiveness without state support in delivering programs on the modernization of structural proportions between industry segments of the system. The innovation of a manufacturer is already visible at the stage of developing a balanced marketing communication space that engages different market actors into relations based on the trust and productive cooperation of the business (Shchepakin and Krivosheyeva 2015; Shchepakin et al. 2018). The behavioral responses of the regional

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industrial complex (RIC) should be tested for the communication penetration of decisions made. Moreover, it concerns the decisions that are at the upper tiers of the authority and far from business entities and human resources that are put into action from the top for the successful completion of the modernization and restructuring programs. It should be borne in mind that in the course of structural and other modernization, the motivational penetration of elements for update and transformations in key links of value chains should be activated, as well as the communication penetration of actors for useful cooperation to mitigate negative factors in an unstable market should be broadened. An example of the unjustified (or mistaken) efforts of federal officials is a plan to introduce a four-day working week in Russia, which will consolidate the negative responses of employees to measures violating their interests and result in stiffer contradictions in the business medium. According to a survey by a research agency of the HeadHunter portal, entrepreneurs believe that labor productivity will be falling, labor discipline will be worsening, the number of overhours will increasing and the salary will be declining while the intensity of labor will be rising. Only 12% of employers are ready to pass to this schedule, but 76% do not recognize such a proposition as appropriate. A business cannot succeed in modernization without a) initiatives of employees focusing their inner potential (primarily innovative, professional, creative, motivational, behavioral and other) to innovative changes; b) the combination of available resources; c) consistent establishment of communications within a business and between business bodies of various industries and fields, which is an indispensable condition of a synergistic approach for the integration of actors in the shaped communication spaces; d) scientific groundwork in the theoretical-methodological and instrument-procedural provision of modernization management in unstable economies, when the economic nature of processes (and especially communications) is interpreted from a technocratic standpoint when communication is built with disregard to the internal state of the elements in the chain of relations of local economic bodies. The science-based vision of the enterprise as an object with mixed tangible resources (Kleiner 2008) should be certainly complemented by an understanding of the hierarchy of intangible knowledge, processes and accompanying phenomena formalized by human resources in the forms of new knowledge (Conner and Prahalad 1996). And this knowledge should be aimed at creating new value chains that integrate the experience, competencies, various knowledge, and understanding of the socio-political vector of business and social development. The integration of different standpoints allows regarding the system structure of the enterprise from the perspective of the nature of communications being developed and the theory of marketing communication space worked out earlier (Khandamova 2013). We move beyond the understanding of enterprise’s economic nature as an activator of consumer behavior and broader interpret the enterprise as a communication process that exhibits the relations between the parties and periods of their life cycles (we mean ones of the consumer, manufacturer, goods offered and communications developed) (Shchepakin and Gubin 2019, p. 358). The state of the socio-economic system is clearly expressed during recession and crises that destroy and slow down the establishment of communication ties, as well as reduce their effectiveness under resource constraints and motivational disappointments of the

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developers of innovative solutions and products. Crises shut down not only economic activity (Greenberg 2015) and behavioral reasonableness in developing a marketing space, but also undermine the system of interpersonal and inter-actor relations. The undermined relations destroy the moral and ethical foundation of communication and distort the principles, regulations, rules, and traditions developed by civilized society. As a result, the scientific segment of the market is sidelined, financing of innovative developments is outsourced to the initiative groups of businessmen and some individuals, investors lose the incentive to attract investments in the establishment of new industries with a long return-on-investment period. The activity of financial organizations aimed rather at mitigating the risk of loan default than achieving the efficient modernization of core economic sectors is sharply rising. This situation is resulting in a slowdown of structural modernization of the industrial production and the restructuring of enterprises in the core sectors even before the start of transformations. Management of marketing behavior turns into leverage that weakens crisis events and makes sense of actors’ and staff’s influences. This sense can be embodied in development programs aimed at the social vector of transformations under way (Schepakin 2019, pp. 109–110). The manufacturer gasps for air under tax burden and can’t invest money in the establishment of new industries and increase their share in the structure of the national economy. It would be reasonable to exempt business investments from profit taxes and provide state financial support for newly established industrial complexes. Promotion of the manufacturing enterprises would create new opportunities to meet the consumer demand of the population and bring it to the parameters of the real state of the market space. The decline in the incomes of the working population leads to a weak “transformation of savings” into efficient business investments (Lvov and Porshnev 2002). Namely, “ramp-up of output, which involves investments by both the state and private investors in human resources, infrastructure, and technology” can lay a base for structural modernization of most sectors of the Russian economy (Rubini 2019). However, the unfavorable economic situation in Russia caused by political and geopolitical reasons and aggravated by disadvantageous measures of state regulation leads to a slowdown of economic growth and retardation of decisions on the execution of the structural modernization program for the industrial sector. Investment in fixed assets is spiraling downward due to serious leaks of funds into an offshore zone. Russian business should reconsider its marketing behavior in industrial and consumer markets, regardless of deteriorating market conditions and the weak response of authorities to the demands of a changing market. It is required to develop adaptive mechanisms for resource management that would meet the interests of different market actors (manufacturers, consumers, employees in various fields of activity, society and the state as a defender of the population’s interests). It’s impossible to increase the motivational penetration of the business and its employees for the socially important changes without the intensification of innovation and marketing-communication activities of all parties interested in the development of market exchanges, as well as without the regulatory and managerial adaptation of authorities at all tiers to the goals of structural transformation and industrial-technological transformations. The business should feel the direction of the wind of change and employees should switch their inner

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state to make the changes reasonable. The changes that would transform the state, quality, and scale of communication ties within the business medium and between market agents aiming their efforts at creation of greater “consumer value of the product” (Day 2008). Incorporation forms of business should not weaken the positions of enterprises and their elements. Changes should touch all business components that do not meet the demands of modernization transformations. The marketing imitation mechanism should initiate organizational changes and optimization of management subsystems by filling them with the new content of means of influences on the consumer and other market agents). Marketing injections should be focused on the positive adaptation of the business both to the market demands and needs of employees and societies. The spirit of human resources and business should be targeted at incrementation of marketing behavior optimism and enhanced by the efforts of the state and its social institutions.

4 Applied Scientific Findings 4.1

The Index of Marketing Behavior Optimism

Behavioral economics acts in the marketing in such a way that it shows the quantitative influence of social, cognitive, emotional and other factors on the economic behavior of actors and their decisions on the establishment of relations with interested market agents. It displays the impact of various factors on market variables (prices, profits, resource allocation, sales, and other benefits), thereby adjusting the behavioral responses of different participants within their resource capabilities. In the context of economic instability and obscured crisis phenomena, it becomes important for the business to introduce an index of expediency of changes in the actors’ behavior under the influence of a particular marketing pressure by expanding the range of marketing tools that meet the challenges and demands of the market environment. In view of an analytical approach to the essence of current marketing and managerial tools, the authors suggest the introduction of a term “marketing behavior optimism deflator” (MBOD) of a manufacturing enterprise in its marketing communication space (MCS). With the help of this tool, one can choose the path of modernization and other changes when executing business development programs. MBOD is written (formula) as the ratio between the cost of goods produced and sold at real price levels under use of innovative marketing tools (including ones developed on the digital economy platform) to the cost of goods sold that are promoted to the market through conventional marketing communications at prices of some reference year. For taking into account the impact of innovative marketing tools on the marketing behavior of an actor, it is necessary to introduce an index of marketing behavior optimism, which can be represented as follows.

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where I MBO is the Index of marketing behavior optimism of actor in his MCS; Vими is the volume of goods sold (services provided) by the actor initiating the development of a marketing communication space for the accounting period (year) when using innovative marketing tools designed in the course of modernization and other transformations; Vp is the volume of goods sold (services provided) for the base period (year) before changing the entirety of marketing tools to influence consumers and market partners that have been used until structural and other transformations. We mean by an index in behavioral marketing a specific performance indicating the changes in a complex behavioral phenomenon in time and space, the elements of which are not directly summed up, but presented for some period. We have investigated the MBO index using the example of perfumery and cosmetic products in the Krasnodar Territory. The competitive market for perfumes and cosmetics products in the Krasnodar Territory is represented by the following enterprises: Avanta OAO, Svoboda OAO KO, Nevskaya Kosmetika OAO, PKK Vesna OAO, Contsern Kalina OAO, and Companiya Klever OOO. For calculating the MPO index, we have used the data on the gross revenues of enterprises (Table 1). Table 1. MBO index for perfumes and cosmetics enterprises (for example, the Krasnodar Territory as of January 1st, 2020) Enterprise

Gross revenue (base period – Vp), thousand rubles 535,253.0

Avanta OAO 10,410,215.0 Nevskaya Kosmetika OAO PKK Vesna 2,622,063.0 OAO 14,058,166.0 Contsern Kalina OAO Svoboda 15,51,607.0 OAO KO 2,769,324.0 Kompaniya Klever OOO Source: compiled by the author.

IMBO, price rise included

1.36

Price rise index in the accounting period against the base one 1.20

1.06

12,737,595.0

1.22

1.16

1.02

3,378,922.0

1.29

1.13

1.09

15,324,490.0

1.09

1.15

0.93

1,955,025.0

1.26

1.15

1.06

3,263,220.0

1.18

1.14

1.02

Gross revenue (accounting period – Vими), thousand rubles

IMBO, net of price rise

729,734.0

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It should be noted that Vp is the base period (year), i.e. the volume of goods sold using conventional marketing communications for delivery of transformations, and Vими is the accounting period (year), i.e. the volume of goods sold using innovative marketing tools after delivery of transformations. The application of innovative marketing tools changes the MBO index of actors (manufacturers). The growth of the MBO index lay the conditions for the enterprise to expand the market for the sale of products and change its marketing behavior in the competitive market. 4.2

The Model for Management of Structural Modernization in the Regional Industrial Complex

The MBO deflator renders the state of the market environment, within which (space and time frames) the marketing communication space of actor is developed. It is a measure of the decisions made by a business to formalize its marketing behavior in the specific conditions of the economic and social state of the system (whether local or the national economic system). The deflator affects the selection of the communications that reflect the stages of their life cycles, the quality, and composition of the resource components of the enterprise. The deflator acts as an indicator of business opportunities, on the one hand, to meet the consumers’ demands, and on the other hand, to answer the question about the sufficiency of the resource capabilities of market agents to enter into mutually beneficial market relations with the initiator of transformations in his marketing and communication space. The Communication Life Cycle (CLC) rejects the tools that do not meet the time imperatives, the resource potential of the business, the state tasks concerning the transformation of the manufacturing sector (Fig. 1). Designations: MCS is a marketing communication field; a is a period of unstable motivation; b is growing motivation to the establishment of communication; 1 is an integrative potential of RIC; 2 is actors of a market environment, RP is a regional product; MBO is marketing behavior optimism. Smart market relations most often serve as a product of the marketing and communication actions of the initiator at the right time and in the right economic space. At CLC stages (from I to VII), the actor oriented at the establishment of partnerships (most often it’s the initiator of communications) makes up the essential contents of information signals, arranges the most acceptable channels for their transmission with regard to the impact of backward signals and the action of noises. Within the developed model, the “distributor of communications (DC) of the business enterprise” is of fundamental semantic and organizational-technical importance. It is this distributor that integrates the incoming signals from the actors of the marketing network and management levels, bodies-innovation developers, investors, and other related market agents. It accumulates the influencing tools, differentiates them by the directions and nature of outward signals, and then sends these signals to waiting participants of the marketing communication space. The smarter the differentiation of signal impulses is, the more targeted will be the impact of the initiator of the transformations on the market agent interested in the partnership.

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Fig. 1. The model for management of the structural modernization in the regional industrial complex amidst an intensification of the motivational-behavioral factor in respect to market actors

Accumulated content of the messages sent in DC affects the outward signals and changes the internal state of the business. This state is changing when the human resources are mobilized to carry out modernization and smooth current tensions and disagreements.

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Allocating the funds for marketing communications amidst market downturns, unstable economic growth (due to systemic and non-systemic crisis events), poorly predicted fluctuations in oil prices (for example, due to coronavirus in China and other countries, etc.) there is a need to involve a mechanism of marketing volatility. The latter means the variability of prices (costs) for marketing impact tools on target audiences (investors, consumers, resource providers, business owners, etc.) applied in certain periods and within specific marketing and communication spaces. Marketing volatility displays significant fluctuations in prices for various types of goods and services, as well as tariffs in various fields of economic and other activities. Such volatility leads to unreasonable and sometimes unpredictable behavior of market agents who suppress the weaker actors or drive them from the occupied space, or try to enhance their competitiveness (by simulating positive or negative actions in relation to partners, contractors, and other societies). This is unfeasible without appropriate respective modernization transformations. Prerequisites for the economy to reach new frontiers of the competitiveness are laid exactly when developing programs of structural and other modernization. The development issues of business agents and particular areas of activity have started to be addressed. First of all, this is achieved by changing the marketing behavior of business agents within the frames of real time and the real marketing and communication space. Michael Becker proved this possibility in his theory and argued that “the recognition and assumption of the need to gain a better understanding of the way the (marketing) system works” stresses the need to “develop an efficient theory of exchange” (Baker 1975; 1983; 1995). But M. Becker disregarded the fact that an unstable market poses a myriad of problems related to marketing simulation and production of simulacra that do not meet the demands and requests of consumers and society, which may arise in connection to the modernization of the industrial and production area. Assessing the marketing behavior of actors in the context of industrial modernization, we see important to introduce a term “reorganization of entity’s marketing behavior (MBE)” to designate a set of measures aimed at changing marketing behavior responses (and marketing behavior as such) of business agents, their links and elements on the spot of restructuring changes within space and time frames, which are defined by the authorities, the state or the business to be adapted to crises and instability. Negative processes should be overcome by cementing the competitive position of a business, the economic system as a whole and the state due to innovative changes of a different nature made on a modernization basis. The complex of measures under development can be aimed at: a) restructuring of internal and external relations; b) tackling debt retirement and building new business processes with new parties; c) upgrading production links, marketing and communication platforms, broadening the stock and product line groups of goods of new quality and purpose; d) optimizing the resource potential of a business, human resources, and the government’s opportunity to assist the resolution of conflicts, raising the efficiency of managerial influences on target groups and functional tools for implementation of decisions, mitigating losses and preventing damage to society and the state, etc. Reorganization (rehabilitation) of the marketing activity of actor presupposes the introduction of new marketing tools for management of business performance,

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reflecting the demands of adaptive marketing behavior to changing market conditions to be met by various actors. For example, a) referring marketing injections to the components of the marketing cycle; b) the utilization of various forms of positive marketing imitation (Shchepakin 2018; Shchepakin et al. 2019; Shchepakin and Handamova 2016; Shchepakin and Handamova 2015) in changing market states of system elements and links; c) the introduction of a new marketing toolkit, namely a marketing protector, a marketing damper and a marketing implant to solve the development issues of the regional industry and manage the competitive position of the business (in terms of individual enterprises of the industrial complex) amidst newly arising market challenges (Shchepakin et al. 2017a; Shchepakin et al. 2017b; Shchepakin and Khandamova 2015). The reorganization of marketing activity poses to the owners and top managers the tasks that should be solved by market actors in order to strike a balance of interests and gain mutual benefits. Therefore, they should restructure their marketing behavior (including the actions of staff). The changes predetermine a successful modernization and achievement of reasonable structural proportions in the RIC. Changing organizational and functional relations within the business and with foreign market partners allows initiating the development and delivery of innovations and new projects concerning technological and other cycles in the production and commercial activities of the business. Bettering state influences on market actors, including consumers, to their own benefit, raises the trust of market partners to modernization programs and the government. The random actions of government bodies, business, and population without state control cause discontent with transformations and aggression and instigates negative simulation behavior in a market environment. The communications and behavior of actors are getting chaotic, the motivational penetration of people for innovations in economic and social life is sharply declining. In this situation, the actor faces marketing and social bifurcation, which hinders structural and other transformations. 4.3

The Impact of Staff Penetration from Various Perspectives on the Behavioral Optimism of Actors

The nature of the marketing behavior in the communication space is multi-faceted. It directly and indirectly depends on the factors, such as the motivational and communication penetration of entities (and their staff) for the execution of modernization and restructuring in operating and developing business, as well as behavioral optimism for unlocking innovative potential and engaging unutilized reserves to cement competitive positions of the business in a changing market medium. We attained the following results: – motivational penetration of staff for delivery of various transformations (technical, technological, structural and others) made up 28%; – communication penetration of entities (and their staff) for the establishment of productive relationships with various market agents for the accomplishment of modernization and restructuring programs is 36%;

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– behavioral optimism of entities (and their staff) to a higher volume of modernization and restructuring transformations in the industrial sector is 21%. The findings indicate that contradictory relations have established in the national economic space (between the state and business, business and employees, bodies of the business environment, employees and state, state and society). They are caused by discords, disagreements, and conflicts, as well as risks and threats arising from outside and existing within the socio-economic system. The weaker influence of contradictions and risks on transformations in the industrial sector under positive interference of the government can enhance the motivational and communication penetration of entities (and their staff) for large-scale changes in the production, technological and economic areas of society. Besides, behavioral optimism will be translated into innovative projects under development and meaningful initiatives to unlock all kinds of system potentials for accelerated economic growth and the establishment of a humane society. We have broadened the understanding of turbulent marketing. The term reveals its economic nature, which is characterized by the random and chaotic split of values, the inappropriate structure of marketing links and elements (in particular, restructuring and modernization of business is carried out with out-of-date tools, poorly-defined proportions between entities and elements industrial complex in various terms, the establishment of unbalanced relations between various parties in terms of resources and benefits, distortions within the marketing mix, the destruction of staff incentive systems and disregard to the promotion of goods in view of their real properties, wrong choice of communication tools of influence leaving without attention the life cycles of consumers, goods, communications, etc.). Such chaotic marketing is characterized by growing entropy in the development of market behavior when disorder and chaos propel various parties in the generation of behavioral responses of entities to any external stimuli. The following findings should be recognized: a) the development of a deflator of marketing behavior optimism for an industrial enterprise; its correlation with the life cycles of communications (CLC) of various market agents and their resources for active participation in modernization in the marketing communications space of the initiator; b) the identified impact of motivational-communication and behavioral factors on structural modernization and restructuring of the production and technology platform within the development of innovative marketing leverage for interested market actors; c) channels for the attraction of market partners are accumulated in the distributor of communications and their involvement in the resolution of business development problems is contingent on CLC stages of various market actors; d) recommendations to choose acceptable (resourceefficient) forms and scopes of marketing imitation (positively directed) in turbulent marketing within the marketing communication space of the regional industrial complex to maintain competitive positions through structural modernization of the technical and technological platform of the regional industrial sector.

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5 Conclusion 1. The need for delivery of business development program based on structural modernization and restructuring of the regional industrial complex (RIC) is associated with the advance of their management with a focus on: a) changing the marketing behavior of entities if the prerequisites for smoothing contradictions and disagreements of a different nature are laid; b) the state of the market environment exposed to stronger pressure from the West and unbalanced regulatory influence of the state from the point of parties’ interests that cause negative processes in the internal state of the business and its constituents; c) oscillations of staff motivations related to their interest in modernization and development of an effective business in terms of unresolved contradictions; d) ambiguous manifestation of the communication factor under resource constraints and ill-defined goals in the socio-economic development when creating conditions for truly supported humanization of socio-economic relations; e) accumulation of integrative potential of the RIC by means of innovative value chains, efficient use of available resources and ones involved in the economic turnover, wider application of marketing imitation in adaptation processes, as well as marketing injections in development of efficient management decisions on restructuring. 2. In the face of modern market challenges and threats, the business processes can be simulated on new production and technology platform that reasonably uses developing marketing tools (including, economic digitalization tools) to engage a wide range of market actors seeking stronger competitiveness and positive marketing identification when shaping balanced marketing-communications spaces under resource constraints and aggravation of contradictions. 3. The key factor in the growth of the national economy is structural modernization and restructuring of regional industrial complexes and tools for getting the desired result are management models based on incrementation of entities’ motivation for activation (and integration) of their potentials to cement competitive positions in an unstable market environment. Delayed response to influences from the state, business, and society regarding modernization restrains business process restructuring, raises market pressure, widens the gap in the interests of various market actors, scales up contradictions between different social classes. 4. CLC as a tool for the management of communication between actors in the marketing communication spaces outlines the range of opportunities provided by the content of applications, the volume of modulation signals, methods and forms of message delivery. The communication life cycle reflects the variability of the motivational capacity of modulating communication effects. It displays the communication development costs and estimates the potential of resource provision of the communication cycle. Employing certain methods and forms of impact, business is built in the marketing imitation model, relying on the marketing identity of each market party, the stability of their motivational penetration for modernization in particular and innovations in different components of the business’ and society’s

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performance and development in general. The lack of initiative in business is no prospects for positive changes in the economy and the movement of society along the given social development path. The interaction between enterprises of the regional industrial complex when working out business development programs through structural modernization and business process restructuring means getting a unanimous opinion on the use of resources involved in economic turnover by the entities, fair distribution of the benefits to mitigate inner business contradictions causing the gap in interests of the state, business, and society. 5. The suggested MBO deflator of the industrial enterprise integrates the relationships between many participants in market impacts. It allows shaping the marketing behavior of actors on the new theoretical and methodological basis. It integrates new ideas about the economic nature of restructuring and influencing factors. We have identified the relationship between the stages of the communication life cycles form the perspective of interacting parties, have proposed the methods for resolution of motivational-resource contradictions in an unstable economy, which gives reason to expect the growth of communication penetration of entities and individuals for innovative-based modernization. The key factor is the marketing identity of entities and marketing volatility that can point at the choice to be made by the state, business and population to lay conditions for higher competitiveness of the economic entities making up the regional industrial complex.

6 Further Lines of Research The identification of socio-economic relations reflecting the essence of the MBO deflator allows developing an efficient model to manage the marketing behavior of business entities. The management is focused on the expansion of marketing tools range, the establishment of conditions for structural modernization and qualitative transformation of the production platform in the industrial sector of some territories. Mobilization of business resources for the development of marketing communications spaces with the balance of benefits and interests in the context of different challenges (requirements of the state and society, consumer demands and interests of business entities), as well as due attention to contradictions, disagreements, and conflicts in business and society, can indeed weaken crisis events and contribute to the potential for accelerated economic growth. Acknowledgments. The article has been written under support of the Russian Foundation for Basic Research and Administration of the Krasnodar Territory in framework of the research project 19-410-230016 p_a.

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Analysis of the Impact of Robotic Legal Services on the Changing Institutional Environment of Economy and Law Yuliya A. Tymchuk(&)

and Anna V. Shkalenko

Volgograd State University, Volgograd, Russia [email protected], [email protected], [email protected], [email protected]

Abstract. Purpose: The article provides an overview of the impact of robotic services on changes in the institutional environment of the economy and law through the introduction of modern technologies, including artificial intelligence and robotics. Design/Methodology/Approach: The basis of this study is the use of elements of an innovative methodology of post-institutional analysis based on the interdisciplinary synthesis. Findings: The authors highlighted the terminological problems of robotics in the context of legal services. They described the specifics of providing and evaluating the effectiveness of robotic legal services. The article highlights the directions of the transformation of the legal services market through the use of robot lawyers. It identified the advantages and disadvantages of robotic legal services both in the current activities of law firms and departments as well as in solving pressing legal problems of ordinary consumers. Researchers have identified the institutional challenges of digital transformation in the delivery of public services with respect to transition to a customer-oriented approach. Originality/Value: They determined the influence of the processes of robotization and automation on the development of legal practice. The study formulated institutional changes in the management paradigm in terms of refocusing on the subject (client) of the services received. The authors described recommendations that could be implemented at the government level to ensure the coherence of national digital initiatives in line with national development priorities. Keywords: Legal practice
Robotics
Legal services
Robot lawyer
Legal tech
Institutional change
Digital economy
Management paradigms JEL Code: K12


K19
O14
O32
O38
B52

1 Introduction In the context of the transition to the fourth industrial revolution or so-called 4.0, there are inevitable processes of transforming social relations through the introduction of fundamentally new technologies, such as artificial intelligence and robotics. Social © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1146–1158, 2021. https://doi.org/10.1007/978-3-030-59126-7_125

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robotics research is increasingly focusing on this broad political, institutional and economic role, including roboethics (Haselager 2005; Veruggio 2006; Nagenborg et al. 2008) and robolaw (De Cock Buning et al. 2012; Bertolini and Palmerini 2014). Science and technology research focused on robotization and co-production aspects, can lead and contribute to institutional research by highlighting the institutional and legal environment as a broader policy innovation economy. The state’s past and potential contribution to innovation and the digitization of the economy is the most pressing challenge for the digital transformation and institutional regulation of all spheres of life, including legal services. The mismatch between the general conviction of the digital economy business sector and the real needs of the digital economy requires much more political involvement in the creating the institutional environment of the entrepreneurial state, considering the emerging risks. The legal practice of providing legal aid and legal services1 to stakeholders is also undergoing modernization despite the inherent conservatism. In our opinion, today one of the key trends in the legal services market is the improvement of their accessibility to consumers. This trend has been observed in many foreign countries, with a difference only in the degree of its manifestation. So, for example, in the USA, UK and others, the problem of access to legal services is extremely acute. Citizens are actually deprived of the opportunity to defend their violated rights because of the high cost of the services. Modern technologies will successfully contribute to overcoming this problem, its introduction into legal practice allows to significantly reduce the cost of legal services or even provide the stakeholder with a free legal solution. In particular, it is about robot lawyers. However, we should recognize that without an analysis of the key terms for this study, it is not possible to go directly to the issues raised. Since the problem of determining the essence of robotics, including robotics based on artificial intelligence, is broad and requires separate detailed consideration as well as an interdisciplinary approach, in this study, we refer to the approaches existing in domestic legislation.

2 Materials and Methods The basis of this study is the use of elements of an innovative methodology of postinstitutional analysis based on the interdisciplinary synthesis, which involves overcoming the monodimensionality, dichotomization and dogmatism of many concepts of orthodox neo-institutionalism. The authors also used general scientific methods, including dialectic, inductive, deductive, prognostic and private scientific methods, such as formal-legal, the method of legal interpretation, the principle of assessing legal processes, etc. The normative basis of the study included legal acts, their projects, their drafts and various policy documents. In particular, one of the priorities of scientific and technological development outlined in the Strategy for Scientific and Technological

1

Despite the essential differences, for this study, we will use the concepts of “legal service” and “legal assistance” as synonymous.

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Development of the Russian Federation (approved by the Decree of the President of the Russian Federation dated December 1, 2016 No. 642) are directions that provide the adoption of advanced digital technologies and robotic systems. Despite this, the legal framework for robotics has been defined as one of the related areas of artificial intelligence use according to the National Strategy for the Development of Artificial Intellect for the period up to 2030 but has not yet been established. Without an established regulatory framework, the accelerated introduction of new technologies is transforming a number of social relations. For example, the legal services sector has undergone significant upgrading and acquired new features with the use of robot lawyers. At the same time, the procedure for both the provision of such services and their legal processing do not currently have a legislative regulation. The theoretical basis of the study was the work of Russian and foreign researchers, whose studies deal with individual issues related to the legal understanding of artificial intelligence and robotics (Haselager W., Veruggio, G., De Cock Buning, Madeleine et al. Arkhipov V.V., McGinnis, John O., Morhat P.M., Nagrodskaya V.B., Naumov V.B., Pierce Russell J.).

3 Research and Development Terminological Problems of Robotics in the Context of Legal Services In current GOST R 60.0.0.4-2019/ISO 8373: 2012 from September 1, 2019 “Robots and robotic devices. Terms and definitions” (Gost R 2019), a robot means a drive mechanism programmable on two or more axes, having some degree of autonomy, moving within its working environment and performing intended tasks. If we refer to other applicable GOSTs (Gost R 2014; Gost R 2011), it is possible to find that robots are determined exclusively from the position of the key function that they perform (for example, the “therapeutic robot” in GOST ISO 9999–2014). In our opinion, the definition contained in GOST R 60.0.0.4-2019 is universal and fully complies with the latest developments in this field. Stakeholders have developed legislative initiatives whose essence is to establish a special legal status for «smart» robots in our country. In particular, in the draft Federal Law “On Amendments to the Civil Code of the Russian Federation on Improving the Legal Regulation of Relations in the Field of Robotics” (Draft acts 2017) developed by D. Grishin jointly with the international law firm Dentons, commissioned by Grishin Robotics (at the time of writing of this work it is under public discussion), it is proposed to supplement the Civil Code of the Russian Federation with a new Chapter 6 entitled “Robotic Agents”, which establishes the concept of a robot, a robot agent, its legal capacity, responsibility for his actions, etc. In this case, if the robot according to the indicated draft law is understood as “a device capable of acting, defining its actions and evaluating their consequences based on information coming from an external environment without full human control” then a robot-agent means “a robot that intended to participate in civil circulation by decision of the owner and due to design features” (Draft acts 2017). According to the meaning of these definitions, a robot is a

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subject of regulation, and a robot agent, due to design features endowed with artificial intelligence, has a special legal personality (Arkhipov and Naumov 2017). The draft Model Convention on Robotics and Artificial Intelligence (authors A. Neznamov, V. Naumov) (Model Convention 2017) defines objects, subjects of robotics, general safety rules, development and use of robots. In addition, Article 26 of the draft Model Convention allows the robot to participate as an independent subject in the civilian circulation. Both nationally accepted approaches and ISO 8373:2012 “International Standard Robots and Robotics Terms and definitions”, to which the domestic GOST R 60.0.0.4-2019 is currently aligned, can be used to define the content of terms in the draft model convention. The terms “robotics”, “robotization” do not currently have a legislatively defined definition and have only mentions in several regulatory acts of a programmatic nature (Roadmap for the development of “pass-through” digital technology “New Production Technologies”, “Components of Robotics and Sensors”, “Neurotechnologies and artificial intelligence”). For example, the passport of the federal project “Digital Technologies” (approved by the Presidium of the Government Commission on Digital Development, the Use of Information Technologies for Improvement of Quality of Life and Conditions of Entrepreneurship, Protocol No. 9 dated 05/28/2019) plans to increase costs for «through» digital technologies including robotics and artificial intelligence technologies. In addition, to implement the national program “Digital Economy of the Russian Federation”, the Order of the Ministry of Finance of Russia of 06.06.2019 86n provides special codes of the directions of expenditures for targeted expenditures of the federal budget (for example, 04200 Implementation of the technologies “artificial intelligence”, “big data” and “Robotization” in the framework of accounting and registration activities in the Russian Federation). The paragraphs “G” p. 5 of the National Strategy for the Development of Artificial Intelligence for the period until 2030 defined robotics as one of the related areas of use of artificial intelligence (Decree of the President of the Russian Federation 2019). We believe that this approach of the legislator is justified and correct since it is known that from a technical point of view that artificial intelligence and robotics are certainly related but not identical concepts. However, in fact, the absence of regulatory frameworks, both artificial intelligence and robotics, is one of the factors preventing their popularization. Regarding the doctrinal work of domestic legal scholars on the legal understanding of the essence and applicability of robots in legal practice, attention should be drawn to their small number which is due to the novelty and specificity of the problem. In addition, from a legal point of view, a number of questions inevitably arise in the context of addressing the use of artificial intelligence and robotic technologies: – how to distinguish between the concepts of artificial intelligence, robot, chatbot, robotics, cyber-physical system, machine learning, a neural network under terminological uncertainty? – what type and method of legal regulation is most appropriate to regulate the legal relations arising from the use of robots and artificial intelligence? – robot considering the current level of technology, is it an object or a subject of law? – who is the subject of liability for damage caused by the robot?

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The terminological problem in this area is a major one and requires separate detailed analysis. Therefore, for research purposes, the concept of robot lawyers will designate Internet-services based on a neural network that provides legal services to Internet users on a reimbursable and free-of-charge basis. In our opinion, it is possible to provide answers to other identified questions depending on the legislator’s approach to robots: if we follow the classic and traditional approach, the robots can be classified as objects of civil rights and fixed in Article 128 of the Civil Code of the Russian Federation. In this regard, the issue of liability for harm caused to them will not be very difficult for either the legislator or the enforcer. Meanwhile, given the level of modern scientific and technical achievements in the field under consideration, we believe that this approach will not fully meet the needs of the subjects of civil turnover, as well as correspond to the actual state of things. Moreover, as Morhat P.M. rightly notes, «increasing the autonomy of robots by artificial intelligence will inevitably require a review of the whole spectrum of legal reference regimes and even reference industries and legal institutions» (Morhat 2018). Regarding the type and method of regulation of the legal relations arising from the use of robots and artificial intelligence, we believe that, first, it should develop appropriate regulations for the standardization of robotics which would resolve both terminology and all technical issues related to the creation, operation, etc. of robots. In this case, for such new legal relations complicated by robotics and artificial intelligence technologies, it is advisable to use the permissive type as the prevailing type of legal regulation. At the initial stage of creating an appropriate regulatory framework for robotics and artificial intelligence, we consider it appropriate to appeal to the possibilities of “soft” legal regulation (Talapina 2016). Transformation of the Legal Services Market Through the Use of Robot Lawyers In the legal literature, it is noted that «robotics position itself as a certain industry that introduces robots into a particular area, i.e. programmable machines that can autonomously or automatically perform certain actions” (Nagrodskaya 2019). In this connection, when researching issues related to the introduction of artificial intelligence technologies and smart robots into legal practice, they also identify some areas of their use (Morhat 2017). Foreign researchers also identify several areas of legal activity that are significantly transformed by the application of artificial intelligence: search for information on the circumstances of the case; search for precedents; drafting of documents; preparation of case materials; forecast the outcome of the case or legal analytics (McGinnis and Pierce 2019). In this study, we will focus on followings areas: – automation of standard legal processes (in particular, preparation, including filling out standard documents according to a previously predefined template, searching for the most suitable judicial practice); – provision of primary legal advice, including through specialized Internet portals; – use as an alternative way to resolve disputes at the pre-trial stage in the process of mediation. When using robots in the above-mentioned areas, it should additionally pay attention to the need for a certain degree of autonomy. Otherwise, additional double-

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checking of decisions that are the results of the work of a particular autonomous system will contradict its essence. When characterizing the areas identified, it is important to note their inherent duality, which is reflected in their focus on the needs of the entities providing legal services and the entities to which these services are provided. Legal Tech is the key term that now refers to processes related to the optimization of lawyers’ work and automation of routine legal processes through the introduction of the latest technical tools. We agree with researchers who believe that in the context of Legal Tech it is incorrect to talk about the possibility of completely replacing professional lawyers with robots since the main purpose of this market segment is to increase the efficiency of legal activities (Golovanova et al. 2019). Although it is possible to recognize the term Legal Tech as a well-established in the legal science and practice, some researchers distinguish it from the term Law Tech, which is the new concept of providing legal services to consumers. An analysis of practice shows that the United States occupies a leading position in the process of legal services robotization. In particular, it is in the United States that there are already many positive practices that, in our opinion, are worth considering in more detail. For example, in the US legal services market, Rocket Lawyer and LegalZoom are among the pioneers that have introduced information technologies into everyday legal practice. For example, Rocket Lawyer allows stakeholders when accessing the corresponding site to create the necessary document suitable for a specific life situation (for example, to rent out real estate, to create a business), and if necessary, to obtain legal assistance (to select a lawyer who is geographically closest to the client or receiving legal advice online) (Legal made simple 2019). Meanwhile, when designing a document, the system considers the specifics of the legislation of a particular state of the USA indicated by the client. In addition, the USA has launched many mobile applications and online services, which are very popular because they allow stakeholders (not only ordinary citizens but also small businesses) to address pressing legal issues (selection of lawyers, suitable judicial practice, sending legally significant digital contracts, etc.) (Market of legal online services in Russia, 2019). The Smartsettle electronic negotiation system is a successful example of a tool that allows for a quick and efficient resolution of a dispute in the pre-trial stage (Robot mediator settles first-ever court, case 2019). According to the developers and manufacturers of the designated system, the offered solutions go far beyond the traditional Win-Win negotiation concept (win-win, where each of the parties to the dispute is the winner) (Smartsettle 2019). There are two versions of this program (focused on complex negotiations in the business environment and on simpler negotiations), each of which can be used free of charge. Despite attempts by domestic legislators to reduce the burden on the judicial system by popularizing and introducing new alternative dispute resolution procedures (e.g., judicial conciliation (Federal law 2019)) there is no equivalent in our country. Legal Tech revolution is currently occurring in Russia. In particular, over the past five years, the Legal Tech market has grown significantly and is now represented by

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dozens of products whose purpose is quite diverse (Lawyer newspaper 2019): from legal reference systems, designers of legal documents, tools to automate claim work in a particular organization to services that predict the probable outcome of a case (Lawyer of the company 2019). So, the Pravo.ru group of companies created the entire legal ecosystem Legal Tech (Right.ru 2019), which includes a number of tools that automate routine legal processes. It is worth noting, however, that such an ecosystem is a complex tool for automating the work of a law firm (or legal department). In our opinion, one of the most striking examples is the introduction of a robot lawyer Fedor Neuronov, who has been operating for about a year and specializes in providing initial legal advice on family law and consumer protection (Robot lawyer Fedor Neuronov 2018). The robot lawyer developed by Setup Company LLC (Robot lawyer 2017a, 2017b) provides a wider range of services free of charge (in operation since January 2017). In 2018, another company launched robot lawyers Debetok whose main activity is the collection of receivables from sole proprietors and legal entities (Debetok 2018). This service is paid. In particular, the costs for the full operation of the case from the filing of the claim to the demand for the debt will amount to 19,000 roubles. Considering that the process of collecting receivables in the given service is automated and that disputes are not very complex, are typical and do not require a creative approach in most cases, the cost of the service, in our view, seems excessive. In addition, it is also necessary to consider the simplicity of filing and further tracking of arbitration cases filed electronically through My Arbitrator system (My arbitrator.ru 2019), which, given the scope and capabilities of Debetok, is the main way to file documents in court. As indicated on the official website, virtually all expenses for legal services will be returned, since the court, upon a favourable decision to recover the debt in the operative part of the judicial act, will recover the plaintiff and the full legal expenses incurred. However, the analysis of judicial practice also available on the website https://debetok.ru/decisions does not allow us to draw such unambiguous conclusions. When deciding whether to indemnify a person against whom a judicial act has been issued, the court shall apply the criterion of reasonableness, which considers the volume of claims, the price of the claim, the complexity of the case and the length of the proceedings, number of services provided, the time required to prepare his procedural documents and other circumstances (Resolution of the Plenum of the Supreme Court of the Russian Federation 2016). As other successful examples on the automation of legal activity, in terms of finding the necessary judicial practice that any legal practitioner uses in dealing with a specific legal situation, it is worth paying attention to the services to reinforce the developed legal position and predict the possible outcome of the case, using a machine learning model based on neural networks: Pravobot and Sutyazhnik (Analytical system Sutyzhnik 2019). Robotic Legal Services: Specifics of the Provision and Performance Evaluation From the standpoint of civilistic doctrine, the analysis of the above-mentioned instruments raises two questions. The first is who are the subjects of legal relations arising with the use of robot lawyers for purposes related to the provision of legal assistance, as well as what contractual design can be used to formalize the relevant

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legal relations. The second question that arises from the first is if the robotic legal service is provided free of charge. There are a number of difficulties in answering the questions since the legislation does not provide for the method of contract formation which occurs when an interested person contacts a robot lawyer (for example, a robot lawyer from Setup Company LLC). In the legal literature in the context of the problem of online contracts, there are several ways to conclude them: shrink-wrap (used to buy software), click-wrap (agreements concluded by clicking one of the parties on the button «I agree» , in particular with the terms of the user agreement) and browse-wrap (as opposed to clickwrap it did not require explicit consent to the terms of the user agreement posted on the site) (Muratova 2019). For example, when accessing the Robot Lawyer system, it is possible to determine the method of concluding a contract only after entering the system (for example, using social media). As a result, after entering the profile on the site it is possible to find that it is necessary to expressly agree with the rules of the service for work with it. Accordingly, in the system, we can to consider the method of concluding contracts with the entities interested in receiving legal assistance as click-wrap. Using traditional terminology, we believe that this method of concluding agreements is closest to the method of concluding agreements through concrete actions. If we analyze the procedure for concluding a contract when accessing the Robot Lawyer system, then it is possible to identify the following features: – when using the Robot Lawyer system the subjects of the contract and the relations resulting from it according to the user agreement are Setup LLC (OKVED 62.0 computer software development, consulting services in this area and other related services) and the Internet user (Robot Lawyer 2017b); – on the start page of the site of the Robot Lawyer system according to the current Civil Code of the Russian Federation, in particular, Art. 435, legal services contract offer available (the system’s site is open and constantly accessible for Internet users, and to start using its functionality it is necessary to log in using one of the proposed social networks or register in case of absence of an account); Interested in receiving legal assistance, the Internet user accepts the offer by registering on the system’s website and accepting a user agreement. These features of the conclusion of the contract allow some researchers to classify it as public (Article 426 of the Civil Code of the Russian Federation) and unnamed contracts (Kalyatin 2004). According to clause 3 of the user agreement: “The service for preparing documents by the Robot Lawyer System is provided to the User free of charge unless otherwise specified” (Robot Lawyer 2017b). First, there is the highly controversial legal science issue about the legal nature of the provision of free services (Braginsky and Vitryansky 2002). Secondly, it is also necessary to consider that Federal Law of 21.11.2011 No. 324FZ “On Free Legal Aid in the Russian Federation” has, for one of the goals, the creation of conditions for the realization of the constitutional right of citizens to receive qualified legal assistance, secures organizational and legal basis for the formation of state and non-state systems of free legal aid, establishes the types of free legal aid, as

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well as the categories of entities that provide it. This raises the question whether it is possible to include robotic legal services (assistance) provided on free of charge basis to a special type of free legal assistance and, accordingly, to incorporate it into Article 6 of the above law. In our opinion, considering the current state of the Legal tech market in Russia, the absence of a legal basis for such new phenomena of modern reality as artificial intelligence and robotics, it would be premature to give a positive answer to this question. Besides, most robotic legal services provided free of charge on various services on the Internet have one key feature: the robot lawyer (or its rights holders) is not responsible for possible errors. A subject that has received a robotic legal service, has no guarantees that the result of the service will meet its expectations and will be reliable and accurate (Robot Lawyer 2017b). Interestingly, there are no significant legislative obstacles in domestic legislation that would, in principle, prevent the use of robot lawyers in the provision of legal services. Unlike Russian legislation, which does not reflect the nature of robotic legal services, some US state laws prohibit such activities equating them to unauthorized legal activities (McGinnis and Pierce 2019).

4 Results In our opinion, the advantages of using robot lawyers both in the ongoing work of law firms and departments and in solving the pressing legal problems of ordinary consumers are obvious. For law firms and departments, the use of robot lawyers automates many daily routine processes, ranging from checking and typing documents, ending with standard documents of the same type and finding the most relevant jurisprudence. Lawyers can use the time saved to develop a legal position on complex and non-standard litigation or to develop the terms of contracts, which due to the specifics of relations between contractors and other circumstances, require an individual and creative approach. For ordinary citizens, access to robot lawyers make legal services more accessible, and the possibility to present their problem both in natural language and answering specially chosen questions, increase their demand because of the simplicity of interaction with the robot. A number of robot lawyers provide free legal advice and the necessary legal documents (statement of claim, claim, contract, etc.), which also indicates an increase in the accessibility of legal services to the public. Meanwhile, it is worth paying attention to some disadvantages of robotic legal services that affect or potentially could affect the rights of both consumers of such services and lawyers using robots as assistants, automating routine processes. The first problem, which is a common one, is related to the unauthorized introduction into the systems used to provide the services in question. The objectives of such actions may be different: destabilizing the activities of the law firm, discrediting in the eyes of consumers, etc. There may also be system failures that are not caused by such factors but by internal errors. The second problem that emerges from the first is the leakage of users’ personal data, which can result from various kinds of cyberattacks

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on the system. However, since the market for robotic legal services in Russia has just begun to develop, there were no similar problems to date. From the viewpoint of consumers of robotic legal services, a key drawback may be the mistakes of a robot lawyer related, in particular, to a misunderstanding of the legal problem raised by the consumer, which led to an incorrect solution. Moreover, as noted earlier, a robot lawyer (or its rights holders) is not responsible for possible errors, nor does it guarantee exactly the result intended by the consumer. It is necessary to consider that the errors of the robot lawyer may also be due to the constant changes in the law, to which the robot is not trained to independently respond. To solve these problems and create an effective institutional environment, the state, first, needs creating a new policy in the digital age. Rapid technological development and explosive generation of big data require policy innovations and flexible processes, and policy-making institutions. A strong networked and large-scale economy is the most promising model of institutional change. Among the most promising digital transformations, in our opinion, there is an open economy, an open global knowledge, dedicated political and state leadership, joint institutional training, public-private partnerships, investment in a competitive information infrastructure, early attention to ICT literacy and user training opportunities, clear cyber policies and dynamic management based on results orientation and accountability. Adopting a holistic approach to the development and use of ICT for its economic transformation. The experience of developed countries offers important lessons. Political leadership and a long-term commitment to digital transformation are one of the most important conditions. Equally important is the industrial cooperation through which it is necessary to involve the private sector in the digital transformations taking place in society. The Government’s work should focus on creating opportunities and facilitating working partnerships. It is necessary to shape the institutional environment in a way that the public sector works closely with the innovation industry such as the state program of technological experiments and testing. Through ongoing dialogue and experimentation, new ICT solutions will be developed and adapted for innovative use, creating an enabling environment for ICT development, growth and diffusion. Other important success factors are the balance of investments in hard and soft infrastructure, such as awareness and broad e-literacy, a willingness for innovation to ensure a pioneer position and early investment in shared networks and data concentrators. The most important thing for continuing innovation and electronic transformation is the development of a management system that can remain relevant and effective, intelligently responding to emerging needs in a changing environment. This management system includes: • A commitment by political and civil service leaders with a vision and high commitment to set the tone for ICT strategies and institutions. • Creating a learning environment in which people consciously learn and strive to apply new ideas and explore various ways to improve their work. • Creation of innovative processes and flexible structures by introducing change management methods, integrating change capabilities into management processes and introducing process reorganization with the support of effective participation and feedback mechanisms.

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• Compliance with the competitive environment in the provision of services. • Regulation of employment due to rapid progress in the field of artificial intelligence and robotics. • Coherence of national digital initiatives in line with national development priorities. • Inclusion of stakeholders in the research and testing of promising digital technologies and solutions. • Expanding available Internet infrastructure.

5 Conclusion The management of digital transformation and the creation of an effective institutional environment for the digital economy pose many new challenges for the state. The main problems and difficulties encountered are that the additional investments in ICT do not provide the necessary level of digital dividends due to the lack of competencies of all participants in the system. Such investments should consider new vectors of state development and policies, create a favourable institutional environment with the participation of new institutions and actors with new skills, where the state should assume new roles. These roles include the following: the formation of national policies and priorities for digital transformation, including the creation of state capabilities and institutions for planning, financing and implementing national strategies for digital transformation; leading transformations in public administration and digital transformation planning institutions; investing in human capital and the formation of a clientoriented service of public services, institutional training in all sectors. Summing up the results of the study, we would like to focus on the impact of robotization and automation on legal practice in general. First, as a result of the widespread introduction of robot lawyers into the legal profession, who will perform many routine processes and typical legal tasks, the demand for paralegals services will be very low. This will result in a corresponding reduction in the number of law firm employees. A similar situation will arise for lawyers who prepare standard legal documents (model treaties, power of attorney, etc.). However, robots lawyers will not be able to replace lawyers representing the interests of the parties in the courts. With the introduction into legal practice and the popularization of tools aimed at successful pre-trial settlement of disputes, litigation which requires to represent the interests of clients will become less. It, in turn, will also affect the income of legal practitioners. On the other hand, the use of robot lawyers in legal practice will save time and reduce the cost of legal services provided as well as positively affect their accessibility to citizens. Institutional changes in public administration during the digital development period need to use a client-oriented approach and to involve the key stakeholders. Digital change at the state level is not enough. In modern conditions, governments around the world are faced with a wide variety of challenges, including growing constraints on public budgets; unjustified expectations of citizens regarding received public services; widening gap in access to common goods, incomes and opportunities; growing demand

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for transparency and accountability in the public sector; reduced confidence in the government for failure to fulfil promises; and the need to compete in a rapidly changing global knowledge-based economy. Acknowledgement. The work was supported by Russian Science Foundation (project No. 2018-00314).

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Lawyer newspaper: Legal tech steps through Russia: how has the market changed over the past year? PwC (2019). https://www.advgazeta.ru/upload/medialibrary/653/Itogi_oprosa_ Arutyunyan_TSshayge.pdf. Accessed 20 Oct 2019 Lawyer Company: Lawyer + Artificial Intelligence = Friendship, Aktion-MTsFER (2019). https://www.law.ru/article/22211-servis-po-podboru-sudebnoy-praktiki-kotoryy-dumaet-kakyurist. Accessed 20 Oct 2019 Legal made simple: Rocket Lawyer (2019). https://www.rocketlawyer.com. Accessed 20 Oct 2019 McGinnis, J., Pierce, R.: The Great Subversion: How Artificial Intelligence Changes the Role of Lawyers in the Provision of Legal Services. Topical Problems of Economics and Law, no.2 (2019). https://cyberleninka.ru/article/n/velikiy-podryv-kak-iskusstvennyy-intellekt-menyaetrol-yuristov-v-okazanii-yuridicheskih-uslug. Accessed 20 Oct 2019 Model Convention: About Robotics and Artificial Intelligence, Robopravo. Research Center for the Regulation of Robotics and Artificial Intelligence (2017). http://robopravo.ru/modielnaia_ konvientsiia. Accessed 20 Oct 2019 Morhat, P.: Artificial Intelligence: Legal View: Scientific Monograph, ROO Institute of StateConfessional Relations and Law. Buki Vedi, Moscow (2017) Morhat, P.: To the question of legal personality of electronic person, Legal research, no.4, pp. 1– 8 (2018) Muratova, O.: Concept of Transnational Consumer Law in the Modern World. Lex rusica 7, 20– 28 (2019) My arbitrator.ru: Federal Arbitration Courts of the Russian Federation (2019). https://my.arbitr. ru/#index Accessed 20 Oct 2019) Nagenborg, M., Capurro, R., Weber, J., Pingel, C.: Ethical regulations on robotics in Europe. AI Soc. 22, 349–366 (2008). https://doi.org/10.1007/s00146-007-0153-y Nagrodskaya, V.: New technologies (blockchain/artificial intelligence) in the service of law. In: Nowelova, L.A. (ed.) Scientific and Methodological Manual. Avenue, Moscow (2019) Resolution of the Plenum of the Supreme Court of the Russian Federation: On Certain Issues of Application of Legislation on Reimbursement of Costs Related to the Consideration of the Case. No. 1 of 21 January 2016, Bulletin of the Supreme Court of the Russian Federation, no. 4 (2016) Right.ru: Ready-made solutions for automation of lawyers and legal departments, Right.ru group of companies (2019). https://legal-it.pravo.ru/. Accessed 20 Oct 2019 Robot mediator settles first ever court case: Legal Futures (2019). http://legalinsight.ru/rynokyuridicheskih-on-layn-uslug-v-rossii-1-mlrd-rub/. Accessed 20 Oct 2019 Robot lawyer: Specify your problem. LLC Set Up Company (2017a). https://robot-urist.ru/. Accessed 20 Oct 2019 Robot Lawyer: User Agreement, LLC Set Up Company (2017b). https://robot-urist.ru/index. php/useragriment. Accessed 20 Oct 2019 Robot lawyer Fedor Neuronov: The first Robot lawyer, Jurist (2018). https://fedor.ai/. Accessed 20 Oct 2019 Smartsettle: About iCan Systems Inc., Smartsettle (2019). https://smartsettle.com/about-us/aboutican-systems-inc-2/. Accessed 20 Oct 2019 Talapina, E.: On possibilities of legal regulation of the internet. Works of the Institute of State and Law of the Russian Academy of Sciences 3(55), 57–75 (2016) Veruggio, G.: EURON roboethics roadmap (release 1.1). EURON Roboethics Atelier, Genua (2006)

Smart Solutions for Intellectual Capital Commercialized in Industry 4.0 Vyacheslav V. Burlakov1,2, Olesya A. Dzyurdzya2, Oksana Ev. Gudkova3, Gilyan V. Fedotova4(&), and Alexey A. Sokolov5 All-Russia Scientific and Research Institute «Center» (VNII «Center»), Moscow, Russian Federation [email protected] 2 Moscow Polytechnic University, Moscow, Russian Federation [email protected], [email protected] 3 Ryazan State Radio Engineering University, Ryazan, Russian Federation [email protected] 4 Volga Region Research Institute of Production and Processing of Meat and Dairy Products, Volgograd State Technical University, Volgograd, Russian Federation [email protected] 5 Volgograd Institute of Management, The Branch of the Russian Academy of National Economy and Public Administration, Volgograd, Russian Federation [email protected] 1

Abstract. Purpose/Objectives: The article is devoted to traditional smart development tools, being transformed in Industry 4.0. The modern economic system is based on the priority of new knowledge and developments, establishing the competitiveness of a commercial structure and its capital, that is, on intellectual innovation activity that predetermines the search and development of new directions in traditional work of a market entity. For successful innovation activity, necessary are certain costs that will be paid back in multiple amounts when implementing the results of such work in the future. Methodology: In the work, regulatory analysis and assessment of the current situation in public national economic system administration, methods of content and statistical analysis, and formalization and analog methods were applied. Results: Modern trends in the world economy are predetermined by the fourth industrial revolution of Industry 4.0 that is based on cyber physical systems, artificial intelligence, remote control, and algorithms. Today, digital platforms for interaction between market entities have already been developed and make it possible to remotely solve many problems. Conclusions/Significance: The proposed investigation is important because it has systematized and comprehensively substantiated key trends in the development of intellectual capital induced by Industry 4.0 in the world market. The obtained solutions will become intellectual property and act as a specific asset that has its market price and is aimed at modernizing the entire economic system. The emerging economy is an economy of knowledge and intellectual capital that enables gaining a monopoly position in the world market.

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1159–1166, 2021. https://doi.org/10.1007/978-3-030-59126-7_126

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Intellectual capital
Innovations
Industry 4.0
Modernization JEL Code: O14


O15
O32
O34

1 Introduction Innovation is both creating a new product or idea and a result of intellectual activity. Modern commercial organizations are constantly developing their potential and looking for new competitive opportunities in the sales markets. To maintain competitive position, it is necessary to follow the principles of innovative development, that is, continuously improve own procedures, methods, mechanisms, and technologies for achieving a new qualitative level of work. Thanks to this approach to current activities, it is possible to satisfy the growing demand in the market and maintain competitiveness. We believe, innovation is nothing else than results of intellectual activity that qualitatively change the life of society and generate maximum positive effects. It should be noted, that in the modern innovation-driven economy the key movement factor is scientific and technological progress, resulting in increasing the competitiveness and commercialization of an enterprise. In a market economy, the issues of commercializing intellectual property are quite acute, as this is a source of income for its owners and opportunity to expand sales markets in a highly competitive struggle. So, the concept of intellectual property is necessary to be determined. The intellectual property is a set of legally secured rights of ownership of certain intangible objects. The intellectual property (hereinafter referred to as “IP”) rights may be held by states or private individuals (individuals or legal entities). These rights are enshrined in law. Many objects and values created by previous generations or the state itself and its structures (laboratories and institutes), as well as those that are not somebody’s property are assigned as federal property. Private property is established on objects that are created by individuals or acquired by them. In this study, we are more interested in the option of private IP ownership, since it is more focused on commercialization. According to the legislation, the main types of private intellectual property rights are the property right, non-property rights, and other rights (the resale royalty right, the right of access, and others) provided for by this Code. The IP owner can draw income from the property in two ways, i.e., insourcing innovation and its implementation; and selling the rights to use the intellectual product to another person or selling the rights to manufacture and distribute the product. In order to modernize the Russian IP market, there were developed recommendations on managing the IP rights in organizations that are aimed at intensifying innovative development programs and promoting the growth of competitiveness of Russian companies with respect to ongoing digitalization of world economies. According to statistics, intellectual activity has increased in recent years (Fig. 1).

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Fig. 1. Dynamics of applications for registration of inventions for the period of 2009–2018, units

The dynamics presented in Fig. 1 demonstrates an increased invention activity in Russia over the past 10 years and proves the priority of innovative development in the country. Mostly inventions and trademarks were applied for. The applications for utility models, on the contrary, decreased over 10 years by 2168 units.

2 Materials and Method In the modern world smart technologies are increasingly conquering areas of society and penetrate into management and production of goods and services. The constant search for new smart solutions is becoming a modernization paradigm. Artificial intelligence is developed on the basis of human brain studies and allows rapid gaining momentum of economic breakthrough. The fundamentals of the AI work were investigated by (Marsden and Sonnino 2008; Mizyun 2008; Viziter et al. 2010; Kharitonenkov 2011; Presnyakova 2016; Cheyns et al. 2017; Sekerin et al. 2017a; Sekerin et al. 2017b; Dudin et al. 2018; Giannakis and Bruggeman 2015; Plotnikov et al. 2015; Vertakova et al. 2016), and (Cheyns et al. 2017). The technologies of computer vision and machine learning studied by (Newell et al. 2008; Korolev 2010; Gudkova 2011; Gordin 2015; Vizilter et al. 2010; Brink et al. 2017; Brockman, 2017), and (Gudkova 2019) are widespread in practice. The issues of development and commercialization of intellectual capital were discussed in (Mamengaev and Fedotova 2019; Katulsky and Bespalova 2016; Kudashev and Nechepurenko 2015), and (Kazakova et al. 2014).

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The reviewed scientific and practical publications of Russian and foreign economists have proved the relevance of this research area. Today, national economies are still being transformed, and current institutional structures are being digitalized. The methodological base of the research includes the method of system, problem and graphical analysis, as well as program-target and formalization methods.

3 Results The intellectual property market is developing chaotically today, has a large number of players and no strict mechanism to regulate relations in this area. There are several groups of participants in this market. The first group consists of various state regulatory structures such as Rospatent, the RF Ministry of Economic Development, and the RF Ministry of Education. They set the rules for work on the production of innovation and intellectual property. The second group of market participants is prospective customers of intellectual property. They can be all branch ministries and departments, private corporations, and foreign companies —everyone who is ready to invest financial resources in the production of a new product, new technology, etc. The third group of participants is executors (scientific organizations, laboratories, design bureaus, innovative enterprises, and private companies), that is, all those involved in the development and production of innovations and intellectual products. The fourth group of participants is consumers of the intellectual activity results or goods produced. It should be noted that intellectual activity is performed not for the sake of science, but to meet certain needs of society and improve the quality of life; therefore IP must generate certain effects that all consumers use. The main problem in the mindswap medium is the lack of coordinating relationship between groups of participants. Conditions often occur, when there are performers and customers, but they do not know about each other, so ideas are avoided. Sometimes there is IP and executors, but there are no consumers or a mechanism to commercialize and implement the obtained innovation into economic activity. In the IP market, the main challenge is the development of IP commercialization mechanisms that has two ways to be met, i.e., insourcing and implementation; and licensing agreement and making a profit. The way of insourcing IP is quite understandable and is used to produce new products and technologies and improve current production. This can be implemented at the expense of own resources due to organizing a multidisciplinary team containing personnel, own subsidiary or a branch. The option of assignment of IP usage rights is implemented on the basis of a license agreement. In fact, this is one of the main forms of international technology exchange, subject to registration. The types of licenses used in practice differ in intellectual property rights. An exclusive license gives its buyer the right to use the property to the extent specified in the contract. All rights to use the property are reserved by the seller according to a non-exclusive license. Today the world market of licensed trade is about $250 billion, with the expenses of the average Russian household (according to brand4rent, 0.5–0.6% of total income)

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being also inferior to world trends. This indicator makes 2% in the USA, 1% in Europe, and 1.5–2% in the countries of Asia, Korea and Japan. The Russian licensing market is only gaining momentum and will stimulate the development of science-intensive industries, since the main problem of their inertia is the lack of funding. If there is an IP demanded by the market, trading in its licenses seems to be a commercially profitable operation for the seller (licensor) and the buyer (licensee). In this transaction the licensor acquires the following opportunities: making a profit from the enforcement of the right, ensuring the recoupment of R&D costs, expanding the sales market, and expanding the demand for its own scientific base. The actual dynamics of the Russian licensing market is demonstrated by the indicator of shipped innovative goods, works, and services. This indicator is compiled by Rosstat and published in the “Official Statistics” section. Let us analyze the dynamics of this indicator for the period of 2010–2018. Figure 2 shows the dynamics of the production of goods, works, and services in Russia, including innovative goods. From 2010 to 2018, the volumes of shipped goods, work performed and services rendered are steadily growing and increased by 43188008.5 million RUB. The volume of produced innovative goods, works, and services also increased by 3272563.9 million RUB for the period under review, with the share of innovative goods in the total volume of goods amounting to 6.5%. This indicator was higher than that in 2010 (4.8%), but it amounted to 9.3% in 2013, so we evaluate it as a decrease to 6.5% in 2018. This fact indicates that the innovative products market is narrowing for various reasons. One of such reasons may be the lack of clear mechanisms and tools for the commercialization of innovations. The world licensing practice proves that the conditions for successful implementation of the licensing policy are reliable legal protection of intellectual property and rights of its utilization; high scientific, technical and economic importance of IP; comparison of the licensed object with existing analogues, which is possible to be demonstrated; uniqueness and novelty of the IP that is possible to be produced on an industrial scale and according to existing technologies; and its use, safe in modern conditions. Given all these, the licensing market will function successfully and expand the commercialization of many scientific and technical developments. The problem of the lack of interaction between the participants in the IP market can be solved by digitalization of the society, that is, by creating an online platform and organizing online IP auctions. For the operation of such an electronic system, it is necessary to carry out preparatory work—form a pool of innovative developments that have been already prepared and are anticipating commercialization. The system should be integrated into the main trading floors existing in Russia. An example for this is the Association of Electronic Trading Platforms that combines all current electronic trading systems in Russia and forms the All-Russian single interactive space on their basis, which will allow global combining the efforts of all electronic trading systems. Another example is the All-Russian e-commerce system that is a procurement module for budget purchases; the Support Center for Entrepreneurship that along with generally accepted services provides services for preparation and participation in electronic bidding, etc. Similar electronic modules have been created for organizing electronic interaction between counterparties in each region; therefore, creating a

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8,00,00,000.0

10.0 9.2

7,00,00,000.0

8.7

6,89,82,626.6

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8.0 6,00,00,000.0

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4,12,33,490.9 4.8 3,83,34,530.2 3,59,44,433.7 3,34,07,033.4

5.0 4.0

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3.0 2,00,00,000.0 2.0 1,00,00,000.0

1.0 43,64,321.7 41,66,998.7 45,16,276.4 28,72,905.1 35,07,866.0 35,79,923.8 38,43,428.7 12,43,712.5 21,06,740.7 0.0

0.0 2010 2011 2012 2013 2014 2015 2016 2017 Shipped goods of own producon, works and services performed on their own, million RUB

2018

Innovave goods, work, and services, million RUB Percentage of innovave goods, works, and services in the total volume of goods shipped, work performed, and services rendered, %

Fig. 2. Dynamics of innovation activity indicators in Russia

commercial platform for IP implementation is not difficult. It is very important to include as many executors and prospective R&D customers in the database as possible, which will ensure maximum demand and supply in the medium. Moreover, necessary is a regulatory operator of the entire electronic information platform, for example, a state body or a commercial structure. The operator of this system should regulate its work, i.e., register traders, create a database of offers and demand, verify the database and identify counter offers to expedite the transaction, register transactions and contracts, register concluded contracts, timely update data, ensure database security data, continuously monitor to avoid fraud, and report on the work of the electronic site to the state. For the first 2 years, this system can be run in test mode; a series of traces can be conducted, and their quality and public opinion should be evaluated. Then, if there are sufficiently high indicators and volumes of licensed trades, the system can be launched in full-scale operation.

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4 Conclusions The current innovative intellectual medium is quite far from the real needs of manufacturers; many IP generated by scientific organizations are not in demand on the market or do not provide for the industrial scale of production and output on the consumer market for various reasons. Therefore, science must take into account the real needs of manufacturers and consumers, and only then begin developing an intelligent product. Many large companies have found a way out of this situation, having formed research units in their structure that require high R&D expenses. The scientific organizations and innovative laboratories at educational institutions should not only be engaged in scientific research, but work under real orders and demand. The innovative electronic IP commercialization system proposed for implementation will allow tracking and identifying needs for specific intellectual products, which will reduce the time spent on searching for customers and bring science as close as possible to the manufacturing sector and consumers. Acknowledgments. The reported study was funded by RFBR according to the research project No. 18-010-00103 A.

References Gudkova, O.E.: Systematization of the reasons for the insolvency of defensive enterprises. Sci. Bull. Mil.-Ind. Complex Russ. 4, 29–38 (2019) Gudkova, O.E.: The relationship of competitiveness factors and business value. Russ. J. Entrepreneurship. 4(2), 57–62 (2011) Sekerin, V.D., Burlakov, V.V., Gorokhova, A.E., Dzurdzya, O.A.: Innovations’ latency sources. Rev. Espacios. 38(62), 26 (2017a) Sekerin V.D., Burlakov V.V., Bank V.S., Gorokhova A.E.: Latency of innovations as economic category of innovative process. Rev. Espacios. 38(33), 22 (2017b) Dudin, M.N., Lyasnikov, N.V., Reshetov, K.Y., Smirnova, O.O., Vysotskaya, N.V.: Economic profit as indicator of food retailing enterprises performance. Eur. Res. Stud. J. 21(1), 468–479 (2018) Mamengaev, Y.N., Fedotova, G.V.: Modern trends of innovative intellectual activity. In: Mamontova, S.V. (ed.) Digital economy: problems and development prospects. Interregional Scientific and Practical Conference, 14–15 November 2019, Southwest state university, 2 vols, vol. 1, pp. 479–482. South-West state University, Kursk (2019) Kudashov, V.I., Nechepurenko, Y.V.: Forms and methods of commercialization of intellectual property. Proc. BSTU. 7, 34–39 (2015) Katulsky E.D., Bespalova N.A.: Methodological approaches and problems in assessing the value of intellectual capital. MIR Modernization Innovations Dev. 7(28), pp. 84–88 (2016). No. 4 Kazakova, O.B., Iskhakova, E.I., Kuzminykh, N.A.: Intellectual capital: concept, essence, structure. Econ. Manag. Sci. Pract. J. 5(121), 68–72 (2014) Gordin, M.D.: Scientific Babel: The Language of Science from the Fall of Latin to the Rise of English. Profile Books, London (2015) Kharitonenkov, A.S.: The evolution of the administrative-legal mechanism of management of national projects and state programs. State Adm. 26(1), 39–44 (2011)

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Korolev, L.N.: Evolutional computations, neuronet, genetic algorithms – formal statements. J. Math. Sci. 168(1), 80–88 (2010) Mizyun, V.A.: Intellectual enterprise management. Publishing House of the St. Petersburg Academy of Management and Economics, Saint Petersburg (2008) Newell, A., Shaw, J.S., Simon, G.: Computer Simulation of Human Thinking. In: Hippenreiter, Y.B., et al. (eds.) Psychology of thinking, Ast; Astrel, Moscow (2008) Presnyakova, A.D.: Modern project management. Mod. Sci. Res. Innov. 6(1), 39–47 (2016) Marsden, T., Sonnino, R.: Rural development and the regional state: denying multifunctional agriculture in the UK. J. Rural Stud. 24(4), 422–431 (2008) Cheyns, E., Daviron, B., Djama, M., Fouilleux, E., Guéneau, S.: The standardization of sustainable development through the insertion of agricultural global value chains into international markets. In: Sustainable Development and Tropical Agri-chains, pp. 283–303. Springer, New York (2017) Giannakis, E., Bruggeman, A.: The highly variable economic performance of European agriculture. Land Use Policy 45(1), 26–35 (2015) Plotnikov, V., Fedotova, G.V., Popkova, E.G., Kastyrina, A.A.: Harmonization of strategic planning indicators of territories’ socioeconomic growth. Reg. Sectoral Econ. Stud. 15–2, 105–114 (2015) Vertakova, Y., Plotnikov, V., Fedotova, G.: The system of indicators for indicative management of a region and its clusters. Procedia Econ. Finance 39, 184–191 (2016) Vizilter, Y., Zheltov, S.Yu., Bondarenko, A.V., Osokov, M.V., Morzhin, A.V.: Image Processing and Analysis in Machine Vision Problems: Course of Lectures and Practical Exercises. Fizmatkniga, Moscow (2010)

Smart Technologies in Electoral Fundraising Yuriy A. Bokov(&) Volgograd State University, Volgograd, Russia [email protected]

Abstract. Purpose: The purpose of this paper is to carry out a comprehensive analysis of the application of smart technologies in electoral fundraising and to generate proposals on reforming current electoral practices. Design/Methodology/Approach: The use of etymological and system analysis, formal legal, legal comparative, historical and sociological methods allowed the author not only to analyze scientific research results regarding electoral fundraising, digital forms of its implementation, provisions of laws and regulations, but also to make recommendations on improvement of current electoral practice of implementation of smart technologies. Findings: The use of online crowdsourcing and fundraising technologies for fund raising is becoming increasingly popular and established. The application of Internet fundraising methods during the election race can yield tangible results within a very short time. The active role of voters in fundraising is indicative of their personal interest in the electoral process and their involvement in the political life of society. The existing legal and regulatory framework in Russia prevents the one-click system, which is common in many countries, from functioning, so the one-click transfer of money to the electoral fund is impossible. Originality/Value: In the course of the research, it was found that in presentday reality we can reasonably distinguish a new type of electoral and legal culture of a personality - electoral and legal culture of “digital natives” who demonstrate the latest information and communication methods of involvement in political and legal reality. Electoral crowdfunding and fundraising should be distinguished as some of the first and effective forms of such digital participation of a citizen in the election campaign. It is suggested that crowdfunding should be classified into types according to the criterion of gratuitousness. Through their donations, citizens (donors) are given the opportunity to become involved in politics, to give the thumbs up to the views of certain politicians. Campaign finance by many donors is much better than finance by a few individuals in terms of democratic processes. “Smart” Internet fundraising technologies with the adequate legal and regulatory framework are a powerful tool for increasing the level of electoral and legal culture of citizens. Keywords: Crowdfunding
Fundraising
Smart technologies
Electoral legal culture
Electoral practice JEL Code: K24


K33
K38

The reported study was funded by RFBR, project number 20-011-00436. © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1167–1175, 2021. https://doi.org/10.1007/978-3-030-59126-7_127

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1 Introduction “Smart” information and communication technologies have an increasing influence on modern electoral procedures. The emergence and active development of digital technologies contribute to the acceleration of the processes of development of new behavior patterns of a person, electoral patterns, and development of the “e-democracy”. The “edemocracy” tools, partly mandated by the government within the scope of pilot models, have been used increasingly often, becoming an effective means for implementing forms of the rule of the people. Today, all candidates use the Internet in one way or another in their election campaigns: they create websites, blogs, communities, post videos and use social networks. Although it is clear that not everyone efficiently takes advantage of the possibilities of the global network, it is difficult to believe that in the future applicants for different positions will ignore the importance and maybe even the need of using the Internet. Indeed, the world network gives a chance not only to quickly disseminate information among the wide audience, but also to raise funds necessary for a successful pre-election campaign. This paper is aimed not only at performing a comprehensive analysis of the application of smart technologies in electoral fundraising and identifying existing problems and “blank spaces”, but also generating proposals on reforming current electoral practices, its legal and regulatory framework.

2 Materials and Method In the study of designated topics, the author relied on scientific findings proving the relationship between donations and results of the election campaign of candidates Ferguson et al. (2019), Holbrook and Weinschenk (2014), Gersbach (1998), Le and Yalcin (2018), Yörük (2009), Haggerty (1979), Heerwig (2016). Due to the use of methods of etymological and system analysis, the author managed to define the terms used in this paper, including “electoral fundraising” and “crowdfunding”. The formal legal method was aimed at disclosing the regulatory component of implementation of electoral fundraising. The paper analyzes scientific research results regarding electoral fundraising, digital forms of its implementation, provisions of laws and regulations. The findings of the research are based, in particular, on legal comparative, historical and sociological methods.

3 Results Digital technologies facilitate participation of citizens in various social activities. There is a tendency towards the increasingly integrated utilization of smart information technologies, tools and applications of social networks, generating a phenomenon that might be called Cyberactivism 2.0 (Sandoval-Almazan and Gil-Garcia 2014). The field of competition policy is no exception.

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With the development of smart technologies and digital competency of the voter, modern digital methods of implementing electoral fundraising are undergoing rapid development. Funds can be raised via the Internet. The application of innovative smart technologies brings electoral fundraising to an essentially new level. Digital citizenship is developing rapidly. Citizens acquire new competencies necessary to participate in these digital processes. An unenterprising, inactive, and incompetent citizen will not be able to obtain “digital citizenship” and the benefits associated with it (Bokov 2019). In addition to computer sciences, Russian authorities have been actively discussing the introduction of a new course of study of artificial intelligence. Electoral fundraising means activity that is aimed at attraction of money for the candidate’s election campaign. Political ambitions can generally be achieved only if sufficient funding is available. Different financial conditions result in unequal starting opportunities for candidates and political parties. There is no direct, strong relationship between the election of a candidate and the results of the vote. The mutual cause and effect relationship of money and elections may be present to some extent, but the independent influence of money on elections is still strong (Ferguson et al. 2019). The expenses for the election campaign are closely related to the current share of votes, but it is the candidate rather than the current expenses that is of fundamental importance (Holbrook and Weinschenk 2014). The contributions from stakeholder groups influence political competition. Fundraising is an essential prerequisite for elections, since it directly influences the electoral platform chosen by candidates and the final political outcome (Gersbach 1998). The “money for political benefits” lobbying model is used by lobby groups to influence electoral competition and issues of equilibrium policy. When a lobby group seeks to influence election results, it supports financially only one political party whose politics is closely related to its own ideal model (Le and Yalcin 2018). The propagation of the candidate’s program and its promotion depend on the amount of the electoral fund. It is essential for candidates not to miss a single legitimate fundraising opportunity. Requests for donations increase the propensity to donate by about 19% points with regard to those who are asked for a donation. This effect is long-lasting under different specifications and with different toolkits (Yörük 2009). A survey of 100 respondents conducted by the author (students of “Jurisprudence” degree program) has shown that all respondents replied in the negative to the question: “Would you transfer money to the electoral fund of the candidate without the express appeal from the candidate you support to do this?”. 76 per cent of respondents replied that the transfer of funds to the electoral fund of the candidate without the express appeal from the supported candidate could be deleterious to this candidate. In view of the foregoing, candidates must actively ask for donations to attract funds for their election campaigns, including through the use of digital technologies. Personal meetings of the candidate with electors with a view to raise money should be included with conventional fundraising methods. This method is generally characterized by high efficiency, but it has a significant drawback which consists in heavy time costs. The candidate is faced with time constraints and therefore his/her requests are usually addressed to the wealthiest donors. Besides, supporters of the candidate meet with potential donors to ask for donations on their own behalf.

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Another conventional fundraising method is direct mailing. The attractiveness of this method is that there is no need to ask for assistance in person. Direct mail message to potential political supporters becomes of high importance here, given the legal restrictions of the maximum amount of donations per person. This restriction encourages candidates to search for “grassroots” financial backing (Haggerty 1979). The collection of donations via the Internet is becoming increasingly relevant, since this method can be used to reach as many people from different social groups as possible within a very short time. The candidates take advantage of this Internet activity of citizens and create their official websites. For more effective fund-raising, it is important that the candidate’s website was “live”, constantly kept up to date. The ease with which entrepreneurs and other fundraisers can raise money via crowdfunding platforms to fund the project depends on the nature of formal and informal institutions in the economy (Kshetri 2015). It is obvious that there is also a dependence on development of political and legal institutions in a particular society and on a number of other factors. The flow of all funds that are collected and then spent on the election campaign is governed by regulations and standards. In most States, electoral legislation makes high demands on the involvement of citizens in election campaign financing. It is prohibited to a wide range of actors to donate to electoral funds of candidates and associations or to referendum funds. In particular, such historically justified prohibition is the expulsion of such as actors of public relations as foreign States and foreign organizations from donation. The need for this prohibition is obvious and has been substantiated by various historical examples. One of the most striking examples of such funding is the transfer of funds from abroad to the National Socialist German Workers’ Party (NSGWP) during the Weimar’s Germany. It is apparent that without sufficient material resources, the money needed to finance expensive agitation propaganda activities, the NSGWP could not take over the government and would be lost among many other political organizations. On January 4, 1932, at a meeting between the leader of the NSGWP Adolf Hitler and the Executive Manager of the Bank of England Montague Norman, future prominent US statesmen, brothers John and Allen Dulles, a secret agreement was concluded to fund the NSGWP. The devastating consequences of such funding are known to the world. The prohibition on anonymous cash transfers to electoral funds is also justified. If it was not for such prohibition, many people would easily bypass any existing restrictions by transferring funds anonymously. Pursuant to the provisions of Russian legislation, an anonymous donor shall be understood to mean an individual who has not provided any one or several of the following pieces of information in the payment document for the donation: full name, residence address - or incorrect information has been provided; or a legal person that has not provided any one or several of the following pieces of information in the payment document for the donation: taxpayer identification number, company name, bank details - or incorrect information has been provided. If the donation has been made by an anonymous donor, it must be credited to the account of the relevant budget. It appears that anonymous donors should disclose their identity only if it impossible to return the payment made using information provided by the sender.

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If a citizen did not indicate information on the date of birth, series and number of passport or an equivalent identity document, or information on citizenship in the payment document when making a donation, such donation is subject to return to the donor in full. We believe that this information, for example, with regard to the simultaneous indication of series and number of passport or an equivalent identity document, as well as nationality, is excessive and duplicative. It is quite clear that only a Russian citizen has a Russian passport. Online payments in the form of card-to-card transfers that are common and very convenient for consumers, do not allow to present complete information on the donor, as required by the legislation of the Russian Federation, which may result in the payment being recognized as anonymous or returned to the sender. In this regard, the ability of voters to use state-of-the art money transfer technologies to provide financial support to a particular candidate is minimized. Funding of election campaigns is based on different principles depending on a particular State. In Germany, elections are mainly funded by the State, while elections in the United States are mainly funded by direct donations from voters. It appears that it is impossible to univocally assert a model that is better and more democratic. Attracting a significant number of voters to election campaign funding, to election procedures, is an important tool for increasing the level of electoral and legal culture. State funding of a candidate’s election campaign makes it possible to reduce his/her speculative dependence on donors. A reasonable question arises: why do representatives of large and successful businesses spend huge amounts of money to help someone become the most powerful person in the state? Why should they do that if they do not expect any response reaction? The Supreme Court of the United States ruled that donations to electoral funds may only be restricted in case of corruption. The following axiomatic rule calls attention to itself. If voters donate small amounts of money, this is usually characterized as the active participation of citizens in the political life of the State with a view to promoting democracy. If a candidate receives substantial amounts of money as donations from a relatively small number of people, a reasonable question arises about further dependence of the selected candidate on his or her donors, about the corruption component of the relationship between the candidate and donors. The frequency of donations may also indicate the degree of relationship between the donor and the candidate, including the elected candidate. In theory, donors who are often involved in the funding of election campaigns of candidates, have more firm feedback from the elected candidates than donors, who rarely participate in funding. Funds from occasional donors appear to be more ideologically motivated (Heerwig 2016). In the 2016 presidential election in the United States, two candidates chose not to accept large donations: they were Republican Donald Trump, who funded his election campaign himself, and Democrat Bernie Sanders, who claimed to be a democratic socialist and has long been publicly combating the monetary influence in politics. The decision of these candidates to get away from the influence of large donors increased the number of their respective voters.

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In 2010, the Supreme Court, in its judgement Citizens United v. FEC made it clear that political donations are considered a form of freedom of speech – not only donations from individuals, but also from companies, lobby groups, or trade unions. This judgement means that business companies and trade unions can use unlimited amounts of money for election campaigns – unless this money is transferred directly to the candidate; it should be transferred to a fund created to support this candidate (SuperPAC). In the United States, during Barack Obama’s presidential campaign, online fundraising technologies proved to be a success. They use generated a heavy public response, encouraged citizens to raise funds on a massive scale and provided the candidate with sufficient financial support to win the elections. Recent political campaigns have demonstrated how smart technologies are used to improve election results by micro-targeting voters. Political activists turn to voters at the local level trying to convince them. Depending on the technological advantage and budget, political activists are targeting certain population groups on the Internet where their activities can generate the most support from voters. The calibration of technological parameters of the last presidential election in the United States suggests that the solely technological advantage of targeting corresponds to Trump’s victory over Clinton. (Hoferer et al. 2020). If development of Internet fundraising in Russia is not widely occurring at present, the examples of the use of crowdfunding are more common. Crowdfunding is a form of cooperation of people (donors) who, usually via the Internet, voluntarily combine their resources, including money, to support the actions of other people or organizations (recipients). It should be noted that the congruence (adequacy, equivalence) between the views of politicians and individual citizens is identified as a crucial factor in people’s intention to participate in online political crowdfunding. Citizens are willing to provide financial backing to a politician whose ideas are not alien to them (Kusumarani and Zo 2019). Politicians, being aware of the existence of this intention, are trying to create the necessary and sufficient methods for its realization. Thus, the oppositionist Alexei Navalny is actively using various smart technologies for fundraising. Money can be transferred from one card to another, using the bank account details, Paypal, or Bitcoin. Democracy is a fragile process, and many people grow alarmed about the fact that it is not strong enough to withstand the seemingly illegitimate freedom provided to all people by the Internet. The 2016 presidential election in the United States and the Brexit referendum in the United Kingdom have only bolstered fear that the Internet provides a powerful tool to those seeking to score an advantage in public discourse and the struggle for political power. The dangers and possibilities for the development of democratic processes posed by the Internet have not yet been fully investigated (Mansfield-Devine 2018). Digital intervention of major sociopolitical institutions and individual States in the elections is being actively discussed. Discussions and investigations regarding possible intervention of Russia in presidential elections continue unabated in the United States.

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Taking into account the increasingly larger role smart technologies, there is every reason to speak of the need for improve control over digital information disseminated on the Internet and the use of smart technologies for political purposes, particularly for elections. At the same time, the established regulatory procedures must be well grounded and consistent with the ideas of democracy. Researchers become increasingly interested in the issues of electoral culture, but little is known about the motivation behind trust of citizens in the electoral process. Institutional frameworks that promote creation of “equal conditions” at each stage of the electoral process, will contribute to the increase in the degree of perception of elections by voters as fair. Hierarchical models, including both individual and electoral variables, demonstrate that proportional electoral systems and public financing of parties have a positive impact on the trust in the electoral process (Birch 2008). It is important that people feel their involvement in political and state affairs, being secure that their donations and their choices affect their future well-being. The fatigue of voters is a disaster for democracy. A considerable number of citizens renounce their right to vote at their own initiative, grounding their renouncement on the lack of interest in political procedures and the fatigue of unfulfilled promises in election programs of candidates. An absentee states with certainty “My voice makes no difference”. It is essential that the “democracy of participation and control” pick up momentum and that the active citizenship become the norm of life for everyone. Given this state of public life, the issue of initiating participation in political and electoral procedures will be resolved by itself. For the concept of “citizen”, the democratic vector of development is the refinement of the status of an individual not only with rights but also with the substance of the “citizen-state” relationship: from a common city dweller to a person who is the wielder of power and has full democratic legal status, high index and competencies of citizenship, as well as a robust legal bond with the State (Bokov 2019).

4 Conclusion The prime benefit of smart technologies in electoral fundraising consists in the possibility of exercising legal powers of the right to vote without personal visit to social facilities in the comfort of one’s home, via Internet, using blockchain technologies. Of course, this is quite convenient, as there is no need to take unnecessary efforts to donate to electoral funds of candidates. Electoral fundraising is a means of involving an “ordinary citizen” in the electoral programs of a particular candidate. Co-funding of an election campaign of a certain candidate by citizens emphasizes the importance and value of the voting right of a particular individual, helps to whittle down the generally held opinion that “elections are fraudulent and ineffective”, and “the judgements of the voters have no role in the decision-making”. A democracy in which support of a candidate by a voter begins with funding of candidate’s campaign and ends with direct voting at the polling station, without proper legal regulation may turn into a chaotic

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swamp of donations touching upon corruption. Large amounts of money do not guarantee election; money is not the only factor of victory, but it gives a significant advantage over candidates with a smaller budget. Crowdfunding can be classified into types according to the criterion of gratuitousness: crowdfunding based on remunerations and crowdfunding based on donations. It is apparent that institutions that were created on the basis of these types of crowdfunding may differ from one another, including by the degree of democratism and the level of electoral and legal culture of their creators. It is offered to conveniently classify the methods of implementing electoral fundraising into conventional methods and digital methods. A considerable part of regulatory basis governing the procedure of donations to electoral funds is substantiated, but individual provisions are wide open to criticism and need to be changed. The need to comply with unreasonable regulatory requirements significantly limits online transfers of funds to electoral funds in Russia. The uses of Internet fundraising technologies are restricted not only by current statutory regulations, but also by such factors as the lack of funds to master the technology itself, accessibility and prevalence of the Internet, the level of digital citizenship and development of electoral and legal culture of electors. Acknowledgments. The reported study was funded by RFBR, project number 20-011-00436 “Electoral legal culture of citizens of Germany (1871–1933)”.

References Birch, S.: Electoral institutions and popular confidence in electoral processes: a cross-national analysis. Electoral. Stud. 27(2), 305–320 (1998) Bokov, Y.: Conceptus “citizen” and “subject”: dynamics and prospects of development. In: The International Scientific and Practical Conference “Current Issues of Linguistics and Didactics: The Interdisciplinary Approach in Humanities and Social Sciences (CILDIAH-2019), Volgograd, 2019, SHS Web Conf, Article 00024 (2019) Ferguson, T., Jorgensen, P., Chen, J.: How money drives US congressional elections: Linear models of money and outcomes. In: Structural Change and Economic Dynamics, 20 September 2019 (2015, In press, corrected proof) Gersbach, H.: Communication skills and competition for donors. Eur. J. Polit. Econ. 14(1), 3–18 (1998) Haggerty, B.A.: Public relations in direct mail political fundraising. Pub. Relat. Rev. 5(3), 10–19 (1979) Heerwig, J.A.: Donations and dependence: Individual contributor strategies in house elections. Soc. Sci. Res. 60, 181–198 (2016) Hoferer, M., Böttcher, L., Herrmann, H.J., Gersbach, H.: The impact of technologies in political campaigns. Phys. A: Stat. Mech. Appl. 53815, Article 122795 (2020) Holbrook, T.M., Weinschenk, A.C.: Money, candidates, and mayoral elections. Electoral. Stud. 35, 292–302 (2014) Kshetri, N.: Success of Crowd-based Online Technology in Fundraising: An Institutional Perspective. J. Int. Manag. 21(2), 100–116 (2015) Kusumarani, R., Zo, H.: Why people participate in online political crowdfunding: a civic voluntarism perspective. Telematics Inf. 41, 168–181 (2019)

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Le, T., Yalcin, E.: Lobbying, campaign contributions, and electoral competition. Eur. J. Polit. Econ. 55, 559–572 (2018) Mansfield-Devine, S.: Hacking democracy: abusing the Internet for political gain. Netw. Secur. 10(2), 15–19 (2018) Sandoval-Almazan, R., Gil-Garcia, J.R.: Towards cyberactivism 2.0? Understanding the use of social media and other information technologies for political activism and social movements. Gov. Inf. Quart. 31(3), 365–378 (2014) Yörük, B.K.: How responsive are charitable donors to requests to give? J. Pub. Econ. 93(9–10), 1111–1117 (2009)

Prospects for Reforming the Criminal Procedure Through the Introduction of Information Technologies as Well as Issues Associated with Their Compatibility with the Psychology of Criminal Proceedings Valentina A. Lazareva1(&) and Natalya A. Solovyova2 1

Samara National Research University, Samara, Russia [email protected] 2 Volgograd State University, Volgograd, Russia [email protected], [email protected]

Abstract. Purpose: The purpose of this research is to carry out a comprehensive analysis of prospects of the progress of criminal proceedings based on modern information technologies and issues related to their compatibility with the psychology of criminal proceedings. Design/Methodology/Approach: The authors of the paper used both general scientific and particular scientific methods of knowledge acquisition, such as system-structural method and comparative legal method of knowledge acquisition to achieve their target goal, which made it possible to describe the prospects for introducing digital technologies in the criminal procedure in the context of systemic interaction with other development trends. Findings: The paper shows that criminal proceedings of the Russian Federation undergo substantial changes in a digital society. Despite the fact that development of digital technologies in criminal proceedings, owing to its special aspects, is lagging behind civil and arbitration methods of administration of justice, its digital modernization through the use of digital technologies is not only inevitable but possible. The authors of the paper note that the use of digital technologies in criminal proceedings improves the general culture of proceedings, has a positive impact on the procedural time limits, ensures efficient control of legality of proceedings in criminal cases, contributes to the effective solution of computer-related crimes. This research is used as the basis for determining the paths and options of the progress of criminal proceedings towards the specified direction. Originality/Value: In order to increase the effectiveness of criminal procedural activity, it is necessary to formalize the status and the rules for the establishment of a new type of evidence in the Criminal Procedure Code of the Russian Federation; provide for the possibility to electronically document criminal procedural activity (electronic criminal case), and to solve a set of financial, organizational and technological problems which impede the use of new information technologies by parties to criminal proceedings. The training standards of specialists engaged in criminal procedure activity should be adjusted, and the doctrine of criminal procedure evidence should be revised. © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1176–1184, 2021. https://doi.org/10.1007/978-3-030-59126-7_128

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Keywords: Digitization
Electronic evidence
Electronic data storage device
Digital information
Electronic document flow
Electronic document image
Electronic passport of criminal case JEL Code: K39

1 Introduction New information technologies become increasingly integrated with proceedings, effectively providing both organizational and procedural interaction between the parties to proceedings and judicial authorities (Pastukhov 2015). The electronic document flow introduced in judicial practice has already proved to be highly effective in the field of civil, arbitration and administrative legal proceedings. Criminal proceedings are also moving towards this direction. Necessity and practical utility of the introduction of digital technologies in pre-trial proceedings in a criminal case are apparent. Digitization of criminal proceedings can ensure not only the integrity of procedural documents, but also the efficient control of legality, reasonableness and compliance with deadlines for formulation of proceeding decisions; it simplifies familiarization with proceeding decisions by the parties to criminal proceedings, disciplines the crime investigator, eliminates a number of issues of interaction of the subjects of criminal prosecution with each other and the court, etc. This alone is quite enough to raise the profile of issues solving which can significantly change the image of criminal proceedings in the Russian Federation. The introduction of digital technologies in criminal proceedings caught a lively interest of a number of researchers: Andreeva, O.A. and Zaitsev, O.A., Meshcheriakov, V.A., Olinder, N.V., Pastukhov, P.S., Poliakov, V.A., Rossinskaya, E.R., Frantsiforov, Y.V., Yunoshev, S.V., Yakovlev, A.N. etc.), but reforming of criminal proceedings towards this direction has just started, so many issues are still understudied. The research tasks consisting in identifying the needs of criminal proceedings of the Russian Federation in modern information technologies and problems on the way towards the introduction of digital technologies in criminal proceedings, are focused on identifying the most likely development trends in criminal proceedings in the context of their digitization in the near future.

2 Materials and Methods The general methodological framework of the research is the philosophy of dialectical materialism which necessitates the study of problems of criminal proceedings in terms of their interrelation and interdependence. In addition, the authors of the research used: – general scientific methods of cognition, such as analysis, synthesis, observation, comparison, induction and deduction, simulation, etc.; – particular scientific methods of jurisprudence, such as system-structural method, historical method, as well as method of comparative legal studies, which enabled a systematic analysis of Russian criminal procedure legislation, recommendations of

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the Supreme Court of the Russian Federation, current domestic scientific research results taking into account relevant experience of several foreign countries.

3 Results The authors of the research hypothesized that the problems of digitization of criminal proceedings that are largely determined by the complexity of the process itself, which differs from other types of proceedings, first, in the presence, if not to say predominance, of its pre-trial part, in which the information base for the forthcoming judicial procedure is being formed, second, in the specific composition and procedural status of the parties and, third, in the objective need to maintain secrecy of investigation and guarantees of individual rights arising from these factors, do not prevent the wider use of digital technologies in proceedings in a criminal case. The authors concluded that the process of development of digital information technologies is generally irreversible and that it reformatting of criminal proceedings as a part of a common information space that could not be isolated from objectively present trends is inevitable (Alexandrov and Kuvychkov 2013). The current level of scientific and technological advance allows considering it possible to make a relatively fast transition to the electronic document flow that ensures effective procedural interaction between: a) judicial authorities; b) the court, preliminary investigation bodies and the prosecutor’s office; c) the court and persons involved in criminal proceedings, primarily by professional defensors and representatives (lawyers). It seems that this process will evolve in different directions and at different rates, but will eventually end in a complete transition from a paper-based case to an electronic case (criminal for the time being). The basis for verifying this hypothesis is presented by the analysis of recent changes in domestic legislation, which has previously taken the first steps towards the introduction of modern information technologies in the work of not only judicial authorities but also preliminary investigation bodies. In particular, we can observe an expanded possibility of conducting a number of legal proceedings by means of videoconferencing, we can use facial recognition software (Ivanov 2019) and information obtained from publicly available internet sources for evidentiary purposes (Yunoshev and Kondratiuk 2018). A more major technological change in criminal procedure is for the most part only a matter of money and time, but the compatibility of forthcoming changes with the system of long-established theoretical and practical skills, the system’s capability to overcome the stereotypes generated by learning and, one can say, age-old practices, requires serious reasoning. Researchers agree that the use of digital technologies in criminal proceedings is objectively conditioned by the practical needs. The global digitization of public life has materially affected not only crime as a general social phenomenon, but also the ways in which crimes are committed and concealed, and therefore the ways and means of detecting and solving them (Rossinskaya 2019). Efforts to investigate and examine the crimes cannot ignore this objectively existing fact, as the purpose of the investigation is to obtain, record and verify any traces of crime which are used to prove the

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circumstances that are of relevance to the case. Digital, electronic, and virtual traces are no exception, although there is no consensus on their nature or title (Agibalov 2012; Poliakov 2013). It must be admitted that the second factor that determines the need to modernize criminal procedure is the excessive formalization of criminal procedure, which coupled with the many-fold increase in the volume of information processed by the investigative authorities, including existing information, received information, and information in digital form, is not so much a guarantee of legality as it is a factor that gets in the way to a rapid and effective result. The conversion of procedural document flow into electronic form can shorten the time required for pre-trial investigation and put a modern face on the culture of criminal proceedings in general. The experience of a number of technologically advanced countries gives us examples of using digital technologies to improve communication and document proceedings in a criminal case. In particular, in the United States, pre-trial preparation of a case is in fact carried out with the use of the electronic document flow, regulated various regulations, rules and instructions. The parties to a trial, including lawyers, are subject to the standard procedure of registration in the electronic case management system, and are provided with a login and password which they can use view existing case files and submit their own case files, while being responsible for maintaining the email address and the account necessary to receive the electronic notification of the progress of the case as well as decisions taken (Pastukhov 2018). In 2017, the electronic document flow was introduced in criminal proceedings of the Federal Republic of Germany by a special law that stipulated formation of an electronic folder of documents (proceeding decisions, complaints and petitions), either created in electronic form or digitized by means of scanning, photographing and video recording (Zazulin 2018). The parties to criminal proceedings can familiarize themselves with information in the electronic folder by receipt of a hardcopy of file content or a digital data storage device with data on it. The defense lawyer may receive electronic versions of documents from the electronic folder in his special mailbox, as well as cross-check documents and evidence against their electronic counterparts. The defense lawyer is obliged to file complaints in electronic form only. In December 2017, amendments were made to the Criminal Procedure Code of the Republic of Kazakhstan (2014), in accordance with which criminal proceedings can be documented not only in common hardcopy, but also in electronic format. The parties to criminal proceedings may submit electronically not only representations, petitions and complaints, but also written evidence, including an expert opinion. A motivated resolution must be made for the conduct of a pre-trial investigation in electronic format, and the return to paper-and-pencil format is only possible in an emergency. All official documents are produced using an electronic template system, signed with an electronic signature or using a signature pad. The system provides for scanning paper-based documents and storing them as PDF documents, as well as attaching media files to the dossier of the case (Zadorozhnaya 2018). Thus, electronic technologies are used with equal success in countries with different legal systems and different types of criminal proceedings. When it comes to general jurisdiction courts, Russian laws and regulations which govern the use of new information technologies in proceedings mainly apply to civil

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proceedings. Where these laws and regulations refer to criminal proceedings, they solely refer to the judicial stages of criminal proceedings. And even though Article 474 of the Criminal Procedure Code of the Russian Federation, referring to the possibility of producing procedural documents in electronic form, does not associate this possibility with any stages of criminal proceedings, the Criminal Procedure Code contains no indication on the use of such documents in pre-trial proceedings. The text of Article 474.1 of the Criminal Procedure Code of the Russian Federation clearly indicates the judicial area of application of electronic documents, both for citizens’ applications and for proceeding decisions. Therefore, the norm in Article 474 only refers to the method in which the document is produced and not to the form of the procedural act. A document which is produced electronically is printed out and signed by an official in person, while a document in electronic form is certified by a basic or encrypted and certified digital signature. Subject to the foregoing, we note that the use of electronic documents in criminal proceedings is only possible at the judicial stages for the time being, and the posting of information related to the criminal trial in court provided for in Paragraph 14 of the Resolution of the Plenum of the Supreme Court of December 26, 2017 “On certain issues in the application of legislation governing the use of electronic documents in the activity of general jurisdiction courts and arbitration courts” on the official website of the relevant court on the Internet is considered an additional means of informing the parties to criminal proceedings and, for the time being, concerns only the place and time of the upcoming court session [12]. Nevertheless, the rate of development of digital technologies leaves no room to doubt – the electronic document flow will in the near future penetrate pre-trial proceedings as well. Today, however, the real possibilities of using these technologies even for judicial stages of criminal proceedings are quite modest to say the least. Let’s see how electronic document flow is described in the Criminal Procedure Code of the Russian Federation. Article 474.1 of the Criminal Procedure Code of the Russian Federation provides for two possibilities of using electronic documents. This is a) application to the court by parties to criminal proceedings with petitions, applications, complaints and representations by filling in a special form on the official website of the court on the Internet, and b) producing an electronic copy of court judgment and mailing it to the parties to criminal proceedings via Internet. Other electronic documents may be attached to the Internet applications of the parties to criminal proceedings, which creates certain prospects for the wide use of electronic documents as evidence, although this issue has not yet been clearly regulated in the Criminal Procedure Code of the Russian Federation, unlike the civil procedure legislation (Lazareva et al. 2019). The abovementioned forms of electronic informational interaction between the parties to criminal proceedings and the court could in principle be considered sufficient for the initial stage, but the conditions for the exercise of provisions of Article 474.1 of the Criminal Procedure Code of the Russian Federation by the parties to criminal proceedings are not exactly satisfactory so far. We shall name just a few grounds for this conclusion which are the most obvious. According to Article 474.1, the electronic interaction between the court and the parties to criminal proceedings is conditioned by the presence of a technical capability in the court, that is, a website connected to the unified system of automated proceedings

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and the general information system of the Internet. Therefore, the law provides for the possibility of uneven development of the judiciary system, hence, unequal procedural opportunities for the parties. If we considered the existing situation as a temporary situation, it would be necessary to specify the deadline by which all courts should have been able to enable the parties to proceedings exercise the rights stipulated in Article 474.1. It is stipulated that electronic documents and copies of all documents must have an electronic signature, and in some cases, an encrypted and certified digital signature in accordance with the requirements of legislation of the Russian Federation. It is quite clear that electronic signatures are not yet widely used by ordinary citizens for many reasons, which hampers the development of the electronic document flow. It appears that the makers of Chapter 56 of the Criminal Procedure Code of the Russian Federation did not fully take into account the possibilities of interaction between citizens and public officials and authorities, provided, for example, by such Internet resource as “Security and Law Enforcement” on the web portal “State Services” that enables reporting a committed crime to the law enforcement agencies without the use of an electronic signature. The requirement of the use of an electronic signature for a procedural document, which is normal for public officials, appears to be not only superfluous but unreasonable in relation to citizens. The question of when electronic signature of a party to criminal proceedings is required and when alternative, simpler ways of authenticating the authorship of the document would be enough, needs further study. Researchers have noted other shortcomings of the legal and regulatory framework for electronic document flow which impede its wide use in practice. In particular, they point out that there is no clear definition of the term “document in electronic form” (“electronic document”), which in official records is thought of as “a document produced in electronic form” or a “electronic document image” (Andreeva and Zaitsev 2018), although the former is produced without prior paper form, and the latter is only an electronic copy of a document made in the usual form, that is, on paper. There is a significant difference among them. If we broadly interpret the applications to the court by parties to criminal proceedings that are mentioned in Article 474.1, we should also point to the ambiguity about the question of applicability of this norm to those types of judicial activity that is exercised in the course of pre-trial proceedings. Today, we have at least three forms of judicial control – appeal against actions and decisions of preliminary investigation bodies and the prosecutor restricting access to justice or violating the constitutional rights of the parties to criminal proceedings (Article 125, 125.1); a petition for the application of certain preventive measures (Article 108): an application for granting a permission on several investigative proceedings (Article 165) (Kolokolov 2008). The latter is the form of judicial control which is the simplest in terms of electronic interaction in pre-trial proceedings; it does not stipulate for involvement of one of the parties and does not require the presence of a second party applying for permit for investigative proceedings restricting the constitutional rights and freedoms of an individual. The court takes its decision according to the documents, outside the adversarial procedure. The petition that was sent, received and examined electronically, can be easily and quickly examined and approved by the head of the investigating

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authority or the prosecutor, and affirmatively authorized by the court by making an electronic resolution. In cases where due to exigent circumstances investigative action was taken on the basis of an order of the investigator without a court decision, all documents referred to in Paragraph 5 of Article 165 of the Criminal Procedure Code of the Russian Federation shall also be submitted for verification to the court electronically. The investigator may be summoned in case of need. In our opinion, the rules described above fully stay within the scope of Article 474.1 of the Criminal Procedure Code of the Russian Federation, but it would be a good idea to incorporate the relevant recommendations at least in the Resolution of the Plenum of the Supreme Court if not in the Criminal Procedure Code of the Russian Federation. It appears that digital technologies have the potential to fundamentally change pretrial proceedings, including the ways in which information about circumstances relevant to the case can be obtained, stored and used as evidence (Pastukhov 2019). Record-keeping, even through the use of computer equipment and electronic signature, loses the meaning of a versatile and highly efficient way of certifying the progress and results of investigative proceedings. Digital video recording comes to the fore, as it ensures the absolutely complete and impersonal recording of everything that is going on during any investigative proceedings, which guarantees the observance of rights by its participants, avoids the outbreak of differences about the interpretation of its results, and facilitate their evaluation. Digital technologies are truly capable of revolutionizing the procedural legal consciousness, as they radically change the image of criminal proceedings and the concept of “criminal case” as such. The automated system called “Electronic passport of criminal case” (Order of the Investigative Committee of the Russian Federation No. 27/108r of April 9, 2014) developed by the Investigative Committee of the Russian Federation should be considered a significant move towards this direction, since it allows tracking the progress of the criminal investigation in real time, monitoring the fulfillment of instructions on the criminal case, ensuring effective procedural controls, and planning the criminal investigation. Judging on available information, the Electronic passport of criminal case is a collection of information that can be found using the relevant search engine on the Internet, containing information on the crime and the progress of the case – the dates of relevant decisions, transfer of case from one subject to another, change of qualification, information about suspects, accused persons, affected persons, assigned expert examinations, etc. In our opinion, the already complete and quite actual transition from paper-based criminal case to electronic case is the next step in the modernization of criminal proceedings based on digital technologies in the abstract (Kachalova and Tsvetkov 2015).

4 Conclusions The foregoing verifies the hypothesis that has been put forward: the introduction of digital technologies in criminal proceedings is an inevitable phenomenon. It is therefore pointless to discuss the challenges of digitization of procedural activities. The problem consists in developing such rules for the use of digital technologies that would maximize the protection and security of personal data, preservation of secrecy of the

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pre-trial investigation and at the same time availability of case files for the parties to criminal proceedings to the extent conforming to their procedural status. The inevitability of digitization of criminal proceedings necessitates rethinking of a wide range of speculative postulates and ideas, especially in the field of evidence law, improving educational programs and educational process using module technologies, overcoming psychological barriers and, of course, eradicating computer illiteracy and underdevelopment in terms of the scientific and material and technical basis of investigative authorities and pretrial investigation authorities. The establishment of an electronic recording system for proceedings in a criminal case will require joint efforts of IT experts and experts in criminal proceedings, as well as changes in the system for the training and retraining of personnel of investigating and judicial authorities.

References Agibalov, V.Y.: Virtual traces in forensics and criminal procedure (2012) Alexandrov, A.S., Kuvychkov, S.I.: About reliability of “electronic proofs” in criminal procedure. Libr. Criminalist 5(10), 76–84 (2013) Andreeva, O.I., Zaitsev, O.A.: Problems of using electronic documents in criminal proceedings. Legal issues of consolidation of Russian statehood. Collection of articles, Tomsk, pp. 4–17 (2018) Zadorozhnaya, V.A.: Proceedings in a criminal case in electronic format pursuant to the law of the Republic of Kazakhstan. Pravoporiadok: Istoriya, Teoriya, Praktika 4(19), 70–75 (2018) Zazulin, A.I.: Regulatory support of electronic document flow in criminal proceedings: Experience of Germany. Pravoporiadok: Istoriya, Teoriya, Praktika 4(19), 76–80 (2018) Ivanov, V.V.: Employment of high technology and guarantee of human rights in criminal procedure. In: Activity of law enforcement agencies in the current context. Information package of the XXIV International Research-to-Practice Conference, pp. 130–132. East Siberian Institute of the Ministry of Internal Affairs of the Russian Federation (2019) Kachalova, O.V., Tsvetkov, Y.A.: Electronic criminal case – a tool for improving criminal proceedings. Rossiyskoe Pravosudie 2, 95–101 (2015) Kolokolov, N.A.: Operating judicial control in criminal procedure (2008) Lazareva, V.A., Olinder, N.V., Perekrestov, V.N.: Digital information in criminal proceedings: the concept and evidential significance. Stud. Comput. Intell. 826, 93–100 (2019) Pastukhov, P.S.: Electronic document flow in the U.S. criminal procedure. Pravoporiadok: Istoriya, Teoriya, Praktika 4(19), 81–87 (2018) Resolutions of the Plenum of Supreme Court of December 26, 2017: On certain issues in the application of legislation governing the use of electronic documents in the activity of general jurisdiction courts and arbitration courts. Law-Inquiry Computer System KonsultantPlius. Professional Version Poliakov, V.V.: On the use of concepts of “virtual traces” and “digital electronic traces” in forensics. Pressing issues in combating crimes and other delinquent acts, No. 11–1, pp. 123– 125 (2013) The Criminal Procedure Code of the Republic of Kazakhstan of July 4, 2014 (as subsequently amended on July 12, 2018) [Electronic resource]. Legal information system of laws and regulations of the Republic of Kazakhstan. http://adilet.zan.kz/rus. Accessed 05 Jan 2020 Pastukhov, P.S.: Modernization of criminal procedure evidence in the information society. Dr. Jurid. Sci. Diss. Moscow (2015)

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Rossinskaya, E.R.: On the issue of innovative development of forensic science in the age of digitization. Legal Bull. Samara State Univ. 4, 144–151 (2019) Yunoshev, S.V., Kondratiuk, S.V.: On the issue of the procedural treatment of evidentiary information obtained from Internet sources, Vector of Science of the Tolyatti State University. Ser. Forensic Sci. 3(34), 52–57 (2018)

“Smart Cities” as a Modern Model of Territories’ Sustainable Development Natalya Yu. Sorokina(&) , Liliya N. Chaynikova and Irina V. Sharova

,

Plekhanov Russian University of Economics, Moscow, Russia [email protected], [email protected], [email protected]

Abstract. Purpose: To show the interconnection between “smart city” and sustainable development of city and verifying the hypothesis that cities with higher living standards transform into “smart cities” faster. Methodology: The concept “smart city” is studied, including the methodological principles that are set in the basis of the humanistic concept “smart city” and the typology of “smart cities”, which takes into account the tendencies in their dynamics. The authors generalize the international and Russian practice of creation of “smart cities”. Based on compilation of top 10 “smart cities” of Russia and the leaders of the ranking of sustainable development of Russian cities, the authors confirm the hypothesis that city’s sustainable development is based on the process of creation of “smart city’s” competitive advantages. The provided statistical data show spatial heterogeneity in distribution of “smart cities” on Russia’s territory. Results and Recommendations: As a result of compilation of the data of the ranking of Russian cities by quality of life and activity of cities at the “Smart city” portal, it is shown that there is direct connection between the cities’ positions in these rankings. It is recommended that city authorities – together with interested parties – determine the top-priority directions of the city’s strategic development and set the target level of implementing the digital and engineering solutions in the city and communal infrastructure for the purpose of city’s sustainable development and formation of a comfortable and safe environment for living. Keywords: “Smart city” quality of life JEL Codec: O18


Sustainable development
Region
Population’s


R 22

1 Introduction According to experts, there will be 600 smart cities in the world by the end of 2020. Smart city is an innovative model of management, which envisages “formation” of a system and uses the whole potential of the modern IT infrastructure for raising the citizens’ quality of life by analyzing information from various sources and using it during development of the managing influence in the system of municipal © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1185–1194, 2021. https://doi.org/10.1007/978-3-030-59126-7_129

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management. The main idea of a smart city consists in comfortable life for citizens, effective work for business, and efficient managerial decisions for city administration based on information technologies. In practice, such approach is implemented with the help of a digital eco-system, which connects all elements of the city infrastructure: from transport and social institutions to the objects of municipal property. Let us consider the examples of smart cities around the world. Yinchuan is one of China’s 200 pilot cities in which the standards of smart city are implemented. Yinchuan is a smart city of the future; its uniqueness consists in ubiquitous implementation of the system of face recognition, which allows citizens to pay in public transport and stores even without a smartphone. The example of Yinchuan was considered successful by the government of China, so a series of such cities are to be created by 2050; 250 villagers will be relocated to such cities. Another example is Fujisawa (Fujisawa Sustainable Smart Town) in Japan. Fujisawa’s philosophy is very close to the first prototypes of a smart city, which main goal was eco efficiency. Renewable energy sources, smart gadgets which allow saving resources, autonomous life necessities, and share economy – which could be controlled via a mobile app that is connected directly to the city portal. Organizing such approach is not difficult, as the city has only 3,000 residents. Milton Keynes is the smartest city of the UK. Its history started in 1960’s. It was built near London, for freeing its overpopulated suburbs. The project is based on the technology of “smart” planning (Agencysgm 2020; Docplayer 2020; Dolgikh et al. 2020; Domofond 2020; Government of the Russian Federation 2020a, 2020b; HighTech 2020; ISO 2020; McKinsey 2020a, 2020b; Media MTS 2020; Read.infometer 2020; Robo-Sapiens 2020; VC 2020). The city does not have a historical center, for it was designed in the form of a “grid” of perpendicular highways with a one-kilometer step. Milton Keynes is an innovative transport hub, in which unmanned vehicles are actively developed and implemented. The “MK: Smart” system gathers the city data from different sources (satellites, sensors, CCTV, and socio-economic indicators), which allows Milton Keynes to be one of the fastest growing and most perspective smart cities. Russia also has examples of smart cities (Table 1). The fiscal capacity of the federal cities (Moscow and St. Petersburg), as compared to other Russian cities, is high – which allows implementing “smart services” projects. In Moscow, “smart services” have been implemented in the sphere of housing and utilities infrastructure, transport services management, and formation of unified city information systems; St. Petersburg started implementing large-scale projects on “smart systems” in the sphere of provision of security and rational management of the municipal communal facilities. Smart technologies are implemented in Russian cities by international IT companies (IBM, Microsoft, Cisco, etc.) (Dolgikh 2015). However, such practice reduces the level of information security of cities, as a result of which the process of provision of accessibility, integrity, and confidentiality of information is disrupted. For the purpose of opposing the threats to information security, it is necessary to develop own technologies and sharing platforms.

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Table 1. Top 10 smart cities of Russia – 2017 ranking. Position 1

City Moscow

Characteristics Leader by the number of companies that provide carsharing services, by the number of innovative objects (32 objects), charging stations, road traffic cameras, and the set of open data. Moscow residents use 24 public services via mobile apps Moscow is the leader in the rankings of cities by implementation of IT services 2 St. Petersburg 31 banks; 0.62 wi-fi spots per 1 m2; 24 objects of innovative infrastructure; 22 public services that could be received via mobile apps. St. Petersburg is ranked 4th in Russia by the number of visitors of official web-sites of executive authorities; it is ranked 2nd by the number of charging stations (Moscow is 1st) 3 Kazan Smart city has the largest Russian IT park and one of the largest technological parks in Europe. Kazan has 0.16 charging stations per 100 km2 and 0.19 traffic cameras per 1 km of road 4 Ekaterinburg A transport and logistics center and a very important industrial center. The leader by the number of ATM’s (3.23 ATM’s per 1 km2) 5 Krasnoyarsk Logistical center. The leader by number of wi-fi spots – 1.2 spots per 1 km2 6 Novosibirsk Four city services are accessible via smartphone; 3 ATM’s per 1 km2 7 Ufa The leader by the number of IT companies; among the leaders by the level of carsharing services 8 Sochi Transportation hub and cultural center of the Black Sea region. The tourist smart city is ranked fourth by the number of carsharing services and first by the number of users of official web-sites of city administration 9 Perm Perm is ranked 8th by the number of objects of innovative infrastructure and 6th by the number of city services accessible via mobile apps 10 Rostov-on-Don Rostov-on-Don is ranked 6th by the number and accessibility of ATM’s and charging stations. However, the indicators of activity of Internet users, number of wi-fi spots, and number of objects of innovative infrastructure are not high Compiled by the authors based on (Top-10 smart cities…, 2018).

Initially, the term “smart city” was used only regarding eco-efficiency and was actually a synonym of green technologies; in early 2000’s its emphasis shifted to IT tools with the help of which a smart city uses data for creating new quality of life for citizens. Expenditures for technological solutions for smart cities in Russia constituted RUB 81 billion as a result of 2018, which was by 8% more than in 2017 (A study: market of solutions, 2019).

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2 Methodology The “smart city” concept, which formed in early 2000’s, is based on development of technologies and infrastructure of cities, as the basis of faster and more comfortable access of population to a wide specter of services – primarily, services of transport and municipal institutions. As a result of implementation of this technocratic concept, cities saw the appearance of large centers of data processing, “smart sensors”, and automatized electric grids. However, excessive interest in modern technologies led to a paradox – technologies and systems started developing quicker than the growth of population’s quality of life. As a result, a critical attitude towards the innovations emerged. Contrary to this concept, scholars and practitioners in the sphere of urbanism offered a new humanistic model of smart city, which envisages not only various methods of application of smart technological solutions but also the active involvement of citizens in their development. The methodological principles that are set in the basis of the humanistic concept of smart city are as follows: taking into account the opinion of population and nongovernment organizations; controlling indicators of growth; trust to all participants of the process of city and environment management; economic planning and town planning; saving and balance of distribution of resources according to the priorities; digitization of processes. Implementation of the above principles requires implementing a wide circle of innovations in all spheres of population’s activities. The types of innovations that are necessary for bringing a city to “smart” standards (Smart cities, 2018) are as follows: technological, organizational, and innovations in the sphere of politics. We think that the key attribute of a smart city is orientation at the long-term sustainable development. The issues of sustainable development become more popular at the level of administrations of regions and large municipalities in Russia. Surveys show that mayors of the largest Russian cities are interested in the modern solutions in the sphere of environment protection, improvement of the ecological situation, etc. However, development and implementation of these solutions lack system and complex character and professional justification during setting of priorities. The solution of this problem could lie in formation of the concept of smart city in the context of the sustainable development paradigm. At present, the most popular typology of smart cities is the one that takes into account the tendencies of their dynamics: U-City. Cities with certain elements of smart city. Cities without a complex plan of intellectualization. City 2.0. Cities with complex platforms of smart city. Elements of U-City are systematized. City 3.0. Very sustainable smart cities. Smart cities that are built according to a detailed plan. All aspects of the city’s life conform to the characteristics of smart city, with synergetic effect between the elements of smart city. Achievement of the City 3.0 level is to be stimulated by implementing a series of international standards ISO 37100, which specify the key aspects of development of cities’ development strategies for provision of higher level of sustainability. The latest

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published standard ISO 37122 “Sustainable cities and communities—Indicators for smart cities” contains a set of indicators for measuring their effectiveness in the key spheres of population’s activities. This approach allows persons who make decisions to generalize the best practices of other cities around the world, substantiate innovative solutions of the development problems, and ensure long-term positive socio-economic dynamics of a territory (New international standard, 2019).

3 Results Let us compare top 10 smart cities of Russia (Table 1) and the leaders of the ranking of sustainable development of cities compiled based on the index of sustainable development of cities, which includes 42 statistical indicators that characterize city’s development according to the following blocks: economic development, city infrastructure, demographics, social infrastructure, and ecolog (Table 2). Table 2. Ranking of sustainable development of Russian cities in 2017. Rank

City

Population, thousand people

Sustainable development index

Leaders 1 Moscow 12,506.5 0.676 2 Tyumen 760.4 0.670 3 St. Petersburg 5,351.9 0.646 4 Krasnodar 990.2 0.646 5 Kazan 1,243.5 0.631 Source: compiled by the authors based on (McKinsey 2020a, 2020b).

Federal district Central Ural Northwestern Southern Volga

Comparison of information in Tables 1 and 2 confirms the hypothesis that sustainable development of cities is based on the process of creation of competitive advantages of a smart city. Moscow, St. Petersburg, and Kazan are most sustainable in their development and conform to the level City 3.0. However, it is possible to speak of spatial heterogeneity in the processes of formation of smart cities in Russia. Most of leaders in the Ranking of sustainable development of cities are located in the European part of Russia and Ural. At the sub-federal level, heterogeneity is even higher: almost all market is formed by Moscow, which accounts for 93% of Russian revenues, while St. Petersburg’s share equals 2%, and other regions’ share – 5%. Overcoming these negative tendencies and further perspectives of implementing the “smart city” concept in the Russian Federation are connected to realization of the national project “Accommodation and urban environment” (Passport…, 2019) and the national program “Digital economy of the Russian Federation” (National program…, 2019). Studies of the McKinsey Global Institute (MGI) (Smart Cities…, 2018) showed that cities with higher living standards transform into smart cities quicker. Is this

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statement true for Russian cities? At first glance, the answer is obvious: successfulness of implementing the smart city concept is largely determined by the city’s economic potential and possibilities of its implementation at the regional, national, and international levels, which is expressed in sustainable economic dynamics of territories and higher quality of citizens’ life. For obtaining a more justified evaluation, let us compare the data of the ranking of Russian cities by quality of life, which is compiled annually by Domofond.ru (Full ranking…., 2018), and activity of cities at the portal “Smart city”, which was created for formation of an effective system of the city economy management and provision of safe and comfortable conditions for residents of Russian cities (Table 3). The level of implementation of the leading digital and engineering solutions into the city and communal infrastructure, in our opinion, largely determines the city’s perspectives of becoming a smart city. The ranking of cities by quality of life is a subjective evaluation by the residents of such key parameters of life as safety of living, cleanliness, ecology, quietness, public transport, roads, parking, stores, markets, sports and leisure, infrastructure for children, neighbors’ friendliness, work of communal services, and income/cost of life ratio.

Table 3. Ranking of Russian cities by population’s quality of life, 2018. Position in the ranking

City

Average score

Anapa

8.3

81.4

+5,333.0

4

2

Gelendzhik

8.3

77.2

0.0

3

3

Grozny

8.2

297.1

0.0

11

4

Domodedovo

8.0

127.9

−420,517.2

7

5

Surgut

8.0

376.3

−947,200.0

9

Leaders 1

Population, thousand people (as of 01.01.2019)

Municipal budget, RUB thousand 2018

Number of implemented projects, according to the portal “Smart city” (as of 25.07.2019)

Directions of projects

Energy efficiency, information city, transport Information city, transport Energy efficiency, information city, safety, transport Energy efficiency, information city, water supply Energy efficiency, information city, safety, transport

(continued)

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Table 3. (continued) Position in the ranking

City

Average score

Population, thousand people (as of 01.01.2019)

Municipal budget, RUB thousand 2018

Outsiders 146 Noginsk

5.9

102.6

−76,185.6

1

147

Achinsk

5.9

105.3

−85,305.0

1

148

Rubtsovsk

5.8

144.1

−49,000.0

2

149

Novocherkassk 5.5

168.0

−30,926.8

2

150

Volokolamsk

19.8

−52,066.0

1

5.2

Number of implemented projects, according to the portal “Smart city” (as of 25.07.2019)

Directions of projects

Energy efficiency Energy efficiency Energy efficiency, information city Energy efficiency, information city Information city

Compiled by the authors based on (McKinsey 2020a, 2020b).

The following conclusions regarding the perspectives of Russian cities’ turning into smart cities could be made. 1. There is no direct dependence between number of population, living standards, and perspectives of entering the group of smart cities. The leaders by quality of life in 2018 are medium remote cities with population up to 300,000 people. The first position belongs to Anapa, which has 81.400 people. At the same time, it is necessary to note the activity of the leaders of the ranking in the sphere of mastering of information technologies: according to the portal “Smart city”, they are way ahead of the outsiders by the number of implemented projects. Thus, Anapa is implementing four projects that are aimed at provision of energy efficiency, development of city information systems, and public transport. At the same time, Noginsk and Achinsk (146th and 147th positions in the ranking of 150 cities, accordingly) are implementing only projects in energy efficiency. It is possible to suppose that the leaders will obtain advantages over the outsiders, as they started implementing a wide circle of digital solutions earlier, and, therefore, the results will be obtained sooner. 2. Successfulness of the city’s evolution into smart city is largely determined by its capabilities in the sphere of economic potential realization, which is indirectly reflected by the indicators of the state of municipal finances, in particular the presence and level of city’s budget deficit. All outsiders have a large budget deficit, and uncompensated receipts account for a large share in the structure of their revenues. Without a powerful investment potential or high level of socio-economic development, they have rather limited capabilities in obtaining loans and credits.

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City’s financial position forms a resource basis for provision of decent living conditions and for implementing innovative solutions aimed at achievement of the high technological level of the city infrastructure. This is proved by the fact that Moscow, with 18th position in the ranking of population’s quality of life, implements 94 projects on development of smart city infrastructure in the sphere of construction, ecology, energy efficiency, security, transport, etc. 3. When implementing digital solutions, outsiders focus on economic efficiency, including development of the service components of the city environment. The leaders develop complex solutions in several top-priority spheres of the city and communal infrastructure, thus building the foundation for long-term sustainable economic growth. In modern cities, such integrated solutions are the measures on reducing the urgency of the transport problem, which allow city administration and citizens saving time, energy, and financial resources. In the existing situation, it is possible to expect a less vivid effect from implementing the digital solutions in the cities that are outsiders in the ranking.

4 Conclusions Provision of sustainable socio-economic development is the top-priority task of the leading Russian cities. This process could be given the long-term character based on the key postulates of the smart city concept, within which competitive advantages of city territories are ensured in the modern economy. Smart city is a city in which – according to the principles of sustainable development and based on the digital and intellectual systems – the functioning of life supporting systems, which ensure high living standards of the population, is achieved. However, comparison of the ranking of smart cities and the ranking of sustainable development of cities did not show any coincidences, which allows stating that transition to the principles of sustainable development is largely declared by Russian cities. Thus, Novosibirsk and Sochi occupy the 6th and 8th positions in the first ranking, accordingly, and 59th and 99th positions in the second ranking. We think that this contradiction is caused by the fact that the principles of sustainable development are not fully implemented in the process of Russian cities’ digital transformation. Spatial heterogeneity is observed in the process of smart cities’ formation: most of the leaders of the ranking of sustainable development of Russian cities are located in the European part of Russia and in the Ural region, while the number of smart cities in remote federal districts is lower – though it is the remote territories that have the largest need for their creation. We cannot state that there is direct dependence between population’s quality of life – as a purpose of sustainable development – and perspectives of city’s entering the groups of smart cities. It is obvious that more developed – in the economic aspect – cities are quicker to master digital and engineering solutions and to implement them into the system of the city economy management. The key conditions that ensure the evolution of Russian cities into smart cities and achievement of the sustainable character of their development are as follows:

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– implementing a complex of measures in the sphere of mastering of new information technologies, envisaged by the national program “Digital economy of the Russian Federation”; – changing the distribution of tax sources between the levels of the budget system for provision of local budgets’ balance; – city’s high motivation for implementing complex and integrated solutions that create multiplicative effects in the spheres and sectors of the city’s economy (smart street illumination, smart public transport, smart monitoring of waste, etc.). The most important aspect is that city authorities – together with population, business, and other interested parties – have to determine the top-priority directions the city’s strategic development and set the target level of implementing the digital and engineering solutions into the city and communal infrastructure for the purpose of the city’s sustainable development and formation of a comfortable and safe environment for the population.

References Agencysgm: Reyting ustoychivogo razvitiya gorodov RF za 2017 god [Ranking of Russian cities’ sustainable development in 2017] (2020). http://www.agencysgm.com/projects.pdf Docplayer: Vozmozhnosti sozdaniya v Rossii umnykh gorodov na printsipakh ustoychivogo razvitiya [Opportunities for creation of smart cities in Russia by the principles of sustainable development] (2020). https://docplayer.ru/27186656-Vozmozhnosti-sozdaniya-v-rossiiumnyh-gorodov-na-principah-ustoychivogo-razvitiya.html Dolgikh, E., Antonov, E., Erlich, V.: «Umnye» goroda. Perspektivy razvitiya v Rossii. [“Smart” cities. Perspectives of development in Russia] (2020). https://www.iemag.ru/analitics/detail. php?ID=34007 Domofond: Polnyy reyting gorodov Rossii po kachestvu zhizni v 2018 godu [Full ranking of Russian cities by quality of life in 2018] (2020). https://www.domofond.ru/statya/polnyy_ reyting_gorodov_rossii_po_kachestvu_zhizni_v_2018_godu/7679 GorodSreda: Proekt «Umnyy gorod» [Project “Smart city”] (2020). http://gorodsreda.ru/umniygorod/ Government of the Russian Federation: Natsional’naya programma «Tsifrovaya ekonomika Rossiyskoy Federatsii» [National program “Digital economy of the Russian Federation”] (2020a). http://government.ru/rugovclassifier/614/events/ Government of the Russian Federation: Opublikovan pasport natsional’nogo proekta «Zhil’e and gorodskaya sreda» [Passport of the national project “Accommodation and city environment”] (2020b). http://government.ru/projects/selection/735/35560/ High-Tech: Istoriya i budushchee umnykh gorodov [The history and future of smart cities] (2020). https://hightech.plus/2019/11/26/istoriya-i-budushee-umnih-gorodov ISO: Novyy mezhdunarodnyy standart po izmereniyu pokazateley deyatel’nosti gorodov, kotorye stanovyatsya «umnymi» [A new international standard of measuring the indicators of the activities of cities that become smart cities] (2020). https://www.iso.org/ru/news/ref2395. html McKinsey: Smart cities: Digital solutions for a more livable future (2020a). https://www. mckinsey.com/industries/capital-projects-and-infrastructure/our-insights/smart-cities-digitalsolutions-for-a-more-livable-future

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McKinsey: Tekhnologii umnykh gorodov: chto vliyaet na vybor gorozhan? [Smart cities’ technologies: what influences the citizens’ choice] (2020b). https://www.mckinsey.com/ industries/public-sector/our-insights/smart-city-solutions-what-drives-citizen-adoptionaround-the-globe/ru-ru Media MTS: «Umnye» goroda mira: tri zarubezhnykh primera. [“Smart” cities of the world: three foreign examples] (2020). https://media.mts.ru/business/145661#top Read.infometer: Umnye goroda Rossii [Russia’s smart cities] (2020). https://read.infometer.org/ opencity/rating Robo-Sapiens: 10 samykh smart cities Rossii [10 smartest cities of Russia] (2020). http://robosapiens.ru/stati/10-samyih-umnyih-gorodov-rossii/ VC: Issledovanie: rynok resheniy «umnogo» goroda v Rossii vyros na 8% v 2018 godu i prevysil 81 mlrd rubley [A study: the market of smart city solutions in Russia grew by 8% in 2018 and exceeded RUB 81 billion] (2020). https://vc.ru/future/61464-issledovanie-rynok-resheniyumnogo-goroda-v-rossii-vyros-na-8-v-2018-godu-i-prevysil-81-mlrd-rubley

The Institutional Basis for Implementing “Smart Technologies” in the Legal System of Fighting Crimes Aleksandr S. Aleksandrov1(&) , Oleg A. Zaytsev2 Petr P. Muraev3 , and Vitaly A. Ruchkin3 1

2

,

Nizhny Novgorod Academy of the Ministry of Internal Affairs of the Russian Federation, Nizhny Novgorod, Russia [email protected] Institute of Legislation and Comparative Jurisprudence Under the Government of the Russian Federation, Moscow, Russia [email protected] 3 Volgograd State University, Volgograd, Russia [email protected], [email protected]

Abstract. Purpose: The purpose of this paper is to substantiate the necessity of the reform as the institutional basis for implementing “smart technologies” in the legal system of fighting crimes. Design/Methodology/Approach: The methodology of the research includes dialectical materialism and systemic analysis. Findings: In the age of the digital transformation of economy, society, and state, the Russian system of fighting crimes requires a reform. The authors perform a systemic analysis of the phenomena and processes related to smart technologies’ entering the activities of law enforcement. This allows evaluating the possible consequences of smart technologies implementation in the modern criminally-remedial system of fighting crimes, which has formed in the conditions of autocracy and belongs to the investigatory type. Implementing smart technologies in the investigatory legal system could lead to total control over human and society, which moves Russia away from the ideals of democracy and legal state. Originality/Value: It is concluded that a reform of the two main institutions that determine the legal organization of fighting crimes – prosecution and evidence – is required. This envisages a long-pending reform of pre-trial investigation: liquidation of investigatory authorities and the investigatory form of realization of their rights in application of criminal law and foundations of law enforcement. Keywords: Prosecution
Evidence
Smart technologies transformation
State management
Fighting crimes


Digital

JEL Code: K140

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1195–1203, 2021. https://doi.org/10.1007/978-3-030-59126-7_130

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1 Introduction The term “smart technologies” has become widespread in the public & political, legal, and scientific discourses. One should agree that the meaning of this term – together with the meaning of the term “digital technology” – is a part of a common conceptual core, which denotes the global phenomenon of “digitalization” that takes place in all spheres of society (Kononova et al. 2018), including fighting crimes. It could be considered a part of the conceptual and categorical framework of a new direction in the sciences of anti-criminal cycle, which object is digital transformation the legal system of fighting crimes. Importance of the selected topic is predetermined by growth of cybercrimes, which is expected to become a criminal threat No. 1 and is already challenging the existing legal system of fighting crimes. The importance of the topic is increased by another aspect: digital transformation of state management, which covers also the system of fighting crimes. The problems that lie in the basis of the selected topic is not only and not so much technical, i.e., criminalistics, legal & technical, or organizational, as institutional – for it concerns the key institutions of public authorities, state, and law. That’s why the purpose of this paper is to determine the institutional basis for implementing “smart technologies” in the legal system of fighting crimes. The tasks include determining and classifying “smart technologies” in the context of the legal activities of government bodies on fighting crimes; determining – based on the existing scientific achievements – the results and tendencies of implementation of smart technologies in certain elements of the system of fighting crimes; determining the institutional problems related to applying smart technologies in the modern legal system of fighting crimes; and looking for a solution to this problem. The research object is the problem of implementing smart technologies in (a) the system of law enforcement of executive authorities, which, according to the law, have special authorities in fighting crimes and (b) their activities in determining, preventing, and solving crimes, as well as criminal prosecution of criminals. Generally, these bodies are called “law enforcement” or “prosecution” (Aleksandrov and Kukhta 2009) (or “prosecutive & investigatory” jurisdiction) (Sheyfer 2013), and their activities are called “pre-trial procedure”, “criminal prosecution”, and “pretrial investigation”. Of course, here we somewhat simplify the idea of these bodies and the essence of their activities. Fighting crimes has a lot of aspects and legal forms (e.g., investigative operations, crime prevention, sentence enforcement, prosecutor’s supervision, control and management of system, etc.). The issues of the legal nature of these bodies and their activities are controversial in theory. We distinguish the main – prosecutive – aspect of these activities, which is especially important for the legal organization of fighting crimes. The function of prosecution starts the court mechanism, which enables the criminal and legal influence on crimes. Thus, neither legislative nor judicial power (their functioning) is not the object of our interest, despite their role in organization of the legal system of fighting crimes. The legal organization of executive (prosecutive) authorities and their activities (criminal prosecution) predetermine the legal organization of the whole system of fighting crimes. This sphere is most

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susceptible to implementation of smart technologies, and the consequences of this are of the systemic character. The research objects are criminal prosecution and evidence – two basic functions that are performed by the public authorities in the form of competent government bodies, which are authorized to conduct pre-trial investigation and investigative operations and prosecutor’s office in the system of fighting crimes.

2 Materials and Method The methodological basis of the research includes dialectical method and systemic analysis. Dialectical method is the basis for cognition of legal science, in particular the specifics of implementing “smart technologies” in the legal system of fighting crimes. Systemic analysis allows characterizing the sequence of actions on establishment of the structural ties between the elements of the legal system of fighting crimes.

3 Results It has been proved long ago that prosecution and evidence are the main institutions of the state and legal system of fighting crimes (Polyansky 1927). Following this postulate, let us try to enter the institutional level of the problems of implementing smart technologies into the law enforcement system of fighting crimes and the methods of its influence on crimes. The starting point of our discussion is the axiom that humans – not technologies – change the world. Technologies influence the social and government institutions, but do not change their essence. Legal system is a product of responsible law-making, not technologies. Smart technologies cannot replace reforms, in particular the judicial reform. There are two essentially different models of the state and legal structure: democracy and autocracy; smart technologies could be implemented into both these models and raise their effectiveness. If autocracy is digitized, the result will be digital autocracy. The same is true for democracy. In autocracy, the system (mechanism) of fighting crimes has an investigatory legal organization – on other words, application of criminal law and implementation of criminal liability take place in the form of criminal procedure – through realization of investigator’s authorities in prosecution and evidence. We support the primary nature of the procedural aspect in the legal organization of the mechanism of fighting crimes (Aleksandrov et al. 2019a, b). The procedural form gives life to “real criminal law” in the form of “effect” of fighting crimes (restraint, control) with the measures of criminal liability. Implementation of smart technologies into the investigatory process of application of criminal law will strengthen the power of an investigator and decrease the protection of individual’s rights. They will not change its fundamental injustice, which consists in the fact that person is hold criminally liable not as a result of fair (competitive) criminal court proceedings but as a result of one-sided pre-trial investigation.

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The two key institutions of the legal system of fighting crimes - prosecution and evidence – are in the hands of an investigator (body of pre-trial investigation). Investigator forms proofs (by recording the course and result of the performed investigative activities in the “investigation report”) and thus establishes the basis for criminal liability – it is contained in the materials of a “criminal case”, which is created by the investigator alone. Investigator presses charges (with the help of an act on indictment as a defendant) and thus holds the defendant criminally liable. He also may make a decision on exemption from criminal liability in the course of pre-trial investigation. In such legal system of fighting crimes, court – a body of justice – is objectively dependent on investigators, which is manifested in the so called “prosecutorial bias”. A formal division of the judicial and executive (investigatory/prosecutive) powers, as well as a guarantee of independence of judicial power with the investigatory legal organization, does not work in practice, and no smart technologies could change this. As is known, smart technologies are classified into several varieties (Selina and Semiokhina 2017). Firstly, these are mechanisms with certain authomatization, and devices that allow – with the help of apps – connecting to networks and data bases and satisfying the user’s needs (smartphone, intellectual security camera). Secondly, intellectually connected devices, which are remotely controlled and which could automatically adapt to the environment and perceive reality with the help of technological sensors, providing data for analysis and output and even making preliminary conclusions for user’s decision making (“Smart city”, “Safe city”). Thirdly, technologies that are a combination of product, application, analytics, and Internet/networks – i.e., technologies that are used at the level of organization of the whole system, its basic institutions, and their functions (“digital platform” of the state). Therefore, it is possible to speak about three levels of implementation of smart technologies in the legal system of fighting crimes: the first two levels do not influence its conceptual foundations, and the third - institutional – level sets the discussion of the issues of responsibility (reality) of the system’s conceptual form. Implementation of smart technologies of the third form allows speaking of the institutional level of digital transformation the legal system of fighting crimes. Meanwhile, in the specialized scientific theory, the issue of using smart technologies is put in a narrow and surface form: only regarding the existing investigatory legal system of fighting crimes. Analysis of literature devotes to these problems shows that the main object of discussion is implementing smart technologies of the first two types into evidence: investigating and solving crimes in the course of pre-trial investigation. Thus, the criminalistic and expert aspects of application of smart technologies are traditionally discussed for determining and studying the digital traces and turning them into criminally-remedial proofs (Kalinovsky and Markelova 2001). Representatives of such approach are concerned with technical & criminalistic and partially procedural issues of the first level, which concern withdrawal, copying, storing, and transfer of digital information and digital carriers of information (with the use of smart technologies) by the subjects of the process – the legal system of fighting crimes (Kuvychkov 2016), (Andreeva and Zaytsev 2018). Despite the importance of the applied problem of improving the regulation of investigatory and other actions with the use of

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smart technologies (Zaytsev et al. 2018), it is necessary to understand its limited character. As a matter of fact, here we speak of investigatory technology of proving and subjects-users of smart technologies in the modern investigatory system of fighting crimes. A more conceptually rich step towards solving the problem of implementation of smart technologies is the offer on introduction into the code of the investigatory action “Obtaining of digital information” (Aleksandrov et al. 2019a, b), including automatized search for information in data bases, scanning of Internet and telecommunication channels, similarly to such investigative action as “obtaining of digital information”, according to Paragraph 15 Article 6 of Federal Law No. 144 “On investigative activities”. It could be considered a measure for overcoming an institutional barrier (in the form of a ban formulated in the norms of Article 75 and Article 89 of the Russian Federation Code of Criminal Procedure) for using smart technologies in the activities of a police body of pre-trial investigation for determining the signs of crime in the digital space, analysis of information that shows these signs, and establishment of the sources of its origin. However, such offers could be implemented only in the context of the reform of pre-trial investigation – i.e., shifts at the conceptual level of organization of the legal system of fighting crimes (Aleksandrov 2017). The most prominent representative of this direction in the sphere of use of smart technologies – Prof. S.V. Zuev – made several conclusions regarding implementation of smart (digital) technologies in the legal system of fighting crimes: 1) transfer to recording the course of procedural, including investigatory, actions with the help of technical devices and storing the results in the digital form; 2) implementing the technology of verification of a procedural document by any participant of the criminal procedure, instead of a usual signature; 3) developing a model “Electronic criminal case”; 4) implementing remote forms of conducting procedural actions; 5) providing the wronged individual with an opportunity to track the progress of a criminal case via Internet (Zuev 2018), (Kaznachey 2015). This list includes not only tactical & criminalistic measures on implementing smart technologies into the investigatory technology of proving but also those that concern the entities of the second level of the legal organization of the system of fighting crimes – the “criminal case” institution. The problems of a higher level of implementation of smart technologies into the investigatory model of organization of fighting crimes are considered in other works, in which authors discuss the issues of transferring criminal procedure to electronic document turnover, creation of “Electronic criminal case”, use of automatized surveillance systems, and use of their results in solving crimes (Zuev and Nikitin 2017). The concept “electronic criminal case” was first mentioned in the Russian science in 2015 (Kachalov and Tsvetkov 2015), though it had already become a reality in Georgia, Estonia, Kazakhstan, and other countries. However, these countries had also conducted a reform of pre-trial investigation. That’s why they treat “criminal case” otherwise – as compared to Russia. In Russia, criminal case is a product of investigator, while this is not true for the above countries, which have investigating judge and the procedure of depositing of proofs, which results are a part of the criminal case, together with police’s “factual material” which contains sources of proofs, of which evidence is formed in the court.

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The investigatory essence of the phenomenon “criminal case” is not cancelled by smart technologies; quite on the contrary, it is multiplied – in view of creation of a digital copy of the written original and the data base of such criminal cases (Yanushkov et al. 2011). We see only harm in such variant of smart technology: multiplying useless efforts of people on copying the document turnover (in the written and digital forms). This is true for other projects of implementation of smart technologies of the second type (information and analytical systems with AI) into the investigatory legal organization of fighting crimes. Thus, another supporter of the investigatory ideology, V.Y. Miller, discusses the implementation of smart technologies in the stages of initiation of criminal case. According to him, the main potential for optimization of the activities at the stage of initiation of a criminal case consists not in its digital transformation, i.e., aggregation at the information platform of dispatch, government-owned and private CCTV systems: hardware and software complex “Safe city”, the Center for automatized recording of administrative offenses in the sector of road traffic, private security, etc. (Miller 2020). One might agree that the modern stage of initiation of criminal case, as an investigatory form of entering the criminally-remedial system of fighting crimes is very important. It is more open – as compared to other areas of the system – for implementation of smart technologies. For example, due to the new opportunity for filing offense report via the web-site of public services. We understand the concern of those who think that this stage in in a crisis due to the growing volumes of incoming information and the necessity to react to it in the investigatory form. However, unlike V.Y. Miller, we see the solution not in the digital transformation of this stage but in refusal from it and in transition to another system of receipt and reaction to offense reports. V.Y. Miller’s dissertation speaks of the regional – Nizhny Novgorod - experience of using such smart technology as “Biometric identification” for solving and preventing crimes and finding criminals by images from city cameras during the 2018 FIFA World Cup (Miller 2020). Such system of face recognition with the use of the FindFace technology of the Russian company NtechLab is widely implemented in Moscow (city system of face recognition in Moscow). Thus, we move to the third level of the problems of implementing smart technologies in organization of fighting crimes – the institutional foundations of provision of public services to population and business on protection from crimes and solving criminal and legal conflicts on the digital platform. In the context of digital transformation of the whole state management, the contours of this topic are outlined in a range of scientific projects of the strategic character (Petrov et al. 2018). The following technologies are given in these documents, as the most important technologies for implementation in the sphere of fighting crimes: (1) Big Data; (2) neural networks (AI), which a tool for working with Big Data; (3) distributed register (blockchain); (4) digital tracking; (4) quantum communications (State as a platform 2019). A more applied aspect of this technology is outlined by the authors of these developments in the form of predictive analytics based on big data. This is the technology of face recognition for search for criminals – “predictive police” (State as a platform 2019). Such model of police and police activities is a part of the democratic & competitive model of the legal system of fighting crimes, but there is a

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temptation to use it for the purposes of total control and autocracy by the investigatory jurisdiction. The most debatable aspect is implementing the system of distributed register (blockchain) in the legal organization of the system of fighting (State as a platform 2019). This end-to-end technology could be used during reorganization of the institution of prosecution on certain crimes (entrepreneurial) (Vlasova 2018) and in the context of socialization and movement of the mechanism of prosecution to the judicial sphere (Aleksandrov et al. 2019a, b). Only several legal studies make at attempt at a certain strategic, institutional consideration of the topic of implementing smart technologies in the legal system of fighting crimes (Vlasova 2018). There are completely opposite approaches. Y.A. Tsvetkov, supporter of the investigatory ideology, protecting the interests of the Russian Investigative Committee, deems it necessary to preserve the institution of investigatory authorities as the basis for implementing smart technologies in the legal system of fighting crimes and considers these technologies to be the means of strengthening an investigator (Tsvetkov 2019). An opposite opinion is supported by the followers of the competitive ideology, whose conclusion is that smart technologies should be developed on the competitive basis; as the investigatory authorities the Russian Investigative Committee – equipped with smart technologies – pose a threat to individual’s rights, they have to be liquidated (Pastukhov 2015). In our published works, we presented offers on the institutional transformation of a legal organization of fighting crimes. Their essence is brought down to reforms of pretrial procedures: liquidation of its investigatory form, within which evidence and prosecution take place now.

4 Conclusion Digitization of the investigatory authorities and implementation of smart technologies into pre-trial investigation do not change the institutional nature of the legal system of fighting crimes. If the problem of transfer of power from investigator to court is not solved, the system will become a part of autocracy. Equipping it with smart technologies could lead to increase of threat for human rights and rejection of the humanistic tradition which has not yet been destroyed in Russia. The temptation to give smart technologies to punitive, investigatory authorities is too large to be ignored. The only reliable barrier to using smart technologies against the interests of individual, population, and business is limiting the prosecutory power of the state by criminal procedure law, based on the competitive ideology. Only a competitive criminal process could become the institutional basis for implementing smart technologies in the activities of criminal police on solving crimes and in the legal organization of prosecution. This means that the reform of pre-trial investigation should be connected to digital transformation of the legal system of fighting crimes in Russia.

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References Aleksandrov, A.S., Kukhta, A.A.: Vlast’ sledstvennaya i vlast’ obvinitel’naya: kvadratura kruga [Investigatory jurisdiction and prosecutive jurisdiction: quadrature of the circle]. Pravovedenie (4), 22–28 (2009) Aleksandrov, A.S., Aleksandrova, I.A., Vlasova, S.V.: Teoreticheskaya kontseptsiya gosudarstvenno-pravovoy organizatsii protivodeystviya prestupnosti v 21 veke [The theoretical concept of state and legal organization of fighting crimes in the 21st century]. Gosudarstvo i pravo (9), 75–86 (2019a) Aleksandrov, A.S., Andreeva, O.I., Zaytsev, O.A.: O perspektivakh razvitiya rossiyskogo ugolovnogo sudoproizvodstva v usloviyakh tsifrovizatsii [The perspectives of development of the Russian criminal justice in the conditions of digitization]. Vestnik Tomsk State Univ. (448), 199–207 (2019b) Aleksandrov, A.S.: Uchenie o sledstvennykh deystviyakh na poroge «tsifrovogo» mira [A study of investigatory actions at the threshold of the “digital” world]. Yuridicheskiy vestnik Samara Univ. 3(4), 80–85 (2017) Andreeva, O.I., Zaytsev, O.A.: Problemy ispol’zovaniya v ugolovnom sudoproizvodstve elektronnykh dokazatel’stv [The problems of using digital evidence in criminal justice]. Pravovye problemy ukrepleniya rossiyskoy gosudarstvennosti, vol. 79, pp. 4–16. Tomsk State University Publ., Tomsk (2018) Vlasova, S.V.: K voprosu o prisposablivanii ugolovno-protsessual’nogo mekhanizma k tsifrovoy real’nosti [Adapting the criminally-remedial mechanism to the digital reality]. Biblioteka kriminalista. Nauchnyy zhurnal (1), 18–28 (2018) Zaytsev, O.A., Grigoryev, V.N., Medvedeva, M.O.: O perspektivakh reformirovaniya ugolovnogo protsessa na baze vnedreniya informatsionnykh tekhnologiy [The perspectives of reforming criminal justice based on information technologies]. Razvitie informatsionnykh tekhnologiy v ugolovnom sudoproizvodstve: monografiya. MScience (2018) Zuev, S.V.: Tsifrovaya sreda ugolovnogo sudoproizvodstva: problemy i perspektivy [Digital environment of criminal justice: problems and perspectives]. Sibirskiy yuridicheskiy vestnik (4), 118–123 (2018) Zuev, S.V., Nikitin, E.V.: Informatsionnye tekhnologii v reshenii ugolovno-protsessual’nykh problem [Information technologies in solving criminally-remedial problems]. Vserossiyskiy kriminologicheskiy zhurnal 11(3), 587–595 (2017) Kalinovsky, K.B., Markelova, T.Y.: Dokazatel’stvennoe znachenie «elektronnoy» informatsii v ugolovnom protsesse [The evidentiary value of “electronic” information in criminal justice]. Yuridicheskaya mysl’. Nauchno-prakticheskiy zhurnal (6(6)), 86–88 (2001) Kachalova, O.V., Tsvetkov, Y.A.: Elektronnoe ugolovnoe delo – instrument modernizatsii ugolovnogo sudoproizvodstva [Electronic criminal case – a tool of criminal justice modernization]. Rossiyskoe pravosudie (2(106)), 95–101 (2015) Kononova, O.V., Lyapin, S.Kh., Prokudin, D.E.: Studying the interdisciplinary terminological landscape of digital economy with the use of contextual analysis tools. Int. J. Open Inf. Technol. 6(12), 57–64 (2018) Krasnova, L.B.: Elektronnye nositeli informatsii kak veshchestvennye dokazatel’stva [Electronic carriers of information as physical evidence]. Izvestiya TulGU. Ekonomicheskie i yuridicheskie nauki (4–2), 254–260 (2013) Kuvychkov, S.I.: Ispol’zovanie v dokazyvanii po ugolovnym delam informatsii, predstavlennoy v elektronnom vide [Using electronic information in evidence in criminal cases]. Ph.D. thesis, Science, Nizhniy Novgorod, Russia (2016)

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Miller, V.Y.: Optimizatsiya pravovoy organizatsii stadii vozbuzhdeniya ugolovnogo dela: doktrina, praktika, tekhnika [Optimization of the legal organization of the state of initiation of criminal case: doctrine, practice, and technique]. Ph.D. thesis, Science, Nizhniy Novgorod, Russia (2020) Pastukhov, P.S.: Doktrinal’naya model’ sovershenstvovaniya ugolovno-protsessual’nogo dokazyvaniya v usloviyakh informatsionnogo obshchestva [The Doctrinal Model of Improving Criminally-Remedial Evidence in the Conditions of Information Society]. Yurlitinform, Moscow (2015) Polyansky, N.N.: Ocherki obshchey teorii ugolovnogo protsessa [A study of the general theory of criminal justice], pp. 54–58. Science, Moscow (1927) Selina, O.A., Semiokhina, E.A.: «Umnye tekhnologii» v sotsial’noy sfere [“Smart technologies” in the social sphere]. Molodoy uchenyy (1), 260–262 (2017) Sheyfer, S.A.: Dosudebnoe proizvodstvo v Rossii: etapy razvitiya sledstvennoy, sudebnoy i prokurorskoy vlasti [Pre-trial Procedure in Russia: Stages of Development of the Investigatory, Judicial, and Prosecutor Jurisdictions]. Norma, Moscow (2013) Tsvetkov, Y.A.: Rossiyskiy sledovatel’: ot inkvizitora k sverkhcheloveku. Etyudy po filosofii ugolovnogo protsessa [Russian investigator: from inquisitor to superhuman. Essays on Philosophy of criminal justice]. Ugolovnoe sudoproizvodstvo (1), 16–23 (2019) Yanushko, A.V., Babanin, A.V., Kuznetsova, O.A., Petrushenko, S.V., Chekmarev, M.Y.: Zashchishchennyy apparatno-programmnyy kompleks tsentra khraneniya elektronnykh kopiy materialov ugolovnogo dela [Protected hardware and software complex of the center of storing of electronic copies of criminal case materials]. Bezopasnost’ informatsionnykh tekhnologiy (1), 21–29 (2011)

“Smart Contracts” vs Legal Technology in Contract Practice Marina Yu. Kozlova1(&)

and Maria Aleksandrina2

1

2

Volgograd State University, Volgograd, Russia [email protected] Astrakhan Branch of the Saratov State Academy of Law, Astrakhan, Russia [email protected]

Abstract. Purpose: The purpose of the article is determining the advantages and disadvantages of using both «smart contracts» and «classic» contracts in contractual practice, with the possibility of agreeing on the conditions and applying the full range of available legal technology tools. Design/Methodology/Approach: We use dialectic and comparative legal research methods. Findings: The article identifies the concept of smart contracts, their scope, advantages and disadvantages of use. We study the means of legal technology, which are used in the text of a traditional contract. The question of the basis for comparing smart contracts and contracts that exist in the form of text is investigated. The prospects for the using of smart contracts and traditional contracts are determined. Originality/Value: It has been established that the process of negotiating the terms of a traditional contract is carried out through negotiations and the search for the most appropriate formulations. The parties may agree on conditions that most closely reflect their interests and at the same time comply with applicable law. There are also used terms that serve to ensure a uniform understanding of the text of the contract. Such an approach, however, may lead to errors and the need for interpretation of the contract. Smart contracts aren’t based on text, but on computer code, through which the terms of the contract are recorded. This deprives such an agreement of the shortcomings that are usually inherent in the text - errors in the formulation of certain conditions, different understanding of the terms used by the parties. However, smart contracts have a limited scope, and shouldn’t be used in cases of regulation of atypical relations of parties requiring an individual approach. Smart contracts can successfully replace mass accession agreements existing in the form of typing and concluded via the Internet (for example, contracts for the sale of goods in online stores), due to their unconditional advantages - selffulfillment, the inability to make changes to an already concluded contract, the fundamental lack of interpretation of the treaty. Keywords: Smart contract Contract terms


Blockchain
Legal technology
Contract


JEL Code: K12 © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1204–1212, 2021. https://doi.org/10.1007/978-3-030-59126-7_131

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1 Introduction Digitalization in many areas of public relations has led to the fact that processes that previously took a lot of time and effort are algorithmized, take a new form and become much less costly. This process also affects contractual practice - more and more contracts are concluded through the Internet, applications on smartphones, and the using of smart contracts is expanding. In this regard, the question arises of what is the scope of the using of smart contracts, are there any risks of their use, can they completely replace traditional contracts with their legal equipment.

2 Materials and Methods The emergence of such a tool as a smart contract has caused considerable interest in the scientific community. The legal nature of smart contracts is studied in Russian jurisprudence (Savelyev 2016; Grin et al. 2019) and in the works of foreign authors (Bodó et al. 2018; Christidis and Devetsikiotis 2016; Duke 2019; La Diega 2019). Smart contracts aren’t a new phenomenon, but also a challenge for legal science and practice, as they represent an alternative to traditional approaches to concluding a contract and agreeing on its terms. There are questions about the advantages and disadvantages of using «smart» contracts compared to traditional ones, the scope of their application, the possibilities to supplant «ordinary» contracts, which allow the parties to agree on conditions based on legal technology. The authors use methods of comparative law, methods of description and interpretation; theoretical methods of formal and dialectical logic.

3 Results A smart contract can be defined as a set of computer code that automatically executes all parts of a transaction and is stored on a platform with a blockchain (Duke 2019). Researchers note that Nick Szabo introduced this idea in 1994 and defined the smart contract as «a computerized transaction protocol that fulfills the terms of the contract». He proposed translating contractual clauses into code, and transforming them into tools (software or software) that they can implement to minimize the need for trusted intermediaries between participants in the transaction, and the possible occurrence of malicious or accidental exceptions (Christidis and Devetsikiotis 2016). It’s necessary to take into account the differences between the «classic» smart contracts and those executed on the blockchain platform (Gryleva 2019). Smart contracts reduce the costs of concluding and executing a contract, thereby increasing the efficiency of trade. A smart contract is difficult to break, it’s executed automatically. With the help of the security and decentralized system provided by the blockchain, smart contracts can stimulate trust in a transaction among its parties without the need for third parties, as is used in ordinary contracts (Zaheer 2018).

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Smart contracts are unambiguous and do not require interpretation due to the absence of any text in their content. All conditions of smart contracts are formalized in advance and can’t be changed both sides are in an equal position relative to each other in terms of information available (Savelyev 2016). However, there are significant unresolved issues that limit the applicability of smart contracts. So, the legal nature of such contracts isn’t quite clear, and there is still no understanding how the code as a contract fits into the traditional concepts of contract law. At the same time, the current legal regulation isn’t able to solve all emerging legal problems; therefore, a significant change in the legislation will be required (Ivashchenko et al. 2019). The question remains of identifying parties with pseudo-snaps that are typical for smart blockchain contracts. The consequences of violating smart contracts and also resolving conflicts of jurisdiction are critical issues for extraterritorial law (Bodó et al. 2018). In addition, the legal status of cryptocurrencies, which are used to calculate smart contracts, remains uncertain and illegal in many countries. There are risks of errors in the development of smart contracts, risks of unauthorized influence on oracle programs, which can then produce false data, risks of loss of access to the blockchain system (Kardonov 2018). Smart contracts are accession contracts, the terms of which are publicly available in the blockchain system, respectively, the predominant scope of distribution are standard mass contracts. At the same time, it’s couldn’t taking into account that almost any contract involving an equivalent exchange can be algorithmized. However, the costs of using smart contract technology should also take into account. Obviously, it’s economically feasible to create smart contracts just in case of the conclusion of mass model contracts - for example, this is the sphere of Internet commerce, insurance, financial relations. If the contract requires an individual agreement of the conditions, or doesn’t involve the transfer of values that can be expressed in bitcoins, then the use of a smart contract wouldn’t be justified. Unlike a smart contract, in which a mathematical code is used to enter all the terms of the contract into the blockchain, the content of the classic contract is built from the conditions that formulated in accordance with the requirements for a particular type of contract, and through the using of terms and expressions in the framework of legal technology. Terms are usually grouped together - sections of the contract, within which terminology is used and it’s appropriate for specific circumstances and designed to exclude different options for its understanding. In a smart contract, the conditions are in the form of a mathematical algorithm for a clear sequence of actions of signatories to fulfill the contract. In a traditional agreement, the conditions as a general rule are formed as a result of the negotiation process, in which the parties to the agreement reach a compromise regarding the differences. In fairness, it should be noted that a large volume of contracts is concluded in a different order - by attaching one side to the form drawn up by the other side. These agreements mediate typical, massive relations in the area of trade, work, and services. So, the passenger doesn’t have the opportunity to agree on the conditions of the flight, he can only choose a carrier offering acceptable options. But even in such agreements it’s possible to identify the text that forms of its conditions.

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Any legal phenomenon exists in the form of a text (Davydova 2009), and the language of the contract provides the required communication between the parties and leads to the achievement of the goal for which the subjects reckoned upon concluding the contract. Smart contracts are a different reality that doesn’t imply any text. Nevertheless, the text of the smart contract exists from the very beginning, until it’s converted into computer code. Traditional contracts are characterized by an official business style, the using of template phrases and expressions that are traditional for a particular terminology. For contracts subject to Russian law, it’s typical to include in the text provisions that reproduce the content of a particular rule of law. Agreements have a certain structure, which facilitates the understanding of the meaning of the agreement, streamlines the relations of the parties. The section «Subject of the contract» is typical for any type of contract, as it’s always an essential condition. By the way, the term «subject of the contract», as it applied to a smart contract, is understood completely differently: here it’s the content of a smart contract, to which the program has free automatic access. The subject matter of each contractual obligation reflects its specificity. In the absence of a condition on the subject matter, the contract doesn’t make sense and is considered non-concluded (Egorov and Harm 2015). Attention should be paid to the definition of the subject of the contract. Traditionally, two concepts have emerged regarding the definition of the subject of a civil law contract: firstly, the subject is identified with the objects of civil law; secondly, the subject refers to the actions that the parties to the contract must perform in relation to the object. In fact, these are the basic rights and obligations of the parties, fixed in the concept of the corresponding agreement. The wording of the terms of the contract on the subject usually consists of the following characteristics: name of the object (in an international contract - preferably in accordance with the customs classification of goods, works and services of the country of destination), date of production, name of the country of origin, quantity, volume, weight (with packaging and without), assortment, models, labeling and other additional characteristics depending on the type of product and the nature of the transaction and also the basic rights and obligations of the parties. The condition of the contract on the subject in general should be formulated in accordance with the requirements of the Civil Code of the Russian Federation to the corresponding type of contract. The term condition isn’t always allocated in a separate section. It may also be indicated in the section «Subject of the contract». Depending on the type of contract, the terms are determined either as a specific date, or as the period of time, the moment of the occurrence of an event, the dates of the beginning and end of the fulfillment of obligations by the parties. For example, a sales contract usually refers to a specific time period for the transfer of a thing. If this is a contract of delivery or work, which is carried out in stages, then interim periods may be indicated (terms of delivery of individual consignments, dates of completion of individual stages of work). In such cases, a schedule of supplies or work is drawn up, which is also signed by the parties and is an integral part of the contract. As a rule, the contract price and the settlement procedure are determined in the next section. The price may be indicated as a solid cash amount or approximately.

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The parties agree on the conditions under which the price may change in the latter case. Various protective clauses may be included in order to reduce the risks of financial losses on both sides, for example: «the price of the goods increases (decreases) in case of increase (decrease) in production costs that were justified and inevitable» or «the price of goods (work, services) increases in accordance with rising prices in the market for similar goods (works, services)». The price may be indicated in the estimate, which is part of the contract. The price of the contract can be determined on the basis of the price that is charged under comparable circumstances for similar goods, works or services. In addition to the price, the payment currency is also determined in an international contract. This condition is called the «currency statute of the transaction». At the same time, the currency of the contract price may not coincide with the payment currency. In this case, it’s necessary either to independently determine the ratio of the exchange rate in which the price of the contract is expressed to the rate of payment, or provide for the procedure for determining the exchange rate with respect to each other. There are usually formulations of the following type: «…at the rate of the Central Bank of the Russian Federation on the day of payment». The condition on the place and time of payment for the goods (work, service) is usually included in the contract. But the absence of such a condition in accordance with the rules of the Vienna Convention and the civil legislation of the Russian Federation (depending on the applicable law) suggest that the seller must pay the price of the goods at the place where the seller’s commercial enterprise is located or where the goods are transferred. Moreover, the term «transfer of goods» means the transfer at the disposal of the buyer of either the product or the documents of title. Regarding the method of payment, the agreement provides for its possible options: «payment is made by transferring cash to the seller (performer, etc.)», «depositing funds to a notary’s deposit», «by bank transfer (by payment order, by letter of credit, by collection, checks, etc.)». In addition, the contract may determine the moment the payer fulfills the obligation to pay for goods (work, services): the moment the funds are credited to the correspondent account of the beneficiary’s bank, the moment the funds are debited from the payer’s current account, and the moment the funds are credited to the recipient’s bank account. This is one of the differences from smart contracts, which can only work with assets located in the digital ecosystem. And the lack of legal regulation of the circulation of cryptocurrencies is the reason for restricting their circulation (Grin et al. 2019). The contract may include the section «Procedure for the delivery and acceptance of goods (result of work)». Its content is limited to indicating the possibility of accepting the goods (result of work), if the characteristics satisfy the terms of the contract and the need to draw up an acceptance certificate, which is based on its results. It’s important to establish in the contract the conditions on the moment of transfer of risks from the seller to the buyer. If the parties have agreed on the delivery of goods by the carrier, then it’s especially important to determine the moment of transfer of risks. The parties may include in the contract such a condition, for example, that is expressed by the following phrase: «risks pass when the goods are transferred to the carrier» or «…to the first carrier», or «…when the buyer receives the goods from the carrier».

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But, if the parties have determined the procedure for executing the contract in accordance with some INCOTERMS basis, then the conditions on the moment of transfer of risks and ownership of the goods are automatically considered agreed. The terms and conditions of the rights and obligations of the parties usually begin with the following phrases: «The seller (supplier, landlord and customer) undertakes (the right)…»; «The buyer, tenant, contractor, executor is obligated (entitled)…». First of all, this section should, reflect through clear expressions those rights and obligations that are provided for in the legislation, taking into account the specifics of a particular contract. In smart contracts, the obligations of the parties are entered in the form of a code on the blockchain containing a special algorithm that allows you to automatically track the performance by participants (signatories) of their obligations. The following section may list force majeure circumstances upon the occurrence of which the parties are exempted from liability for failure to fulfill the contract (force majeure). It’s enough to list the maximum of those force majeure circumstances here that may impede the execution of the contract, taking into account the climate, the possible actions of state bodies, military conflicts, etc. This list may be open. All of the above circumstances should be inevitable at the same time, that is, when any participant in a civil turnover in a comparable situation couldn’t have avoided the onset of this circumstance or its consequences. The section of the contract on liability of the parties provides for penalties for nonfulfillment by the parties of their obligations under the current legislation. Standard formulations are used here, such as: «In the event of delay in the delivery of goods (work, services), the supplier pays the buyer a fine of… (penalty for each day of delay or property as a penalty) and compensates for losses». As a general rule, the law allows recovery of losses only to the extent not covered by the penalty. The contract may include the section «Modification and termination of the contract», which usually includes such conditions: «Modification and termination of the contract is possible by agreement of the parties. At the request of each party, the contract may be amended or terminated in court in the following cases: … Each of the parties has the right to one way amendment of the contract in the following cases… Amendments and additions to the contract are made out by concluding additional agreements». It’s necessary to note that this opportunity is unrealizable for a smart contract - it exists unchanged until execution. The terms of the agreement on dispute resolution are traditionally formulated as follows: «All disputes arising between the parties are resolved through negotiations. If it’s impossible to resolve the dispute through negotiations, the dispute is resolved in court (options: in the arbitral tribunal; in accordance with applicable law)». A smart contract doesn’t involve disputes, unless an error has crept into its code, and a condition on actions in case of a conflict of parties cannot be laid in its algorithm. At the same time, a compromise option is possible - the contract exists in the form of a text with the definition of the most important conditions, including the conditions on the procedure for resolving disputes, and execution actions are implemented by using software tools (Mitrofanova 2018). The final provisions of the contract are also mainly expressed in standard formulations: «In everything that isn’t provided for by this contract, the parties are guided by

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the current legislation of the Russian Federation. The contract comes into force from the day when it’s signed by the parties and is valid until the parties fully fulfill their obligations. The contract is made in duplicate and they have the same legal force». However, such formulations are unnecessary clericalism, without adding anything new to the content of the contract. If this is an international contract, then a characteristic condition for it is a condition on the choice of applicable law, although it’s worth noting that the parties rarely determine the applicable law. In addition, participants in an international commercial transaction have quite wide possibilities in formulating the terms of the contract regarding the method and conditions for the delivery, use of forms and methods of settlements, inclusion of protective clauses, forms of insurance of currency risks, liability for non-performance or improper performance of the contract, arbitration agreement and force major. Thus, traditional approaches to the formation of the text of the agreements imply a very wide variability of the set of conditions, as well as their content. A smart contract implies a limited number of conditions regarding the obligations of the parties. Incompleteness or lack of clarity of certain conditions of the contract, challenging the fact of its conclusion may lead to the need for interpretation of certain terms and expressions from which the content of the contract is built. The court has a need for interpretation in cases where is a dispute regarding the nature of the contract and its individual conditions. The term «interpretation» is used in relation to the vocabulary of normative legal acts and agreements to determine the order of interaction of parties to the legal relationship, the price of the agreement and other terms of the agreement, etc. (Saltykov 2016). The literal interpretation is primarily used while interpreting the terms of the agreement by the court. The literal meaning of the terms of the contract in case of its ambiguity is established by comparing with other conditions and the meaning of the contract as a whole. This value is determined taking into account their generally accepted use by any participant in civil turnover, acting reasonably and in good faith, unless another value follows from the business practice of the parties and other circumstances of the case. Grammar, logical, and systematic analysis of the contractual text can be performed. The simplification of the language of civil law contracts is characteristic of modern contractual practice and has some advantages over more complex language constructions (Davydova and Kozlova 2019). Simplified contract designs, which are typically model contracts, are more likely to be algorithmized and converted into smart contracts. At the same time, classical legal contracts are characterized by detailed regulation of the relations of the parties through the using of special terms and expressions. The quality of the contract is determined, first of all, by the using of clear and unambiguous terms, phraseological constructions that exclude the possibility of ambiguous interpretation. The possibility of arbitrary interpretation of some regulatory requirements, on the basis of which the content of the contract is based, and its terms become impossible in the case of using smart contracts.

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4 Conclusion In a traditional contract, the parties independently determine its content, forming conditions taking into account their own interests in the negotiation process and considering protocols of disagreements. The agreement of the parties is wrapped in the text of a single document, or several documents, which are exchanged by counterparties. The contract uses legal terminology to ensure a common understanding of the text. However, in modern conditions, more and more contracts are standardized, concluded in droves, including via the Internet. In such agreements, one party offers its terms to the other, and the counterparty only has the choice to conclude or not to conclude an agreement. Contracts of this kind can be completely replaced by smart contracts, which have a number of unconditional advantages over traditional contracts (self-fulfillment, the inability to make changes to an already concluded contract, the fundamental lack of interpretation of the contract). Contracts of an individual nature are preferably concluded in the form of a traditional text document, or several documents. The language means of the contract allow you to coordinate the volition of the counterparties in such a way as to ensure the interests of the parties and to ensure compliance with the law. Acknowledgments. The reported study was funded by RFBR according to the research project № 19-011-00251 «The tendencies of juridical technique’s language means development in civil contract».

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Davydova, M.: Legal technology: problems of theory and methodology. GOU VPO “VolSU”, Volgograd. Publishing House of VolSU, Volgograd (2009) Davydova, M., Kozlova, M.: Some trends in the development of the legal language of the modern civil law contract. Legal Sci. Pract. Bull. Nizhny Novgorod Acad. Ministry Intern. Aff. Russia 3(47), 113–118 (2019). https://doi.org/10.36511/2078-5356-2019-3-113-118 Egorov, V.E., Harm, I.V.: Some judgments on the definition of the subject and object of a civil law contract. Bull. Pskov State Univ. Ser. Econ. Law Manag. (1), 121–126 (2015). http://eng. pskgu.ru/nekotor-e-sujdeniya-po-opredeleniyu-predmeta-i-obekta-grajdansko-pravovogodogovora Kardonov, A.: Areas of application of smart contracts and risks when working with them. Bus. Educ. Knowl. Econ. 1, 44–47 (2018). https://cyberleninka.ru/article/n/sfery-primeneniyasmart-kontraktov-i-riski-pri-rabote-s-nimi Savelyev, A.I.: Contract law 2.0: “smart” contracts as the beginning of the end of classic contract law. Bull. Civil Law 3, 32–60 (2016) Saltykov, K.G.: Features of the interpretation of legal terminology. Bull. Krasnodar Univ. Ministry Intern. Aff. Russia 2(32), 93–98 (2016)

“Smart Decisions” in Development of a Model for Protecting Information of a Subject of Critical Information Infrastructure Elena A. Maksimova(&) Volgograd State University, Volgograd, Russia [email protected]

Abstract. Purpose: The purpose of the work is the use of “smart” solutions when developing a model for protecting the information of a subject of CII taking into account the destructive impact on the subject. Methodology: Smart solutions are determined based on the tasks that the model solves at the model design stage. The following methods and approaches are used to analyze and evaluate the destructive impact on the subject of CII: Petri nets (modeling system CPN Tools); simulation modeling; system modeling using Markov random processes; functional modeling; conceptual cards. As a result of the analysis of these methods, Petri nets are identified as the most rational. Results: The use of “smart” solutions when designing a model of information security for a subject of CII allows minimizing information security risks, increasing the level of security of a subject of CII, reducing transaction costs, reducing the cost of information security, increasing model flexibility. Originality: With this formulation of the research objective, a dynamic threat model will allow to assess the state of information security depending on changes in the influencing factors: sources of threats, vulnerabilities of CII objects, methods for implementing threats, as well as the state of the information security system SCII. The introduction of an additional parameter is necessary to take into account the degree of impact of the threat on the subject or object of CII, depending on the stage of its life cycle. Keywords: “Smart” decisions
Critical information infrastructure
Subject Life cycle
Destructive impact
Petri nets
Criticality level
Model JEL Code: H56





C18
C39
C41
C53
C51
C61
D81

1 Introduction The presence of a mature market, the constant increase in production costs, the desire of enterprises to increase the marginality of their businesses, and maintaining competitive positions in the long term are, according to Moseev (2019), the main reasons why enterprises today introduce “smart” technologies. But in the absence of an effective information security system at an enterprise, smart manufacturing can become vulnerable and non-viable. © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1213–1221, 2021. https://doi.org/10.1007/978-3-030-59126-7_132

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At the same time, after the approval of Federal Law (2017), all enterprises and organizations, including those operating in the field of healthcare, science, transport, communications, energy, banking and other areas of the financial market, fuel and energy complex, in the field of nuclear energy, defense, rocket, space, mining, metallurgical and chemical industries are subjects of critical information infrastructure (CII). Consequently, the requirements specified by regulators are imposed on the information protection system (IPS) on the subjects of CII. It should be noted that currently there is accumulated worldwide practical experience in protecting information in the CII, which is confirmed, for example, in the works of Rosslin et al. (2019), Kundert (1999), Council Directive (2008). Thus, on the one hand, we can talk about “smart” technologies and solutions at enterprises in the context of production solutions. On the other hand, the information protection system of CII subjects can itself be considered as an object, in the design of which smart solutions can be used. Enterprises that introduce digital technology into production primarily pay attention to the following types of solutions: analytics and BigData; accurate digital modeling of all elements of the production process; orchestration of all production systems (production, non-production); solutions that allow the collection of reliable data from all elements of the production process, etc. These types of solutions are either implemented at CII facilities, or are themselves CII facilities. Consequently, the well-being and viability of the subject himself depends on their security. This study proposes to consider “smart” solutions at the design level of the IPS of the subject of CII - one of the stages of the IPS life cycle. As the main control element, it is necessary to consider the destructive impact on the object of CII.

2 Methodology Under the destructive impact, based on the etymology and meaning of the terms “destruction”, “destructive”, we mean the result of the threat, which leads to adverse and destructive consequences for the subject of CII. The destructive impact on SCII can be considered at the global and local levels. The global level implies an indirect destructive effect on SCII. The implementation of a successful attack on SCII entails an indirect effect on other SCII, which may be not only from the sphere of the attacked subject. The interconnection and mutual influence of SCII is explained by the interconnection of the areas of activity in which they operate. In turn, as shown by Lukacky (2019), Positive Technologies (2019), Baranov et al. (2019), Klenin and Maksimova (2018a, b), Maksimova et al. (2015a, b), the latter leads to an increase in information security incidents. Destructive impact at the local level considers the impact directly on the SCII itself and its critical objects. The main problem of the analysis of the destructive impact on SCII is the variety of areas of their activity. Defining a set of results of the destructive impact for each object of CII is not a difficult task, in contrast to the task associated with conducting a comprehensive analysis of the destructive impact on the SCII.

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The prerequisites for the transition of enterprises to smart technologies are a mature market and a constant increase in the cost of production. In general, the introduction of smart solutions into production primarily refers to the marketing concept. At the same time, when designing ISS on the subjects of CII, there is a need to optimize the costs of IS, maintain the required level of information security, support production processes associated with increasing the margin of the business, maintain the competitive position of the enterprise in the long term, and prevent the emergence of “digital counterparts”. Thus, “smart” decisions on the subject of CII can be considered from the moment the process of its authentication begins in response to changes in legislation. When choosing “smart” solutions for the analysis and evaluation of the destructive impact on SCII, the following methods and approaches are used: Petri nets (CPN Tools modeling system); simulation modeling; system modeling using Markov random processes; functional modeling; conceptual cards. As a result of an analysis of the work of Egorov and Zinoviev (1997); Auad et al. (2014); Tsvetkov (2009); Gromov and Osin (2013); Kinzabulatov (2020), as the most rational identified: Petri nets - for assessing the destructive impact and modeling of the system under the action of the results, as well as functional modeling for analysis of the obtained simulation results. In order to analyze the destructive impact on the subjects of CII in general form at the local level, an approach based on the study of the life cycle of the subject of CII is proposed. The main stages of the life cycle of the subject of CII: Stage 1 - analysis of requirements for the subject of CII; Stage 2 - design of the protection system of the subject of CII; Stage 3 - the implementation of the system of protection of the subject of CII, including the development of ISS SCII and conducting bench or prototype tests. Stage 4 - the introduction of a protection system on the subject of CII; Stage 5 - operation and technical support of the subject of CII; Stage 6 - reorganization and liquidation of the subject of CII. Based on the stages of the life cycle of SCII and their features, we distinguish the following types of factors leading to destructive effects: Destr 1 - errors in the analysis of requirements for the SCII. Based on the sub-steps of the first stage of the SCII life cycle, the following errors are possible: errors in determining critical processes and their parameters, errors in the list of CII objects to be categorized, errors in checking and agreeing on a list of objects to be categorized. However, in the case of a correct check of the list of CII objects to be categorized, and correction of the list of objects, this result will become irrelevant for the SCII and its effect is leveled. Destr 2 - infrastructural analysis errors. This result is highlighted separately from the main stages of the SCII life cycle. Infrastructure analysis errors can occur at the stages of designing the system of protection of the subject of CII and its support. Infrastructure analysis determines the interconnection and mutual influence of CII objects. This result characterizes the effect of an attack on objects of CII that are interconnected with the attacked object. Incorrect infrastructure analysis affects the assessment of the risks of an attack. At the stage of maintenance, the infrastructural analysis takes into account the

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change in the number of objects, which leads to the need for repeated passage of the stages of the life cycle of the SCII, starting from the first stage. Destr 3 - errors in the design of a security system. Based on the sub-steps of the design phase of the SCII protection system, the following possible errors should be highlighted: errors in categorizing CII objects, where Destr 2 is possible, based on categorization errors, errors in forming a list of safety requirements for significant CII objects, as well as errors in forming measures for overlapping requirements for ensuring the safety of significant CII objects. If errors in the categorization are detected and corrected correctly, this result may partially overlap, since correcting errors during the categorization does not guarantee that there are no errors in the formation of measures to overlap the requirements for ensuring the safety of significant CII objects. Destr 4 - errors when implementing the SCII protection system. At the stage of implementation of the SCII protection system, a partial overlap of Destr 3 is possible when checking requirements for ensuring the security of significant CII objects, as well as protection measures to overlap these requirements. At this stage of the life cycle of the subject of CII, measures are being taken to protect the SCII and testing the SCII protection system with its subsequent correction. In the case of incorrect verification of the requirements for ensuring the safety of significant CII objects and protection measures for overlapping these requirements, errors appear in the implementation of the SCII protection measures, that is, errors in the protection system. When implementing the CII protection system, errors are possible in fulfilling and implementing the requirements and protection measures of the CII subject, even if the SCII protection system was correctly designed. Errors when testing the SCII protection system entail errors in correcting the protection system of the subject of CII. As a result, the SCII protection system has a number of vulnerabilities that can be used to implement Destr 7 attacks. Destr 5 - errors when implementing the system of protection of the subject of CII. Destr 4 entails Destr 5, that is, the implementation of the protection system of the subject of CII, in which there are not overlapping vulnerabilities. In the case of a correct SCII security system, there is the possibility of errors when implementing a security system on the entire SCII. Also, this result of the destructive impact includes errors related to not notifying personnel about security changes and new rules for implementing the security system. Correction of implementation errors is possible when the life cycle is repeated in the event that infrastructure changes were detected at the maintenance stage, as a result of which there was a transition to stage 1. In this case, subsequent passage of the life cycle stages is possible without the results of destructive effects. Destr 6 is the errors when tracking the SCII. This result implies Destr 2, in case of infrastructural analysis errors when changing the number of significant objects to be categorized. The support phase of the SCII realizes the return to the first stage of the life history of the SCII, in the event of a change in the number of CII objects, since there is a list of CII objects to be categorized. There is a possibility of overlapping Destr 1 errors in the analysis of requirements. Destr 7 is the threat of an attack on the subject of CII. This result is implemented on the basis of the above, especially in the case of errors in the SCII protection system (Destr 4), which is implemented with non-blocked vulnerabilities that can be used to implement attacks on the SCII.

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It should be noted that not detecting (or not accounting) the result of the destructive impact at a certain stage of the SCII life cycle entails the emergence of new results in the future (at subsequent stages). At the same time, it is possible to determine the values of such indicators as “the level of criticality of the result of the destructive impact” and “the criticality level of the SCII. When performing these works use is possible. Based on the fact that the possibility of implementing each result of the destructive impact, with the exception of Destr 7, depends on the specific stage of the life cycle of the ICID that a single individual goes through, a mathematical model in discrete time is proposed to analyze the assessment of the destructive impact on the ICS. To assess the destructive impact, the following parameters are identified: Param 1 - stage of the life cycle of SCII, at which the result of the destructive effect appears; Param 2 - Destr lifetime, if the result of the destructive effect is not found in the life cycle of the subject of CII; Param 3 - conditions for eliminating the result of a destructive impact; Param 4 - Destr lifetime, if at any stage of the life cycle the result of the destructive effect is detected and eliminated; Param 5 - generating additional destructive effects. For each result of the destructive impact, a separate model is assembled using Petri nets, estimated by parameters. Figure 1 presents a model for assessing the destructive impact on the SCII for Destr 1 “errors in the analysis of requirements for the SCII”, compiled in the CPN Tools program.

Fig. 1. Modeling the action of Destr 1

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The model reproduces the scenario of the origin of Destr 1 at the first stage of the SCII life cycle with the subsequent passage of all other stages. The model takes into account the conditions of overlapping Destr 1 at the first stage of the life cycle of the subject of CII, in case of adjusting the list of objects of CII to be categorized, as well as at the fifth stage of the life cycle of the CII - tracking of the CII in case of infrastructural changes.

3 Results An analysis of the results of an experimental study showed that the most critical stage in the life cycle of a subject of CII is the analysis of requirements for a subject of CII. In case of errors at the first stage of the life cycle of the subject of CII, i.e. the appearance of Destr 1, the appearance of the remaining results of the destructive impact, as well as vulnerabilities that increase the likelihood of attacks on the subject of CII, are inevitable. The second result of the destructive impact on the level of influence on the SRS is Destr 2 - errors of infrastructure analysis. The analysis showed the relationship between the appearance of the results of the destructive impact from the implementation of other results (Fig. 2). The IDEF0 model clearly demonstrates the interconnection and mutual influence of the results of the destructive impact, as a result of which vulnerabilities appear in the system of the subject of CII that can be used by attackers to implement attacks - Destr 7.

Fig. 2. Model IDEF0, reflecting the mutual influence (aftereffect) of the results of the destructive impact at the stages of the life cycle of CII subject

In the process of conducting an experimental study, one of the significant parameters for assessing the destructive impact on SCII is the lifetime of the results of the destructive impact in the process of the SCII life cycle. This parameter represents the

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time in units of program time during which the result will go through all stages of the life cycle. The implementation of the results is also possible from two stages, which was also taken into account when evaluating this parameter. The most “tenacious” is Destr 1, and also, under certain conditions of occurrence, Destr 2, Destr 3, Destr 4. In the course of the experimental study, the conditions for eliminating the results of the destructive effect and the time required to detect and eliminate them were identified. As a result, it became possible to compare the life time of the result of the destructive impact in the life cycle of the SCII with the time necessary to eliminate it. In the case of Destr 1, Destr 3, and Destr 4, it is worth noting that the possible time to eliminate them is much shorter than the time of their exposure until the end of the life cycle of the SCII. However, one should pay attention to Destr 2, Destr 5, and Destr 6. The greatest danger of their impact is that the time required to correct them is much longer than the life time until the end of the SCII life cycle. Those. The ability to detect and neutralize the impact of these results exists only when the SCII life cycle is repeated. The large value of the detection and elimination time increases the likelihood of successful implementation of attacks by attackers who can exploit the SCII vulnerabilities. As a result of the analysis of the IDEF0 functional model (Fig. 2), the following function of the interdependence of the results of the destructive effect is derived: Destr6 ¼ F ðDestr5 ðDestr4 ðDestr3 ðDestr2 ðDestr1ÞÞÞÞÞ: The study of the obtained functional model (Fig. 2) and the function of the interdependence of the results of the destructive impact allowed us to determine the scale for assessing the level of criticality of the destructive impact on the subjects of CII. In this case, by the criticality level we mean the level of negative impact that characterizes the appearance of vulnerabilities in the SCII. Scale for assessing the criticality level of destructive impact on SCII: Level 1 criticality - the highest level of negative impact that occurs as a result of the impact of Destr 1, since according to the function of dependence on Destr 1, the rest of the results of the destructive effect depend; Criticality level 2 - a level characterized by the impact of Destr2; Level 3 criticality - characterized by the impact of Destr 3; Level 4 Critical - Impact Destr 4; Level 5 Criticality - Impact Destr 5; Severity 6 - Destr 6 exposure. The introduction of this scale will allow a comprehensive assessment of the destructive impact on SCII without reference to a specific area of functioning of the subject, to solve the problem of assessing the destructive impact on SCII at a local level. In the event of an information security incident, after identifying the vulnerability that contributed to the attack, the scale will help determine the criticality level of the destructive impact on the SCII. It should be noted that in the documents currently used when working with the SCII, there is no system for recording and scaling destructive effects on the subject of CII.

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4 Conclusion The study of the life cycle of SCII allowed us to identify 6 types of results of the destructive impact of an infrastructural nature. When using “smart” solutions during the experiment, the parameters for assessing the destructive impact on SCII are highlighted. Based on the selected parameters, the action models of the results of the destructive effects on Petri nets are evaluated and compared. An experimental study showed that there is a dependence of the activation of the implementation of some results on others. The most dangerous is Destr 1, since it activates the appearance of all the other results of the destructive impact and has the longest life time in the life cycle of the SCII. Therefore, the stage “Requirements Analysis for SCII” of the SCII life cycle is the most responsible and important for the subsequent functioning of the SCII. The “smart” solution made it possible to determine the conditions for eliminating the results of the destructive impact and the time required to detect and eliminate this result. As an analysis of the results of an experimental study showed, Destr 2, Destr 5 and Destr 6 have the longest detection and elimination time, which emphasizes the need for the most frequent and careful checks of the SCII security system. Destr 2 errors of infrastructural analysis, the second result on the degree of criticality of the destructive impact on the subjects of CII, which can occur at two stages of the life cycle of CII: “Designing a system for the protection of SCII” and “Maintenance of SCII”, which emphasizes the need for a more thorough and careful infrastructure analysis of SCII.

References Moseev, V.: Why Businesses Switch to Smart Technologies (2019). https://iot.ru/promysh lennost/po-kakim-prichinam-predpriyatiya-perekhodyat-na-umnye-tekhnologii. Accessed 20 Feb 2019 Federal Law: On the Security of Critical Information Infrastructure of the Russian Federation. Dated July 26, 2017 N 187-FZ (latest revision) (2017). http://www.consultant.ru/document/ cons_doc_LAW_220885/. Accessed 06 Aug 2019 Rosslin, J., Min-kyu, C., Eun-suk, C., Seok-soo, K., Gil-cheol, P., Jang-Hee, L.: Common Threats and Vulnerabilities of Critical Infrastructures (2019). http://article.nadiapub.com/ IJCA/vol1_no1/3.pdf. Accessed 13 Dec 2019 Kundert, K.: Introduction to RF simulation and its application. IEEE J. Solid-State Circuits 34(9), 1298–1319 (1999) Council Directive 2008/114/EC of 8 December 2008: On European critical infrastructures and measures for their protection (2008). http://base.garant.ru/70333008/. Accessed 06 Aug 2019 Lukacky, A.: Securitylab. Statistics of real information security incidents in industrial systems (2019). https://www.securitylab.ru/blog/personal/Business_without_danger/38672.php. Accessed 10 Dec 2019 Positive Technologies: Current cyber threats of 2019 (2019). https://www.ptsecurity.com/ru-ru/ research/analytics/cybersecurity-threatscape-q1-2019/#id3. Accessed 11 Dec 2019

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Baranov, V.V., Maksimova, E.A., Lauta, O.S.: Analysis of the model of information support for processes and systems in the implementation of multi-agent intellectual interaction. J. Dev. Syst. Manag. Control Diagn. (4), 32–41 (2019) Klenin, D.V., Maksimova, E.A.: Analysis of types of intrusions into the information system. In: Actual Issues of Regional Information Security in the Context of Russia’s Transition to a Digital Economy Proceedings of the VII All-Russian Scientific and Practical Conference, Volgograd, Russia, pp. 17–22 (2018a) Klenin, D.V., Maksimova, E.A.: Model of intrusions into the information system. J. NBI Technol. 12(3), 19–23 (2018b) Maksimova, E.A., Korneva, V.A., Wittenburg, E.A.: Markov chains as a means of forecasting insider intrusions. J. Probl. Inf. Secur. Comput. Syst. (4), 9–12 (2015a) Maksimova, E.A., Wittenburg, E.A., Bogdanov, V.V.: Numerical forecasting of insider attacks. J. Inf. Counteraction Threats Terror. 3(25), 229–234 (2015b) Maksimova, E.A., Wittenburg, E.A.: Formalization of the process of ensuring information security in the implementation of insider attacks. J. Bull. Tula State Univ. Techn. Sci. (8–2), 231–238 (2015) Egorov, Yu.B., Zinoviev, A.V.: Key temporal modeling algorithm with power estimation. J. Inf. Technol. (9), 7–11 (1997) Auad, M., Gromov, Yu.Yu., Minin, Yu.V., Prikhodko, M.V.: The procedure for the selection and distribution of resources in information systems. J. Dev. Syst. Manag. Control Diagn. (1), 18– 26 (2014) Tsvetkov, V.Ya.: Logic units of information systems. Eur. J. Nat. Hist. (2), 99–100 (2009) Gromov, Yu.Yu., Osin, V.N.: Implementation of analytical and procedural models for analyzing the functioning of network information systems. J. Inf. Secur. 16(4), 526–529 (2013) Kinzabulatov, R.: Introducing IDEF0 Notation and Usage Example (2020). https://habr.com/ru/ company/trinion/blog/322832/. Accessed 14 Dec 2019

“Smart” Innovations in the Public Sector Kirill A. Belokrylov(&) , Elena F. Gutzluk and Evgeniy I. Firsov

,

Southern Federal University, Rostov-on-Don, Russia [email protected], [email protected], [email protected]

Abstract. Purpose: The goal of the chapter is to assess, based on an economic and theoretical analysis of institutional innovations in the public sector, their effectiveness in restricting the national public procurement regime and to develop proposals for improving public procurement policies to meet the production needs of public sector institutions and organizations in the context of expanding digitalization. Design/Methodology/Approach: An institutional approach was chosen as the research methodology, which provides an analysis of the rules and norms of improving the quality of procurement to meet the needs of the state and an assessment of the effectiveness of a number of institutional innovations in this area of ensuring the continuity of production of public goods. In the process of empirical assessment of the effects of restrictions on the national regime, the next specific methods of economic analysis were used: taxonomy, sampling, grouping and comparative analysis. Findings: Based on the taxonomy of «smart» technologies, types and specific IT solutions in the area of public procurement are identified; the inefficiency of institutionalization of the full digitalization of all trading methods in 2018 was substantiated, since the share of contracts concluded at the initial maximum price has almost doubled compared to 2017; revealed the inefficiency of a number of institutional innovations in introducing a national regime in the public procurement process. Originality/Value: The following are proposed as promising directions for solving the posed problem: the formation of an algorithm for the specification of imported products with a limited national regime; creating a closed list of documents provided by the supplier in confirmation of the exclusion of purchased products from the established prohibitions; amendments to regulatory legal acts restricting the purchase of imported products for the needs of public sector entities. Keywords: Public sector
Innovation
Public procurement
Digitalization Smart technologies
Institutional innovation
Contract price JEL Code: H420

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1222–1231, 2021. https://doi.org/10.1007/978-3-030-59126-7_133




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1 Introduction The object of this article is the systematically expanding public sector worldwide with the most developed platform organization in Russia, based on the use of «smart» information and communication technologies, due to the growing interest in research in the public sector in modern domestic and foreign scientific literature state digital innovations, primarily in the area of public services for the population and the public procurement system. However, there is still no comprehensive analysis of innovations in the system of meeting the needs of the public sector - institutional and technological. Although it’s well known that innovation is the key to success, first of all, for private business, in the context of digitalization, as the most important component of the 4th industrial revolution, innovations in various areas of the public sector have an even larger effect because they produce public goods. However, Downes A. - a representative of the theory of public choice - argued that with the growth of bureaucracy, most of the resources of the public sector are used to ensure internal coordination and struggle with other government officials (Downs 1967. P. 58). At the same time, in reality, the public sector turned out to be more dynamic and innovative than its bureaucratic assessment 20–30 years ago. Moreover, innovation in the public sector provides not only the growth of the national economy, but also an increase in the well-being of the population (Windrum and Koch 2008. P. 58). Among the most important innovations in the public sector of Russia and developed countries, first of all, there is a new active policy in the labor market, in the area of health care, the environment, and the provision of public services (multifunctional centers of public services in Russia). The new digitized public services are widespread, and organizational reforms have changed the working methods of many public institutions that have become sufficiently transparent for the state, business and civil society. Although, numerous obstacles to state innovation, primarily corruptions are still existing (Belokrylov 2017, pp. 127–139), there are innovator drivers in the public sector that provide an adequate response to the challenges of digitalization. However, the introduction of institutional innovations in the public sector through changes in formal laws or departmental acts, for example, in the area of public procurement in Russia, doesn’t always provide the expected effect, in particular, the implementation of the import substitution strategy in the context of expanding economic sanctions by the United States, the EU and several other countries. The introduction of smart digital procurement technologies for the public sector was also not so effective. This requires an analysis of the current situation and development of proposals to improve the digitalization of the public sector.

2 Materials and Methods Institutional methodology has a high resolution effect of the economic and theoretical study of the public sector, as evidenced by the separation of the theory of public choice into a special branch of economic science (Muller 2007). In the context of research issues, the application of the institutional approach is implemented through analysis of the effectiveness of a number of institutional innovations in such a large-scale public

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sector sphere as procurement of goods, works and services to meet the production needs of public sector entities. In the process of empirical analysis of the effects of restrictions on the national regime, specific economic analysis methods such as the taxonomy of smart technologies, the selection of procurements from the Unified Procurement Information System, their grouping and comparative analysis were used as a response to Western sanctions against Russia.

3 Results Implementation of an institutional approach to the study of innovative prospects, including smart technology in the public sector, in our opinion, is most effective, since the neoliberal economic theory of the 1980s negatively assessed its ability to innovate due to its negative institutional characteristics such as bureaucracy, inertia, lack of dynamism and adaptive changes (Sørensen and Torfing 2012. P. 1–14). Thus, the wellknown institutionalist M. Weber showed that stability is the main goal of a public bureaucracy, and formal innovations, a multi-level hierarchy, and the absence of economic incentives for representatives of the state bureaucracy stifle social innovation (Weber 1968. P. 139). Civil society as a public controller plays an increasingly active role in stimulating innovation in such a significant component of the activities of public sector entities as the public procurement system (Federal Law of 21.06.2014 No. 212FZ On the Basics of Public Control in the Russian Federation). Thus, the activity of the participants of the Public People’s Front project «For Fair Purchasing» (http:// zachestnyezakupki.onf.ru/) ensures the prevention of corrupt behavior of bidders and, thereby, reduces the loss of budget funds. As a constructive feedback on the effectiveness of the procurement policy of the state, this activity of civil society is optimal for improving the quality of results, as A.O. Hirschman points out (Hirshman 1970. P. 169). Finally, last but not least, many public sector entities are endowed with state financial resources for research and innovation, which, as a public good, are created through innovative digital platforms, for example, the innovative infrastructure of the Southern Federal University (Belokrylova and Pogosyan 2016. P. 84–92) are rapidly spreading in higher education. «Smart» information and communication innovations create new opportunities for improving state procurement policies, reducing costs and transaction costs (Volchik and Nechaev 2015), and increasing budget savings. Moreover, it isn’t the origin of new solutions at the present time, but the context in which they are implemented that determines whether they are new and innovative (Roberts and King 1996. P. 83). It should be noted that the neoliberalist attempts to modernize (in the Russian Federation - monetize) public welfare systems were largely unsuccessful (Page 2010. P. 246–3), but, at the same time, they demanded the transformation of the old state administration of the public sector into New public management mechanisms (NPM), the purpose of which is to implement more neoliberal, market mechanisms for the functioning of the public sector. In addition, innovative digital technologies in the public sector open up new possibilities for the reorganization of interaction between citizens and public authorities, changing the form and content of

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public services based on Big Data, combining information systems of all ministries and departments. «Smart» innovations, for example, stimulate the formation of networks and partnerships between interdependent entities from the public and private sectors in higher education institutions (Eggers and Singh 2009. P. 43), an example of which is the innovation infrastructure of the Southern Federal University, noted above (Belokrylova and Pogosyan 2016 S. 84–92). At its core, NPM is a link between management, which is based on the import of management methods from the private sector and the reduction (optimization in Russia) of the public sector through a combination of privatization, the conclusion of outsourcing contracts (government procurement of services in the private sector), and the commercialization of a number of public sector functions (Hood 1991, p. 14), for example, paid education, health care in order to increase its effectiveness and join ineffective subjects (universities, clinics) to larger or more effective ones. This emphasis on the proactive role of the new public administration is based on the position of the modern theory of public choice on the separation of politics and administration, according to which politicians formulate the goals of public sector development, and administrators ensure the efficient production of public goods through the flexible using of resources, personnel and organizational structures. Over the years, NPM has led to some transformations, such as a growing emphasis on strategic management, a wider using of goal management (result management), and more emphasis on performance measurement. But at the same time, a number of problems remain in the public sector, such as bureaucracy, limited autonomy of state institutions and employees and number of unforeseen negative consequences - the cost of auditing, the emergence of new forms of opportunistic behavior of public servants (kickbacks in public procurement) and the general tendency of politicians to define strategies for the development of the public sector, which is based on the import of institutions, for example, optimization of the Russian higher education system according to Bologna tracing paper. The most important component of NPM is the digitalization of the public and municipal procurement system, which has a double effect on accelerating the process of innovative modernization of the entire public sector: – They are a tool to stimulate innovation - on the one hand, through the systematic expansion of the using of digital technologies, and on the other hand, through the procurement of innovative products for the needs of the state (Belokrylov 2018); – They act as the most important component of the electronic state (national eProcurement platforms). Since 1997, electronic procurement in Russia has become a sphere in which permanent institutional, legal and technological innovations are implemented. They ensured the digitalization of all methods of determining a supplier in the process of competitive procurement procedures in 2019 (Table 1). Although all purchases were to be carried out in electronic form (instead of the allowed one recommended in 2018) in 2019, but the data in Table 1 show that the volume of purchases in the form of electronic competitions, requests for quotations and offers remains low, and their share in the overall trading structure is insignificant. In

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Table 1. Dynamics of volumes and shares of new electronic trading methods on the electronic trading platform of Sberbank-AST Type of purchase Electronic auction Electronic contest Request for quotes in electronic form Request for proposals in electronic form Amount

2019 NMCC, billion rubles 1 725,8 185,2 8, 84

Share, % 88 9 1,7

2018 NMCC, billion rubles 1 362,8 2,7 0,394

Share, % 99 0,02 0,03

32,86

2

14,7

1,1

1 952,65

1 380, 57

addition, even the mandatory use of electronic purchases rules didn’t allow the creation of an integrated digital procurement system, because, in our opinion, there are still some problem areas in which modern solutions in the area of smart information technologies can provide improvement in the context of system complexity and integrity electronic purchases. For example, the experience of Ukraine shows the effectiveness of embedding verification of compliance of purchases procedures with national legislation (Prozorro system) and the use of Big Data, which are automatically generated by the electronic procurement system and consolidated in the procurement registry to expand data analytics to support purchases decision-making, monitoring, audit eliminating conflicts of interest, evaluating competition and also identifying signs of collusion of bidders in Russia, using the automated program «Big Digital Cat» developed by the Federal Antimonopoly Service. The transition of national e-procurement systems to a higher level of functionality through the using of smart technologies (for example, on the electronic trading platform Sberbank-AST - Blockchain, Big Data, Machine learning, Smart contracts) is a progressive step forward, which is based on more advanced Big Data analytics. Structuring Big Data is one of the effects that the new institutional digitalization policies seek to increase the availability of (better) procurement data for transparency. In addition, further digitalization of purchases, which is based on smart technologies, is a strategic priority for all countries, not only for public procurement, but also in the context of a broader strategy to create a regulatory environment conducive to institutional innovation and to use public procurement as a catalyst for wider innovation - in the private sector. In our opinion, the improvement of digital budget purchases platforms has a high transformative potential: new «smart» technologies allow transforming the organization of public procurement and the corresponding parts of public administration. The taxonomy of innovative digital technologies regarding the effectiveness of their application in purchases management has allowed us to distinguish the following types of «smart» technologies with high potential for using in public procurement:

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– Virtual assistants - chat bots simulating a conversation for delivering voice or text information to a user via the web, kiosk or mobile interface; – Big Data structuring - to classify documents of bidders; – Machine learning - the development of algorithms that perform training automatically without human intervention or his help; – Deep learning - the using of computational models with several processing levels to study data representations with several levels of abstraction; – Robotics - the using of robots and computer systems to manage them (for example, at the logistic warehouses of large joint procurements); – Recommendation systems, which filter information that doesn’t meet the requirements of the law; – Expert systems that mimic the ability of an expert person to make decisions on determining the winner of tenders. Digitalization provides increased transparency of the public procurement market. In 2019, the Rostov Region was on the 40th place in the National Procurement Transparency Rating (Results of the «National Procurement Transparency Rating 2019»). However, with a radical increase in the digitalization of procurement in recent years, a significant part of the contracts are concluded at the initial maximum price (NMCC). Federal customers are the leaders in this indicator, who have signed 47.33% (in 2017 24.71%) of contracts for NMCC in 2018, regional and municipal customers - 36.30% and 30.64%, respectively (Fig. 1).

Fig. 1. The share of contracts concluded by NMCC by the levels of subjects of the public procurement market (2018) (National Procurement Transparency Rating 2018. P. 31)

In recent years, the object of innovative modernization in the public procurement system has become the institution of a national regime, according to which foreign legal entities and individuals and also foreign goods, works and services, have the same rights and advantages as domestic legal entities and individuals, as well as goods, works, services (Talantsev 2017. P. 372). The introduction of a national regime is aimed at protecting the domestic market, supporting domestic producers in the procurement process for the needs of the state.

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The most important institutional innovation in the procurement management mechanism since 2014 under the sanctions of the EU, the USA and a number of other countries against Russia was the introduction of restrictions on the access of foreign competitors to the public procurement market, which was significantly tightened with the introduction of Order of the Ministry of Finance of the Russian Federation dated 04.06.2018 No. 126n, which determined the conditions for the purchase of foreign goods for the needs of the state. This formally institutionalized innovation obliged customers to establish national treatment requirements in their procurement documentation and procurement plan. In relation to the purchase of medical products, the innovation to limit the market was introduced by Decree of the Government of the Russian Federation of November 30, 2015 No. 1289, which established restrictions on state and municipal purchases of essential medicines (Vital and Essential Drugs) from foreign suppliers. After in 2015 this market was influenced by a significant devaluation of the ruble, the list of these medicines, which are not subject to the national regime, was determined for the purpose of state regulation of medicine prices. As a result, pharmaceutical prices rose not only in the import, but also in the domestic segment. Taking into account these negative effects, a research problem arises of assessing the effectiveness of institutional innovation introduced. We sampled 45 Vital and Essential Medicines purchases presented in the Unified Information System to do this. At the first stage, the methods of purchasing Vital and Essential Medicines were analyzed - 35 purchases were conducted using an electronic auction, 10 - request for quotations. At the next stage, the analysis of notifications and documents about the selected procurement was carried out in the context of the restrictions established in the Decree of the Government of the Russian Federation of November 30, 2015 No. 1289. The results showed that the restriction on the admission of medicines produced abroad from the Vital and Essential Medicine List was established in all 45 selected procurements. Although customers complied with the law and established appropriate restrictions, they didn’t give an effect, since the national regime was not applied (Fig. 2). Thus, it’s obvious that the support system for the domestic producer doesn’t work in practice, i.e. she isn’t sensitive to institutional innovation. To eliminate the uncertainty of the result, we carried out an analysis on a second example - the implementation of institutional innovation to restrict access for foreign participants, which is established by Decree of the Government of the Russian Federation of September 5, 2017 No. 1072 «On the establishment of a ban on the admission of certain types of furniture and woodworking products originating from foreign states (with the exception of the member states of the EEC), for the purpose of procurement to meet state and municipal needs». It forbade state and municipal purchases of furniture from foreign suppliers. We formed a new sample of 30 purchases made before September 5, 2017 and 30 purchases made after September 5, 2017, during which we used the prohibition on the procurement of certain types of furniture produced abroad. A comparative analysis showed that all customers in the notices and procurement documents provide for the application of the ban. However, an analysis of the protocols for reviewing and evaluating applications participating in procurements indicates that

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Fig. 2. Results of competitive procedures

the number of procurements recognized as failed increased by 30% (from 9 to 13 procurements). In turn, the number of purchases, the winner of which was determined by the results of competitive procedures, decreased by 19%. Further, in order to identify the impact of the established ban on the procurement results, we analyzed the number of procurement participants. So, 51 firms took part in 30 purchases made before September 5, 2017, and it was 8% less after the entry into force of Resolution No. 1072-47 organizations. Thus, with the introduction of institutional innovation to limit entry to the public procurement market of furniture and woodworking industry of foreign participants, the number of participating companies decreased. On the one hand, this indicates the using of budgetary funds in order to support the domestic producer of furniture products, but on the other hand, the introduction of a national regime led to an artificial restriction of competition in the public procurement market. The result of institutional restriction of competition resulted is an increase in the average price of a contract: according to the results of our study of contracts concluded with suppliers of furniture and woodworking industries, the average price of a contract increased by 4% (Fig. 3). In general, in our opinion, institutional innovation determines to introduce restrictions on the access of foreign suppliers to the public procurement market the next ones: – Artificial restriction of competition in industry markets; – A decrease in the quality of the supplied products and an increase in prices of state contracts; – Additional, unreasonable administrative and financial costs of procurement participants to confirm the country of origin of goods in the framework of this preference. The introduction of restrictions on procurement for the needs of the public sector of goods produced abroad restricts their supply in the relevant industry markets, provokes an increase in contract prices. Although it also stimulates import substitution in order to

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470 460 450 440 430 2017

2018

Fig. 3. Dynamics of the average contract price for selected furniture purchases (thousand rubles)

support national production. The administrative nature of this prohibiting mechanism doesn’t even correspond to the quasi-market nature of the public procurement market and therefore doesn’t provide effective state support for domestic producers.

4 Conclusion/Recommendations In order to optimize and improve the situation on the public procurement market in the conditions of the introduced restrictions on the access of foreign manufacturers and stimulate import substitution, we propose: – Development of an algorithm for forming a list of products of foreign manufacturers, the purchase of which for the needs of public sector institutions is limited or banned; – The introduction in a number of departmental acts of a closed list of documents, which confirm, that products purchased at public auction aren’t subject to prohibitions; – Adjustment of normative legal acts establishing restrictions on state and municipal purchases of goods, works, services from foreign suppliers.

References Belokrylov, K.A.: Procurement of innovative products in the system of innovative investment policy of the state. IVF (12), 110–125 (2018) Belokrylova, O.S., Poghosyan, N.V.: The institutional component of the university’s innovative infrastructure as a resource for strategic development. J. Econ. Regul. 7, 84–92 (2016) Volchik, V.V., Nechaev, A.D.: Transactional Analysis of Public Procurement: Monograph. Publishing House “Assistance - XXI Century”, Rostov-on-Don (2015) Muller, D.: Public Choice. HSE, Moscow (2007)

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National procurement transparency rating (2018). https://1b718c8b-916a-464e-b594ac6aba0cfce4.filesusr.com/ugd/68d124_284c1519cf574c44abe1da8c363c610c.pdf. Accessed 19 Dec 2019 The results of the “National Procurement Transparency Rating 2019”. https://www.nrpz.ru/ kopiya-rezultaty-rejtinga-2018. Accessed 19 Jan 2020 Talantsev, V.I.: The contract system and its role in supporting small business. Sci. Sci. 9(6), 369– 373 (2017) Belokrylov, K.A.: Public procurement reform in Russia: ways to reduce the risk of corruption. Int. J. Appl. Bus. Econ. Res. 15(8), 127–139 (2017). http://serialsjournals.com/ serialjournalmanager/pdf/1495269236.pdf. Accessed 29 Nov 2019 Downs, A.: Inside Bureaucracy. Little, Brown and Company, Boston (1967) Eggers, B., Singh, S.: The Public Innovators Playbook. Harvard Kennedy School of Government, Washington, D.C. (2009) Hirshman, A.O.: Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States. Harvard University Press, Cambridge (1970) Hood, C.: A public administration for all seasons? Public Adm. 69(1), 1–19 (1991) Page, S.: Integrative leadership for collaborative governance: civic engagement in Seattle. Leadersh. Q. 21(2), 246–263 (2010) Roberts, N.C., King, P.J.: Transforming Public Policy: Dynamics of Policy Entrepreneurship and Innovation. Jossey-Bass, San Francisco (1996) Sørensen, E., Torfing, J.: Introduction collaborative innovation in the public sector. Innov. J. 17 (1), 1–14 (2012). http://www.innovation.cc/volumes-issues/intro_eva_sorensen_torfing_ 17v1i1.pdf. Accessed 19 Jan 2020 Weber, M.: Economy and Society. Simon & Schuster, New York (1968) Windrum, P., Koch, P.M. (eds.): Innovation in Public Sector Services; Entrepreneurship, Creativity and Management. Edward Elgar Publishing, Chelterham, Northampton (2008)

Development of the Smart City Concept in the System of Municipal Government Hans-Christian Brauweiler1(&) , Vladimir V. Kurchenkov2 Olga V. Fetisova2 , and Elena A. Kurchenkova2 1

,

West Saxon University of Applied Sciences, Zwickau, Germany [email protected] 2 Volgograd State University, Volgograd, Russia {kurchenkov,fetissova,kurlena}@volsu.ru

Abstract. Purpose: The purpose of the article to discuss the problems and prospects of the formation and implementation of the smart city concept in the system of municipal government in Russia at present stage. Design/Methodology/Approach: The authors compare the features of the implementation of this concept in economically developed countries and Russia. The possibilities of realizing the smart city concept in the context of the development of smart technologies, which form the basis for the sixth technological structure, primarily nanotechnology, information technology and the creation of artificial intelligence, biotechnology are determined in the article. The text reveals the effect of the uneven use of smart technologies in various functional and territorial subsystems of the urban ecosystem, in particular the development of social infrastructure, urban transport, resource support, the development of urban recreational spaces, waste disposal management. In this regard, the completeness of the implementation of the smart city concept as a whole is determined by the total level of use of smart technologies in each of the fundamental subsystems. Findings: For a general assessment of the implementation level of the smart city concept, an integral indicator is developed in the article, which reflects the share of the use of smart technologies in the total set of functional and territorial subsystems of urban agglomerations. The leading role of municipal authorities in the implementation of the smart city concept, providing the integrated use of new information technologies in all spheres of the city’s life, is substantiated in this article. Originality/Value: The smart city concept can be implemented heterogeneously and asynchronously both in individual sectors of the urban economy and in the aggregate of autonomous micro-agglomerations. For a general assessment of the level of implementation of the concept of a smart city, integral indicator is used, that reflects the share of the use of smart technologies in the total set of functions of subsystems of urban agglomeration and urban sectors. Keywords: Information technologies
Smart technologies
City economy Urban ecosystem
Smart city
New technological structure
Municipal government JEL Code: P25


O18
C53
C54

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1232–1239, 2021. https://doi.org/10.1007/978-3-030-59126-7_134




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1 Introduction The use of modern information technologies is an important direction in the development of any economy, especially that of Russia in the near future. Among the 12 national projects reflected in the Decree of the President of the Russian Federation V.V. Putin No. 204 dated 05/07/2018, the formation of the digital economy is highlighted as a separate priority area (Decree of the President of the Russian Federation No. 204 2018). This is due to the objective trends of the global digitalization processes in all spheres of human activity, which today cover almost all countries of the world. In particular, according to the report of the World Economic Forum “The Future of Jobs 2025”, from 2012 to 2020, the number of industrial robots in the world will increase by more than 2.5 times, and by 2025 industrial robots´ work will account for 52% of all work done (The Future of Jobs Report 2018). This will significantly affect the future professions, the most important of which in the near future will be data analyst, artificial intelligence and machine learning specialist, programmer, sales and marketing manager, big data specialist, digital transformation specialist, new technology specialist, organizational development specialist, information technology service technician. However, the digitalization processes of industrial production and the economy as a whole are extremely uneven in the world. The leaders in introducing digital technologies into industrial production are South Korea - 631 newly commissioned robots per 10,000 workers, Japan - 303, Germany - 309. Russia, unfortunately, lags behind in this process with indicator 3 as well as India (The Future of Jobs Report 2018). At the same time, it should be noted that new digital technologies today are actively used not only in industrial production, but also in other areas of human activity: education, healthcare, state and municipal government, social services, and urban management (Graham 1996; Greenfield 2013). This is quite natural, since the introduction of new technologies in some areas suggests the possibility of their diffusion into other areas (Brauweiler 2002). As S. Yu. Glazyev noted on this occasion, the systematic processes of introducing new technologies involves not only the creation of new industries and sectors of the economy, but also the large-scale modernization process of the existing ones (Glazyev 2009). At present, the so-called sixth technological structure is actively being formed, the basis of which is made up of such technologies as genetic engineering, artificial intelligence and machine learning, new biomaterials, nanotechnologies (Inshakov and Inshakova 2017), which in turn covers a whole range of independent areas (nanoelectronics, nanomaterials and nanostructured coatings, molecular and nanophotonics, nanobiotechnology, nanosystem technology and equipment, nanotubes, etc.). The use of these technologies contributes to a radical update not only of industrial production, but also to all spheres of human activity. Today in the period of transition to the sixth technological structure the so-called smart technologies, which are already used in all areas of our lives: healthcare, ecology, and production organization have a great impact (Kurchenkov et al. 2017). The use of artificial intelligence for solving complex problems today plays an important role in municipal management, organization of urban economy, as well as the development of rural areas. Based on these technologies, the smart city concept and smart village

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concept are being successfully implemented, which significantly increase the efficiency of municipal management, contributing to the innovative development of both urban and rural areas. Today in the world there are already enough cities successfully implementing the smart city concept. However, there is ambiguity in assessing the level of implementation of this concept in various conditions. In this regard, clarification of the existing methodology for the formation of this assessment system is required.

2 Materials and Methods The article uses publicly available research materials, the theoretical basis of which was scientific monographs, classic works on the economics of the development of modern cities, scientific articles on the research of leading domestic and foreign scientists. Statistical data was used to analyze the dynamics of urban development processes within the framework of the concept of a smart city. The report of the World Economic Forum in Davos, “The Future of Jobs - 2018” and other documents, reflecting the transition to a new technological structure were used in the work. The authors used general scientific methods of induction and deduction, analysis and synthesis, dialectics, and a hypothetical deductive method. We used methods of comparative analysis of various urban ecosystems and methods of analogies, as well as historical and evolutionary analysis. The use of systems analysis methods while considering the transition to the smart city concept was of great importance.

3 Results and Discussion The smart city concept involves the development of the integration of several information and communication technologies (ICT) in the framework of urban ecosystem management, which includes the social infrastructure of the city, municipal property, housing and communal services, law enforcement, etc. The implementation of this concept is aimed at improving the quality of life for urban population using smart technologies, enhancement the efficiency of interaction of all urban services. The specialty of the application of the smart city concept is the integration of direct contacts and feedback of intrasystem and intersystem interactions in real time. Moreover, the city is considered as a holistic ecosystem, where all its components are integrated among themselves within the framework of a single management system. This concerns urban transport, waste disposal systems, functioning of the institutions of the social infrastructure of the city. The use of artificial intelligence elements makes the city management system more flexible, adaptive to changing factors of the external and internal environment, including by increasing the interactivity of city services, reducing costs and resource consumption, and strengthening ties between city residents and state authorities. The application of smart city technology is carried out with the aim of increasing the efficiency of urban ecosystem management and ensuring a quick reaction to the emergence of complex tasks. Sectors or areas that can be covered by the smart city concept include: state and municipal services, urban transport management, rational energy and resource use,

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healthcare, education, environmental protection and waste disposal management. The implementation of this concept is more relevant for large metropolitan cities with a complex structure of territorial settlement, a transport network, and housing and communal services. This concept gives a good effect for medium and small cities too. As noted, today there are already a number of examples in the world of successful implementation of the smart city model. These include cities such as Milton Keynes, Southampton, Amsterdam, Barcelona, Stockholm, Tel Aviv, which received the 2014 World Smart City Award (Amsterdam Smart City 2014). Russian cities that successfully implement smart technologies in the urban environment are Moscow, St. Petersburg and Sochi. According to Arup, it is estimated that the global market for smart urban services will be $ 400 billion per year by 2020 (Smart Cities appeared in Russia in 2019; Smart City - 2030 project 2018). At the same time, today there are a lot of problems concerning the relevant assessment of the level of completeness and implementation of a smart city concept. In particular, as practice shows, smart technologies are implemented in the urban sectors extremely unevenly and integrated poorly. For example, smart technologies can be implemented to a greater extent in the urban transport system and to a lesser extent in the solid waste disposal system. In this regard, an expert assessment of the level of development of various spheres of the city economy of Volgograd using a 10-point system showed a significant discrepancy in the level of the use of smart technologies (Table 1). Table 1. The level of use of smart technologies in various sectors of the economy of the city of Volgograd. No. City Industry 1 City Transport 2 Social Infrastructure 3 Water Supply and Sanitation 4 Ecology and Waste Disposal 5 Information Support 6 Heat Supply 7 Power Supply 8 State and Municipal Services Source: developed and compiled by

Estimation 7 6 5 4 7 5 6 8 the authors.

As is seen in Table 1, the highest level of implementation of smart technologies is observed in the urban transport management system and state and municipal services, and the lowest one is in the waste disposal system. In accordance with this, to assess the overall level of use of smart technologies in the city’s ecosystem, it is necessary to apply methods that allow integrating the values of this indicator in some sectors of urban economy. Besides, it is necessary to consider the territorial system of settlement of the city. Currently, there are two main types of settlements. First is a classical system, which

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consists of a city center, where business centers and agglomeration and peripheral management structures are concentrated. In this case, the level of implementation of smart technologies in the central city is higher compared to the peripheral (sleeping) urban areas, which must be taken into account when calculating the integral indicator. The second type of territorial settlement of modern cities, which has been observed recently, is characterized by the formation of urban areas with a high degree of autonomy within one metropolitan area. Within the boundaries of each autonomous urban area, the level of implementation of the smart city concept can also vary significantly, despite the existence of the so-called diffusion effect of smart technologies. In this regard, it is necessary to integrate the use of smart technologies not only in the areas of urban life, but also in territorial areas within the framework of the overall urban agglomeration (Fig. 1).

Fig. 1. The integrated concept of the development of the smart city ecosystem based on large urban agglomerations. Source: developed and compiled by the authors.

The estimated integral indicator of the development level of the smart city concept should consist of particular indicators reflecting the degree of implementation of smart technologies in each functional subsystem of the urban ecosystem on the one hand, and on the other hand, in each autonomous area of the urban agglomeration, or the territorial subsystem of the urban ecosystem. So, we have dFn ¼ Fn=Fmax;

ð1Þ

dTn ¼ Tn=Tmax;

ð2Þ

where, dFn – is the level of use of smart technologies in a specific functional subsystem of the urban ecosystem.

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Fn – is the number of smart technologies used in a particular functional subsystem. Fmax – is the maximum number of smart technologies used in a specific functional subsystem in the cities leading in the implementation of the smart city concept. dTn – is the level of use of smart technologies in a specific territorial subsystem of the urban ecosystem. Tn – is the number of smart technologies used in a particular territorial subsystem. Tmax – is the maximum number of smart technologies used in a specific territorial subsystem in the cities leading in the implementation of the smart city concept. Another formulae: dFi ¼ dTi ¼

X

 dF . . .dF =n; 1 n n

X

 dT . . .dT =n; 1 n n

ð3Þ ð4Þ

where dFi – is an integral indicator of the level of use of smart technologies in the totality of the functional subsystems of the urban ecosystem. dTi – is an integral indicator of the level of use of smart technologies in the totality of the territorial subsystems of the urban ecosystem. In this case, the integral indicator will look like: Gi ¼

pffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi k1 dFi þ k2 dTi ;

ð5Þ

Where Gi – is an integral indicator of the level of implementation of the smart city concept, taking into account similar integral indicators of the functional and territorial subsystems of the urban ecosystem. k1, k2 – are the correlation coefficients. According to these formulae, we can compare the level of implementation of the smart city concept in large metropolitan cities of the Southern Federal District by the integral indicator (Table 2). As it is seen from Table 2, the highest indicator is observed in Sochi, where the smart city concept has been implemented for many years (In Sochi, the development of the Smart City system has begun in 2018). In general, for most cities in Southern Russia, the level of implementation of smart technologies in urban development remains low relative to world leading cities, and the processes for implementing the smart city concept are still at the initial stage.

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H.-C. Brauweiler et al. Table 2. The level of implementation of the smart city concept in megacities of the Southern Federal District in 2019. No. City 1 Rostov-on Don 2 Krasnodar 3 Volgograd 4 Stavropol 5 Sevastopol 6 Elista 7 Simferopol 8 Maykop 9 Astrakhan 10 Sochi Source: developed and compiled by the authors.

Gi 0,79 0,86 0,71 0,72 0,76 0,67 0,71 0,61 0,53 0,82

4 Conclusion Thus, the problem of implementing of smart city concept is relevant today. Despite the diversity of modern cities (size, territorial settlement system, level of urbanization and infrastructural conditions), the general system-forming factors are: the massive use of digital technologies in various areas of urban life, the use of ICTs for effective transformation of the city’s resources into tangible and intangible benefits for the population, improving the quality of state and municipal services, etc. The priority areas for the introduction of technological and digital solutions in the city management system, as noted, are: social, health and education, security, ecology, transport infrastructure, innovations. At the same time, smart technologies should not be implemented separately in various fields, but comprehensively, using the synergy effect. In this regard, the city is considered as an ecosystem, with a complex structure of stable direct and reverse internal connections. Simultaneously, we distinguish centric and decentric cities, with the development of autonomous microagglomerations. However, within the framework of the implementation of the smart city concept, these subsystems can exist autonomously, and the implementation of smart technologies in them can be carried out asynchronously and on a different scale. In this regard, the completeness of the implementation of the concept of a smart city as a whole will be determined by the general level of use of smart technologies in each of the fundamental subsystems. Indeed, as it was noted, the smart city concept can be implemented heterogeneously and asynchronously both in separate sectors of the urban economy and in the aggregate of autonomous microagglomerations. For a general assessment of the level of implementation of the smart city concept, it is necessary to use an integral indicator that reflects the share of the use of smart technologies in the total set of functions of subsystems of urban agglomeration and urban sectors.

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Thus, the introduction of smart technologies in the municipal management system significantly increases its effectiveness (Local government in industrialized countries …, 2010). At the same time, the effect of introducing the smart city concept is elevated with increasing synchronization of this process both in the autonomous regions of the city agglomeration, and in the sectors of the urban economy and spheres of life. The uneven development of smart technologies in the urban environment does not allow obtaining the effect of synergy and functioning of the city as a well-developed ecosystem.

References Amsterdam Smart City (2014). https://www.smartecocity.com/eucities/amsterdam/. Accessed 15 Jan 2020 Brauweiler, H.-Ch.: Innovationen im peripheren Raum: Eine Analyse am Beispiel der Grenzräume Süd- und Ostsachsens, p. 124. Gabler/Dt. University Verlag, Wiesbaden (2002) Graham, S.: Telecommunications and the City: Electronic Spaces, Urban Place, p. 231. Routledge, London (1996) Greenfield, A.: Against the Smart City, p. 118. Verso, London (2013) Kurchenkov, V.V., Fetisova, O.V., Orlova, A.A., Gladkaya, E.A.: The importance of the region’s economic activity evaluation in Russia 2012–2016. Revista Galega de Economia N26(3), 3344 (2017) The Future of Jobs Report (2018) World Economic Forum. URL.: https://www.weforum.org/ reports/the-future-of-jobs-report-2018 (data accessed: 19.01.2020) Smart cities appeared in Russia. Russian newspaper. 17 March 2019, p. 3 (2019) In Sochi, the development of the Smart City system has begun (2018). www.sochi.ru. Accessed 15 Jan 2020 Glazyev, S.Yu.: On the doorstep of the sixth technological (2009). https://glazev.ru/articles/165interv-ju/54430-na-poroge-shestogo-tekhnologicheskogo. Accessed 17 Jan 2020 Inshakov, O.V., Inshakova, E.I.: Technological platforms in the Russian nanotechnology industry: problems and development prospects. Bull. Volgograd State Univ. Ser. 3. Econ. Ecol. 19(3), 7–21 (2017) The project “Smart City - 2030” (2018). https://crowd.mos.ru/. Accessed 10 Jan 2019 Decree of the President of the Russian Federation of May 7, 2018 N 204 “On national goals and strategic objectives of the development of the Russian Federation for the period until 2024” (2018). http://kremlin.ru/acts/bank/41449. Accessed 13 Jan 2020

Development of Smart Technology in Tax Control Dmitriy M. Shor(&) , Inna M. Shor , Dildarakhon A. Shelestova , and Elena S. Starostina Volgograd State University, Volgograd, Russia {ShorDM,ShorIM,ShelestovaDA,StarostinaES}@volsu.ru

Abstract. The aim of the study: To develop recommendations for improving the tax control in terms of the development of smart technology. Methodology. For this study, we used systematic, economic and statistical analysis and the dialectical method. Results. Not only does the development of smart technology ensure the effectiveness and efficiency of tax control but it also functions as a factor that fosters competitiveness and economic security in Russia. Meanwhile, the current measures taken to develop smart technology in tax control do not enhance its potential to its fullest. The study includes the analysis of the data from the Russian experience in improving tax control in terms of the development of smart technology. The analysis helped reveal crucial problems in tax control and devise possible solutions. Conclusion and Recommendations. We came to a conclusion that there are several factors accounting for improving tax control in terms of the development of smart technology. These factors are developing of professional competence and tax culture for tax inspectors; creating a Unified information source on unscrupulous persons; establishing a “presumption of good faith” for the counterparty included in the Unified information source without negative indicators; ensuring the certainty of tax legislation in the Russian Federation and its compatibility with the level of development of smart technology; developing tax compliance; etc. Keywords: Tax control
Smart technology
The federal taxation service of the russian federation
Taxpayer
Automated control system JEL Code: H20


H30

1 Introduction Tax control plays an important role in a country’s financial system. The more effective and efficient the tax control is, the better the quality and quantity are which ensure the timeliness and full payment of the taxes stipulated in the tax legislation. In addition, tax control helps prevent, detect, and deal with tax offenses and, as a result, it enhances the economic security of a country. The modern stage of tax control and the perspectives for its development are connected with the implementation of smart technology which integrates all © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1240–1247, 2021. https://doi.org/10.1007/978-3-030-59126-7_135

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information sources into a unified space with an automated analysis of large amounts of information. Thus, it possible to increase the effectiveness and efficiency of tax control. The current tax control system in Russia which is based on smart technology can be described positively. The positive indicators are as follows: the Federal Taxation Service of the Russian Federation exports package solutions of tax regulations and administration; different e-services of the Federal Taxation Service website are actively implemented; tax monitoring becomes more common; etc. Meanwhile, some tax control methods (or instruments) curb the development of smart technology. Such methods help solve local tasks but do not solve long-term problems (e.g. the low quality of tax legislation in Russia; the lack of trust among taxpayers and tax agents for tax authorities; the lack of competence and abuse of authority among some employees of the Federal Taxation Service; the low level of tax culture and literacy among citizens; the low level of interdepartmental cooperation; etc.). In this way, it does not allow optimizing the tax control mechanisms, harmonizing tax relations and actions that aim to raise citizens’ awareness of identification of law violations and collection of mandatory payments (taxes and duties). Thus, nowadays it is crucial to devise a complex of measures to improve tax control methods in Russia which will be based on smart technology and will also help contribute to a sustainable, competitive, and economically secure society. The urgent nature of the problem and the low level of its investigation have conditioned the aim (to develop recommendations to improve tax control methods in terms of the development of smart technology) and purpose (to analyze official data of the current Russian experience in tax control practices in terms of the development of smart technology; to detect current problems and suggest possible solutions) of this study. The structure of this paper follows the aim and purpose.

2 Materials and Methods Many scholars contributed to studying the organization and implementation of tax control methods in terms of the development of smart technology, for instance, Advokatova (Advokatova 2018), Batyrova (2018), Goncharenko et al. (2018), Petukhova (2019), etc. However, the analysis of the level of scientific knowledge in this field points to the lack of a unified approach to the development and implementation of tax control in terms of the development of smart technology. In this way, it does not allow unleashing its full potential and, consequently, enhancing the tax component of the digital economy News (2020a), Audit (2020), D-Russia (2020), News (2020b), Nalog (2020), News (2020c), Garant (2020a), Pgplaw (2020), Garant (2020b), Consultant (2020). As the methodology, we used theoretical and empirical studies on tax control and its implementation in terms of the development of smart technology as well as information in the periodical press and on the Internet. In this study, we used systematic, economic and statistical analysis, and the dialectical method which we employed through scientific methods (observation, synthesis, comparison, grouping, a compilation of theoretical and empirical information).

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3 Results The analysis of the official data on the Russian experience in the development of smart technology in tax control helped make the following conclusions: 1. The databases and automated systems that help promptly reveal tax evasion, e.g. in the control of value-added tax (VAT). In this way, with the use of smart technology and the systemic project management the Federal Taxation Service created a unique automated system to control the valueadded tax. Remarkably, there are no similar systems these days. The Automated Control System VAT-2 (ACS VAT-2) helps change the network of tax control by replacing manual labor with automated business processes. It also minimizes the influence of the human factor in the tax audit. The ACS VAT-2 tracks taxation at the national level which is 15 million operations annually (Innovative instruments of tax revenue administration, 2020). It helps build value chains and prevent tax evasion or fraudulent tax refund. Not only does the ACS VAT-2 control the tax deduction for the value-added tax but it also helps increase revenues from corporate income taxes in the regional budget. Consequently, the tax gap or fraudulent tax operations become less frequent, for example, up to 1% in 2018 which is one of the lowest indicators in the world (8% at the beginning of 2016) (The smallest shadow: The VAT gap reaches the world minimum, 2020). According to the 2018 results of the control and analytical research on the ACS VAT-2, there were additional 13 bln rubles in the budget with 12.4 bln rubles provided through taxpayers’ clarification of obligations (the Federal Taxation Service took stock of 2018: tax revenue to the federal budget grew by 30%, 2020). Furthermore, the increase of the tax revenue is ensured by the Federal Taxation Service’s control on the fiscal operations in retailing through the modern cash registers and equipment which transmit information on real-time cash operations to tax authorities. The current procedures for operations on cash registers ensure more effective monitoring of cash flow, particularly in retailing which is one of the most riskrelated spheres of the national economy. By April 2019, more than 900 000 organizations and entrepreneurs had registered approximately 2.5 million cash registers. Every day 150 million receipts are printed valued at about 90 bln rubles (The results and new aims of the Federal Taxation Service, 2020). Thus, the automated system of the Federal Taxation Service monitors the 2.5 bln rubles retail turnover. On average, the revenue on every cash register is approximately 50% more than it was before the implementation of the real-time data transfer function. It demonstrates the legalization of businesses and the profitability of the new automated system to increase revenues of the regional budgets. Another automated system, “Property Tax Analysis”, helps analyze the taxation structure, forecast the tax revenue, and monitor tax debts. It also concerns the development of automated systems for the verification of databases of tax authorities with the data from the Federal Service for State Registration, Cadastre and Cartography which supports the property tax control.

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2. There is an increasing number of interactive online services for different categories of users at the Federal Taxation Service website. These days, there are 50 interactive online services (The official website of the Federal Taxation Service 2020). For example, “Transparent Business” and “Tax Burden Calculator” are important analytical instruments that help obtain information on the tax obligation fulfillment by taxpayers including those who receive tax benefits, subsidies, and public procurement. In this way, the interactive service “Tax Burden Calculator” helps the taxpayers see their profile from the tax authorities’ point of view. It presents complex information on taxes for every subject and industry of the Russian Federation to calculate tax risks. The service helps taxpayers learn about their current tax obligations. Also, the “Tax Burden Calculator” can be used by public (regional) authorities for complex monitoring of regional (municipal) economic entities. The taxpayer profile – which is currently used by 25 mln people – for individuals has a great number of services. In 2018, the budget received more than 110 bln rubles from individuals through their profiles (The number of users of the Private office of the taxpayer for natural persons in a year grew by 3,5 million, 2020). This service enhanced fiscal discipline on property tax. In November 2018, there was a project launched in a pilot mode which enabled the individuals to pay property taxes with a bank card through their profile. Thus, the Federal Taxation Service could check the status of payments on taxes and duties (The information from the Federal Taxation Service on 14 November 2018 “Property tax can be paid with a bank card” 2020). Previously, the taxpayer had to open the website of a credit organization that has a contract with the Federal Taxation Service and then enter the login and password. If the credit organization has not signed the contract with the Federal Taxation Service, then it was necessary to print the payment instruction. 3. There is a mobile application that a taxpayer can use to register without visiting the tax authorities by scanning a passport. The application can be used to record cash and non-cash sales in receipts. After attaching a bank card, it becomes possible to pay tax from each sale without a tax return. 4. A unified system of tax and customs authorities is created. A unique feature is the electronic workflows of invoices and handover documents between the taxpayer and the tax authority for selling imported goods. 5. The information exchange between tax jurisdictions is being improved. In the near future all transactions of individuals and legal entities will be seen by the tax authorities. Thus, there is an active automated exchange of fiscal information (Automated exchange of fiscal data: Shall it be daunting, 2020). According to the aggregate results of the development of smart technologies in tax control, we can assume that these days the Federal Taxation Service is a digital department that actively improves a digital platform to create a clearinghouse of fiscal

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data. Nevertheless, there are certain problems in fiscal monitoring in terms of the development of smart technologies, namely: 1. Tax inspectors sometimes exaggerate the purpose of implementing smart technologies. According to the results of tax control, tax inspectors appoint beneficiaries themselves. For example, if there are unreliable persons in the network of counterparties, tax inspectors add taxes to a party that will pay them without a shell company. Thus, it is crucial to improve professional competence and tax culture. 2. Tax control becomes more stringent as it regards business representatives. For instance, there are common demands from tax authorities to refine tax obligations due to property tax gaps in the chain of transactions. The time, human, and other costs are spent to get necessary proof of the counterparty’s discretion in order to minimize possible tax risks. However, taxpayers cannot undertake complex analysis of their “tax integrity” which is often demanded by tax inspectors. This also happens since there are no comprehensive official sources on unsafe legal entities and entrepreneurs. Nowadays, interactive online services of the Federal Taxation Service does not provide comprehensive information on possible tax risks. Thus, in order to reach balance in this situation when the Federal Taxation Service has a great amount of information on legal entities and entrepreneurs it is necessary to create a Unified information source with data on unsafe taxpayers including information on the lack of property tax write-off source. It could help the business representatives by accelerating and simplifying the verification of counterparties. It could also foster a safe internal control system that would minimize tax risks and prevent tax fraud. In addition, it has become crucial to establish a “presumption of good faith” of a counterparty included the Unified information source without negative indicators. 3. There is a lack of certainty in the tax legislation in the Russian Federation. In particular, it concerns generating and detecting tax risks in the taxpayers’ activities by the automated information system “Tax-3”. Tax risks are considered to be illegal actions of taxpayers and the grounds for coercive measures. The current generating and detecting of tax risks undermines the guarantees of taxpayers. It is not possible to identify the basis of liability and liability rules cannot be applied retrospectively. Also, smart technology develops faster than control measures. This happens, on the one hand, due to prompt technological advancements and, on the other, due to high levels of bureaucracy in the regulatory framework. As a result, there is no implementation of fiscal control measures whereas there is the spread of illegal acts that aim to prevent law violations. Thus, it is crucial to ensure certainty in the tax legislation of the Russian Federation and its compliance with the level of development of smart technology. Also, the importance of tax compliance is increasing. It could avoid or prevent possible tax risks (Tax compliance in Russia: How to decrease additional tax payments from audits, 2020).

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When tax monitoring appeals to the use of smart technology, then automated tax compliance as a form of tax audit will replace traditional tax audits. Nowadays, in terms of tax compliance, taxpayers can interact with tax authorities through tax monitoring and/or through interactive online service “Business risks: Check yourself and your counterparty” or “Transparent business”. 4. There are substantial constraints in the realization of the taxpayer’s status which signals the violation of the transparency principle of liability. In this way, since the automated information system “Tax-3” was implemented, the risk of tax inspection has increased due to the detected risks in the desk audits. In “Tax3”, the status on a taxpayer’s payments and the information from “Transparent business” or “Business risks: Check yourself and your counterparty” can pose substantial constraints in the realization of the taxpayer’s status. Tax debts or other negative tax information on the taxpayer may not allow him or her to participate in tenders on deals, public procurement, licenses or permissions as well as in other economic activities due to the verification of possible counterparties. While assessing the tax risks, tax authorities also take into account the factual circumstances of the taxpayer’s actions including the economic rationale and documentation. However, the taxpayer may not be aware of that. The automated information system “Tax-3” can assess tax risks without the person concerned. It violates the transparency principle of liability. Thus, it is important to eliminate the constraints in the realization of the taxpayer’s status which signals the violation of the transparency principle of liability. 5. There is a lack of basics for a risk-based approach in tax control. Despite the fact that tax control is codified in the Tax Code of the Russian Federation, in fact, the publicly available lists are used (including the vague criteria for assessment based on the regulations and letters of the Federal Taxation Service which can be both normative and individual). There is no certainty and stability in this regard. The implementation of automated systems for information aggregation in the risk assessment can only worsen the situation since there are no publicly available algorithms for selecting information for a risk-based approach in tax control (Ovcharova 2019). Consequently, it is crucial to devise an economic risk-based approach to implementing tax control in terms of the development of smart technology. To conclude, the development of smart technology in tax control incurs different challenges and risks that need high-quality methods to eliminate them. Particularly, there are the following challenges and risks: financial and economic (fraud and e-theft; cyberattacks, etc.), informational (spyware; software vulnerabilities), and work-related (decline in employment and loss of qualified staff with expertise in smart technology; lack of expertise and qualification in smart technology, etc.). Thus, in order to prevent challenges and risks, it is crucial to develop a multi-layer system of indicators for assessing tax control. The main purpose of this system will be to represent, detect, and prevent risks caused by the development of smart technology. In the system, it is possible to define three layers with the following indicators:

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– technical level – the wear coefficient, coefficient of renewal, and attrition rates of computer and other facilities, etc.; – program level – the number of repelled cyberattacks, the coefficient of software relevance, etc.; – work-related level – the level of employee qualification in smart technology, the coefficient of employee reliability, etc. It is important to define the layers so that the tax control corresponds with the National program on the digital economy in the Russian Federation. The suggested multi-layer system of indicators for assessing tax control in terms of the development of smart technology helps estimate risks related to cybersecurity, detect the lack of employee competence in smart technology as well as assess other risks related to digitalization. Thus, we can make the following conclusion: In the tax system in Russia, a virtual transactional environment is being created. It is a closed system based on smart technology in which all economic entities can transact while the Federal Taxation Service can automatically calculate and withdraw taxes when the transactions are conducted.

4 Conclusion/Recommendations The analysis of the official data on the Russian experience in the implementation of smart technology helped make the following conclusion: The databases and automated systems that help promptly reveal tax evasion are being created; there is an increasing number of interactive online services at the Federal Taxation Service website that are developed according to the needs of users; there is a mobile application that a taxpayer can use to register without visiting the tax authorities and then pay taxes in it; a unified system of tax and customs authorities is created; the information exchange between tax jurisdictions is being improved. Nevertheless, there are difficulties and challenges in implementing smart technology in tax control, namely, tax inspectors sometimes exaggerate the purpose of implementing smart technologies; tax control becomes more stringent as it regards business representatives; there is a lack of certainty in the tax legislation in the Russian Federation; there are substantial constraints in the realization of the taxpayer’s status which signals the violation of the transparency principle of liability; there is a lack of basics for a risk-based approach in tax control. The suggested solutions are: to develop professional competence and tax culture for tax inspectors; to create a Unified information source on unscrupulous persons; to establish a “presumption of good faith” for the counterparty included in the Unified information source without negative indicators; to ensure the certainty of tax legislation in the Russian Federation and its compatibility with the level of development of smart technology; to develop tax compliance; to eliminate the constraints in the realization of the taxpayer’s status which signal the violation of the transparency principle of liability; to devise an economic risk-based approach to implementing tax control in terms of the development of smart technology.

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In order to prevent challenges and risks, it is crucial to develop a multi-layer system of indicators for assessing tax control. The three levels of the system are technical level (the wear coefficient, coefficient of renewal, and attrition rates of computer and other facilities, etc.); program level (the number of repelled cyberattacks, the coefficient of software relevance, etc.); work-related level (the level of employee qualification in smart technology, the coefficient of employee reliability, etc.).

References Advokatova, A.S.: Razvitiye modeley nalogovogo controlya kak faktora snizheniya tenevykh ekonomicheskikh protsessov v usloviyakh tsyfrovizatsii (Developing tax control models as a factor contributing to the decrease in underground economic activity in terms of digitalization). Econ. Taxes Law 11(5), 136–145 (2018) Audit. The smallest shadow: the VAT tax gap reaches world minimum (2020). https://www. audit-it.ru/news/account/1001470.html Batyrova, D.K.: Perspektivy razvitiya nalogovykh dokhodov v tsyfrovoy ekonomiki (Perspectives for the development of tax revenues in digital economy). Finan. Bus. 2, 75–85 (2018) Consultant. The Federal law (1998). The Tax Code of the Russian Federation (Part One) (2020). www.consultant.ru D-Russia. The Federal Taxation Service took stock of 2018: tax revenue to the federal budget grew by 30% (2020). http://d-russia.ru/fns-podvela-itogi-2018-goda-postupleniya-vfederalnyj-byudzhet-vyrosli-na-30.html Garant. The information from the Federal Taxation Service on 14 November, 2018 “Property tax can be paid with a bank card” (2020a). https://www.garant.ru/products/ipo/prime/doc/ 72002262/ Garant. Tax compliance in Russia: How to decrease additional tax payments from audits (2020b). https://www.garant.ru/ia/opinion/author/esipova/1120398/ Goncharenko, L.I., Malkova, JuV, Advokatova, A.S.: Aktualniye problem nalogovoy sistemy v usloviyakh tsyfrovoy ekonomiki (Current problems in tax system in digital economy). Econ. Taxes Law 11(2), 166–171 (2018) Nalog. The Federal Taxation Service (2020). https://www.nalog.ru/rn34/about_fts/el_usl/ News. Innovative instruments of administration of the tax income (2020a). https://news. myseldon.com/ru/news/index/211124806 News. The results and new aims of the Federal Taxation Service (2020b). https://news.myseldon. com/ru/news/index/206283728 News. The number of users of the Private office of the taxpayer for natural persons in a year grew by 3,5 million (2020c). https://news.myseldon.com/ru/news/index/215298854 Ovcharova, E.V.: Tax compliance in Russia: issues in balancing administrative coercion and incentives. Pravo. Zhurnal Vysshey shkoly ekonomiki 1, 89–111 (2019) Petukhova, R.A., Grigoriyeva, Ja.A.: Nalogovoye administrirovaniye v usloviyakh tsyfrovoy ekonomiki (Tax administration in digital economy). Tomsk State Univ. J. Econ. 46, 303–313 (2019) Pgplaw. Automated exchange of fiscal data: Shall it be daunting (2020). https://www.pgplaw.ru/ news/article/the-automatic-exchange-of-tax-data-should-we-be-afraid

Financial Systems Development in a Digital Economy Nikolay V. Kuznetsov(&) , Ksenia V. Ekimova Olga I. Larina , and Viktoria V. Lizyaeva

,

State University of Management, Moscow, Russia [email protected], [email protected], [email protected], [email protected]

Abstract. The paper discusses the key directions and nature of the development of financial systems influenced by the digital economy and society. An analysis of the individual components of the financial system has been carried out and the nature of digitization in each of them has been identified. As a result, four key trends in the development of the financial system driven by the digital economy have been highlighted. The first trend: strengthening the role of remote interaction between financial institutions and end-users of financial products and services. The second trend: redistribution of the financial services market manifested in enhanced horizontal integration of financial institutions. The third trend: changing consumer behavior, requiring a review of existing business processes and regulations, and the development of the technological basis of the financial system. The fourth trend: the blurring of distinctions between the financial system and other sectors of the economy manifested in the partial substitution of traditional finance companies by high-tech companies. Digitization has been shown to have a definite positive impact on the financial system, making it more efficient, accessible, flexible and transparent. However, working with the digital financial system requires the user to have appropriate digital and financial competencies. This gives rise to the problem of managing the awareness-building of population and providing assistance to the most disadvantaged groups. Keywords: User competencies
Development trends Digitization
Digital financial services


Financial system


JEL Code: G29

1 Introduction Digitization has become a comprehensive process at this point. Even if we disregard the unreasonable excitement about the topic that can in principle be observed, it can be stated that digitization has become the dominant trend in technological development. The impact of new technologies is so significant that it is safe to say that there has been a change in the social and economic order caused by the rapid penetration of digital technologies into all spheres of life. The financial system is the most demonstrative example of the gravity and rapid pace of current changes. © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1248–1255, 2021. https://doi.org/10.1007/978-3-030-59126-7_136

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When we analyze the academic papers on the issue of financial digitization, it can be concluded that it mainly focuses on a small number of issues: transformation of the structure, architecture and services of the financial system (Gurusamy 2008; Pshenichnikov et al. 2018), regulation of the digitization of the financial environment (Buckley and Malady 2015; Gibson et al. 2015), as well as assessment of the positive and negative aspects of digitization (Bachas et al. 2018; Ozili 2018). Modern digitization processes entail the comprehensive integration of all spheres of the economy. This results in changes in the boundaries of the financial system and its integration with other components of the national economy. There is an active search for a new format of interaction between the financial system and the end-user and, in parallel, a format for interaction between the citizen and the society, between the citizen and the new digital economy infrastructure. Such global changes require a comprehensive study.

2 Terminology and Methods In order to reveal the specifics of development of the financial system in a digital environment, it is necessary to make a definitive decision about the terms to be used within the scope of this paper. It should be noted, however, that although there are some terminological differences between different scholar school today, most researchers are nevertheless inclined to accept the most harmonized definitions of key terms as basic. Thus, according to the most common approaches, the financial system should be understood to mean a special form of organization of monetary relations between entities involved in financial transactions (O’Sullivan and Sheffrin 2005). In this context, it is common practice to conveniently subdivide into two large spheres: public (or centralized) finance, and non-public (or decentralized) finance (Gurusamy 2008). In addition, there is another approach, according to which the financial system is conveniently subdivided into four independent subsystems: public finance, enterprise finance, market finance, and international finance (Polyanin and Dokukina 2018). Accordingly, public finance refers to the sphere of monetary relations in which a country’s GDP, as well as part of its wealth, is generated and redistributed. Enterprise finance, which is also sometimes referred to as entity finance, can be identified as current assets of all economic actors in a country. Market finance is the relationship that emerges in the process of financial redistribution in the financial market. International finance can be characterized as a global system of organizing the international financial market infrastructure, as well as technologies through which capital is exchanged (Polyanin and Dokukina 2018). The digital economy is fundamentally changing the established processes of interaction and information exchange. In this regard, technological advances and digital solutions are also being actively introduced into the financial system. A new concept of DFS - digital financial services - has appeared, which shall be understood to mean such products, technologies, and related solutions, which allow individuals and organizations to gain full access to the entire financial infrastructure without personal interaction with its institutions, but only through information and communication technologies and special applications (Karlan et al. 2016). Note that there are other, more simplified

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approaches to the definition of “digital financial services”. For example, when these are understood to mean the conversion of traditional financial services to electronic sphere (Avdeeva 2017), or, on the contrary, only new services that have arisen as a result of digitization (Pshenichnikov et al. 2018). The digital processes have an integrated effect on the financial system. This means that there is no single component of the financial system that has been influenced by the digitization processes, and they have an impact on all aspects of development of the financial system as a whole (we might as well say that digitization is actually the main trend of development of the financial system). In order to identify and study the trends in the development of financial systems under the influence of digitization, within the scope of this paper we will analyze and synthesize the transformational processes examined by various scholars, laying emphasis on those that result from the introduction of modern information and communication technologies in the financial sphere. At the same time, we will also pay attention to existing risks and “bottlenecks” of digitization processes.

3 Research Results A synthesis of the areas of financial system digitization that have been examined by various scholars reveals some of the most significant trends (Table 1).

Table 1. Financial system development trends driven by the digitization processes Trend Development of remote interaction between financial institutions and their users

Redistribution of financial services markets

Changing consumer behavior

Blurring of distinctions between the financial system and other sectors of the economy

Characteristic Virtually all end-users of the financial system, as well as users of financial services, have been able to conduct all financial transactions remotely without personal contact with financial institutions as a result of digital penetration The introduction of new technologies and the granting of virtually unlimited choices in financial services and instruments to the enduser entails a corresponding reorganization of financial markets Internet users are accustomed to the highest speed that mobile applications display and expect the same speed when interacting with the financial system Technological integration of the financial system infrastructure leads to the blurring of distinctions between the financial system and other sectors of the economy: as a result, financial instruments are increasingly being sold on the open market by technology companies rather than by financial firms

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The increase in the possibilities of remote interaction with the financial system is directly related to the growing informatization of society and virtualization of social interaction. At the initial stages of digitization, it was the saturation of the market with personal computers and the introduction of e-mail and social networks, while in the following it was the wide use of smartphones (tablets), messengers, and dedicated software which the user can access from his or her smartphone. If, prior to the “era of digital economy” the main way for users to apply for certain financial services was personal contact with a representative of the financial system, today remote communication methods move to the forefront. The process of introducing remote interaction into the financial system primarily affects the payment services sector. A vivid manifestation of such processes is the popularization of various electronic wallet formats, especially Paypal, Yandex.Money, QIWI, and the increasing use of mobile phone payments (Yakunina and Yakunin 2018). Moreover, the market of such payment systems is constantly expanding and has recently been supplemented by payments that are made through the agency of cellular operators as well as various payment services via the Internet. While initially the process of disaggregation in the payment system consisted of the distribution of credit and payment cards, this segment is now gradually being reduced. Modern payment services no longer require such cards in principle, and their issue is often simply due to the need to integrate with the services that were previously launched (such as the Yandex.Money card which can be used for payment on the Internet in the absence of the Yandex service, as well as cash withdrawals in ATMs). All payments by individuals are increasingly made today via various electronic services (online transfers, payment services, cloud cash desks, smart terminals, etc.). The interaction of financial entities with State departmental services is also carried out today mainly through electronic interaction (in particular, the interagency electronic interaction system – IEIS), which improves both the quality and the speed of provision of state and banking services. The redistribution of financial services markets has a significant impact on the financial system. This process is so acute that some authors question the adequacy of the current structure of the financial system to the real needs of society (Lapteva 2019). Previously, prior to the advent of modern technological solutions, the limitations of the end-user in choosing an intermediary (or even a chain of intermediaries) made it natural to divide the financial market into conventionally separate sectors, each with its own strongest players. Today, however, virtually every entity in the financial system can access the end-user of financial services. Therefore, the competition is improved and the secret monopoly of the major players in the financial system who could dictate their will and set their own rules in it, is eliminated (Ozili 2018). At the same time, the transparency of society and, in particular, the transparency of the financial system have made it possible for virtually every consumer to compare price offers in a comprehensive manner and to choose those that suit them most (Basayev 2018). Against this background, business models which were once in common practice in the market, are losing their effectiveness. They are substituted by more flexible financial solutions based on modern information technologies. One of directions of financial systems development is to enhance the horizontal integration of financial institutions by providing an interface for joint organization and developing new

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services. Another trend has been the creation of universal financial platforms integrating a large number of diverse financial services (“financial marketplaces”). The creation of such platforms, which in point of fact are the result of the development of online banking, addresses in an integrated manner a number of problems that have long hampered the development of the financial system (such as the problem of intermediation, the problem of user identification, etc.). Most importantly, such platforms allow the user to access the full range of financial services he or she requires almost anywhere in the world, provided that the site has access to a reasonably fast Internet, and the user himself has the appropriate device (Kazarenkova and Svetovtseva 2018). Of particular note is a significant change in consumer behavior. Modern information and communication resources outside the financial system demonstrate the highest speeds of operation, and their intuitive algorithms are adjusted to user preferences, offering personalized interfaces and services rather than general ones. This is what users expect today, and when they interact with the financial system. At present, the expectation of the customer to get all the services and products he or she needs “in a single click” and “here and now” is a common thing. Although this phenomenon is not directly related to the financial system, it is now becoming a powerful competitive factor, necessitating a review of existing rules and business processes. This, in turn, requires a change in the technological basis of the functioning of the financial system (changes in the spatial organization of the server network, communication channels, their number, capacity, etc.). This process can be conveniently divided into public and non-public parts. In the first case, the number of points of physical contact for users of the financial system is drastically reduced. The number of offices, banks branches, as well as employees who are focused on face-to-face customer relationship is decreasing. In the meantime, the “non-public” part of the infrastructure of the financial system has been constantly growing: it is a case of increasing the number and computing power of servers, bandwidth of communication channels, development of software platforms and algorithms. Modern technological progress implies a manyfold and constant increase in the amount of information circulating in the system. At the same time, from the point of view of end-users (average customers), the system is constantly simplified, the format of working with it is becoming more simple, versatile and multifunctional. The most global trend that can be observed in the financial system, both on a country-by-country basis and on a global scale, is the erasing of its once well-defined boundaries. The financial sector is gradually being integrated with other service sectors, as well as with the information society as such. Even now, the “backbone” websites of the global network (social networks, search engines, etc.) provide more and more opportunities, coming with services for meeting financial needs. Even today, one can successfully make cashless payments with a Google account. Facebook creates more and more services that enable its users to do business. Thanks to the integration of the technological base and infrastructure of the financial system with other technological spheres, today we may talk about the formation of a particular uniform infrastructure base for “a new digital economy”, economy of a new technological mode, which relies entirely on digital solutions (Kostousova and Komarova 2019). Eventually, the increasingly growing volume of financial services on the market is supplied not by financial institutions, but by

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“technology giants” (the largest technological corporations). While finance companies are still in the lead in terms of international and corporate finance, in consumer finance they are being gradually replaced by advanced high-tech companies (fintech companies). It is clear that the degree of digitization of the financial system is closely related to the digitization of a country and society as a whole. It should be noted that, as of 2020, the overall level of informatization of society in the Russian Federation is quite high (even when compared to that in western countries). The Russian Federation is clearly ahead of the worldwide mean value in terms of remote customer interaction, although it still lags far behind the recognized leaders in digitization policy (Tatuev 2018). At the same time, there are occasional cases of digital inequality of citizens both in our country and abroad. Nonetheless, while in Europe it is primarily due to the general high cost of access to the high-speed Internet, in Russia it is due to the presence of regions with low levels of digital and socio-economic development. While the average Internet connection speed in Russia is the same as that of France, Italy and most of the EU countries, we lag far behind them in terms of the prevalence of smartphones among the population, as well as coverage of the territory with mobile Internet repeaters. This is precisely why the proportion of people in Russia who prefer personal contact with representatives of the financial system is still very high – it is not only a question of mentality (trust in non-cash payments) but also a question of accessibility of the necessary devices and infrastructure. Furthermore, digitization gives rise to new security challenges. Some are related to the use of hardware, software, networks, and communications facilities. Such risks will be addressed by the relevant professionals. However, many risks are due to a human factor and are associated with changes in conventional technologies and ways in which users interact with the financial system. These risks should largely be prevented by the users of the system who may often lack the necessary knowledge and skills. The analysis of banking statistics reveals the potential bottleneck in remote technology. Thus, as at the end of 2017, only 55% of clients of financial institutions used remote forms of financial services. At the same time, they conducted more than 75% of all transactions (Aptekman et al. 2017). It is apparent that the majority of those who opted for personal attendance were the most vulnerable segments of the population: the elderly (who are largely slow in terms of adopting new technologies), as well as the residents of remote areas (characterized by the poor Internet access and low levels of socio-economic development).

4 Conclusion Digitization is the modern trend in economic development and the financial system was one of the first to feel its impact. Russia is an active participant in this process. As early as in 2014, the Bank of Russia joined the G20 initiative to increase the accessibility of financial services, which includes essential steps for digitization. Overall, the development pathway of the Russian financial system today corresponds to worldwide trends. The most promising technologies applied in the financial sphere are Big Data and data analysis, mobile technologies, artificial intelligence,

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robotization, biometrics, distributed registers, and cloud technologies. The leader of the process is the association of financial technology development FinTech, established late in 2016 by the Bank of Russia, VTB, Alpha-Bank, as well as a number of other financial institutions. In addition, the FinNet project is being implemented within the framework of the program referred to as the National Technological Initiative (NTI). Participants in these organizations have developed numerous proposals for changing legislation, establishing a technological infrastructure and requirements for the management of operation of the financial system. In addition, a number of major banks (Sberbank, VTB, etc.) carry out their own research and development in this direction. It is evident that reduction of the reliance on public finance for digitization and attraction of interested private investors is an important step towards the penetration of digital technologies into the financial system. Digitization has a clear positive impact on the financial system. Financial institutions using information technology are ultimately given considerable opportunities to optimize their business: diversify products and services, reduce transaction costs, improve the pricing efficiency, expand the client base, etc. Furthermore, increased transparency and monitoring of financial transactions are clearly positive factors. However, digitization in turn places certain demands on consumers themselves. Working with the digital representation of financial services requires a consumer to be both financially and digitally literate. The absence of any of these components immediately renders a consumer ineffective in terms of his or her interaction with the modern financial system. Today, it is just not enough to be computer literate, nor it is enough to be an advanced user of financial services. Complex “financial-digital competencies” are needed. This raises the challenge of educating the population and providing assistance to the most vulnerable segments of it. Acknowledgments. The paper was prepared within the scope of the grant of the Russian Foundation for Fundamental Research on Project No. 20-010-00346 on the topic “The study of the impact of modern digital technologies on the institutional development of the financial market and the systemic analysis of the consequences of the digitization of the financial market”.

References Bachas, P., Gertler, P., Higgins, S., Seira, E.: Digital financial services go a long way: transaction costs and financial inclusion. In: AEA Papers and Proceedings, vol. 108, pp. 44–48 (2018) Buckley, R.P., Malady, L.: Building consumer demand for digital financial services – the new regulatory frontier. J. Financ. Perspect. 3(3) (2015). https://papers.ssrn.com/sol3/papers.cfm? abstract_id=3084037 Gibson, E., Lupo-Pasini, F., Buckley, R.P.: Regulating digital financial services agents in developing countries to promoted financial inclusion. Singapore J. Legal Stud. (26), 26–45 (2015) Gurusamy, S.: Financial Services and Systems, 2nd edn. Tata McGraw-Hill Education, New York (2008). 326 p. Karlan, D., Kendall, J., Mann, R., Pande, R., Suri, T., Zinman, J.: Research and impacts of digital financial services. Working Paper Series 16-037, Harvard University, John F. Kennedy School of Government (2016)

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O’Sullivan, A., Sheffrin, S.M.: Economics: Principles in Action. Prentice Hall, Upper Saddle River (2005). 551 p. Ozili, P.K.: Impact of digital finance on financial inclusion and stability. Borsa Istanbul Rev. 18(4), 329–340 (2018) Avdeeva, I.L.: Vozmozhnosti tsifrovoy ekonomiki dlya razvitiya bankovskogo biznesa v Rossii. Srednerusskii Vestnik Obshchestvennykh Nauk, no. 11. pp. 70–79 (2017) Aptekman, A., Kalabin, V., Klyntsov, V., Kuznetsova, E., Kulagin, V., Iasenovets, I.: Tsifrovaya Rossiya: novaya real’nost’. McKinzie Company (2017). 132 p. Basayev, R.V.: Tsifrovizatsiya ekonomiki: Rossiya v kontekste global’noy transformatsii. World of the New Economy, no. 4, pp. 80–88 (2018) Kazarenkova, N.P., Svetovtseva, T.A.: Transformaciya bankovskoj sistemy Rossii pod vliyaniem cifrovizacii ekonomiki. Southwestern State University News. Series: Economics. Sociology. Management, no. 8, pp. 188–195 (2018) Kostousova, Y.A., Komarova, O.V.: Tsifrovizatsiya gosudarstvennogo finansovogo kontrolya: institutsional’nyy analiz. Zhurnal Ekonomicheskoi Teorii, no. 15, pp. 842–848 (2019) Lapteva, E.V.: Tsifrovizatsiya rossiyskoy ekonomiki, osobennosti i puti razvitiya. Epokha Nauki, no. 20, pp. 30–37 (2019) Polyanin, A.V., Dokukina, I.A.: Transformatsiya sotsial’no-ekonomicheskikh otnosheniy na osnove tsifrovizatsii biznes-prostranstva. Trud i sotsial’nye otnosheniya, no. 5, pp. 16–27 (2018) Pshenichnikov, V.V., Babkin, A.V., Burkaltseva, D.A.: Tendentsii tsifrovizatsii denezhnokreditnoy sfery v usloviyakh formirovaniya informatsionnogo obshchestva. Ekonomika i Upravlenie, no. 11, pp. 76–84 (2018) Tatuev, A.A.: Sovremennyy finansovyy kontrol’: vyzovy, protivorechiya i tsifrovye instrumenty razvitiya. Finansy i Kredit, no. 23, pp. 780–789 (2018) Yakunina, A.V., Yakunin, S.V.: Tsifrovizatsiya finansovogo sektora: novye vozmozhnosti i novye riski. Upravlenie finansovymi riskami v tsifrovoy ekonomike, no. 3, pp. 70–79 (2018)

Development of Accounting, Analytical and Control Support for Setting and Solving Management Tasks of Large Corporations Tatyana M. Rogulenko1(&) , Anna V. Bodyako2 and Svetlana V. Ponomareva3

,

1

2

State University of Management, Moscow, Russia [email protected] Financial University under the Government of the Russian Federation, Moscow, Russia [email protected] 3 St. Petersburg State University of Economics, Moscow, Russia [email protected]

Abstract. The role of accounting, analytical and control support for setting and solving management tasks of large corporations is increasing in connection with the processes of digitalization of management. This requires updating the principles of information support of the system. In order to manage costs, it is becoming important to determine cost centers and responsibility centers. The article considers the ways of development of principles of information support of the system of internal cost and cost management in large companies, which is an important component of the system of economic and financial security. The model of identification of the role of accounting and analytical and control support in the implementation of economic strategy of development of a business entity on the basis of a new competent method has been determined, which allowed controlling and evaluating key business objectives. The purpose of modeling financial and economic processes, investment, innovation and their information support, is to create a clear picture of the opportunities to increase the market value of the company and its value properties. Based on the assessment of the existing practice, the main measures for the successful implementation of the strategic guidelines for the holding’s development have been identified, such as: development of the strategy for achieving targets, close integration of the tactics management systems and development strategy, creation of a business development model, development and control of the target strategic development parameters, an effective financial policy of economy and risk minimization, development of strategic initiatives. Keywords: Accounting
Analytical and control support of management Cost
Development strategy
Intra-corporate financial control JEL Code: M20


M41

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1256–1265, 2021. https://doi.org/10.1007/978-3-030-59126-7_137




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1 Introduction In the economic press and on open forums, many specialists in the field of accounting, analytical and control support for setting and solving management tasks (hereinafter – AACS) anticipate their variants of improvement, so-called “security methods”, as a characteristic of principles, which, according to their idea, are the starting point of any method. This is the only correct way of scientific search of variants of development of accounting and analytical and control support for setting and solving administrative tasks, as well as others. The principles scientifically verified and competently applied in economic and management practice do not allow it to enter a crisis zone. The term “principle” means the established limitations of the strategy and tactics of an economic agent. Improvement of the principles will also ensure the progressive development of the economic subject (Rogulenko et al. 2016a, b). Figure 1 shows an important, in our opinion, principle of “Preferences of national interests in the standardization of accounting rules and actions”, its implementation is now more and more limited in connection with the so-called “westernization of accounting standards”. Demands of economic and political reality

Evolution (scientific heritage)

PRINCIPLES as an object of improvement Improved structure and content of principles in a particular area of economic practice Structure and content of the principles of accounting, analytical and control support for setting and solving management tasks (development of the authors) Effective management find and "neutralize" risks

Scientific strategizatsiya of key competencies

Collaborations save the best and add the necessary

Preferences of national interests in standardization

Transparency and availability of relevant information for stakeholders

Determine the content of the principles of information support of intraeconomic development by management centers in a specific sphere of economy Costs

Investment

Taxes

Profit

Reserves

Fig. 1. The logic of searching for improvements of the principal basis of management and choice of the option of accounting and control support of tactics and strategy of development of a concrete sphere of economy. Source: compiled by the authors.

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2 Methodology Improvement of the principal basis for the management of accounting, control and analytical information is the most important factor in ensuring financial security of economic activities of large economic entities with state participation. The study of literature sources on the factors of financial security of corporate activities in the Russian Federation allowed forming an idea of the most significant factors, the composition and content of which is illustrated in Fig. 2. As the results of our research have shown, many specialists ignore the most important principle of formation of the AACS system – the subject matter of scientific and practical recommendations on improvement of tactics and strategy of economic development.

Norms of reliability, safety and permissible risk levels Environmental influence

Effect of road accidents prevention measures

Influence of the human factor

Factors to ensure safety and reliability of the transportation process

Technologization of the transport process components

Safety and reliability of machinery and tracks

Level of security programs funding Level of intelligent management of all elements of the transportation process

Fig. 2. Factors for ensuring financial security of the holding, which determine the growth rate of total development costs (Zamyshlyaev 2013)

For example, Smirnova and Tsyganova (2016), while disclosing the provisions on the priority role of information and analytical support of business, use a very blurred concept – “in the mode of regular strategic management”, which, in their opinion, is predetermined by “the need to develop a competitive strategy based on the presentation of relevant information and the creation of conditions for adaptation to an unstable

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environment”. The authors of this publication do not disclose what a “regular strategic management mode” is. The modern system of management of business strategy of development of large holding structures implements the principle of collaboration, when, while maintaining successful business units in the holding structure and their tactics, new units, new business processes and their information support are introduced into the holding management. It should be noted that this principle is the basis for the development of the whole set of principles of effective management illustrated in Fig. 1 above. Some researchers refer to this principle as “continuity”, which, in our opinion, is not quite true, since continuity does not imply the use of applied systems (methods, tools, etc.), but the transformation of them. Collaboration implies preserving best practices and complementing them with new ones. Porter (2005) called it a “hybrid development strategy”. The principle of effective management implies, first of all, search and “neutralization” of financial and other entrepreneurial risks, which requires a wide information base (from accounting, statistical and other sources). Such information store is entered into information-analytical systems to receive an output of the required information for administrative decision-making. At its core, it is a historically proven method of information analysis, previously called “economic analysis”, and today, for an inexplicable reason, it is referred to as “business analysis” (Barilenko 2014). Specific indicators are analyzed – the results of financial and economic activity of the real company in the real segment of the economy, and as for business, such indicators have not yet been developed, since the very concept of “business” can mean anything: from sales at fairs to speculation on the stock exchange. According to Smirnova and Tsyganova (2016), “strategic accounting and reporting are included as a subsystem in the strategic management accounting and analytical system that provides information and analytical support for effective strategic management”. The authors of this publication also use the controversial notion of “strategic analysis”. In other words, everything that the adjective “strategic” is added to requires specification, but this information can be hardly found in any publication or even textbook.

3 Results The development of strategies of any object (company, information system, etc.) has now acquired a relatively new method which is called the competent method. One of the principles of the AACS system is the principle of scientific strategy by competence. Competence in our understanding is a set of economic and management properties inherent to the majority of companies and their structural units in a particular sphere of economy. This method is also used for smaller tasks – in planning, analysis and control. By and large, competences are the “internal knowledge” of management about where to develop, at what expense (resources and reserves) and using which method. The AACS strategy is also shaped by key competencies based on the results of tactics achieved over the evaluation period, as illustrated by Fig. 3.

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Application of such a method (model) is predetermined by business scaling and expansion of its economic (technical, financial, credit, social) tasks. From all their variety key tasks are selected, the solution of which is controlled and evaluated.

ECONOMIC STRATEGY A d j u s t m e n t s

ASSESSMENT

Provides information to solve management tasks in full. Such information is insufficient and its search should be expanded. Relevant information is not enough and improvements are needed in the principles and methods of accounting, analytical and control support for setting and solving management tasks

Competencies are indicators of plans (budgets) RESULT

Accounting, analytical and control support for setting and solving management tasks

VARIANTS

Amendments to the rules of formation of relevant information (socalled "management accounting"), development of new accounting policy positions (accounting and tax), making adjustments to the principles and methods of internal corporate control and analysis

Fig. 3. Model for identifying the role of accounting, analytical and control support in the implementation of the economic development strategy of an economic entity

Analysts note that IFRS reporting does not solve the problem of creating relevant management information, as it contains only financial indicators. To implement the Development Strategy of a business entity in terms of the competencies specified in it, a wide but clearly structured array of relevant information is needed, and this is not only financial, but also other types of information, such as technological, social, environmental, etc. With modern information technologies, the collection of such information has been significantly accelerated, there is an opportunity to structure it and present to interested users as specialized information reports. The compilation and analysis of all information in such reports is an important element of internal corporate financial control along with the control of non-financial information, which is a functional element of the AACS. It is common knowledge that the Russian Government approved the Concept of Development of Public Non-Financial Reporting (Concept 2017). Consequently, the system coordinators received guidance for action. The purpose of the traditional internal control system (hereinafter referred to as the ICS) is perceived by most specialists as verification of compliance of accounting with the requirements of the Law and the Accounting Regulations (currently – federal standards). Changed situations in the corporate economy and business process management system have formed new challenges faced by specialists in accounting, analysis and control, and above all, it is evidence of the simultaneous expansion of the

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range of ICS objects, along with the specialization of its methods in relation to these objects. In practice, this is expressed in the fact that the effectiveness of the ICF is determined by the need to separate methods and sequence of control actions on current (operational) financial and economic activities (officially recognized reporting periods) and long-term investment projects, usually covering 2–5 years. The long-term investment project, especially if it concerns modernization, technological reequipment and other capital intensive works, has become if not new, more actualized object of internal corporate financial control. At the same time, the control in the circuit of operational financial and economic activity not only preserves its importance, but also becomes the object of improvement in terms of principles and methods of conduct. Professor Melnik (2015) drew attention to this property, noting that “in this part, the task of harmonization of the internal control system with the main positions of the organization of the operational management and regulation of production becomes central, because in order to prepare objective, reliable and complete reporting it is necessary, first of all, to be oriented on operative identification of those deviations which arise in the process of implementation of the set tasks and development of measures ensuring maximum reduction of risks and minimization of their consequences”. It is sensible to rely on the authoritative opinion of Professor M.V Melnik in substantiation of the necessity of clear specialization of methods of internal corporate financial control in the sphere of current financial and economic activity (tactics of solving everyday tasks) and for the state of realization of economic strategy adopted in the company. “Any management accounting at the present time,” says Professor Melnik (2015), “is already oriented not only towards the summarizing of the annual task, i.e. it is oriented towards the annual reporting period, but is also considered somewhat more broadly, including investment activities and future project management”. At present, the principles of corporate management, which must necessarily include the principle of operational provision of management tasks with relevant accounting, analytical and control information, are implemented by means of high-tech operating systems such as CMS (corporate management system). Within the framework of the corporate management system, the “Concept of Defining the Goals and Tasks of the Corporate Mission of the Holding” should be developed. The purpose of modeling financial and economic processes, investment, innovation and other processes and their information support is to create a clear idea of the possibilities of increasing the market value of the company and its value properties (nowadays referred to as “business socialization”). It is possible to support the opinion of many experts that the most significant contribution to the financial stability of the company and, consequently, to its market capitalization is made by the so-called “internal controllers and auditors”. In order to identify the shortcomings of control procedures in the corporation, it is advisable to apply the following four-stage diagnosis, including control procedures, in accordance with the planned register of control measures; identification of missing elements, error detection, inclusion of compensation control procedures in the check.

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New concepts of formation of accounting and analytical support of the holding strategy are created not only in the sphere of control, but also in the system of indicative budgeting. The study of scientific publications on the content and methods of application of “budgeting” tools in practice gives grounds to believe that the development of an indicative budgeting system for specific practice, is impossible for two reasons. Firstly, the term itself is used incorrectly, because budgeting is a specific process and indicative planning is applicable to the strategy of the industry, region, company, when the boundary values are calculated – maximum and minimum indicators. Secondly, even the construction of alternative budgets, which is possible with the help of modern information technologies, has no particular practical value due to the extreme mobility of modern economic, political, social and other processes. Of course, it is possible to develop several budget options and then compare them with the actual indicators achieved to identify the causal relationship between them. However, this is rather a task for research institutions. In our opinion, the term “budgeting” should be understood as the formation of estimates when planning indicators of financial and economic development of this or that sector of the economy. In this case, it is the planning of tactical steps towards the indicators of the approved strategy that is a functional element of the management system as a whole, along with accounting, analysis and control. Guided by this conviction, we studied the planning problems in the companies of PJSC “Russian Railways”. Due to the mentioned problems and tasks, accounting and analytical support of the new business model of holding strategy management becomes the center of formation of the proof base of holding possibilities in achieving its goals (Fig. 4). The development of the principles of information support of the system of intercompany management of operating costs and cost of transportation in railway transport companies seem an important component of the system of economic and financial security of corporations. Improvement of the concept of information support for the system of intercompany management of operating costs and prime cost of transportation in railway transport companies involves the solution of two issues. Firstly, it is the development of accounting principles and methods of reporting as prerequisites for increasing their information value. Secondly, this improvement should involve two other information sources of management solution support – economic analysis and internal corporate control, since the triad – accounting, analysis, control – is an organic whole from the point of view of both economic theory and financial and economic activity management practice. It should be stressed here that the general composition of such principles is divided by all researchers into two arrays: fundamental (unchanging depending on the policy of a particular economic space and time) and methodological and legal, determined by local and temporal policies. The composition and content of the fundamental principles of information support of any process is well known: truthfulness, consistency, relevance, etc., so we accept them as given and turn to the characteristics of methodological and legal principles of information support system of intercompany management of operating costs and prime cost of transportation in railway transport companies.

Development of Accounting, Analytical and Control Support

Development of the Strategy for achieving targets for each of the blocks and for the Holding as a whole

Close integration of tactical management systems and the Development Strategy

Creation of a business development model for the main key blocks: "Production", "Services", "Infrastructure; repair", "International Engineering and Construction", "Social"

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Development and control of target strategic development parameters for each business unit

Measures to ensure implementatio n of the Holding's Strategy

Effective financial policy of economy and risk minimization

Development of strategic initiatives aimed at achieving targets for each key block and indicator, as well as the application of corporate policies, programs and standards aimed at implementing the Strategy

Fig. 4. The main measures for successful implementation of the strategic guidelines for the development of the holding company

For effective use of methodical and legal principles it is necessary to receive the exhaustive characteristic of object of their application, in our research it is expenses and all information arrays connected with them. From these positions, it is not so much the discussion of terminology (differentiation of costs, expenses, etc.) that is important here, but rather the classification of costs and identification of the factors of their growth or reduction. This is the main area of accounting for the purposes of managing the efficiency of freight and passenger transportation, as well as other processes (infrastructure, research, etc.). In order to manage costs, the goal setting of cost centers and responsibility centers becomes important (Budgeting-based organizations 2016; The goal setting of internal control 2016). In our view, the distinction of these terms is based on the fact that responsibility centers are formed from the perspective of burden of rights and responsibility, and cost centers are formed from the perspective of resource use (Fig. 5). If we are to catch the differences of concepts, then “the cost center is a structural unit, and the center of responsibility is the head of this structural unit”. In some sources, specialists add the adjective “financial” to the term and write “financial responsibility centers” (FRCs). It also specifies which financial indicator is subject to liability. For example, Murav’ov (2010) believes that “ensuring a reasonable choice of the base for

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To the present

From the past

Terminology ≈ Cost centers Structural units

Understanding from the resource use perspective

Responsibility centers

Understanding in terms of the burden of rights and responsibilities

Fig. 5. Visualization of the correct understanding of the terms “cost center” and “responsibility center”

the distribution of general economic expenses by FRC/CP (profit center) is simply necessary within the framework of cost accounting in the direct costing system. In challenging economic realities, setting and solving the task of updating the principles of information support for the system of intra-corporate management of operating costs and prime cost of transportation, and, consequently, capitalization, income and profitability of companies has turned from a necessity to an acute need.

4 Conclusions First, in complicated economic realities setting and solving the problem of updating the principles of information support of the system of intra-corporate cost and cost management of products and services, and, consequently, capitalization, income and profitability of large companies with state participation has turned from a necessity into an acute need. At present, the problem of forming and presenting transparent accounting and financial information about the activities of corporations is quite formal, i.e. separate blocks of the management system are being improved, and the links between them are not paid enough attention to. Secondly, the development of the principles of information support for the system of internal cost and cost management in large companies seems to be an important component of the system of economic and financial security.

References Barilenko, V.I.: Biznes-analiz kak instrument obespecheniia ustoichivogo razvitiia khoziaistvuiushchikh sub”ektov [Business analysis as a tool to ensure sustainable development of business entities]. Account. Anal. Auditing (1), 5–31 (2014) Zamyshlyaev, A.M.: Prikladnye informacionnye sistemy upravlenija nadezhnost’ju, bezopasnost’ju, riskam i resursam na zheleznodorozhnom transporte [Applied information systems for reliability, safety, risk and resource management in railway transport]. Shubinskii, I.B. (ed.) Ul’ianovsk (Russia), Ul’ianovsk, regional printing house “Pechatnyi dvor” (2013)

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Melnik, M.V.: Sistema vnutrennego kontrolia kak faktor razvitiia upravlencheskogo ucheta [Internal control system as a factor in the development of management accounting]. Innov. Dev. Econ. 2(26), 89–95 (2015) Murav’ov, S.: Upravlenie po tsentram otvetstvennosti. SWOT-analiz [Management of responsibility centers. SWOT analysis] (2020). http://afdanalyse.ru/news/swot_analiz/2010-02-1521. Accessed 11 Feb 2020 Porter, M.: Competitive strategy. Techniques for analyzing industries and competitors. AlpinaBusiness, Moscow (2005) Smirnova, E.V., Tsyganova, I.Yu.: Problems of information and analytical support for business strategies development in competitive environment. Intellekt. Innovatsii. Investitsii (9), 69–74 (2016) Rogulenko, T., Bodiaco, A., Zelenov, V., Ponomareva, S., Mironenko, V.: Budgeting-based organization of internal control. Int. J. Environ. Sci. Educ. 11(11), 4104–4117 (2016a) Bodiako, A.V., Ponomareva, S.V., Rogulenko, T.M., Karp, M., Kirova, E., Gorlov, V.V., Burdina, A.: The goal setting of internal control in the system of project financing. Int. J. Econ. Financ. Issues 6(4), 1945–1955 (2016b)

Artificial Intelligence as a New IT Means of Solving and Investigating Crimes Oleg A. Zaytsev1(&) , Pavel S. Pastukhov2 , Marina Yu. Fadeeva3 , and Vadim N. Perekrestov3 1

Institute of Legislation and Comparative Law Under the Government of the Russian Federation, Moscow, Russia [email protected] 2 Perm State University, Perm, Russia [email protected] 3 Volgograd State University, Volgograd, Russia [email protected], [email protected]

Abstract. Purpose: The purpose of this research is to distinguish the notion of legal, forensic and IT functioning of artificial intelligence in current criminal investigation methods. Design/Methodology/Approach: The research methodology is based on scientific knowledge methods, predominantly the dialectical method. The article applies general scientific (dialectics, analysis and synthesis, abstraction and concretization) and specialized scientific (comparative legal, technical legal) methods. Findings: The article analyzes the potential and opportunities of implementing AI in the criminal proceedings for collecting forensically relevant information from the digital social infrastructure. The new IT-focused strategy of criminal investigation considers artificial intelligence to be the main IT means of solving and investigating crimes. In terms of obtaining digital evidence, artificial intelligence significantly increases proving efficiency and enables a multifaceted, complex and objective approach to investigation of crime circumstances. Originality/Value: The research results stipulate that a properly established IT-based system collecting, storing, processing, providing and using data on significant events provides preliminary investigation agencies the opportunity to obtain forensically and criminally relevant information via automated search systems capable of collecting and analyzing forensic registers, information networks databases and big data. As a conclusion, the present-day social IT infrastructure requires a new investigation strategy of criminal proving based on artificial intelligence, automated search systems and data banks. To meet this requirement, it is necessary to develop a new legal and IT system of evidence collection involving law enforcement analytical centers and specialized protected networks. Keywords: Criminal proceedings
Digital evidence Selectiveness
Personal data
Big data JEL Code: K140


Artificial intelligence



K240

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1266–1273, 2021. https://doi.org/10.1007/978-3-030-59126-7_138

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1 Introduction Criminal investigation is the process of obtaining proving information from traces of criminal activity that can be found in two spheres: material sphere and human consciousness. Division of these two spheres has a practical value because it enables to specify evidence location, detection, reporting and collection. The material sphere is a physical environment containing all traceology evidence types: imprints, biological, chemical and other traces, e.g. traces of bodily damage and other visible changes. Such traces have shape, weight, size and demonstrate other physical parameters and changes. The main attribute of these traces is their visibility to the human eye and ability to be revealed by traditional forensic means: optical and illumination tools; physical devices; chemical reagents, etc. Human consciousness keeps immaterial traces in memory of criminal proceeding participants; these traces can be collected by means of interviewing, interrogation and other investigation activities. Such methods of obtaining information witnesses, victims and other participants are considered to be traditional and can be applied without any forensic tools. As information technologies became widespread, the material sphere and its criminal activity traces got extremely complicated (Fantrov et al. 2019); consequently, their detection and reporting methods changed as well. Digital crime traces and new investigation methods not only require an analysis of respective changes but also promote law enforcement agencies to develop and implement new investigation strategies (Zaytsev and Pastukhov 2019). The key element of such strategies is computer information, estimated as a unique, universal and ultramodern IT means of solving and investigating crimes. Implementation of new strategies is caused by global changes made to the material sphere by information technologies, i.e. by constant development of IT devices, the Internet of things, information systems, ICT networks and cloud systems where traces of crime preparation, commission and concealment are inevitably formed. Thus, it is possible to distinguish a new part of traditional material environment – the digital environment, with its new properties and attributes, previously unknown technological devices and their location, where digital traces are formed. Crime traces in the digital environment have a new form and content and thus require an innovative approach by preliminary investigation agencies. New methods of work with digital traces have a great potential for investigation agencies and provide unique opportunities for crime detection, solution and investigation. This potential is enhanced by computer information, through which AI technologies are implemented. Artificial intelligence can find forensically relevant information thousand times faster than human mind, as well as to analyze and process this information, provide ready solutions, recommend typical forensic theories and their verification options. AI plays a special role is forensic methods of identifying items, documents, materials, substances and people.

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2 Materials and Method Theoretical basis of this research consists of fundamental works by Russian forensic and criminal scientists (O.A. Zaytsev, A.A. Kurin, N.S. Manova, P.S. Pastukhov, G.A. Pechnikov, N.A. Solovyeva, O.A. Sycheva, Y.V. Frantsiforov, V.M. Shinkaruk) who underline importance of artificial intelligence as an innovative IT means of solving and investigating crimes. The research methodology is based on scientific knowledge methods, predominantly the dialectical method. The article applies general scientific (dialectics, analysis and synthesis, abstraction and concretization) and specialized scientific (comparative legal, technical legal) methods.

3 Results For a long time, computer information had been considered by legal science to be a specific case of electronic information and had multiple interpretations until a legal definition was provided in 2001. According to Amendment 1 to Article 272 of the Russian Federation Criminal Code, computer information is understood as information (messages, data) presented in the form of electric signals, regardless of the facilities used for their storage, processing and transmittance. Computer information is made unique firstly by its multiple properties that both separately and jointly enable it to become the information society’s value, because computer information provides economy robotization; monetary turnover; financial market functioning; intellectual property creation and protection; contract and trade activities of individuals and legal entities; reduction of paperwork to its minimum. As Y.V. Frantsiforov and N.A. Solovyeva rightfully note, computer information establishes digital rights for monetary funds, shares, bonds, other property and thus more and more often becomes the object and subject of criminal offences (Frantsiforov and Solovyeva 2019). The second property, as we mentioned above, is that computer information is able to preserve numerous crime traces in cellphone networks, computer systems and other various IT devices and video systems (this applies not only to cybercrimes but all common crime types), thus becoming electronic evidence in criminal cases. Commission of traditional common crimes may involve digital technological devices, vehicles, electronic payment transfers, information systems and ICT networks that record people’s actions and decisions. The third property is that computer information is the main source of evidence collection in criminal proceedings. In this case computer information acts as a forensic tool because digital traces can be detected only using computer information provided by programs and hardware. For example, examination of electronic data storage units requires respective computing devices and software. No other means can reveal this digital information and make it become a criminal case evidence. Thus, computer information involvement creates a new method of working with digital traces and eventually shapes new proving technology (Zaytsev et al. 2019).

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Changes in methods of digital trace collection influences forensic identification as a universal method and a process of comparative examination and obtaining knowledge about crime circumstances. Present-day identification procedures are based on mathematical description, reporting and research methods applied to all criminal investigation objects classified as evidence. The new identification concept indicates a shift from analogue information examination to digital information processing. Digital methods of information processing enable to achieve mathematical precision in detection and reporting attributes of a criminal trace or evidence, face image and human voice and then to save, systematize and use this information for solving a specific case in relation to which it was collected as well as for solving other crimes connected to the suspect. As a result of mathematical method application, description of general and specific attributes of the object becomes more exact and precise. Revealing these attributes is the basis of all forensic registers (Yumatov 2015). The most important thing is that digital forensic information in all forensic register types other databases becomes available for comparative examination to all authorized preliminary investigation bodies regardless of their location, thus establishing a new investigation strategy. Such strategies are based on information analytics and will potentially lead to establishment of IT centers collecting and analyzing digital forensically relevant information from various electronic data storage units, information networks, ICT networks, identification modules of end-user devices. Comparative study of forensically relevant digital data is provided by formalization of its attributes. Formalization results in a strictly regulated description of a task by means of a mathematical model enabling to use computing devices for comparative study of various forensic items located in different places or stored in different databases (Kurin and Kolotushkin 2004). Registering data are formalized and included in main units of forensic registering system, i.e. information charts, formalized blanks with a limited number of fields or their digital analogues (Kurin 2018). We consider the sequence of solving a forensic task through mathematical methods and computing devices as a set of the following stages: 1. Collecting initial data on a forensically relevant object. 2. Defining attributes of a forensic object by applying technical forensic means. 3. Setting forensic objectives that can be solved by using forensic objects during investigation. 4. Formalizing information contained in the attributes and task solution using electronic computing devices. 5. Developing (selecting) a task-solving mechanism. 6. Developing (selecting) a task-solving program given computing device and forensic registering types. 7. Preliminary investigation officers’ usage of data stored in forensic registers and databases applying electronic computing devices as a way of interaction between human and information for comparative analysis and obtaining forensically relevant case evidence.

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While in the analogue era a search for identifying data had to be manually performed by analytic center personnel, electronic computing device made this process automated (Solovieva et al. 2019). Initially, due to lack of computer networks, small computing captures and other technical issues comparative process was long, simplistic and limited. IT progress put artificial intelligence in the foreground – AI is capable to solve comparative analysis tasks in short time using not only forensic registers but also numerous databases of state agencies and companies, while getting more accurate identifying data. The notion of artificial intelligence is understood by the National strategy of artificial intelligence development as “a complex of technological solutions enabling imitation of human cognitive functions (including self-learning and searching for solutions without a pre-set algorithm) and fulfillment of tasks with results at least comparable with human intellectual activity results. The complex of technological solutions comprises an informational and communicational infrastructure, software (including software involving machine learning methods), processes and services on data processing and providing solutions”. Efficiency of AI application for searching relevant proving information is provided by its ability to imitate human cognitive functions (Pechnikov and Shinkaruk 2019), i.e. human intelligence. Traditionally intelligence means ability to perform activities with previously obtained information, i.e. to analyze, compare, evaluate, generalize and eventually use it for fulfilling tasks. Intelligence involves cognitive abilities typical for brain functions that enable human cognition, spatial orientation, understanding, calculation, speech and thinking abilities. Application of artificial intelligence in searching forensically relevant information involves usage of automated searching systems by authorized personnel for examining various databases according to certain parameters: keywords, sizes, IP addresses, MAC addresses, number, IMEI and other identification modules, voice, appearance description, full name etc. Preprogrammed artificial intelligence would compare search parameters with information available in databases, analyze it and offer solution options. Thus, we can only partially agree with V.B. Nagrodskaya, who claims artificial intelligence’s purpose is solving tasks that can be completed without involving human intelligence (Nagrodskaya 2019). Actually, human involvement is rather active when it comes to development of search programs, forensic registers, databases and other means of automated registering of events, i.e. digital systems of various kinds for storing potentially relevant forensic data. Due to the fact that artificial intelligence is understood as “a complex of technological solutions”, electronic computing devices, ICT networks and software, we can characterize it as an ultramodern IT means of solving and investigating crimes. In his study of AI and opportunities for its legal implementation, R.F. Zakirov specifies its attributes: “…multifunctionality, ability to work with massive amounts of data, system stability, reliable data preservation, flexibility, ability to self-learn and analyze legal situations under constantly changing conditions” (Zakirov 2018). Ability to work with massive amounts of data is a vital advantage of artificial intelligence that enables it to successfully combat crimes even when information sources are increasing rapidly (Sycheva 2019). If searching parameters and objectives

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are set correctly, robotic hardware and software complexes can perform searching procedures without human assistance. Present-day social digitalization and law enforcement informatization enabled to integrate information resources based on a common system of hardware/software support of law enforcement activities (Manova et al. 2019), as well as Center of the Traffic Organization databases, Safe City hardware/software complex, ERAGLONASS state automated information system, genome data, personal data in various ICT networks, etc. Application of AI information analysis capacities is aimed at searching and analyzing information stored in various law enforcement registering systems as well as in data sources not related to law enforcement thus enabling to process large data volumes by using a set of approaches, tools and methods for automated processing of structured and unstructured data from multiple sources, including non-related ones, that can’t be processed manually in due time. A successful case of AI implementation is the experiment on improving coherence and quality of state information resources’ data (Fantrov and Shinkaruk 2018) that is aimed at developing digital profile infrastructure. Personal data are collected by interagency communication in a single identification and authentication system as well as governmental and municipal information systems.

4 Conclusion Thus, computing information, information technologies and artificial intelligence are mega-industrial digital tools and drivers for modernizing criminal investigation activities and justice system as a whole. Meanwhile it must be kept in mind that AI is an extremely powerful tool able to intrude private lives and provide personal data to law enforcement agencies, so it is necessary to maintain a reasonable balance between state, social and personal interests (Losavio et al. 2016). The international scientific community is looking for a compromise between private life integrity and necessity to combat cybercrimes and takes measures for developing a justice system that is based on latest IT achievements. The guidelines for electronic justice stipulate main principles for increasing justice system efficiency. The European Ethical Charter on the use of artificial intelligence in judicial systems and their environment emphasizes the need for an in-depth public debate on these tools prior to their implementation caused by the urgent need for cyberethics to provide a framework for the development of artificial intelligence algorithms while respecting fundamental rights The 2018 Montreal Declaration of Responsible AI also underlines moral and ethical problems that may have serious social consequences. Its AI development principles include protection of personal spaces from the intrusion of AIS and data acquisition and archiving systems unless a person is the object of official supervision of study. According to the Declaration, people must always have the right to digital disconnection in their private lives.

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In conclusion we would like to underline that in the present-day information society proving process can be understood as “collection, analysis, transfer and decoding of digital evidence” from various IT devices and its transformation into electronic evidence. In the digitalization era we consider artificial intelligence to be an efficient IT method of solving and investigating crimes that is able to significantly facilitate cranial proceedings. However, it is necessary to follow the key principles for AI development and implementation – private life integrity and protection from unlawful or unreasonable limitations of human rights and freedoms.

References Fantrov, P.P., Shinkaruk, V.M.: Regional strategies of national security of the South of Russia: opposition of civic associations to criminal threats. Legal Concept 17(2), 33–38 (2018) Fantrov, P.P., Guhl, W., Solovyeva, N.A., Shinkaruk, V.M.: National Security of Russia: Controversies of Society and State. Volgograd State University Publishing House, Volgograd (2019) Frantsiforov, Y.V., Solovyeva, N.A.: Questions of ensuring protection of participants of criminal legal proceedings in an information sphere. In: Popkova, E. (eds.) Ubiquitous Computing and the Internet of Things: Prerequisites for the Development of ICT. Studies in Computational Intelligence, vol. 826, pp. 67–76. Springer, Cham (2019) Kurin, A.A.: Modern opportunities and prospects of information and analytical support for crime detection. Lawyer-Lawyer 1, 45–51 (2018) Kurin, A.A., Kolotushkin, S.M.: Mathematical Methods in Forensic Science: A Course of Lectures. V.A. Ministry of Internal Affairs of Russia, Volgograd (2004) Losavio, M., Pastukhov, P., Polyakova, S.: Cyber black box/event data recorder: legal and ethical perspectives and challenges with digital forensics. J. Digit. Forensics Secur. Law 10(4), 43– 57 (2016) Manova, N.S., Shinkaruk, V.M., Solovyeva, P.V.: The problems of using electronic information in criminal proof. In: Popkova, E. (ed.) Ubiquitous Computing and the Internet of Things: Prerequisites for the Development of ICT. Studies in Computational Intelligence, vol. 826, pp. 77–83. Springer, Cham (2019) Nagrodskaya, V.B.: New technologies (blockchain/artificial intelligence) in the service of law: scientific and methodological manual. Prospect, Moscow (2019) Pechnikov, G.A., Shinkaruk, V.M.: Computing systems (computers) and criminal trial. In: Popkova, E. (ed.) Ubiquitous Computing and the Internet of Things: Prerequisites for the Development of ICT. Studies in Computational Intelligence, vol. 826, pp. 265–274. Springer, Cham (2019) Solovieva, N.A., Khorsheva, V.S., Likholetov, E.A., Naumov, Yu.G., Kairgaliev, D.V.: Program modeling in the investigation of crimes against cybersecurity in Russia. Communications in Computer and Information Science, vol. 1084, pp. 305–314 (2019) Sycheva, O.A.: Common sense in judicial proof. Russ. Judge 8, 15–20 (2019) Yumatov, S.V.: Computer program “Forver-trasolog”. Volga Sci. Bull. 6, 69–71 (2015) Zakirov, R.F.: The use of modern IT-technologies as a means of achieving the main goals of legal proceedings. Bull. Civ. Process 1, 211–219 (2018)

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Zaytsev, O.A., Pastukhov, P.S., Solovyeva, N.A.: The legal and informational-technological regime of access to the secret protected by the law at an initial stage of investigation. In: Popkova, E. (ed.) Ubiquitous Computing and the Internet of Things: Prerequisites for the Development of ICT. Studies in Computational Intelligence, vol. 826, pp. 59–66. Springer, Cham (2019) Zaytsev, O.A., Pastukhov, P.S.: Formation of a new crime research strategy in the era of digital transformations. Bull. Perm Univ. Jurisprudence 46, 752–777 (2019)

Innovations in Pawnshop Activity: Legal Considerations and Practical Issues Yu. V. Sokolov(&), S. I. Lenshin, and F. G. Myshko State University of Management, Moscow, Russia [email protected], [email protected]

Abstract. Innovations are increasingly penetrating our lives and daily relationships. Progress is inevitable, and we can’t but take into account and exist together. Almost all relations are no longer inconceivable without innovation. It has long been common practice to make banking transactions, buy and sell goods and services staying at home. It is assumed that relations with pawnshops are no exception. However, operating law governing the work of pawnshops does not pay due attention to this issue and does not even envisage relations with them. In this article, the authors raise the question of innovating and using advanced capabilities of scientific and technological progress in relations with pawnshops. Law on pawnshops stipulates and presumes conventional relations with a pawnshop when a person having an item in possession brings it to the pawnshop for valuation and gets cash loan against this pledged item based on its market value. The author proposes to examine the introduction of innovative tools for the exercise of relations with pawnshops, for example, electronic workflow management in pawnshop activities and the term “electronic pawnshop”. In this article, the issues of identifying the legal nature of changes in relations with a pawnshop, as well as the legal considerations and problems concerning the application of new technologies in pawnshop work are also addressed. Keywords: Pawnshop
Pawnshop activity pawnshop
Pawn ticket


Innovations
Electronic

1 Introduction The introduction of innovative technologies in various fields of society in the 21st century, as well as their use in the governance of relations, have long been no dreams and fancies. Innovations become more widespread and deeply ingrained in everyday life. Companies setting up their business won’t be attractive in the market if they don’t have a properly designed site or even a page containing some information about their activity. Moreover, such companies or firms arouse doubt and suspicion, since they are insufficiently represented in information terms. Today, companies entering the market do not just open the corresponding sites and publish information about their activity to attract customers. Various electronic platforms, databases, clipboards serve for workflow management and making relevant operations. It’s no surprise because they facilitate the relations as truly as makes © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1274–1279, 2021. https://doi.org/10.1007/978-3-030-59126-7_139

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unnecessary to move from one office to another, being stuck in traffic jams in overcrowded public transport, and then spending countless hours on negotiations and networking, go back. Having realized that, many companies shifted to electronic workflow management and eased the lives of theirs and their partners. The pawnshop is no exception. It’s a special subject of civil law relations intended to protect the rights of the population from usury by granting short-term loans, as well as keeping against the pledged movable property. Any decent pawnshop has at least a well-designed website, and in turn, wins the advantage among those who do not use digital innovations. That’s the application of innovation and current laws in this field we will be talking about. Methodology. The methodological background of the study is general scientific methods, such as dialectical and historical; specific scientific methods, such as analysis, synthesis, induction, deduction; specific methods, such as formal-legal, comparativelaw, specific-sociological. Findings. The authors examine the possibility of using modern innovative technologies in legal relations with pawnshops and make a conclusion about that.

2 Changing Importance and Place of a Pawnshop in Civil Legal Relations at the Present Stage When someone talks about pawnshops, an image of a bad financial situation immediately comes to mind. There is a long-standing stereotype associated with the main purpose of the pawnshop. We used to think that people come to this organization only when they need to solve financial problems. This follows from the main purpose of the pawnshop specified in the law. Its purpose is to protect the population from usury. However, the lawmaker did not draw the lines of usury but gave reference to Art. 809 of the Civil Code of the Russian Federation (Clause 5)1, which defines “usurious interest” as interest two or more times exceeding the interest usually charged in such situations, therefore being excessive for the debtor (usurious interest)”. But everything indicates that in recent times various categories of people have resorted to the services of pawnshops. According to representatives of pawnshop associations, the clients are office clerks, i.e. people with relatively high income, and entrepreneurs. However, the provision of pawnshop services to entrepreneurs and legal persons is in direct contradiction of the current law, since the main purpose of a pawnshop under Art. 1 (Government of the Russian Federation 1996) of the Law on pawnshops is to protect the population from usury. The pawnshops are obliged to accept the movable property as a pledge only from entities not doing business and items are intended for personal use. If the entrepreneur enjoys the services of pawnshops, this directly breaches the current law on pawnshops. The law specifies the direct purpose of the pawnshop that is to accept for keeping items intended for personal use (consumption). Moreover, the law 1

Grazhdanskij kodeks Rossijskoj Federacii (chast’ vtoraja) ot 26.01.1996N 14-FZ (red. ot 18.03.2019, s izm. ot 03.07.2019) [Civil Code of the Russian Federation (part two) No. 14-FZ as of January 26, 1996 (last updated on 18 March 2019, as amended on July 03, 2019)] // Sobranie zakonodatel’stva Rossijskoj Federacii, January 29, 1996; No. 5, Art. 410.

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on cash loans (Government of the Russian Federation 2019a) is directly extended to pawnshop relations. For instance, if the entrepreneur pledges a movable thing intended for entrepreneurial purposes without declaring, he breaches the law thereby misleading the pawnshop and taking the consumer’s benefits. Accepting an item to be kept under a loan, the pawnshop relies on the good faith of the consumer and the corresponding purpose of the item, but the burden of identifying the nature of its use (entrepreneurial or consumer) is imposed on the pawnshop because it arises from its activities. A pawnshop is a business entity pursuant to the law on pawnshops. Clients of pawnshops more often borrow funds not to make ends meet, but to tackle some problems of financial circulation. Thus, the pawnshop is getting higher importance for the economic and financial turnover in the field of economy. And the point is not that the pawnshop takes advantage over competitors because it doesn’t require any special documents, doesn’t carry out special verification procedures, doesn’t practice approvals/disapprovals as in banks and other financial organizations. The pawnshop takes the risk of loss of property accepted for keeping, while a bank or other financial institution can impose a penalty on the debtor’s property in the event of non-return through the judicial authorities, but a liability to the pawnshop is usually confined to the value of the property under transfer. The pawnshop quickly responds to requests on granting loans and does not apply special procedures for checking the financial status of the borrower. Besides, the borrower won’t be persecuted by the financial organization in the relation of imposing a penalty on the property under possession, since his liability is limited to the value of the pledged item.

3 Pawnshops in Property Circulation and the Introduction of an Electronic Pawnshop This seems to suggest the possibility of engaging the institution of pawnshop lending in civil relations. Along with that, attention should be paid to some constraints related to the application of the law on pawnshops. Among them are: 1. Limitations and restrictions about the subject-matter of a loan agreement against the pledge of movable property. The law specifies that only individual movable thing that meets people’s needs can be pledged in the pawnshop. 2. Relations between pawnshops and individuals imply only direct communication without the use of modern electronic means that could reduce the time for interaction and satisfaction of their interests. 3. The sale of the pledged property is provided exclusively under the direct participation of both a pawnshop and other interested parties. It seems to us that the electronic pawnshop project would help to resolve the abovestated problems. It could provide for electronic registration of relations between the pawnshop and an individual. At least, an individual should have an opportunity to apply for a loan against pledged property on the pawnshop website and its electronic evaluation, for example using special tools, such as scanner, which would help the

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pawnshop employees to get the necessary information and parameters of the items under pledge. In the earlier articles, the author attempted to divide the relations between a pawnshop and an individual in relations on the provision of loan by pawnshops and pledge of the item provided to a pawnshop as collateral for a loan (Government of the Russian Federation 2013). Thus, relations on the provision of loans could be exercised using electronic capabilities and available means of legal regulation of e-money flow and e-document management. As far as the law on pawnshops does not explicitly prohibit e-document management in a pawnshop, it is even more desirable to introduce electronic pawnshop into relations with reporting organizations. It would allow granting to individuals loans against pledged property using electronic means (electronic application, an electronic contract, borrowed funds are provided for payment through a bank without visiting a pawnshop). The idea of an electronic pawnshop is not new to modern civil-law relations. The establishment of relations through electronic communications and the Internet has considerably facilitated the civil-law transactions. If banks provide the Bank-Online service, and the range of these services has long moved to e-document management, then the pawnshop also will be able to do the same. The digital provision of loans will facilitate the relations between the pawnshop and the borrower, as well as save documents in electronic form. But at the same time, it makes the provision of evidence in the event of a dispute between the pawnshop and the borrower troublesome. Besides, the introduction of e-document management entails amendments to the current law, including the Civil Procedure Code, in which the court is eligible to require the originals of written documents. Such a right of the court makes an assignment of the workflow functions to electronic media, as well as the use of digital signature, pointless (Government of the Russian Federation 2016; Government of the Russian Federation 2019b). However, practically electronic provision of a loan upon application will require the valuation by pawnshop of movable property under a pledge, good faith, and mandatory performance of an agreement by an individual. Accepting the item to be kept under the pledge of movable property, the pawnshop assumes the functions of appraisal, condition, market value (Sokolov 2013a; Nanping 2003) and also… establishing the intended purpose of the item (for personal use (consumption). By implication of the law on pawnshops, these actions are carried out by the pawnshop at the same time and funds are disbursed solely based on an assessment of item’s market value and performance, the loss or preservation of qualities. Thus, in the event of the introduction of the electronic pawnshop, as well as its legal regulation, the pawnshop takes on the risks of not-provision of movable items for valuation and storage, as well as the discrepancy between the actual value of the item and the amount of the loan. But it seems to me that if the lawmaker entitles the pawnshop to request items for assessment and confirmation of its value declared by the individual, as much as to repay the amount of the loan in the event of official nonconfirmation of the market value of the item declared by the borrower, this will help solve the problem. A similar conclusion is based on statements related to the loan nature of the agreement for the provision of funds under the pledge of movable property. I believe

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that it’s a loan agreement by its legal nature, and the provision of funds by pawnshops under certain conditions can be considered a loan if the pawnshop is granted with the appropriate status (Sokolov 2015). The interpersonal issues between the borrower (individual) and the pawnshop can be assigned to the latter, because, for example, affixing an electronic digital signature to electronic contract by the borrower and electronic pawn ticket issued by virtue of it can be deemed the ground for the emergence of a contractual relationship between the pawnshop and pledgor. The digitalization of pawnshop activity will also facilitate reporting, as well as oversight and supervision by financial institutions. In particular, the Central Bank of the Russian Federation will be able to exert electronic control over compliance of reports not only in the part of current reporting but also within business activities. Agreements and pawn tickets may be available for reporting to the Central Bank of the Russian Federation and other supervisory bodies, but with the obligation of confidentiality and protection of personal data of borrowers. In addition, digitalization will enhance the protection of borrowers from usurious interest pointed out by the current law. When it comes to the sale of pledged property in the vent of non-return or default in return of borrowed funds, we should discuss the utilization of modern innovative means, including in matters concerning the sale of the pledged property. And of course, the most feasible way of sale is an electronic digital platform so far as it meets the requirements for the sale of the pledged property, namely, the public nature of the procedure for sale of the pledged property, as well as the presence of at least two individuals. An electronic digital platform provides the transparency of this procedure, especially that the operation of electronic digital platforms and bidding as an auction is also regulated by applicable law. The procedures for registration of bidders, bidding process, establishing a step for a rise, as well as the procedure for determining the winner are well-regulated. But this relates only to the state contract procurement system (Sokolov 2014; Sokolo 2013b). Conducting electronic bidding should be regulated using tools designed for electronic trading platforms. It should be noted that the public nature and a certain procedure for the sale of the pledged property are applied exclusively to items of over 30 (thirty) thousand rubles, and if the value of the item to be pledged or kept is lower, then it can be sold out of public bidding тopгoв. But this does not mean that the use of e-document management and electronic means of representing these transactions is not permitted.

4 Conclusion and Results Thus, a pawnshop, like other business entities, can employ innovative technologies in civil-law transactions, and this opens up for them an opportunity to maintain the competitiveness, as well as transparency of information and actions for both customers (individuals), pledgors, and relevant reporting bodies. Making transactions using modern electronic means will expedite and facilitate relations between actors of the pawnshop market. However, the implementation of these relations requires alteration and amendment of the applicable law. The agreement on the provision of funds against the pledge of movable property should be vested with a credit nature, while the risks associated with the use of electronic means in public relations should be imposed on

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the pawnshops. These changes will allow pawnshops to use e-document management, grant cash loans using electronic means, as well as sell the pledged property at designated electronic platforms. The above innovations of applicable law would make it possible to exercise the intended function of pawnshops, that is protection of the population from usury, to a fuller extent.

References Government of the Russian Federation: Grazhdanskij kodeks Rossijskoj Federacii (chast’ vtoraja) ot 26.01.1996 N 14-FZ (red. ot 18.03.2019, s izm. ot 03.07.2019) [Civil Code of the Russian Federation (part two) No. 14-FZ as of January 26, 1996 (last updated on 18 March 2019, as amended on July 03, 2019). Sobranie zakonodatel’stva Rossijskoj Federacii, Moscow, Russia (1996) Government of the Russian Federation: Federal’nyj zakon ot 21.12.2013 N 353-FZ (red. ot 02.08.2019) “O potrebitel’skom kredite (zajme)” (s izm. i dop., vstup. v silu s 30.01.2020) [Federal Law No. 353-FZ as of December 21, 2013 (last updated on August 2, 2019) “On Cash Loan”. Sobranie zakonodatel’stva Rossijskoj Federacii, Moscow, Russia (2013) Government of the Russian Federation: Federal’nyj zakon ot 06.04.2011 N 63-FZ (red. ot 23.06.2016) “Ob jelektronnoj podpisi” (s izm. i dop., vstup. v silu s 31.12.2017) [Federal Law N 63-FZ as of April 06, 2011 (last updated on June 23, 2016) “On electronic signature” (as amended and supplemented effective of December 31, 2017)]. Sobranie zakonodatel’stva Rossijskoj Federacii, Moscow, Russia (2016) Government of the Russian Federation: Federal’nyj zakon ot 19.07.2007 N 196-FZ «O lombardah» (red. ot 02.12.2019) [Federal Law No. 196-FZ as of July 19, 2007 “On Pawnshops” (last updated on December 02, 2019)]. Sobranie zakonodatel’stva Rossijskoj Federacii, Moscow, Russia (2019a) Government of the Russian Federation: Federal’nyj zakon ot 05.04.2013 N 44-FZ (red. ot 27.12.2019) “O kontraktnoj sisteme v sfere zakupok tovarov, rabot, uslug dlja obespechenija gosudarstvennyh i municipal’nyh nuzhd” (s izm. i dop., vstup. v silu s 08.01.2020) [Federal Law N 44-FZ as of April 05, 2013 (last updated on December 27, 2019) “On the Contract System of the Federal and Municipal Procurement of Goods, Works and Services” (as amended and supplemented effective of January 08, 2020)]. Sobranie zakonodatel’stva Rossijskoj Federacii, Moscow, Russia (2019b) Nanping, Z.: Law on movable property pledge in China. Bull. Moscow State Univ. 6(1), 14–29 (2003) Sokolov, Yu.V.: Problemy zashhity prav grazhdan pri peredache dvizhimyh veshhej v lombard po dogovoru zaloga veshhej v lombarde [Protection of human rights problems in the transmission of movables in the pawnshop under the pledge agreement things in a pawnshop]. Bull. State Univ. Manag. 13(1), 39–44 (2013a) Sokolov, Yu.V.: Dogovor hranenija veshhej v lombarde kak chast’ zalogovoj sdelki v otnoshenii veshhi, peredavaemoj v zalog v lombarde [The contract of storage of things in the pawnshop as part of the mortgage transaction concerning the thing pledged in the pawnshop]. Bull. State Univ. Manag. 9(1), 56–67 (2013b) Sokolov, Yu.V.: Problemy realizacii zalozhennogo imushhestva po dogovoru zaloga veshhej v lombarde [Concerning the sale of property pledged under pawnshop agreement]. Bull. State Univ. Manag. 3(1), 49–57 (2014) Sokolov, Yu.V.: Problemy opredelenija prirody dogovora predostavlenija denezhnyh sredstv lombardami [Problems of identifying the nature of the contract for the provision of funds by pawnshops]. Sovremennoe Pravo 13(1), 19–28 (2015)

The Possibilities of the Blockchain Technology in the Provision of the Real Estate Rights’ Registration Services Andrey N. Sadkov1(&) , Vitalii B. Vekhov2 , Nikolay V. Kotelnikov3 , and Vitalii A. Sadkov3 1

3

Volgograd State University, Volgograd, Russia [email protected] 2 Bauman Moscow State Technical University, Moscow, Russia [email protected] Volgograd Academy of the Ministry of Internal Affairs of Russia, Volgograd, Russia [email protected], [email protected]

Abstract. Purpose: The purpose of the study is to consider the problems of introducing the blockchain technology into the public service provision mechanisms aimed at registering the ownership of the real estate objects, to ensure the reliability and prohibition of the unauthorized changes to the information posted in the Unified State Register of the Real Estate and to increase the efficiency of protecting the rights of the public services’ consumers. Design/Methodology/Approach: In the course of the study, the authors used such methods of scientific knowledge as the induction, deduction, the system analysis of the phenomena and concepts studied, the legal-dogmatic, the structural-functional methods, etc. Federal laws, by-laws and regulations governing the provision of public services in the sphere of the real estate state registration were studied. The authors also analyzed the relevant law enforcement practice and the Russian and foreign scientists’ research of the specifics of the functioning of the system that provides public services for the registration of the real estate and the implementation of the blockchain technology in this system. Findings: The authors emphasize the importance of introducing the digital technologies in the field of the registration of rights to the real estate objects and transactions with them. It is argued that this will ensure the proper protection of the public interests, the reliability and objectivity of the data contained in the Unified State Register of the Real Estate, elimination of the errors arising in the process of the cadastral works, etc., elimination of the causes for litigation regarding the establishment of the physical parameters of the real estate objects owned by citizens, organizations and public law entities. Originality/Value: According to the results of the analysis being made, the authors defend the thesis about the need for the further development of the digital technologies in the field of the real estate registration, that will allow to achieve stability in the real estate turnover and reduction of the risk of the fraudulent activities in this sphere, insurance of the high quality of the state and, therefore, public services provided to the population. The authors have formulated a proposal to consolidate the thesis on the need of introducing the © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1280–1287, 2021. https://doi.org/10.1007/978-3-030-59126-7_140

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blockchain technology into the work of the Unified State Real Estate Register in the current legislation as one of the priority tasks of the state registration of rights. Keywords: Blockchain JEL Code: K100


Public services
State services
Real estate


K110
K150

1 Introduction It is generally recognized that the service sector is one of the most dynamic sectors of the modern economy. N.V. Mironova asserts quite fairly that all those economic benefits that cannot be attributed to the agricultural or industrial production may be justifiably attributed to the category of “service” (Mironova 2003). Depending on the specifics of the subject of legal relations, actual services (such as transportation, storage services, etc.), financial services (banking and insurance services), legal and intermediary services (drawn up by the design of contracts of assignment, agency, trust management of the property, etc.), other paid services (such as medical, hotel, educational, consulting services, etc.) are distinguished among the services. It is being known that today we can talk about the formation of a specific segment of services characterized by the high social significance and orientation on ensuring the availability of benefits to the population guaranteed by the Constitution of the Russian Federation: educational, medical care, social support services when in a difficult life situation, public safety, security, etc. Services provided in the designated areas of public life are often referred to as “public services” (Sadkov 2016). There is no doubt that the services of the state registration of rights to the real estate objects and the transactions with them should be qualified as the state services and they should belong to the category of public services. Continuing the study of the identified issues, we draw your attention to the fact that the state registration of the rights and encumbrances in relation to the real estate objects is of great legal importance. As the analysis of the judicial practice showed, the transactions aimed at the rejection or encumbrance of the real estate objects which have not passed the state registration procedure, by virtue of Articles 81 and 168 of the first part of the Civil Code of the Russian Federation (dated November 30, 1994 No. 51-FL, hereinafter - the Civil Code of the Russian Federation), are often invalidated by the courts. This provision is quite clearly reflected in the Decisions of the Presidium of the Supreme Arbitration Court of the Russian Federation (dated September 11, 2007 No. 4640/07, dated September 1, 2009 No. 1395/09) and other law enforcement acts. The inaccuracy, absence or illegal change of data about the characteristics of the real estate objects, the ownership of such objects by one or another person, encumbrances imposed on the real estate objects entails quite serious consequences both in terms of the invalidity of transactions with these real estate objects, and in terms of the infringement on the public interests associated with the establishment of a clear procedure for the turnover of the real estate objects, as one of the most liquid and significant objects of the civil rights. It seems that the usage of the blockchain technology

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within the framework of the system of registration of the real estate objects and transactions with them which functions in Russia will allow to ensure the proper level of protection of not only the personal interests of the authorized persons, but also of the public interests of the whole society being interested in establishing the stability of the real estate turnover and reducing the level of law violations in this area.

2 Materials and Method The Civil Code of the Russian Federation, Federal Law of July 13, 2015 No. 218-FL “On State Registration of the Real Estate” (hereinafter referred to as the Real Estate Law of the Russian Federation), other special federal laws and by-laws issued in their execution should be considered as a regulatory basis, which serves as the foundation for the state registration of rights to the real estate and transactions with it. The scientific basis of this article is the research of a number of scientists, such as: A.V. Barnavsky, K.A. Novikov, E.A. Pustovalova, Wendy X. Schadeck, R. Torrens et al. In the process of making the research, such general scientific methods of scientific knowledge were used as induction, deduction, the system analysis of the studied phenomena and concepts. In addition, the private scientific research methods specific to the legal science were used, such as legal-dogmatic, structural-functional, etc.

3 Results As K.A. Novikov notes, the availability of complete, reliable and transparent information about property rights is one of the most important conditions for the stability of its turnover (Novikov 2019). Taking into account the special economic and social importance of the real estate among the objects of public relations, its understanding as a particularly valuable object of the economic turnover, the legislation of almost all countries establishes special rules regarding to the registering of the real estate objects and the transactions made with them. The foundations of a modern real estate registering system were laid by Robert Torrens at the end of the 19th century and were successfully tested in the Australian colonies of the British Empire. The essence of the R. Torrens’s title system is that all real estate objects are subject to registration in special registers that make up a single resource, while a person who suffered from the register inaccuracy has the right to receive compensation, regardless of whether the registrar was guilty of inaccuracy or not. At the same time, the rules governing the maintenance of the real estate register are aimed at minimizing the number of inaccuracies (Torrens 2018). The norms of Articles 1 and 3 of the Law of the Russian Federation on the Real Estate establish that the Unified State Register of the Real Estate (hereinafter referred to as the Unified State Register of the Real Estate - USRN) is a set of the reliable systematic information about the recorded real estate, registered rights to it, the grounds for their occurrence, ownership holders, as well as the other data established by the above-mentioned law. At the same time, we emphasize that the state registration of

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rights to the real estate objects, maintaining the USRN and providing the data contained in it is assigned to the federal executive authority – the Rosreestr. Besides its functions include the cadastral registration and the implementation of the federal state supervision in the field of geodesy and cartography. Being interested in the accelerating of the interagency cooperation, ensuring the reliability and the completeness of maintaining the registry of the real estate objects and transactions with them, the Rosreestr is actively working on the usage of the blockchain technology as a part of providing a state service of the cadastral registration and the registration of the real estate rights. This properly corresponds to the main goal of the state registration of the real estate objects, the elements of which E.A. Pustovalova rightly calls the protection of property, as well as the development of civil circulation with the legal means (Pustovalova 2012). Theoretically, the use of blockchain may reduce a time of the transaction registration from a week to a few minutes (Shpringer 2018). Initially, the blockchain technology (from the English “blockchain” - “the block data transfer chain”) was developed for a peer-to-peer decentralized system of electronic calculation means, which received the name “Bitcoin”. However, we note that its potential is not limited to the monetary and financial sectors only. Today it is widely used in the provision of services, including state ones. It also successfully solves the problems of digital identification in the state voting systems and even in the field of the security of air transportation of goods and passengers. Whatever information is stored in the electronic journal - the register, it is perceived by the information system as a sequence of digital records. Giving a general description of the computer technology in question, Wendy Xiao Schadeck writes that in fact it is an open database maintained by a network of independent members who join it according to the certain rules. The electronic data exchange protocol, working on this technology, permits to realize the confidential, peer-to-peer information exchange without a central coordinating and controlling body. This circumstance allows us to attribute the blockchain technology to the reliable, well-protected and generally accessible information storage systems, since each user can check such a protocol, but cannot control it (Schadeck 2017). Gradually, many countries are beginning to use blockchain technology in the provision of public services, for example: in West Africa, a decentralized database is being created for land ownership rights (Allison 2016), in India, members of the democratic party can vote through an application created on the basis of blockchain (Skella 2018), and the state railway and mail of Thailand uses blockchain technology to improve its logistics services (Leesa-nguansuk 2017). Characterizing the advantages of the blockchain technology A.V. Varnavsky notes the lack of a single repository of information that is distributed in blocks. It is impossible to rewrite the information without the other participants’ in the system learning about it, or to enter the information storage system covertly, since the transactions are checked by all participants in the system. It is also impossible to delete an entry from the blockchain, as any block is a collection of the transactions combined into the one record, and the inclusion of the previous block key in the current block determines that making changes to the previous block will entail changing the keys in the subsequent blocks (Barnavsky et al. 2020).

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Exploring the problems of introducing the blockchain technology into the activities of the Rosreestr, A. Sukharevskaya and P. Kantushev note that the control over the conformity of the new transactions in the real estate turnover to the already recorded information will be carried out through the verification sites of the Rosreestr, which are managed by Dom.RF Joint Stock Company (until March 2018 - Joint-Stock Company “Agency for Housing Mortgage Lending”, established by the decision of the Government of the Russian Federation in 1997. 100% of the shares of it belong to the Russian Federation), the Information Technologies of Moscow department, the Federal Tax Service of Russia, PJSC “Savings Bank” and “Rostelecom”. In addition to them, it is planned to connect the verification sites of the housing developers who have confirmed their technological readiness to this work (Sukharevskaya and Kantushev 2018). This way the interdepartmental information system that operates with the blockchain technology will be built. In our opinion, the indisputable advantages of this approach are the transparency of information, the reduction of time needed to make mutually acceptable decisions, which require the long-term coordination by all parties when using the conventional electronic document management systems. At the same time, the participation of any intermediaries during the registration activities carried out by participants in the interaction system is not required when using the blockchain technology. The ATLANT IT- platform created in the Rosreestr is the technical base where the usage of the technology investigated is tested to ensure the legal activity under consideration. It is planned that it will ensure to provide the smooth operation of a number of information services that confirm the subject’s list of the owners of the real estate object (or other title owners who own the real estate object on limited property rights), guarantee the solvency of a potential buyer (or a tenant) and automatically calculate the amount of tax payments on income from the rental property. In fairness, it should be noted that certain experience in using the blockchain technology in the activities of the Rosreestr already exists. According to the information posted in November 2018 on the official portal of the Federal Service for the State Registration, Cadastre and Cartography, in February 2018, the territorial bodies of the Rosreestr in the Leningrad Region conducted the first registration of an agreement on the participation in the shared construction. By the way, 1006 real estate transactions were registered using the blockchain technology in this region up to November 1, 2018. One more positive aspect of this innovative solution is the transparency of the information about transactions. For example, the Unified Housing Information System, being developed as a part of the usage of the blockchain technology in the activities of the Rosreestr, allows all the interested parties to achieve the access to the relevant information on the process of registering each contract of participation in the shared construction, that ensures the reduction of risks of performing illegal actions and thereby contributes to the protection of citizens’ rights, that is, protection of public interests in the provision of public services related to the registration of rights to real estate. The use of the blockchain technology within the interaction between the public law company “Fund for the Protection of the Rights of Citizens - Participants in Shared Construction”, which was created in pursuance of the Federal Law “On a public law company to protect the rights of the citizens participating in the shared construction in

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the event of insolvency (bankruptcy) of the developers and to amend certain legislative acts of the Russian Federation” (dated July 29, 2017 No. 218˗FL), made it possible to exclude the desynchronization of the Rosreestr and the above mentioned public law company information systems and, as well to exclude unauthorized adjustment of information contained in the databases of their information systems. Another direction of introducing this technology into the work of the Rosreestr is the decentralized depository system for registering mortgages on the real estate objects, created on the basis of the “Masterchain” blockchain platform and the Ethereum protocol adapted for it. According to I.Yu. Grushin, this project may turn into the world’s largest repository of the electronic mortgages (Grushin 2018). Continuing the study of the highlighted issues, we note that we are in solidarity with those researchers who focus on the fact that the reliability guaranteed by the blockchain technology, is extremely important for solving legal issues related to the registering of rights to the real estate objects and transactions with them (Arnautov et al. 2019). For the sake of objectivity, we consider it advisable, for an example, to refer to the fact that cases are often considered in court, for the solution of which it is necessary to establish the boundaries of the land plots. These are disputes over the recognition of the ownership of land, the demolition of the unauthorized buildings, vindication and negative requirements in relation to land plots, etc. In the course of the judicial proceedings of such cases, one often has to deal with the phenomenon of imposing boundaries on the neighboring (one or more) land plots. Such imposition of boundaries can be of two types: formal (when the overlay is formed with comparing the data on the boundaries of the land plots reflected in the relevant documents) and actual (when the actual overlay on the terrain of the border of one of the plots on the border of the other neighboring land plot). Moreover, in both these cases, the imposition of the boundaries of the land plots occurs due to the inaccuracy of the credentials on the land plots. The reasons for the inaccuracy of the data on the boundaries of land plots can be different: changes in the landscape of the disputed territory; errors in the boundary calculations; inaccuracies in measuring the boundaries of the territory; poor cadastral work; unscrupulous actions of the landowners, etc. We believe that the negative impact of the above mentioned factors (with the exception of landscape changes) on the reliability of the registered data on a land plot can be overcome with applying the blockchain technology. And together with modern means of carrying out the cadastral works (precise measuring instruments, computers, the global computer networks, etc.) the blockchain technology will completely exclude such errors, thereby eliminating the causes of many litigations and ensuring the stability of the civil turnover of the real estate.

4 Conclusion The legal regulation ensures the stability of the public relations. By the A.O. Inshakova’s fair assertion, it is the law that acts as the basis for the infrastructure support of the economy (Inshakova 2019). There is no doubt that the normative consolidation of the need for maintaining the USRN, cadastral maps and other cadastral documents in

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the electronic form, providing remote access to this information through the use of the public information and telecommunication networks, including the Internet, the active introduction of the blockchain technologies in the state registration system of the real estate and the corresponding legal support, will ensure the proper stability of the real estate turnover, reducing the risk of the fraudulent activities in this sphere, ensuring the high quality of state and, therefore, public services provided to the population. The authors believe that the consolidation of the thesis on the use of the blockchain technology in the activities of the Rosreestr in the norms of the Federal Law “On the State Registration of the Real Estate” will contribute to the more active improvement of the registration system of ownership of the real estate, ensuring the reliability, accessibility and speed of obtaining information necessary for the adoption of lawful and weighted decision. It seems that the norms of article 1 of the above mentioned legislative act should be supplemented with paragraph 4.1 of the following content: “The introduction of the blockchain technology into the work of the Unified State Real Estate Register is one of the priority tasks of the state registration of rights.” Acknowledgments. The authors are grateful to all the experts whose scientific research formed the basis of the study.

References Allison, I.: Blockchain-based Bitland is looking to address the unregistered land issue in West Africa (2016). http://landportal.org/news/2016/09/bitland-revolutionising-african-landregistry-partnership-ccedk. Accessed 12 Dec 2019 Arnautov, D., et al.: Digital Economy: Problems of Legal Regulation. KNORUS, Moscow (2019) Varnavskij, A.B., et al.: Blockchain in the Service of the State. KNORUS, Moscow (2020) Grushin, I.: The BlockChain is a solution to the problems of registration of real estate. Working Paper Moscow Econ. J. 2, 48–60 (2018) Inshakova, A.O.: Law as a basis for infrastructure support of the digital economy and Internet of Things technology. Legal Concept 18(3), 6–11 (2019) Mironova, N.V.: A differentiated approach to marketing of services. Mark. Mark. Res. 3, 10–18 (2003) Novikov, K.A.: State Registration of Rights to Real Estate: Prerequisites, Goals, and Main Techniques and Achievements. Prospekt, Moscow (2019) Pustovalova, E.A.: State registration of rights to real estate at the present stage of development of civil legislation. Moscow (2012) Sadkov, A.N.: Legal mechanisms for providing public services. VA Ministry of internal Affairs of Russia, Volgograd (2016) Schadeck, W.: What is blockchain, really? (2017). https://medium.com/@wen_xs/what-isblockchain-really-an-intro-for-regular-people-e51578d98a96. Accessed 12 Dec 2019 Shpringer, V.: Blockchain for registration of property rights transfer (2018). https://ffc.media/ real-blockchain/blockchain-for-registration-of-property-rights-transfer/. Accessed 12 Dec 2019 Skella, J.: Horizon state ties up with democratic party of India (2018). https://www.theindiansun. com.au/2018/09/21/horizon-state-ties-democratic-party-india/. Accessed 12 Dec 2019

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Suharevskaja, A., Kantushev, P.: Rosreestr used blockchain technology (2018). https://www. vedomosti.ru/economics/articles/2018/02/08/750276-rosreestr-blokchein. Accessed 12 Dec 2019 Leesa-Nguansuk, S.: Rail and post to use IoT, blockchain (2017). https://www.bangkokpost.com/ business/1307071/. Accessed 12 Dec 2019 Torrens, R.: An essay on the transfer of rights to real estate by the double registration method in force in the British colonies (translated by R. S. Bevzenko). Bull. Civil law 2(18), 227–288 (2018)

Financial Strategy of Creating “Smart” Regions in Russia’s Digital Economy Kseniya V. Ekimova(&) State University of Management, Moscow, Russia [email protected] Abstract. Purpose: The purpose of this paper is to develop a financial strategy of creating “smart” regions in Russia’s digital economy. Design/Methodology/Approach: Experience of financing of creation of smart regions in Russia’s digital economy is studied with the help of case study, which allows determining the specifics of this process. The balance of state and corporate budgets, direct foreign investments, and the level of digitalization are analyzed. The research objects are regions of the Central Federal District of the Russian Federation – the reasons is that creation of the first (pilot) smart regions is expected in this federal district. The research is conducted as of 2020. Findings: It is determined that there are two strategic problems of financing of smart regions’ creation in modern Russia. The first problem is using direct financing, which is rather limited. The second problem is wide digitalization, which sets high requirements to financial provision of smart cities and which reduces the effectiveness of placement of financial resources, causing high burden for the state budget. Originality/Value: In order to solve the determine problems, a perspective financial strategy of creation of smart regions in Russia’s digital economy is developed. Its advantages include diversification of the sources of financing, which allows overcoming the deficit of financial resources and the hierarchical approach to digitalization, which reduces the general need for financing of this process and increases its investment attractiveness and effectiveness of financial resources’ placement. Keywords: Financial strategy
Financial mechanisms
Smart region
Artificial intelligence
Pilot implementation
Digital economy
Modern Russia
Regions of Russia JEL Code: D91
E01
F42
F43
F64
Q01
Q15 O38
Q56
Q57
O13
O41
O43
O44
O47


O31
O32
O33


1 Introduction Together with other progressive economies, Russia implements digital modernization, which was started by the decree of the Government of the Russian Federation dated July 28, 2017, No. 1632-r regarding adoption of the Program “Digital economy of the Russian Federation”. For implementation of this program, the Ministry for Digital Development, Communications and Mass Media of the Russian Federation was created (2020). © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1288–1295, 2021. https://doi.org/10.1007/978-3-030-59126-7_141

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The decree of the President of the Russian Federation dated May 7, 2018, No. 204 proclaimed digitalization as one of the national goals and strategic tasks of development of the Russian Federation until 2024. Federal projects that are implemented within this Program were adopted by the protocol of a session of the presidium of the Government committee on digital development and use of information technologies for improving quality of life and conditions for entrepreneurial activities dated May 28, 2019, No. 9. After that, the Federal law No. 123-FZ “Regarding the experiment on special regulation for creating special conditions for development and implementation of AI technologies in the subject of the Russian Federation – federal city Moscow – and introduction of changes into Articles 6 and 10 of the Federal law “About personal data”” was adopted on April 24, 2020. This tendency of development of the regulatory field of Russia’s digital economy shows a deliberate preparation of society and business for creation of smart cities. Starting July 1, 2020, Moscow will actually become the first smart city. In view of the specifics of the Russian regional economy, this initiative will spread to smart regions. The multiple advantages of this transition include increase of transparency and predictability of economic activities and increase of their controllability and effectiveness. However, a serious barrier to creation of smart regions in Russia’s digital economy is deficit of financial resources. Thus, the purpose of this paper is developing a financial strategy of creating “smart” regions in Russia’s digital economy.

2 Materials and Method The fundamental and applied issues of creation and functioning of smart regions were studied in Andronova et al. (2019), Belik et al. (2020), Haabazoka et al. (2019), Ivanov et al. (2019), Pichkov (2016), Popkova (2019), Popkova and Gulzat (2020a), Popkova and Gulzat (2020b), Popkova and Sergi (2018), Popkova and Sergi (2019), Popkova and Sergi (2020), Popkova and Zmiyak (2019), Ragulina (2019), Ragulina et al. (2019), Sergi (2019), Sergi et al. (2019), Shulus et al. (2020), Soboleva (2017), Strelets (2017), and Zavyalova et al. (2018). The above publications also pay attention to the specifics and perspectives of creating smart regions in modern Russia on the platform on the Russian digital economy. At the same time, the issue of financing of the process of smart regions’ creation is still open. The works Schmidt and Hoffmann (2019), Khalil and Belitski (2020), Nylund et al. (2019), and Zhang et al. (2019) dwell on the topic of state financing of innovations and attraction of private investments in innovations. However, from the scientific and practical point of view, it is unacceptable to identify innovations, which are usually seen as improvement (modernization) of certain processes and innovative development of certain companies, with creation of smart regions – i.e., implementation of breakthrough innovations at the level of a whole region. That’s why the problem of financing of creation of smart regions in Russia’s digital economy requires deep research – which is performed in this paper. Studying the modern experience of financing of smart regions’ creation in Russia’s digital economy with case-study allows determining a specific feature of this process, which is

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connected to domination of direct financing: from the state budget, private investments, and direct foreign investments. As there are no separate statistics of financing of digital economy in Russia, let us use the official statistics (Table 1). The research objects are regions of the Central Federal District of the Russian Federation; they were selected because the first (pilot) smart regions will be created in this Federal District. The research is conducted based on the data as of 2020.

Table 1. Balance of state and corporate budgets, direct foreign investments, and the level of digitalization in the regions of the Central Federal District of the Russian Federation in 2020. Balance of regional budget, RUB million

Balanced financial result of companies, RUB million

Region

Level of digitalization, points 1–100

Balance of direct foreign investments, USD million

Balance of direct foreign investments, RUB million

Belgorod Oblast Vladimir Oblast Voronezh Oblast Ivanovo Oblast Kaluga Oblast Kostroma Oblast Kursk Oblast Lipetsk Oblast Moscow Oblast Orel Oblast Ryazan Oblast Smolensk Oblast Tambov Oblast Tver Oblast Tula Oblast Yaroslavl Oblast

64.51

6,677.92

88,832.42

26.00

1,820.00

53.87

−183.44

29,157.62

−87.00

−6,090.00

61.57

11,121.19

8,964.84

−278.00

−19,460.00

42.83

−20.15

1,546.18

77.00

5,390.00

57.53

4,690.77

58,247.65

234.00

16,380.00

28.55

−1,318.59

2,931.00

53.00

3,710.00

60.12

4,877.06

64,193.37

3.00

210.00

62.59

4,014.49

478,380.97

486.00

34,020.00

65.61

−195,030.58

1,760,475.21

138.00

9,660.00

27.85

−3,137.97

5,093.50

−28.00

−1,960.00

34.88

6,863.99

29,067.25

−2.00

−140.00

9.09

2,448.68

9,880.82

−40.00

−2,800.00

44.16

−2,425.80

3,402.78

6.00

420.00

31.05

−49.26

−4,072.06

6.00

420.00

64.38

−9,661.49

57,392.98

187.00

13,090.00

57.96

−442.00

64,150.61

50.00

3,500.00

Source: compiled by the authors based on Institute of Scientific Communications (2020), Rosstat (2020).

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As is shown in Table 1, Moscow Oblast differs from other regions of the Central Federal District of the Russian Federation – so it was chosen for creation of a pilot smart region for a reason. However, even Moscow Oblast has a negative balance of the regional budget (RUB -195,030.58 million). Averaged data on the possibilities for direct financing and digitalization in regions of the Central Federal District of the Russian Federation in 2020 are shown in Fig. 1.

Balance of direct foreign investments, RUB million

3635.63

Balanced financing result of companies' activities, RUB billion

166.1

Regional budget surplus, RUB billion

-10.72

Level of digitalization, points 1-100 -500.00

47.91 0.00

500.00 1,000.00 1,500.00 2,000.00 2,500.00 3,000.00 3,500.00 4,000.00

Fig. 1. Averaged data on the possibilities for direct financing and digitalization in regions of the Central Federal District of the Russian Federation in 2020. Source: calculated and compiled by the authors.

As is shown in Fig. 1, balance of direct foreign investments is positive but small (RUB 3,635.63 million), and balanced financial result of companies’ activities companies is also positive (RUB 166.10 billion); however, balance of the regional budget is negative (RUB -10.72 billion). The level of digitalization is low (47.91 points). In view of the fact that digital projects are implemented on the competitive basis – i.e., they compete for private and foreign investments with equal terms with other investment projects – it is possible to state the deficit of direct financing.

3 Results The determined deficit of direct financing causes the necessity to move attention to flexible mechanisms of financing of smart regions’ creation in Russia, of which the most perspective ones are the following four mechanisms. 1st mechanism: collective financing of digitalization by the subjects of integration union of companies, including during cooperation with universities and research institutes. In the digital segments of sectorial markets, clusters and special economic areas could be created. Due to this, financial burden onto economic subjects on financing of digitalization will be reduced. 2nd mechanism: financing of infrastructural projects in the sphere of digital economy and, in particular creation of smart cities based on public-private partnership. This

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allows attracting private investments and reducing the burden onto region’s state budget. 3rd mechanism: stimulation of commercialization (dissemination by commercial terms) of digital innovations based on technological parks and innovative networks. This will allow avoiding the practice of disseminating digital technologies as public benefits and moving them to the group of paid economic benefits. 4th mechanism: financial support for wide implementation of digital technologies through tax and credit subsidies. This will allow covering wide groups of population and business with financial support for digitalization and drawing all economic subjects to the digital economy, thus preparing a platform for creation of a smart region. Russia is also peculiar for comprehensive financing of the digital economy, which envisages equal distribution of financial resources among the economic subjects. At the same time, susceptibility and inclination for digitalization, as well as own capabilities for its implementation, are different with economic subjects in the region’s economy. These problems could be solved by the developed financial strategy of smart regions’ creation in Russia’s digital economy based on a flexible and hierarchical financing (Fig. 2).

financing based on public-private partnership

Bodies of state (public) administration in region Economic subjects conducting rapid digitalization

financing based on the integration mechanism financing based on commercialization

Economic subjects conducting delayed digitalization Wide groups of population and business with no inclination for digitalization

financing based on tax and credit support

support for digitalization Infrastructural provision of the digital economy

Fig. 2. Financial strategy of smart regions’ creation in Russia’s digital economy based on flexible and hierarchical financing. Source: developed and compiled by the authors.

As is shown in Fig. 2, the developed strategy has a clear sequence of financing and is presented in the form of a pyramid. First off, infrastructural provision of the digital economy based on the public-private partnership mechanism is financed. Due to infrastructural support for digitalization, transition to the pyramid’s base is takes place: financing of digitalization of wide groups of population. Then, transition to the central level of the pyramid takes place: financing of economic subjects that conduct delayed digitalization. Then, transition to the pyramid’s peak takes place: financing of economic subjects that conduct rapid digitalization. In the course of transition to each next level, the volume of financing is reduced.

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4 Conclusion It could be concluded that there are two strategic problem of financing of smart regions’ creation in modern Russia. The first problem is foundation on direct financing, which is not sufficient. Deficit of regional budget and the Russian entrepreneurship being at the brink of profitability and bankruptcy, aggravated by a small inflow of direct foreign investments, do not allow for full-scale direct financing of the digital economy and creation of smart cities in particular. The second problem is wide digitalization, which sets high requirements to financial provision of smart cities and which reduces the effectiveness of investing financial resources; it also causes an increased burden onto the state budget. The Russian social and business environment is heterogeneous, which causes different needs for financing of digitalization of this environment’s structural elements. Complete financing is ineffective, as it leads to excess of financial resources in certain social and business circles and lack of these resources in other circles, slowing down the process of smart regions’ creation. For solving these problems, a perspective financial strategy of smart regions’ creation in Russia’s digital economy has been developed. Its advantages include diversification of the sources of financing, which allows overcoming the deficit of financial resources and the hierarchical approach to digitalization, which reduces the general need for financing of this process and raises its investment attractiveness and effectiveness of investing financial resources.

References Andronova, I.V, Belova, I.N., Yakimovich, E.A.: Digital technology in the fishing sector: international and Russian experience. In: 1st International Scientific Conference on Modern Management Trends and the Digital Economy - From Regional Development to Global Economic Growth (MTDE). Proceedings of the 1st International Scientific Conference Modern Management Trends and the Digital Economy: From Regional Development to Global Economic Growth (MTDE 2019), Yekaterinburg, Russia. AEBMR-Advances in Economics Business and Management Research, vol. 81, pp. 277–280 (2019) Belik, E.B., Petrenko, E.S., Pisarev, G.A., Karpova, A.A.: Influence of technological revolution in the sphere of digital technologies on the modern entrepreneurship. In: Lecture Notes in Networks and Systems, vol. 91, pp. 239–246 (2020) Cunha Schmidt, R., Hoffmann, M.: Guarantees used in refundable financing of innovation in micro, small and medium-sized enterprises: the regional bank for the development of the extreme South Inova program. Innov. Manag. Rev. 16(3), 253–268 (2019). https://doi.org/10. 1108/INMR-04-2019-0044 Haabazoka, L., Popkova, E.G., Ragulina, Y.V.: Africa 4.0 as a Perspective Scenario for NeoIndustrialization in the 21st Century. African J. Econ. Sustain. Dev. 2(2), 20–38 (2019) Institute of Scientific Communications: DataSet “Interactive Statistics and Intelligent Analytics of the Balanced State of the Regional Economy of Russia in Terms of Big Data and Blockchain – 2020” (2020). https://www.archilab.online/en/data/date-set-on-the-regionaleconomy. Accessed 27 Apr 2020

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Ivanov, O., Zavyalova, E., Ryazantsev, S.: Public-Private Partnership in the countries of the Eurasian Economic Union. Central Asia and the Caucasus. English Edition 2(2), 33–47 (2019) Khalil, S., Belitski, M.: Dynamic capabilities for firm performance under the information technology governance framework. Eur. Bus. Rev. 32(2), 129–157 (2020). https://doi.org/10. 1108/EBR-05-2018-0102 Nylund, P., Arimany-Serrat, N., Ferras-Hernandez, X., Viardot, E., Boateng, H., Brem, A.: Internal and external financing of innovation: sectoral differences in a longitudinal study of European firms. Eur. J. Innov. Manag. 23(2), 200–213 (2019). https://doi.org/10.1108/EJIM09-2018-0207 Pichkov, O.B.: Social inequality in the US and Canada. Int. Trends (Mezhdunarodnye protsessy) 2(3), 85–92 (2016) Popkova, E.G.: Preconditions of formation and development of industry 4.0 in the conditions of knowledge economy. Stud. Syst. Decis. Control 169(1), 65–72 (2019a) Popkova, E.G., Sergi, B.S.: Human capital and AI in industry 4.0. convergence and divergence in social entrepreneurship in Russia. J. Intell. Capital (2020, in press) Popkova, E.G., Gulzat, K.: Technological revolution in the 21st century: digital society vs. artificial intelligence. In: Lecture Notes in Networks and Systems, vol. 91, pp. 339–345 (2020a) Popkova, E.G., Gulzat, K.: Contradiction of the digital economy: public well-being vs. cyber threats. In: Lecture Notes in Networks and Systems, vol. 87, pp. 112–124 (2020b) Popkova, E.G., Zmiyak, K.V.: Priorities of training of digital personnel for industry 4.0: social competencies vs technical competencies. Horizon 27(3–4), 138-144 (2019) Popkova, E.G., Sergi, B.S.: Will industry 4.0 and other innovations impact Russia’s development? In: Sergi, B.S. (ed.) Exploring the Future of Russia’s Economy and Markets: Towards Sustainable Economic Development, pp. 51–68. Emerald Publishing Limited, Bingley (2018) Popkova, E.G., Sergi, B.S. (eds.): Digital Economy: Complexity and Variety vs. Rationality. Springer International Publishing (2019) Ragulina, Y.V.: Priorities of development of industry 4.0 in modern economic systems with different progress in formation of knowledge economy. Stud. Syst. Decis. Control 169, 167– 174 (2019) Ragulina, Y.V., Alekseev, A.N., Strizhkina, I.V., Tumanov, A.I.: Methodology of criterial evaluation of consequences of the industrial revolution of the 21st century. Stud. Syst. Decis. Control 169, 235–244 (2019) Sergi, B.S. (ed.): Tech, Smart Cities, and Regional Development in Contemporary Russia. Emerald Publishing Limited, Bingley (2019) Sergi, B.S., Popkova, E.G., Bogoviz, A.V., Litvinova, T.N.: Understanding Industry 4.0: AI, the Internet of Things, and the Future of Work. Emerald Publishing Limited, Bingley (2019) Shulus, A.A., Akopova, E.S., Przhedetskaya, N.V., Borzenko, K.V.: Intellectual production and consumption: a new reality of the 21st century. In: Lecture Notes in Networks and Systems, vol. 92, pp. 353–359 (2020) Soboleva, O., Sozinova, A., Spengler, A., Fokina, O., Savelyeva, N.: Mechanisms of regulation of economic processes in a region. In: Contributions to Economics, No. 9783319606958. pp. 403–415 (2017) Zavyalova, E.B. Studenikin, N.V. Starikova, E.A.: Business participation in implementation of socially oriented Sustainable Development Goals in countries of Central Asia and the Caucasus region. In: Central Asia and the Caucasus vol. 19, no. 2, pp. 56–63 (2018)

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Smart Technologies in Lawmaking: Towards the Concept of Smart Regulation Marina L. Davydova(&)

and Vladislav O. Makarov

Volgograd State University, Volgograd, Russia [email protected], {davidovaml,kmp}@volsu.ru, [email protected]

Abstract. Purpose: The paper distinguishes between closely related yet not identical concepts related to the development of an optimal legal policy in modern developed economies: less regulation, better regulation, and smart regulation. Design/Methodology/Approach: The work is based on comparing smart regulation as an academic construct and as a regulatory practice in combination with other approaches to managing regulatory impact. Modern methods of smart regulation are assessed from the perspective of their consistency with the concept of “smart” which is conventionally used with regard to different instruments/technological devices (such devices consume less resources, while opening up more opportunities). Findings: In consequence of the research, the author concludes that smart regulation: (1) saves regulatory instruments (intervenes only where appropriate and to the extent necessary); (2) does not rely on own resources, exerting influence at different levels, engaging any actors whose involvement may help in achieving the objective, as surrogate regulators; (3) does not rely on the intelligence of the regulator, requiring smooth systematic interaction of all parties to the regulatory process during the improvement of the norm; (4) uses a set of different means, including those that are not traditionally considered to be strictly legal; (5) relies on experiments and the need for continuous testing of various combinations of regulatory instruments in search of the most effective combination of them; (6) includes all the progress made in other legal regulation concepts (less regulation, better regulation), but unlike them, it shifts the emphasis from the regulatory process to its outcome in an attempt to understand what exactly is preventing from obtaining it and to achieve it in the least onerous way. Originality/Value: To exemplify the instruments that are capable of addressing the problem in a pinpoint way, the paper presents the combination of command and control regulation with voluntarism and information strategies, nudging, regulatory sandboxes, digitization and automation of the processes of interaction between the participant of legal relations with the State. The success of these instruments depends largely on providing the opportunity to display initiative, to bring a sense of free will, not to subordinate a person to the will of the State, but to form a cooperative relationship that would be much less resource-consuming, more productive and reasonable. Keywords: Law making Smart regulation
Nudge


Regulation
Less regulation
Better regulation

Regulatory sandbox

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1296–1305, 2021. https://doi.org/10.1007/978-3-030-59126-7_142

Smart Technologies in Lawmaking JEL Code: K200

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K400

1 Introduction The term “smart regulation” is widely used in modern academic literature on lawmaking and lawmaking activities. It is often defined as mechanisms and institutions that ensure the quality of feedback of rulemaking agents and subjects of regulation (Kupryashin and Sarycheva 2013). Conventional methods of smart regulation include legal experiment, regulatory impact assessment, actual impact assessment, openness of the legal framework, increased accessibility of existing laws and regulations and their draft versions, simplification of the language of regulatory acts, etc. That said, the concepts “less regulation” and “better regulation” are often used in parallel with the term “smart regulation”. A similar set of tools is specified as their methods or means. If we turn to the better regulation manuals adopted by the governments of the European Union, the United Kingdom, Australia, and other advanced countries, we may conclude that a cross-cutting theme in all these documents is the need for establishing all forms of feedback in the process of creation and implementation of the legal norm, preliminary and subsequent assessment of the quality of this norm providing an opportunity to improve its effect and minimize the administrative burden. This article is aimed at revealing the specifics of smart regulation compared to other conceptually similar approaches to the problem of improving the state influence on business and other social institutions.

2 Methodology The authors of the research have used the methods that are traditional for the general theory of law - dogmatic, comparative, and system method. The work is based on comparing smart regulation as an academic construct and as a regulatory practice in combination with other approaches to managing regulatory impact. Modern methods of smart regulation are assessed from the perspective of their consistency with the concept of “smart” which is conventionally used with regard to different instruments/ technological devices.

3 Results Conventional regulation is a “power-subordination” relationship in which one party makes an imperative demand and the other party is obliged to proceed in compliance with it under penalty. In this construct, it is punishment that becomes the primary vehicle of enforcing the legal norm. The quality of the norm itself, its reasonableness, its expedience, its enforceability in the context of one-way hierarchical communications are not taken into consideration, because there are no channels to pass information about the deficiencies of the norm to the rule-making body. Such regulation (“NONsmart” regulation) relies solely on the authority of the lawmaker and the fear of

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punishment. The less perfect is the norm, the more actively the enforcement mechanism has to be applied to overcome the resistance of performers. The State is forced either to endlessly increase the severity of the prescribed punishment and to strengthen control over compliance with the norm (which requires enormous resources) or to put up with the unwillingness of the addressees to comply with it. Both may threaten to destroy the system in the long run. The concept of a lawmaker sitting on a high throne and conveying his will to obedient subjects is absolutely obsolete today. As early as in the 80s of the 20th century, active search and testing of various forms of involvement of potential performers in the norm creation process has begun in the world. It is worth mentioning that Soviet legal science in this period was also extremely concerned with lawmaking issues, including scientific, sociological, information and other support of lawmaking (Halfina 1981; Gavrilov 1979; Koldaeva 1974). However, the fundamental distinction of this approach from the concept of regulation that was developed in Western countries was that the emphasis in domestic research was shifted to the subject-matter of issues that should have been studied by the legislator prior to adoption of a norm rather than mechanisms that make addressing these issues mandatory. The analysis of the state of regulated relations, consideration of the opinion of the academic and expert community were substantiated as a recommendation to the lawmaker, by no means casting doubt on its exclusive right to ignore these recommendations. Since the mid-1980s, the Western countries (the United States, the United Kingdom, Germany, Holland, Norway, Sweden) have started developing an approach dubbed New State Management. The regulatory impact assessment was introduced in Australia in 1985 (Kupryashin and Sarycheva 2013) (Regulatory Impact Assessment) is an institution that subsequently gained universal currency in the world. Further development of this range of problems has led to the cycle of several successive concepts: Less regulation, Better regulation, Smart regulation. Less regulation implies determining the optimum level of government intervention in public relations to simplify legislation and to avoid overregulation and reduce administrative burdens. This concept is based on the understanding of the fact that “people whose lives are not excessively regulated by the state, and who are able to determine their legitimate goals for themselves, are more creative and productive and live in more productive and creative societies” (Doering 2019). Assessing the sufficiency of intervention is a challenging task that requires consideration of many factors. For example, research suggests that the number of issued laws and regulations and the degree of regulatory stringency depend on the degree of government presence in the field, but this dependence is nonlinear: when the state increases is presence above a certain level, the rule-making activity starts decreasing, since it is replaced by instruments of direct state regulation (Pavlov 2019). In the private sector, instruments of direct regulation are inapplicable; hence, by setting the rules, the State risks crossing the line beyond which regulation becomes a roadblock on the way to full-scale development, stifling initiative and self-sufficiency. Forming up the feedback mechanisms in the lawmaking process is actually the best way to understand whether the projected instrument is perceived as necessary or excessive and to get to know the opinion of the business community and other addressees as to whether it can be omitted.

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Better regulation retains the tendency towards reducing unnecessary government intervention (including recommendation on the use of alternative mechanisms: Selfregulation or Co-regulation). In addition, other ways of improving the norms are provided: choosing the right regulatory instruments, speeding up the law-making process, simplifying and codifying existing texts, and other means that focus on improving and simplifying the regulatory environment. “The primary goal is to simplify specific regulations and to make the framework conditions of regulation in the EU flexible to take into account day-to-day business processes. It is of the utmost importance that specific simplification measures be implemented in those fields that are considered most important by the business. Efforts are being made to directly involve end-users and address their needs with a view to identifying these fields” (Danish Business Authority). This approach requires tracking the full life cycle of a regulatory act: from its preparation to its implementation, including introduction of changes, i.e. amending the instrument while it is in effect. At all stages, it is of key importance to obtain and analyze the assessment given to the instrument by the performer and the addressees of its precepts. Within this framework, the legal norm of high quality becomes the result of a systematic joint effort by the rule-making body and society to make the regulation better. Smart regulation is the next level of delving into the problem. According to the definition of the European Commission, “Smart regulation is not about more or less legislation, it is about delivering results in the least burdensome way” (Stakeholder Consultation 2010). The shift of emphasis from the regulatory process to its result, the intention to understand exactly what prevents from obtaining it, the choice of means that are capable of addressing the problem in a pinpoint manner – these issues can be resolved using the smart regulation concept. Researchers describe it as the form of regulatory pluralism which encompasses flexible, creative and innovative forms of social control, engaging both government, business, and third parties (Gunningham and Sinclair 2017). All requirements that were formulated earlier remain relevant today: tracking the full life cycle of a regulatory act, overall accountability of authorities at different levels, the pivotal role of the opinion of those affected by regulation (Stakeholder Consultation 2010). However, the mere need to request and take into account the opinion of the addressees of a norm does not guarantee its quality. In this case, it is presumed that the addressees have a better understanding of the heart of the problem and the benefits of possible solutions to it. Indeed, this is often the case, but not always. Moreover, with a formalist approach to the organization of the regulatory impact assessment, public consultation and other procedurally established feedback forms, their efficiency can be extremely low. In the context of low social activity, States would rather implement the minimum required procedures, having little to no concern about the representativeness of the feedback received. In many states of the former Soviet Union, the efficiency of such procedures varies from low to zero (Turgel and Panzabekova 2018; Davydova and Kushniruk 2017). When we give consideration to the regulatory impact assessment and various forms of public consultations as the main tool of improving regulation, we are concerned about the procedure of creating the act, redistribute responsibility for searching for a solution to the problem, but we do not give any specific recommendations on what

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tools and technologies can be used to solve it. For smart regulation, it is the maximum effective solution to the problem that serves as the primary goal. What appliances or technological devices does the concept “smart” apply to? The scholars have distinguished two attributes (Karmanov 2014) that allow using this term: 1) prudent and efficient utilization of resources (“smart” economy is based on energysaving, clean, “green” (biological) technologies); 2) the use of smart technologies opens up new opportunities. Most often, the question is about devices that are capable of adapting to the owner or to the situation and can do more tasks than conventional devices of the same intended purpose (the car parks itself, the TV selects the program, the medicine finds the sick cell itself, the house goes shopping itself). These technologies allow significantly reducing mental and physical effort of people; they simplify life and make it better for people. Eventually, better result can be achieved at lower cost. It creates the effect of a miracle, a magic, where the result seems unbelievable to an outside observer. Is it possible to achieve similar effect in lawmaking activities? Apparently, this can be achieved in two ways, involving the macrolevel and the microlevel of regulation. What both of them have in common is that in both cases the focus is not on the rule of conduct to be formulated, but on the problem to be solved. 1) The macrolevel implies scaling-up the assessment scope, improving the regulatory system rather than a particular regulatory act, identifying all possible centers of decision-making (local, regional, national, supranational) and including them in the problem-solving mechanism. “A holistic view on regulation is crucial in identifying the unnecessary ones but also in establishing the fields where synergies through consolidation could be achieved” (‘Smart Regulation’). 2) The microlevel means searching for impact mechanisms which are able to provide the effective solution to the problem in a particular situation. In such a case, not only purely legal instruments, but also social, psychological and economic factors influencing the parties to the regulated process, are taken into account. The theorists of smart regulation Neil Gunningham and Darren Sinclair distinguish the following categories of regulatory instruments: – command and control regulation (standards that determine technical processes and the quality of attained results); – economic instruments (establishing common rules, incentives, and responsibilities); – self-regulation (including industry-specific regulation); – voluntarism (rules that imply voluntary compliance, free will); – information strategies (education and training; environmental reporting; community-right-to-know; freedom of information; active public disclosures; registers of pollution; products certification) (Gunningham and Sinclair 2017). If the top of the list presents the tools that are the most traditional for legal regulation, then the end of the list presents the means that do not imply regulation in the ordinary way. Yet it should be acknowledged that transparency alone is able to radically increase the efficiency of the force of legal norms. Richard Thaler whose research is mentioned below writes on this issue as follows: “In actual fact, the requirement of

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disclosure of information in the toxic emissions database may be the most successful measure in all environmental legislation” (Thaler and Sunstein 2009). Transparency employs “informal social control mechanisms” (Gunningham and Sinclair 2017) which are often turn out to be much more effective than official mechanisms. Among principles that should be taken into consideration during the inclusion of particular instruments in regulatory acts, the authors make mention of requirements that are quite consistent with the two abovementioned attributes of the “smart” concept. The cost savings principle urges to give preference to the least stringent measures (less interventionist measures). The principle of using surrogate regulators also has an economic component, since it affords an opportunity to achieve greater results at lower cost due to the fact that regulation is not only done by the State, but also by the second (self-regulation) and third parties (commercial and non-commercial organizations). The principle of combining multiple tools means that the right combination of tools is able to significantly improve the efficiency of their action, thus opening up new opportunities, while using incompatible tools turns out to be counterproductive. For example, the efficiency of non-regulatory legal norms has traditionally been assessed as low. In Soviet legal doctrine (the provisions of which are considerably inherited by modern Russian law), the possibility of public enforcement is the most important feature of the law and the main instrument of ensuring its effect. Therefore, a norm that has no sanction in its structure (penalty for non-compliance with the rule of conduct) is totally not considered by many researchers as a comprehensive legal norm (Voplenko 2009). Indeed, non-regulatory norms alone cannot guarantee notable results when a State wishes to enforce implementation of onerous regulations, to set standards that are useful for society but difficult in implementation or disadvantageous for business (reduce emissions, provide additional safeguards to employees, increase salaries, etc.). Some organizations will likely comply with these regulations for reasons of altruism or goodwill. However, most would rather ignore it, being aware that there would be no punishment for it. At the same time, if the minimum threshold requirements are enshrined in imperative norms, and regulatory standards are used to set higher complementary standards, it will be possible to simultaneously influence “irresponsible” organizations through sanctions and orientate “responsible” organizations on compliance with raised standards. When it comes to the efficiency of the combination of instruments “voluntarism + command and control regulation”, N. Gunningham and D. Sinclair provide an example of a successful 33/50 program to reduce the level of toxic chemical emissions implemented in the United States (Gunningham and Sinclair 2017). They refer to the combination “command and control regulation + economic instruments” as an example of counterproductive combination of regulatory instruments (Gunningham and Sinclair 2017). We can easily agree with that if we present something like that through an example. Thus, if, in the event of failure to comply with requirements of effective contract, the teacher is in fear of dismissal and, if requirements are complied with, a small raise in salary, the instruments used clearly duplicate each other. There is no point in economic stimulation, because people will in any case seek to comply with requirements so as not to lose their jobs. From the perspective of regulatory logic, the simultaneous stipulation of the right and the duty to labor in Soviet legislation was equally senseless.

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It is worth noting that it is not only and not so much the compatibility of instruments as such. The point of a suitable combination is that several regulatory instruments must be used not to establish the same behavior, but to offer a sequentially bonded, logical, and reasonable variation of actions. That said, it is important that such variation should be based on the possibility of free will of participants who have comprehensive information on the benefits and drawbacks of each variant. The governments of various countries (OECD 2017) have been increasingly including instruments developed by behavioral sciences that are designed to organizing the adequate selection architecture, improving the efficiency of traditional regulatory mechanisms, and solving many issues in similar regulatory complexes that have been used throughout the last decade. If classical economics (like the classical doctrine of legal regulation) is based on the possibility of judicious choice made by an individual in assessing the positive and negative effects of his or her actions, then behavioral economics, a direction that has been developing since the 80 s of the 20th century (Khaneman and Tversky 1979; Thaler 1980) shows that the decision made may actually depend on many factors: motivation and cognitive abilities of an individual, robust behavioral responses, social group influence, information shortage, mistakes that are inherent in human reasoning, etc. As a result, people scarcely ever make the smartest and most favorable decisions. The means to facilitate the choice, to make it more reasonable, without imposing or necessitating any particular behavior, were given generic name “nudge” or “nudging”. In one of the most cited works in this field, Richard Thaler (who was awarded the 2017 Nobel Prize for behavioral economics research) and Cass Sunstein substantiate the concept of “libertarian paternalism”, according to which the state must provide conditions for free will. The authors define nudging as “the aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives”. “To count as a mere nudge, the intervention must be easy and cheap to avoid” (Thaler and Sunstein 2009). The tools that ensure such an impact include setting a certain default choice, emphasizing and presenting in a clearer view some of the characteristics of the proposed selection, disclosure of information, application of social norms, etc. (Sunstein 2013). All of these tools appeal to “shallow cognitive processes” (Saghai 2013), which imply a prompt reaction that is based on a small amount of information and requires minimal intellectual effort. Hence, nudging is intended to improve choice and make it more rational, and it does so by exploiting the shortcomings of irrational decisionmaking typical of ordinary people. The enormous popularity of these methods and the many successful examples of their application in policies of modern states (OECD 2017) do not resolve the debatable issues regarding the nature and limits of the possible use of nudging. Thus, the argument that nudging has relevance to economic rationality has been criticized. The concept was initially based on the fact that very few people were able to make economically reasonable decisions. Others need help in making the adequate choice. In actual fact, as S. Zorzetto and F. Ferraro rightly point out, nudging is not used to promote economic rationality, but serves various purposes aimed at contributing to the public interest. Measures to protect the environment or support consent

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to donation of organs that are implemented by nudging have no relevance to economic rationality (Zorzetto and Ferraro 2019). The second problem is the correlation between nudging and manipulation (Wilkinson 2013). If economically unfavorable but socially useful goals can be achieved through behavioral methods, what can become an obstacle to using these methods for the benefit of the State and to the detriment of society and an individual? R. Thaler and K. Sunstein believe that such obstacles are feedback and information; according to them the state should be prohibited from choosing politics that it is unable or unwilling to publicly maintain for its citizens (Thaler and Sunstein 2009). Unfortunately, such a prohibition is unlikely to be a tangible obstacle to corrupt practices for many States. We have to admit that nowadays legal regulation gets to a new level, and this inevitably results both in positive and negative consequences. More sophisticated mechanisms for influencing the behavior of people lead to the improved efficiency of legal norms, but at the same time they increase the threat of dishonest influence. The progress cannot be stopped. Hence, as regulation is becoming increasingly smart, the law will face new challenges in developing mechanisms to counter manipulation and abuse by the state.

4 Conclusion Hence, smart regulation: – saves regulatory instruments (intervenes only where appropriate and to the extent necessary); – does not rely on own resources, exerting influence at different levels, engaging any actors whose involvement may help in achieving the objective, as surrogate regulators; – does not rely on the intelligence of the regulator, requiring smooth systematic interaction of all parties to the regulatory process during the improvement of the norm; – uses a set of different means, including those that are not traditionally considered to be strictly legal; – relies on experiments and the need for continuous testing of various combinations of regulatory instruments in search of the most effective combination of them; – includes all the progress made in other legal regulation concepts (less regulation, better regulation), but unlike them, it shifts the emphasis from the regulatory process to its outcome in an attempt to achieve it in the least onerous way. Nudging that is addressed in this paper is just one of the tools of smart regulation. Another area of active development is associated with the creation of regulatory sandboxes (Zetzsche et al. 2017), which represent a broad range of regulatory instruments that in Russian legislation have been referred to as “experimental legal regimes”. Other combinations of tools that are capable of significantly improving the efficiency of the force of law are possible. Extensive development of the gig economy, in which many employees prefer flexible hours and independence from the employer to

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traditional employment rights and social safeguard (Dokko et al. 2015) shows how important are the values of autonomy and free will for contemporary society. Therefore, digitization and automation of the processes of interaction between the participants of legal relations with the State, allowing for the implementation of actions provided for by the legal norm law without contacting the authorities, have potential in the context of public law. Hence, while leaving the opportunity to display initiative, to bring a sense of free will, such instruments do not subdue a person, but to form a cooperative relationship that would be much less resource-consuming, more productive and reasonable. Acknowledgments. The chapter was prepared with financial support of the Russian Fund for Fundamental Research. Project number 20-011-00583 A.

References Voplenko, N.N.: Essays of the general theory of law. Volgograd, p. 242 (2009) Gavrilov, O.A.: System analysis and modeling of the information mechanism of action of the legal norm. Nauchno-Tekhnicheskaya Revoliutsiya, Upravlenie i Pravo, pp. 50–58. Publishing House of the Institute of State and Law of the Academy of Sciences of the USSR (1979) Davydova, M.L., Kushniruk, E.P.: Electronic law-making initiative in the system of Edemocracy forms. Sovremennoe Obshchestvo i Pravo 1(26), 37–42 (2017) Karmanov, A.M.: Smart technologies as an indicator of the level and quality of life of the population. Ekonomika, Statistika i Informatika 6(2), 425 (2014) Koldaeva, N.P.: On the participation of the working people in the law-making process. Aktualnye Problemy Teorii Sotsialisticheskogo Gosudarstva i Prava, pp. 145–148 (1974) Kupryashin, G.L., Sarycheva, N.N.: The concept of “smart regulation”: foreign experience and the possibility of its application in the Russian public administration. Bull. Moscow State Univ. Seri. 21. Upravlenie (Gosudarstvo i Obshchestvo) (2), 3–19 (2013) Halfina, R.O., Gavrilov, O.A., Koldaeva, N.P., Pigolkin, A.S., Polenina, S.V. et al.: (rev. red.) Science behind Soviet lawmaking. Nauka, 317 p. (1981) Pavlov, P.N.: Economic factors of rule-making activity in Russia. Voprosy Gosudarstvennogo i Munitsipalnogo Upravleniya (2), 39–70 (2019) Turgel, I.D., Panzabekova, A.Z.: Regulatory impact assessment in post-Soviet countries: outcomes, problems, and prospects. Upavlencheskie Nauki 8(2), 84–93 (2018). https://doi. org/10.26794/2404-022X-2018-8-2-84-93 Danish Business Authority. https://danishbusinessauthority.dk/smart-regulation-eu Dokko, J., Mumford, M., Schanzenbach, D.W.: Workers and the online gig economy. a hamilton project framing paper. The Hamilton Project, December 2015, pp. 1–7 (2015). https://www. hamiltonproject.org/assets/files/workers_and_the_online_gig_economy.pdf Doering, D.: Less and Better Regulation Means Better Life. (Not So) Smart Regulation: 4liberty. eu Review (10), 7 (2019). http://4liberty.eu/wp-content/uploads/2019/04/4liberty.eu-ReviewNo.-10_spread.pdf Gunningham, N., Sinclair, D.: Smart regulation. In: Drahos, P. (ed.) Book: Regulatory Theory. Foundations and Applications, Canberra, Australia. pp. 133–148 (2017). https://doi.org/10. 22459/rt.02.2017.08. http://press-files.anu.edu.au/downloads/press/n2304/pdf/ch08.pdf

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Khaneman, D., Tversky, A.: Prospect theory: an analysis of decision under risk. Econometrica 47 (2), 91–263 (1979) OECD: Behavioural insights and public policy. Lessons from around the World. OECD Publishing, Paris (2017). https://doi.org/10.1787/9789264270480-en. Accessed 14 Feb 2020 Saghai, Y.: Salvaging the concept of nudging. J. Med. Ethics 39, 487–493 (2013) ‘Smart Regulation’ - Towards smarter regulation and cutting red tape in the EU (2017). EPP Policy Paper. https://www.epp.eu/files/uploads/2015/11/Smart-Regulation.pdf Stakeholder Consultation on Smart Regulation, issued by European Commission in April 2010. European Foundation for the Improvement of Living and Working Conditions. https://www. eurofound.europa.eu/observatories/eurwork/industrial-relations-dictionary/smart-regulation Sunstein, C.R.: Nudges.gov: Behavioral economics and regulation. In: Zamir, E., Teichman, D. (eds.) Oxford Handbook of Behavioral Economics and the Law, 16 February 2013, Forthcoming. SSRN: https://ssrn.com/abstract=2220022 or https://doi.org/10.2139/ssrn.2220022 Thaler, R.: Toward a positive theory of consumer choice. J. Econ. Behav. Organ. 1(1), 39–60 (1980) Thaler, R.H., Sunstein, C.R.: Nudge. Improving Decisions About Health, Wealth and Happiness, Revised Edition. Penguin Books, London (2009) Wilkinson, T.M.: Nudging and manipulation. Polit. Stud. 61(2), 341–355 (2013). https://doi.org/ 10.1111/j.1467-9248.2012.00974.x Zetzsche, D., Buckley, R., Arner, D., et al.: Regulating a revolution: from regulatory sandboxes to smart regulation. In: EBI Working Paper Series, no. 11. UNSW Sydney NSW 2052 Australia (2017). https://bit.ly/2NiZlav Zorzetto, S., Ferraro, F.: Legislation and Nudging. Towards a Suitable Definition. In: OliverLalana, A.D. (ed.) Conceptions and Misconceptions of Legislation. LL, vol. 5, pp. 107–129. Springer, Cham (2019). https://doi.org/10.1007/978-3-030-12068-9_5

Perspectives of Implementing “Smart” Digital Technologies in Criminal Justice Ilia S. Dikarev1(&)

and Vitalii F. Vasyukov2,3

1

3

Volgograd State University, Volgograd, Russia [email protected] 2 Moscow State Institute of International Relations (University), Moscow, Russia [email protected] Orel Legal Institute of the Ministry of Internal Affairs of Russia named after V. V. Lukyanov, Orel, Russia

Abstract. Purpose: The purpose of the paper is to determine the perspective directions of implementing information technologies in the Russian criminal justice and to find the most effective means of using “smart” digital technologies in the production investigatory and other procedural actions (electronic document turnover, SMS notification, video conference, etc.). Methodology: The authors distinguish the main directions of implementing “smart” digital technologies in criminal justice and study the criminal procedure legislation and the doctrine of criminal procedure, in which – based on analysis of the law administration practice – the modern demands for implementing technologies in the law enforcement activities are formulated and the specific offers aimed at satisfaction of these demands are developed. Results: It is shown that the modern criminal justice, in the conditions of quickly developing information technologies, cannot stay in the same form. In view of the fact that development of criminal procedure legislation should take place in view of formation of the legal platforms with the use of AI, the rule that limits the role of machine thinking as a technological helper during making of law enforcement decisions by the officials should be adopted. Originality/Value: A perspective method of solving the set task is development of “smart” technologies in criminal justice, by development of the mechanisms that would allow for quick search and record of digital evidence of a crime and the use of big data in compilation and systematization of criminal cases’ materials. The authors suggest reconsidering the attitude towards “smart” technologies that are used during criminal cases proceedings, through the prism of the technological paradigm. Keywords: Criminal justice
Criminal case
Information technologies
Electronic document
Electronic carrier of information
Video conference Investigatory action
AI JEL Code: O 30


D 83

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1 Introduction Criminally-remedial activity, aimed at a specific and very significant – from the social point of view – result – is in the constant search for the ways to increase effectiveness. One of such ways is adapting the solving the tasks of criminal proceedings with the help of the achievement of technological progress. As of now, such achievements are connected – directly or indirectly – to digital technologies, which influence on the life of a modern human is very large. According to research performed in Stanford, 130 billion various devices will be connected to Internet by 2030 (Gayard 2018). Implementing “smart” digital technologies in criminal justice has objective foundations. On the one hand, accessibility and low price for technical devices and expansion of their exploitation characteristics allow for significant increase of effectiveness and economy of procedural activities. On the other hand, activity of a modern human, including personal communication and labor or professional activities, leisure and receipt of services is conducted in the digital environment, with the help of Internet. Accordingly, the tracks of this activity – which, alas, could be or unlawful nature sometimes – remain in the digital form, which requires the development and implementation of adequate and effective means of finding and recording such evidence. As a result, the volume of electronic information that is used in criminal proceedings grows annually. Carriers of electronic information are used by courts and law enforcement bodies as evidence or as technical means of solving the tasks connected to organization of procedural activities (Sergeev 2018).

2 Materials and Methods For determining the perspectives of using smart technologies in criminal justice, it is necessary to consider the doctrine of criminal proceedings, in which, based on analysis of law administration practice, the modern demands for implementing technologies in law enforcement activities are formulated, and the offers aimed at satisfaction of these demands are developed. Besides, recently a lot of materials for studying these problems were provided by criminal procedure legislation, enriched by a range of provisions, which allow judicial and law enforcement authorities to work – more effectively – with carriers of electronic information and to use multimedia technologies in procedural actions. For the targeted and methodologically correct development of the research topic, it is expedient to distinguish the main directions of implementing “smart” information technologies in criminally-remedial activities. These include the following: 1) increase of efficiency of search, determination, and record of crime evidence, including electronic information; 2) solving intellectual tasks with possible use of special knowledge; 3) modernization of the means of interaction between the participants of criminal proceedings; using digital technologies for recording the course and results of

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criminal procedural activities, as well as provision of access to the participants of criminal proceedings to legal information.

3 Results 1. The first of the above directions is very important for ensuring the effectiveness of investigating and solving crimes and conviction of persons who committed them. The necessity to use electronic information emerges not only due to investigation of so called computer crimes – at present, computer evidence is widely used during investigation of a lot of categories of unlawful activities, including homicides (Ivanov 2011). However, while for the general criminal cases electronic information is rarely the main source of data, which is the content of criminal evidence, for crimes performed with the help of computers and Internet its role grows substantially. There is a tendency of increase of committing “traditional” crimes in this way (Stepanov-Egiyants 2016). However, a law enforcer faces – on the path of using electronic information in averment – a whole complex of problems related to absence of a proper doctrinal development and normative regulation of the corresponding issues. The thing is that “the currently dominating theoretical approaches to evidence and the legislative constructions, which are determined by them, cannot always be applied to electronic information, and this sets a question of assigning it to a certain type of evidence, and, accordingly, the order of procedural record of data in the electronic form” (Stelmakh 2018). Thus, practitioners note that the most acceptable method of using an electronic document in evidence is its inclusion in the criminal case file as material evidence. However, electronic document is not material evidence in its nature (Artamonova 2018) and thus it is necessary to implement changes and amendments in the criminal procedure legislation. It should be noted that the Russian legislator has already performed a range of important steps for regulating the order of obtaining electronic information – the Penal Code of the Russian Federation has the corresponding provisions, which develop and evolve in view of the practical needs. In particular, the important provisions are found in Article 164.1 of the Penal Code of the Russian Federation, which regulate the specifics of seizure of electronic carriers of information and copying of information during investigatory actions. However, Russian criminologists still think that copying of electronic information during criminal proceedings is not sufficiently developed as a legal institution. It is noted that the specific of the process of finding such data and assigning the evidence value to them require the independent legal regulation (Bykova and Kazakov 2018), and thus there are conditions for distinguishing electronic evidence as an independent legal institution (Zuev et al. 2018). Working with electronic information during criminal case proceedings is connected to the problems of provision of constitutional rights and personal freedoms. A modern user of computer equipment and mobile devices knows how much personal – sometimes intimate – information is in the memory of these devices, and how much information on personal life, movements, and connections of a person could be obtained with an access to his accounts in social networks and cloud services. All this

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requires the development of the technical aspect of procedural actions, related to search, seizure, and record of electronic information but also the establishment of procedural mechanisms that ensure immunity of the private life of such devices’ owners (it is expedient to consider the possibility to expand the list of procedural actions that are allowed based on a court decision). 2. Another – primarily criminalist – aspect of the problem of using “smart” digital technologies in criminal justice is connected to application of expert systems for solving intellectual tasks in the law enforcement activities. Here we speak of software that helps investigator when making decisions during the investigatory and procedural activities. It is also possible to use the potential of AI, which, based on analysis of the investigatory situation, existing evidence, generalize experience of investigating similar crimes, available information on a suspect, determines the signs of serial character in the crimes and formulates conclusions on possible versions and circumstances of the crime, as well as recommendations for certain investigatory actions, etc. At present, the following expert systems are used: Narkoeks (expertise of drug substances), Baleks (ballistic expertise), Kortik (cold weapons expertise), Manyak (decision support during investigation of serial murders of sexual nature), etc. (Afanasyev 2018). The scientific discussion about solving intellectual tasks in the criminal procedure with the use of AI rarely takes place without considering the issue of the object of decision making – robot or human. According to S.V. Bazhanov, “…in case the global replacement of investigators and detectives by digital robots, the consequences will be destructive: downfall of the established system of law enforcement, destruction of the Penal Code of the Russian Federation, removal of classical criminalistics developments, etc.”. (Bazhanov 2018). It should be noted that researchers agree that the right of decision should remain with human (Pastukhov 2015; Vlasova 2018). It seems that such position is explained not only by skeptical attitude of the scholars to assessment of AI’s capabilities but also by the ideas of the humanistic character – criminal justice is the sphere where rights and freedoms of a person are under the constant threat of their limitation. It is obvious that the decisions that could be fatal for a person cannot be trusted to a robot, for they should remain a human’s privilege – the opposite would mean providing the equipment with the power over humans who created it. 3. Modernization of the means of interaction between the participants of criminal proceedings is connected primarily to implementation of electronic document turnover. Here we speak mainly of the court stages of criminal procedure – pre-trial proceedings are far behind in this respect. The technical possibility to use a certain technology for solving the tasks related to organization of procedural activities is not enough for implementing it into practice. For example, the possibility of notifying the parties of court proceedings via SMS has a range of formalities: the parties have to agree to such notification, and it is necessary to ensure the technical opportunity to record the fact of sending and receipt of SMS to the addressee. For this, Russian courts use the system “Court records and statistics”, which is a module of the government automatized system “Pravosudie” (“Justice”), which ensures the confirmation of the fact of sending with the automatic report on delivery of SMS, which is entered into the case file.

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Video conferences have become very popular in courts. Their application in criminal proceedings is regulated by certain provisions of criminally-remedial law (e.g., Article 278.1 of the Penal Code of the Russian Federation) and multiple publications (Zheltobryukhov 2011; Kachalov and Kachalova 2017). However, at the stage of preliminary investigation this tool of optimizing the procedural actions has not become popular, though the offers to envisage the possibility of pre-trial investigation bodies’ using the system of video conferences are regularly made by scholars and practitioners (Novikov 2014; Shcherba and Arkhipova 2014; Shageeva 2018). One must realized that implementing video conferencing in pre-trial investigation would allow “reducing the distance” between investigatory bodies and witnesses and wronged individuals, as well as eliminating the necessity to change the territorial jurisdiction of criminal cases for the purpose of investigating “at the location of defendant or most of the witnesses” (Part 4 Article 152 of the Penal Code of the Russian Federation). 4. A trend of the recent decades was the transition of certain segments of government activities (connected primarily to provision of government services) to the digital platform. Court proceedings in this aspect have their own archaic form – the course and results of procedural actions and decisions that are made during criminal proceedings are still recorded on paper. Other forms of recording (video, audio, and electronic documents) are of the supplementary character yet. Of course, electronic document turnover gradually enters criminal justice. Thus, SMS notification is nothing else than an electronic document that fully substitutes the paper analog. Apart from this, the Russian criminal procedure legislation envisages the possibility to file complaints, etc. to the court in the form of an electronic document – it is created by completing special forms that could be found at web-pages of the corresponding courts. Other electronic documents, which are filed to the court, are to be signed with a digital signature, according to the requirements of the current law. The Penal Code allows for court decisions in the form of an electronic document, but with a mandatory copy on a paper carrier (Article 474.1) and court’s sending to court bailiff an order of procedure in the form of an electronic document, signed by the judge with encrypted digital signature (Part 2, Article 393). The modern smart technologies already ensure the technical possibility of transferring the whole document turnover on a criminal case into the digital form. “If there is a working system of electronic document turnover, the evidence information could be obtained, stored, and transferred along the telecommunication channels in a dematerialized form (Pastukhov 2015). Thus, certain researchers think that criminallyremedial activity could be conducted in the future based on the Russian digital platform “Gosuslugi” (Vlasova 2018; Sharipova 2018). The initiatives related to development of a model of “unified electronic proceedings on criminal case” (Sergeev 2018) or “electronic criminal case” (Kachalova and Tsvetkov 2015) are of the same character. Of course, there is a range of obstacle on the path of implementation of such offers. The most banal one is that not each potential subject of criminally-remedial relations is able to “join” digital court proceedings. However, there is no doubt that these obstacles will decrease with time.

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4 Conclusions The perspectives of development of smart technologies in criminal proceedings are connected to development of the key directions of using smart technologies, aimed at increase of efficiency of search and recording of the crime evidence, including information; solving intellectual tasks, including with the use of special knowledge; modernization of the means of interaction between the participants of criminal proceedings; using digital technologies for recording the course and results of criminal procedural activities, and providing the participants of criminal proceedings with access to legal information. An important role belongs to further development of the procedural form of work with electronic carriers of information, which includes provision of proper guarantees of rights and freedoms of a person (including by means of expansion of the sphere of applying court control in pre-trial proceedings). In the issues of application of AI for solving the tasks of investigatory and intelligence-gathering activities, it is necessary to use the following axiom – the role of machine thinking should be limited by decision support for human law enforcement decisions. It is experience to implement into the pre-trial proceedings the practice of receipt and consideration of crime reports in the form of an electronic document, as well as regulate and provide the technical opportunity for using SMS notifications and applying video conferencing during investigatory actions. The most perspective direction of development of criminal procedure is transition of proceedings on a criminal case into the digital form, which will require further development and dissemination of digital equipment and serious changes in the criminal procedure legislation.

References Gayard, L.: Géopolitique du Darknet. Nouvelles frontières et nouveaux usages du numérique. ISTE Group, London (2018) Artamonova, E.A.: “Tsifrovizatsiya yuridicheskoy deyatel’nosti » : obzor osnovnykh vystupleniy kruglogo stola” [Digitization of legal activities: an overview of the main reports from the round table]. Biblioteka Kriminalista 3(1), 339–343 (2018) Afanasyev, A.Y.: Iskusstvennyy intellekt ili intellekt sub”ektov vyyavleniya, raskrytiya i rassledovaniya prestupleniy: chto pobedit? [AI or intellect of the subjects of determining, solving, and investigating crimes: what will win?]. Biblioteka Kriminalista 3(1), 28–34 (2018) Bazhanov, S.V.: Sovmestimost’ ugolovnogo protsessa s tsifrovymi tekhnologiyami v spetsificheskikh usloviyakh sovremennogo vremeni [Compatibility of criminal procedure with digital technologies in the specific conditions of the modern times]. Biblioteka Kriminalista 3 (1), 35–44 (2018) Bykova, E.G., Kazakov, A.A.: Deyatel’nost’ sledovatelya i tsifrovaya real’nost’: prakticheskaya sostavlyayushchaya [Investigator’s activities and the digital reality: a practical component]. Biblioteka Kriminalista 3(1), 50–53 (2018)

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Vlasova, S.V.: K voprosu o prisposablivanii ugolovno-protsessual’nogo mekhanizma k tsifrovoy real’nosti [Regarding the issue of adapting the criminal procedural mechanism to the digital reality]. Biblioteka Kriminalista 1(1), 9–18 (2018) Zheltobryukhov, S.P.: Dopros svidetelya (poterpevshego) putem ispol’zovaniya sistem videokonferents-svyazi [Interrogation of witness (wronged person) with the help of video conferencing]. Rossiyskaya Yustitsiya 8(1), 43–44 (2011) Ivanov, N.A.: Ispol’zovanie komp’yuternykh dokazatel’stv pri rassledovanii ubiystv [Using computer evidence during homicide investigation]. Rossiyskiy Sledovatel 24(1), 2–4 (2011) Kachalov, V.I., Kachalova, O.V.: Ob ispol’zovanii video-konferents-svyazi v sudebnom proizvodstve po ugolovnym delam [Regarding the use of video conferencing in criminal court proceedings]. Rossiyskiy sud’ya 12(1), 34–38 (2017) Kachalova, O.V., Tsvetkov, Y.A.: Elektronnoe ugolovnoe delo – instrument modernizatsii ugolovnogo sudoproizvodstva [Electronic criminal case – a tool of criminal justice modernization]. Rossiyskoe pravosudie 2(1), 95–101 (2015) Novikov, S.A.: Dopros s ispol’zovaniem sistem videokonferents-svyazi: zavtrashniy den’ rossiyskogo predvaritel’nogo rassledovaniya [Interrogation with the use of video conferencing systems: the future of the Russian pre-trial investigation]. Rossiyskiy sledovatel’ 1(1), 2–6 (2014) Pastukhov, P.S.: Modernizatsiya ugolovno-protsessual’nogo dokazyvaniya v usloviyakh informatsionnogo obshchestva: dis. … d-ra yurid. nauk [Modernization of criminal procedural evidence in the conditions of the information society: doctoral thesis]. Science, Moscow (2015) Zuev, S.V. (ed.): Razvitie informatsionnykh tekhnologiy v ugolovnom sudoproizvodstve: monografiya [Development of information technologies in criminal justice: monograph]. Yurlitinform, Moscow (2018) Sergeev, M.S.: Pravovoe regulirovanie primeneniya elektronnoy informatsii i elektronnykh nositeley informatsii v ugolovnom sudoproizvodstve: otechestvennyy i zarubezhnyy opyt [Legal regulation of applying electronic information and electronic carriers of information in criminal justice: the Russian and foreign experience: abstract of Ph.D. thesis] Science, Ekaterinburg (2018) Stelmakh, V.Y.: Elektronnaya informatsiya v dokazyvanii po ugolovnym delam: sposoby polucheniya i mesto v sisteme dokazatel’stv [Electronic information in evidence in criminal cases: methods of obtaining and place in the system of evidence]. Biblioteka kriminalista 3(1), 93–100 (2018) Stepanov-Egiyants, V.G.: Metodologicheskoe i zakonodatel’noe obespechenie bezopasnosti komp’yuternoy informatsii v Rossiyskoy Federatsii (ugolovno-pravovoy aspekt): dis. … d-ra yurid. nauk [The methodological and legislative provision of computer information security in the Russian Federation (criminal and legal aspect): Ph.D. thesis]. Science, Moscow (2016) Shageeva, R.M.: Problemy pravovogo regulirovaniya primeneniya elektronno-informatsionnykh tekhnologiy v ugolovnom sudoproizvodstve [The problems of legal regulation of applying the electronic and information technologies in criminal justice] Biblioteka kriminalista 3(1), 123– 130 (2018) Sharipova, A.R.: Napravleniya tsifrovizatsii ugolovnogo sudoproizvodstva: primenimyy opyt arbitrazhnogo protsessa [Directions of digitization of criminal justice: applicable experience of the arbitral proceeding]. Biblioteka kriminalista 3(1), 131–135 (2018) Shcherba, S., Arkhipova, E.: Pravovye osnovy primeneniya videokonferents-svyazi v ugolovnom sudoproizvodstve Rossii i perspektivy ikh sovershenstvovaniya [The legal foundations of using video conferencing in criminal justice of Russia and the perspectives of their improvement]. Ugolovnoe pravo 4, 109–117 (2014)

“Smart City” - A New Historical Stage of Housing Policy in Russia Sergey A. Korostin(&) Volgograd State University, Institute of Management and Regional Economics, Volgograd, Russia [email protected]

Abstract. Subject. The work considers the historical stages of the development of housing policy in Russia. Goal. Defining the main historical stages of the development of housing policy in Russia, specifying the methods, approaches and mechanisms of its realization, justifying the emergence of a new stage of development - the project “Smart City”. Methodology. The study is based on the retrospective method, methods of collation and systematization of publications and legal acts. Results. The work analyzed, summarized, and systematized the main historical stages in the development of housing policy in Russia. The most important legal and regulatory documents that formed the basis for the development and promotion of housing policy during the periods under consideration have been identified. A number of housing programs implemented have been analyzed and conclusions have been drawn on their effectiveness. The need to stimulate modern housing policies, drawing on historical experience is justified. The beginning of a new historical stage of housing policy, initiated by the realization of the project “Smart City”, is justified, which is a response to the change in the technological order in Russia. Conclusion. The historical development of Russia’s housing sector involves the development of a regional economic space in the context of urban growth. The historical periods of the implementation of regional housing policy in the Russian Federation and their structuring lead to the conclusion that it is necessary to use regional specificities in the comprehensive solution of the housing issue in order to provide citizens with accessible and comfortable accommodation housing. The digitization of cities and the introduction of “smart technologies” predetermined the need to unite them into a single system for improving the quality and safety of living in cities. The implementation of the project “Smart City” marked the beginning of a new historical stage, in which the socio-economic development of regional housing policy and spatial development will depend on the development of cities, the level of investment in digital development, social and human capital. Keywords: Smart City
Smart technologies Federal targeted programs
National project JEL Code: O18


Housing policy
Housing



R28
R38
R58

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1 Introduction The historical experience of providing the population of Russia with housing is distinctive and unique. The housing problem was long-standing and was aggravated by a social stratification characterized by the inaccessibility of housing for the majority of the population and the provision of adequate housing for a privileged social group, it was causing a social tension. Attempts to solve housing problems have been made at different stages of evolutionary development, as new housing technologies, institutional and economic arrangements have improved or emerged, and new incentives have emerged. From the appearance the need for housing policy in Russia arose and its formation up to the present, we have identified seven (seven) historical stages: 1) 2) 3) 4) 5)

Traditional low-rise urban development (late 19th century - 1917); Expropriation and redistribution, cooperative construction (1917-late 1920’s); Accelerated low-rise development of new industrial centers (1930s-early 1960s); Mass multi-story development (late 1960s-1980s); Liberalization of the housing market and activation of individual low-rise construction (1992–2002); 6) Improving housing affordability and promoting housing through federal targeted programs (2002–2019); 7) Digitization of cities and realization of the project “Smart City” (2019 - to present).

2 Methodology The methodology of the work consists of general scientific and specific methods that make it possible to recognize and systematize the patterns and characteristics of the development of regional housing policy in Russia and to evaluate socio-economic processes in historical retrospect. The methodology of the study includes an analysis of published works on housing policy and legal documents, a synthesis method, retrospective and comparative methods. The author’s identification of the historical stages of solving the housing problem in Russia is based on the historical experience of the evolutionary development described in the works of the following authors: Govorenkova et al. (2007), Ivanova (2009), Grudtsyna (2005), Semina et al. (2009), Androsov (2011), Lutsenko (1972), Rachevskaia et al. (1989), Kazeikin (2010), Levin (2009). The modern stage of development of regional housing policy “smart city” with the use of “smart technologies” is formulated after studying the works of the following Russian and foreign authors: Makarenko et al. (2019), Maksimov (2017), Argunova et al. (2016), Veselova (2018), Kupriianovskii (2016), Paskaleva (2009), Ganin et al. (2014), as well as foreign authors, Baron et al. (2000), Benedikt (2016), Caragliu et al. (2009), Dameri et al. (2013), Giffinger et al. (2007), Hollands (2008).

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3 Results The rapid development of cities in Russia was connected with the transition from feudalism to capitalism, which is associated with the reforms of the 1860s in Russia, including the abolition of serfdom. The reforms triggered industrial growth and the migration of large numbers of people to cities. This sharpened the housing problem and formed a request for housing policy, which was later formalized in the form of the “Law on the Right of Building” of 1912, which supported small homeowners who were allowed to allocate land for housing construction. Since the above-mentioned period we have distinguished 7 (seven) historical stages in housing policy in Russia. Stage 1. Traditional low-rise urban development (late 19th century - 1917). At the end of the 19th and beginning of the 20th century in Russia, the main type of housing was low-rise and earthen houses, most of which (about 85%) were located in rural areas. The main material of construction of houses (30–45 sq. meters) was wood due to economy, accessibility and convenience of use in construction and durability. This type of housing was not suitable for urban development, and the housing problem, aggravated by increased rural-urban migration, became political. The housing policy of the time was unable to provide urban housing for the working class needed for industrial development. Urban workers and the poor were provided with housing through the construction of poorhouses, pristine houses, night shelters and temporary housing. Housing was constructed mainly by charitable means, and to a lesser extent by housing cooperatives, as the difficult material situation of the working class did not allow them to solve the housing issue at the expense of the cooperative movement. Stage 2. Expropriation and redistribution, cooperative construction (1917-late 1920s). The housing stock damaged during the First World War and the mismanagement of the housing stock at the time of the October Revolution of 1917 was not able to improve the housing conditions of the population. However, the Government of the Russian Federation has not been able to do so. The need for a rapid solution to the housing problem for the poorest segments of the population, which had become the basis of Soviet power, and the impossibility of doing so through the construction of new housing, had justified the redistribution procedure. The solution to the housing issue during this period was the expropriation of part of the housing from the affluent population and its transfer to the poor. Under the new housing policy of the Soviet State, the entire housing stock was forcibly municipalities and private property and real estate transactions were prohibited. Expropriation and redistribution have made it possible to alleviate the housing problem, but not to solve it, because of the insufficiency of the existing housing stock. Poorly developed housing construction has been encouraged through cooperation and private initiative. Housing plots were allocated to cooperatives and citizens. Housing has begun to be allocated to the population for loyalty and work.

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In order to improve housing and communal services in the Soviet Union, housing partnerships have begun to be established: housing-rental cooperative societies for the operation of the housing stock; housing construction for the construction of residential buildings; Public partnerships to attract private capital to housing construction. Stage 3. Accelerated low-rise development of new industrial centers (1930s - early 1960s). Despite the increase in the number of dwellings built by cooperative housing construction, there was still a housing shortage in the 1930s. As a result of industrialization, the urban population grew rapidly, from 21.5 million in 1921 to 33.6 million in 1931. The urban population grew rapidly. The urban population mostly lived in communal flats, and the actual housing supply was 5 sq. meters per person. Housing policy aimed at accelerating the development of industrial cities and increasing housing construction for industrial workers, from the point of view of economic viability, was focused on the construction of two-story apartment buildings and barracks in the immediate vicinity or in the accessibility to transport from enterprises. Later, corner sections and blockaded houses were added to such houses. This type of construction continued after the Great Patriotic War, when reconstruction and development occurred spontaneously and ceased in the early 1960s. Stage 4. Mass multi-story development (late 1960s–1980s). At the turn of the 1950s and 1960s, the low-rise housing construction was replaced by mass multi-story construction, on the basis of the Resolution of the Central Committee of the Communist Party of the Soviet Union and the Council of Ministers of the Soviet Union “On the development of housing construction in the USSR”. The new housing policy involved massive industrial construction and the provision of separate housing for all those in need over a period of 10 to 15 years. At the same time, there has been a shift from communal settlement to sopamic settlement. It was decided to limit individual housing construction to [11], with a view to a smooth transition to multistory construction and to contain low-rise development. Housing and building cooperatives, which have been used in the construction of multi-story houses, but within the framework of a single urban plan and under State supervision, have received a new impetus. Housing construction increased significantly in the 1970s. In 1971, the housing supply increased to 11 sq. m per person, which was 8.5 times the pre-war housing stock. At the same time, 13 million square meters of housing have been put into operation by cooperatives. The share of individual dwellings in the total has been decreasing and in 1980–1985 was no more than 12%. Despite the high rate of industrial housing construction, the problem of housing has not been solved. In 1985, about 14 million families (40 million people) were on the waiting list for housing in the USSR. Of which 8 million families in need of housing were in the territory of the Russian Soviet Federative Socialist Republic (RSFSR). In order to intensify construction, in 1985 the Resolution of Council of Ministers of the Soviet Union “On additional measures for the construction of Youth Residential Complex and cooperative residential houses for young people” was adopted. Youth Residential Complex (YRC) were built according to the model projects by the folk construction method.

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Stage 5. Liberalization of the housing market and activation of individual low-rise construction (1992–2003). A new stage in housing policy began with the Law of the Russian Federation of 04.07.1991 “On privatization of housing stock in the Russian Federation”, which was further supplemented by 230 normative acts, which radically changed the situation and marked the transition to market-based housing regulation. State targeted programs played an important role in the formulation of housing policy: the Concept of the reform of the housing and communal sector in the Russian Federation, the State targeted program “Housing” for the period from 1993 to 2001, the aim of which is to bring the introduction of new housing up to 5056 million sq. meters per year, the Presidential Program “State housing certificates”, the Concept of the development of the system of mortgage housing loans in the Russian Federation and a number of other programs. In the early 1990s, the market turnover of land was introduced by law and restrictions on the size of plots for individual construction were lifted, resulting in large-scale development of low-rise housing. The liberalization of the housing market has led to a surge in low-rise, mostly spontaneous, housing development outside the city and among the wealthy, who viewed the country’s comfortable houses as status and savings investments. Later, lowrise housing was seen as an alternative to their urban apartments. Stage 6. Improving housing affordability and promoting housing through federal targeted programs (2002–2019). This phase of the Regional Housing Policy began in 2002, when the Federal Targeted Programs (FTPs) became the main instrument for an integrated solution in housing policy. In 2002–2004, the federal special program “Housing” for 2002–2010 was adopted and started to work, the sub-program “His house” for low-rise housing and sub-program were adopted under this program “Reform and modernization of the housing and communal complex of the Russian Federation”. In 2004, a new Russian Housing Code was adopted, replacing the 1983 RSFSR Housing Code, which is outdated. The new Housing Code and the above-mentioned programs have set the direction for the development and modernization of the housing sector, structuring and integrating them, intensifying housing construction under new regulations and quality standards. The Federal Budget and the Regional Development Fund set out the principles for modernizing and rehabilitating the infrastructure of housing units, the practice of subsidizing loss-making units of housing units was eliminated, and changes were made in housing units. A communal complex with maximum social orientation and the maintenance of targeted benefits for the payment of housing and public utilities services on the basis of the income level of the population. General principles have been accepted for the establishment of tariffs on housing and communal services, stimulating competition in the area of housing, market and administrative regulation of natural monopolies. Investments in housing and improved housing affordability were to be implemented through long-term mortgage lending mechanisms. The rise of low-rise housing, which began in 2003, was supported by an increase in income and savings, the availability of privatized flats for sale and the development of

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the mortgage market. The population had become more active in buying ready-to-build or self-build low-rise housing for which they previously had no resources. The National Project “Affordable and Comfortable Housing for Citizens of Russia” which started its work on January 1, 2006 presents a special significance of all the programs of the State housing policy of this period. The aim of the national project was to develop support for housing construction and to increase the construction volume to 80 million sq. km by 2010. In addition, the Ministry of Housing and Human Settlements has set up a Housing Development Plan. The Ministry of Housing and Human Settlements has set up a Housing Development Plan for Housing and Human Settlements. Fulfilment of the State’s obligations to improve housing conditions for certain categories of citizens. Stage 7. Digitization of cities and realization of the project “Smart City” (2019 present). In recent years, Russia has witnessed the consolidation of cities. Within the region, the migration of people from villages, villages, small urban settlements to the large cities of the region excludes the liberated territories from economic circulation and places on the economies of the enlarged cities increasing responsibility for the social and economic development of the whole region. The proportion of the urban population in the Russian Federation is steadily increasing, from 74% in 2013 to 74.69% in 2019. The proportion of the urban population in the Central Federal District rose from 81.7% to 82.3% during the same period, in the North-West Federal District from 83.8% to 84.5%, in the southern regions of the country from 62.7% to 63,9%. Modern cities face the key challenge of creating conditions for attracting and retaining human capital, thus ensuring their development and competitiveness. To solve this problem of creation of conditions for development of modern economy of the city and increase of its efficiency, creation of comfortable environment for development of human capital, it is necessary during a period of rapid innovation development in sphere “smart” information and communication technologies. Innovations in high technology and robotization are making everything around us more technologically efficient: our cell phones recognize speech and communicate with us with their voice by answering questions; cars have learned to brake in the event of danger and to park by their own, and when we travel by car, we use navigation systems that give us the least-loaded route from one point of the city to another, while calculating the travel time. Taxi aggregators have made the taxi service safer, more comfortable, more accurate and cheaper by supplying the nearest-to-the-spot free car, fully matching our travel requirements. The development of payment systems, the presence of bar codes on goods, the tying of payment cards to telephones will soon allow purchases to be made in shops alone, without sellers. Development of “smart” technologies, including in the direction of development of artificial intelligence, allows to improving existing services, adding new possibilities. For example, every major city has a large number of video cameras that generate huge amounts of video data that cannot be processed manually. The software processing of data and the added feature of the recognition of persons makes it possible to find missing persons or wanted criminals. The integration of all CCTV cameras and the software processing of video data makes the city safer.

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Electronic government services, electronic registration for public offices, clinics, integrated transport applications and information about them in real time, online education, exchange, renting or sharing applications, houses, cars, online communication with city authorities and the availability of platforms for civic activity and much more is the new reality of modern Russia. The guarantee of economic development and high quality of life in the modern world is the concept “Smart City”, which is actively discussed in the world and in Russia. The trend of recent years is the desire to combine “smart technologies” into a single system, to invest not only in digitization, but also in human and social capital, to create a “smart city”. On May 7, 2018 the Decree of the President of the Russian Federation “On national goals and strategic tasks of the development of the Russian Federation for the period up to 2024” was published. On the basis of the new tasks set out in this decree by the President, the passport of the new national project “Housing and Urban Environment” was formed and approved by the Government of the Russian Federation at the end of 2018. This national project included federal projects: “Housing”, “Formation of comfortable urban environment”, “Mortgage”, “Provision of sustainable reduction of habitable housing stock”. On February 4, 2019, within the framework of the national project “Housing and Urban Environment” and the national program “Digital Economy” by the Ministry of Construction and Public Utilities of the Russian Federation with the aim of increasing the competitiveness of cities, the quality and efficiency of their management, and creation of safe and comfortable conditions for living in cities, with the help of introduction of advanced digital and engineering solutions, the implementation of the project “Smart City” was started. The published standard “Smart City” is recommended by the Ministry of Foreign Affairs of Russia for implementation in cities with a population of more than 100,000. In our view, thanks to the introduction of the departmental project for the digitization of the city economy “The Smart City” in the housing policy of Russia, in 2019 a new stage of development began, which will have very serious consequences for the socio-economic development of the regions.

4 Conclusion Summarizing the experience of implementing the regional housing policy in Russia, systematizing it, indicating the stimulating measures in historical retrospect, it should be concluded that the historical experience of the complex solution of the housing problem in mass development makes it necessary to take into account regional specificities. The current regional housing policy addresses the housing issue of the population through national projects and stimulating federal targeted programs. The main role in the provision of housing and in the improvement of people’s comfort must be achieved through social and economic housing policies aimed at stimulating housing construction, modernization and social development, Transport and engineering

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infrastructure, to stimulate solvent demand, improving mortgage lending and other forms of housing loans. Digitization, the emergence of programs for processing large amounts of information in recent years have changed the technological order in Russia. This was made possible by the rapid development of high-speed wireless and wired communications, which accelerated the exchange of data and facilitated the development of the Internet. The guarantee of economic development and high quality of life in modern cities is the use of “smart technologies”. It is obvious that the trend on digitization of cities and development of “intelligent technologies” will continue, and the concept of “Smart city” implemented in Russia, which should unite all “smart technologies” into a single system, together with the development of the Internet, artificial intelligence, With the further development of the new generation of high-speed wired communications and wireless communications (5G and 6G), it will give new impetus to innovative development, improvement of quality of life and safety in cities. Investments in digital, human and social capital, in the realization of the project “smart city” will lead to further changes in migration flows, and to changes in the spatial development of the regions. Accordingly, regional housing policies should be prepared for the increased migration to cities and should provide incentives for housing construction that meets modern requirements in terms of housing quality and a high degree of digitization.

References Androsov, A.N.: Osobennosti sovremennogo razvitiia maloetazhnogo zhilishchnogo stroitel’stva Rossii. Nedvizhimost’: ekonomika, upravlenie [Features of the modern development of lowrise housing in Russia. Real estate: economy, management], no. 2, pp. 44–49 (2011) Govorenkova, T., Zhukov, A., Savin, D., Chuev, A.: Kak stal beskhoznym russkii dom. Zhilishchnyi vopros i istoricheskaia logika ego resheniia [The housing issue and the historical logic of its solution. How the Russian house become abandoned] (2007). http://www. socpolitika.ru. Accessed 10 Feb 2020 Grudtsyna, L.Iu.: Zhilishchnaia politika v Rossii: proshloe i budushchee. [Housing policy in Russia: past and future] (2005). http://www.lawmix.ru/comm/736. Accessed 10 Feb 2020 Housing Cooperation Regulations of 19 August 1924. Collection of Legislative Acts of the USSR, 1924, [Polozhenie o zhilishchnoi kooperatsii ot 19 avgusta 1924 (1924). Sobranie zakonodatel’stva SSSR, 1924] No. 5 (1924) Ivanova, O.E.: Razvitie zhilishchnoi politiki sel’skikh territorii regiona: instrumenty i mekhanizm realizatsii. [Development of rural housing policy in the region: tools and machinery for implementation]. Ph.D. dissertation, Rostov-on-Don, Science (2009) Kazeikin, V.S.: Prakticheskie aspekty realizatsii programmy maloetazhnogo zhilishchnogo stroitel’stva “Svoi dom”. Maloetazhnoe i kottedzhnoe stroitel’stvo, sentiabr’-oktiabr’ [Practical aspects of realization of program of low-rise housing construction “Own house”. Low-rise and cottage construction, September-October], pp. 20–21 (2010) Kazeikin, V.S., Baronina, S.A.: Problemnye aspekty razvitiia maloetazhnogo zhilishchnogo stroitel’stva Rossii. [Problems in the development of low-rise housing in Russia], p. 102. Science, Moscow (2011)

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Levin, Iu.A.: Problemy razvitiia rynka maloetazhnogo domostroeniia i nekotorye puti ikh innovatsionnogo resheniia. Nedvizhimost’ i investitsii. Pravovoe regulirovanie [Problems of low-rise housing market development and some ways of their innovative solution. Real estate and investments. Legal regulation], no. 3 (40), pp. 18–26 (2009) Lutsenko, N.M.: Zhilishchnaia problema i zhilishchnaia politika v SSSR. [Housing problem and housing policy in the USSR] (1972). http://mon.narod.ru/Gilich.htm. Accessed 10 Feb 2020

“Smart Technologies” as a Mechanism for Regulating Bank Competition in Cross-Border Markets Nadezhda K. Savelyeva(&) and Tatyana A. Timkina Vyatka State University, Kirov, Russia [email protected], [email protected]

Abstract. Purpose: The purpose of the study is to verify the hypothesis and determine the prospects for regulating the competition of banks in cross-border markets based on «smart technologies». Design/Methodology/Approach: The methodological apparatus of the study is based on the application of the method of correlation analysis, which determines the relationship between various manifestations of bank competition in crossborder markets with the globalization index and the digital competitiveness index in 2020. Countries, whose banks were included in the world’s 100 largest banks according to Standard & Poor in 2019, were chosen as objects for the study. Findings: Cross-correlation of competition indicators of banks in cross-border markets with the globalization index and with the using of «smart technologies» (digitalization) was calculated. Perspective «smart technologies» are identified and the advantages of their application for regulating the competition of banks in cross-border markets are substantiated. Originality/Value: It’s proved that «smart technologies» allow people to improve the mechanism for regulating the competition of banks in cross-border markets. Currently, globalization has a much stronger impact on the banking sector than digitalization. Because of this, the opportunities of the digital economy and industry 4.0 are used to a small extent in the banking sector, which impedes the development and «recovery» of competition in the banking sector. For example, banks are expanding the network of ATMs and offices to increase customer focus, although smart technologies allow the development of electronic banking services that are in high demand. The most perspective technologies are smart banking, the Internet of things (IoT), ubiquitous computing (UC), artificial intelligence (AI), and blockchain technology (distributed registry). They provide the advantages of «smart technologies» for regulating the competition of banks in cross-border markets in all «5P» in the marketing mix model. Keywords: «smart technologies»
Digital economy
Industry 4.0
Regulatory mechanism
Competition
Banks
Banking sector
Cross-border markets JEL Code: D91
E01
F42
F43
F64
Q01
Q15 O38
Q56
Q57
O13
O41
O43
O44
O47


O31
O32
O33


© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1322–1330, 2021. https://doi.org/10.1007/978-3-030-59126-7_145

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1 Introduction The banking sector is one of the key sectors of the modern economy that have a contradictory effect on it and therefore need to be strengthened. On the one hand, banks optimize financial flows in the economy, and also provide «investments» in its development in the form of loans (in the neo-Keynesian interpretation). In addition to this, the banking sector can act as a vector of economic growth, which was observed at the end of the 20th to the beginning of the 21st century (until 2008). In developed and upcoming countries around the world, lending (mortgage, automobile, consumer, business lending) supported the development of the economy as a whole, created jobs and provided large-scale tax revenues to the state budget. On the other hand, banking is associated with a high level of risk, which causes instability in the banking sector and its susceptibility to crisis. In the context of a global recession, such as in 2008, the banking sector was one of the first to show a recession or may even become a source of financial crises. The close relationship of the banking sector (as an element of the financial infrastructure) with other sectors of the economy causes a «domino effect» when a recession in the banking sector causes negative effects throughout the economy. This forces the government to support the banking sector (through the Central Bank), which is associated with a large burden on the state budget. In recent years, the banking sector has been developing under the influence of two trends. The first of these is related to globalization and increased cross-border competition of banks. The second trend is the spread of «smart technologies» in the context of overall digital modernization of the economy and the transition to industry 4.0. This article proposes that «smart technologies» can act as a mechanism for regulating the competition of banks in cross-border markets. The purpose of the study is to verify the hypothesis and determine the prospects for regulating the competition of banks in cross-border markets based on «smart technologies».

2 Materials and Methods The subject of bank competition in cross-border markets is covered in sufficient detail in existing studies and publications, among which Duho et al. (2019), Harris and Wonglimpiyarat (2019), Louhichi et al. (2019), Mahmood et al. (2019), Rakshit and Bardhan (2019), Savelyeva et al. (2018), Savelyeva et al. (2017). Smart technologies and their diffusion in the digital economy and industry 4.0, including in the banking sector, are reflected in Andronova et al. (2019), Belik et al. (2020), Haabazoka et al. (2019), Ivanov et al. (2019), Pichkov (2016), Popkova (2019), Popkova and Gulzat (2020a), Popkova and Gulzat (2020c), Popkova and Sergi (2018), Popkova and Sergi (2019), Popkova and Sergi (2020), Popkova and Zmiyak (2019), Popkova et al. (2019), Ragulina (2019), Ragulina et al. (2019), Savelyeva et al. (2019), Sergi (2019), Sergi et al. (2019), Shulus et al. (2020), Sozinova (2019), Sozinova (2018a), Sozinova (2018b), Sozinova et al. (2019), Strelets (2017), Fokina et al. (2018), Zavyalova et al. (2018).

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A literature review of the selected topic showed that existing sources cover in sufficient detail only certain aspects of the problem, while the general scientific understanding of the impact of the spread of «smart technologies» on bank competition in cross-border markets is in the process of formation and requires further research. The methodological apparatus of this study is based on the application of the method of correlation analysis, with the help of which the relationship between various manifestations of bank competition in cross-border markets is determined with the globalization index and the digital competitiveness index in 2020 (according to the results of 2019). The countries, whose banks were included in the world’s 100 largest banks according to Standard & Poor (Standard & Poor: The world’s 100 largest banks 2020) in 2019, were selected as objects for the study. Countries are selected by the criterion of accessibility of World Bank indicators on the state of banking competition. Three developed and three countries upcoming were selected: Japan (8 banks in the Standard & Poor ranking), France (6 banks), Canada (5 banks), China (18 banks), Brazil (4 banks) and Russia (1 bank). The source data are given in Table 1. Table 1. Sample data on bank competition in cross-border markets and the use of smart technologies in 2020 Index

Developed Countries Japan France Canada 0.3 0.8 0.1 1.5 n/a 2.7 127.59 98.30 220.60

Upcoming Countries China Brazil 1.5 6.9 4.3 39.1 96.82 104.79

Russia 5.4 8.9 160.92

Deposit interest rate (%) Lending interest rate (%) Automated teller machines (ATMs) (per 100,000 adults) Bank capital to assets ratio n/a 6.5 5.2 9.1 10.1 10.0 (%) Commercial bank branches 34.1 34.9 20.0 8.8 19.0 26.2 (per 100,000 adults) 6 6 8 8 8 7 Depth of credit information index (0 = low to 8 = high) Domestic credit to private 168.8 104.7 124.4 161.1 61.8 75.9 sector (% of GDP) Globalisation index 78.59 87.25 84.64 65.08 60.52 72.45 Digital competitiveness 82.775 82.522 90.836 84.292 57.346 70.406 index Source: compiled by the authors based on materials from KOF Swiss Economic Institute (2020), IMD (2020), World Bank (World Bank: Indicators 2020).

3 Results Based on the data from Table 1, the authors obtained the following results of correlation analysis (Figs. 1 and 2).

“Smart Technologies” as a Mechanism for Regulating Bank Competition 80.00

65.45

60.00 40.00 20.00

42.42 Deposit interest rate

Lending interest rate

-40.00 -60.00

-57.83

-59.00 -72.83

Domestic credit to private sector

Commercial bank branches (per 100,000 adults)

ATMs per 100,000 adults

-20.00

Depth of credit information 24.49 index

Bank capital to assets ratio

0.00

-80.00

1325

-73.90

-100.00

Fig. 1. Cross-correlation of bank competition indicators in cross-border markets with globalization index, %. Source: developed and compiled by the authors. 100.00 76.22

80.00 60.00 40.00

Deposit 20.00 interest rate

Lending interest rate

36.94

Bank capital to assets ratio

0.00

Commercial bank branches (per 100,000 -18.25 adults)

ATMs per 100,000 adults

-20.00 -40.00 -60.00

6.15

Depth of credit information index Domestic credit to private sector

-56.38

-80.00 -100.00

-95.64

-89.88

-120.00

Fig. 2. Cross-correlation of competition indicators of banks in cross-border markets using « smart technologies » (digitalization), % Source: calculated and built by the authors.

As can be seen from Fig. 1, the deposit interest rate decreases (correlation −72.83%) with globalization as well as the lending interest rate (−73.90%). The number of ATMs per 100,000 adults is increasing (42.42%), the bank capital to assets ratio is decreasing (−59.00%). The number of commercial bank branches per 100,000 adults is increasing (65.45%), the depth of credit information index is decreasing (−57.83%), and the volume of domestic credit to private sector is increasing (24.49%). Consequently, bank competition in cross-border markets is becoming more aggressive under the pressure of globalization. As can be seen from Fig. 2, the deposit interest rate decreases with digitalization (correlation −95.64%) as well as the lending interest rate (−89.88%).

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The number of ATMs per 100,000 adults is increasing (36.94%), the bank capital to assets ratio is decreasing (-56.38%). The number of commercial bank branches per 100,000 adults is increasing (6.15%), the depth of credit information index is decreasing (-18.25%), the volume of domestic credit to private sector is increasing (76.22%). Consequently, the spread of «smart technologies» contributes to increased competition among banks in cross-border markets. However, the identified trends indicate that digitalization is characteristic of the economy as a whole, but directly in the banking sector it’s happening at a slow pace. «Smart technologies» that may be in demand in the banking sector, the prospects for their use to regulate the competition of banks in cross-border markets are given in Table 2. Table 2. «Smart technologies » and the prospects for their application to regulate the competition of banks in cross-border markets «Smart Technologies» «Smart » Banking Internet of Things (IoT), Ubiquitous Computing (UC) Artificial Intelligence (AI)

The impact of technology on bank competition Reduction in the number of ATMs and bank branches Increasing the depth of banking information disclosure Decrease in interest rates on credits, increase in interest rates on deposits Diversification of banking services, flexible competition

Blockchain technology (distributed registry) Source: developed and compiled by the author

The effects of changes in bank competition Increase in bank efficiency Reduction of banking services risks Increasing the availability of banking services for interested parties Increased « healthy » competition

As it’s shown in the Table 2, «smart» banking provides a reduction in the number of ATMs and bank branches (the transition to an electronic format for the provision of banking services), thereby increasing the efficiency of banks. The Internet of Things (IoT) and Ubiquitous Computing (UC) help increase the depth of banking information disclosure, thereby reducing the risk of banking services. Artificial Intelligence (AI) allows people to lower interest rates on loans and increase interest rates on deposits, thereby increasing the availability of banking services to interested parties. Blockchain technologies (distributed registry) contribute to the diversification of banking services, flexible competition and enhanced «healthy» competition of banks in cross-border markets. Competition may increase, for example, due to the emergence of banking cryptography and competition in the area of digital security of banking services. The advantages of “smart technologies” for regulating the competition of banks in cross-border markets in the marketing mix model “5P” are presented in Fig. 3. As it’s shown in Fig. 3, «smart technologies» provide numerous advantages for regulating the competition of banks in cross-border markets in the «5P» marketing mix

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«Smart technologies»

reduction of uncertainty and risk; increase in P5: efficiency; Processes process automation. Promotion of services over the Internet (digital marketing); P4: Improved market Promotion segmentation, targeted promotion.

Diversification of services; Improving the quality of services.

P1: Product

P2: Price

Marketing mix (5P) банка

P3: Place

price reduction due to cost decrease and under the pressure of competition

Translation of services in electronic form (provision via the Internet); Expansion of geography (sales of services worldwide).

Fig. 3. The advantages of « smart technologies » for regulating the competition of banks in cross-border markets in the marketing mix model «5P» Source: developed and compiled by the authors.

model. With help of the introduction of «smart technologies», diversification and improvement of the quality of services (P1: Product), reduction of prices due to cost reduction and competitive pressure (P2: Price), translation of services into electronic form (provision via the Internet), expansion of geography (marketing of services) are achieved worldwide) (P3: Place). The promotion of services via the Internet (digital marketing) and improved market segmentation, targeted promotion (P5: Processes) are becoming available. Achieved by reducing uncertainty and risk, increasing efficiency, as well as automation of banking processes (P4: Promotion).

4 Conclusion So, «smart technologies» allow improving the mechanism for regulating the competition of banks in cross-border markets (the hypothesis is confirmed). Currently, globalization has a much stronger impact on the banking sector than digitalization. Because of this, the opportunities of the digital economy and industry 4.0 are used to a small extent in the banking sector, which impedes the development and «recovery» of competition in the banking sector. For example, to increase customer focus, banks are expanding the network of ATMs and offices, although smart technologies allow the development of electronic banking services that are in high demand.

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The most perspective technologies are smart banking, the Internet of things (IoT), ubiquitous computing (UC), artificial intelligence (AI), and blockchain technology (distributed registry). They provide the advantages of «smart technologies» for regulating the competition of banks in cross-border markets in all «5P» in the marketing mix model.

References Andronova, I.V, Belova, I.N., Yakimovich, E.A.: Digital technology in the fishing sector: international and Russian experience. In: 1st International Scientific Conference on Modern Management Trends and the Digital Economy - From Regional Development to Global Economic Growth (MTDE). Proceedings of the 1st International Scientific Conference Modern Management Trends and the Digital Economy: From Regional Development to Global Economic Growth (MTDE 2019), Yekaterinburg, Russia. AEBMR-Advances in Economics Business and Management Research, vol. 81, pp. 277–280 Belik, E.B., Petrenko, E.S., Pisarev, G.A., Karpova, A.A.: Influence of technological revolution in the sphere of digital technologies on the modern entrepreneurship. In: Lecture Notes in Networks and Systems, vol. 91, pp. 239–246 (2020) Duho, K., Onumah, J., Owodo, R.: Bank diversification and performance in an emerging market. Int. J. Manag. Financ. 16(1), 120–138 (2019). https://doi.org/10.1108/IJMF-04-2019-0137 Francis, G., Saqib, C.: The world’s 100 largest banks – 2019 by Standard & Poor (2020). https:// www.spglobal.com/marketintelligence/en/news-insights/trending/t-38wta5twjgrrqccf4_ca2. Accessed 26 Apr 2020 Haabazoka, L., Popkova, E.G., Ragulina, Y.V.: Africa 4.0 as a perspective scenario for neoindustrialization in the 21st century. African J. Econ. Sustain. Dev. 2(2), 20–38 (2019) Harris, W., Wonglimpiyarat, J.: Blockchain platform and future bank competition. Foresight 21 (6), 625–639 (2019). https://doi.org/10.1108/FS-12-2018-0113 IMD: World Digital Competitiveness Ranking 2019 (2020). https://www.imd.org/wcc/worldcompetitiveness-center-rankings/world-digital-competitiveness-rankings-2019/. Accessed 26 Apr 2020 Ivanov, O., Zavyalova, E., Ryazantsev, S.: Public-Private Partnership in the countries of the Eurasian Economic Union. Central Asia and the Caucasus. English Edition 2(2), 33–47 (2019) KOF Swiss Economic Institute: Globalisation Index 2019 (2020). https://kof.ethz.ch/en/ forecasts-and-indicators/indicators/kof-globalisation-index.html. Accessed 26 Apr 2020 Louhichi, A., Louati, S., Boujelbene, Y.: Market-power, stability and risk-taking: an analysis surrounding the riba-free banking. Rev. Account. Financ. 18(1), 2–24 (2019). https://doi.org/ 10.1108/RAF-07-2016-0114 Mahmood, Y., Ahmad, M., Rizwan, F., Rashid, A.: Do banking sector concentration, banking sector development and equity market development influence firms’ financial flexibility? Evidence from Pakistan. South Asian J. Bus. Stud. 9(1), 115–129 (2019). https://doi.org/10. 1108/SAJBS-01-2019-0009 Pichkov, O.B.: Social Inequality in the Us and Canada. Int. Trends (Mezhdunarodnye protsessy) 2(3), 85–92 (2016) Popkova, E.G.: Preconditions of formation and development of industry 4.0 in the conditions of knowledge economy. Stud. Syst. Decis. Control 169(1), 65–72 (2019) Popkova, E.G., Sergi, B.S.: Human capital and AI in industry 4.0. convergence and divergence in social entrepreneurship in Russia. J. Intell. Capital (2020, in press)

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Popkova, E.G., Gulzat, K.: Technological revolution in the 21st century: digital society vs. artificial intelligence. In: Lecture Notes in Networks and Systems, vol. 91, pp. 339–345 (2020a) Popkova, E.G., Gulzat, K.: Contradiction of the digital economy: public well-being vs. cyber threats. In: Lecture Notes in Networks and Systems, vol. 87, pp. 112–124 (2020b) Popkova, E.G., Zmiyak, K.V.: Priorities of training of digital personnel for industry 4.0: social competencies vs technical competencies. Horizon 27(3–4), 138–144 (2019) Popkova, E.G., Sergi, B.S.: Will industry 4.0 and other innovations impact Russia’s development? In: Sergi, B.S. (ed.) Exploring the Future of Russia’s Economy and Markets: Towards Sustainable Economic Development, pp. 51–68. Emerald Publishing Limited, Bingley (2018) Popkova, E.G., Sergi, B.S. (eds.): Digital Economy: Complexity and Variety vs. Springer International Publishing, Rationality (2019) Popkova, E.G., Sozinova, A.A., Menshchikova, V.I.: Managing the adaptation of modern society to the industry 4.0 based on information waves and impulses. Voprosy teorii i praktiki zhurnalistiki = Theor. Pract. Issues Journalism 8(2), 438–446 (2019). https://doi.org/10. 17150/2308-6203.2019.8(2).438-446. (in Russian) Ragulina, Y.V.: Priorities of development of industry 4.0 in modern economic systems with different progress in formation of knowledge economy. Stud. Syst. Decis. Control 169, 167– 174 (2019) Ragulina, Y.V., Alekseev, A.N., Strizhkina, I.V., Tumanov, A.I.: Methodology of criterial evaluation of consequences of the industrial revolution of the 21st century. Stud. Syst. Decis. Control 169, 235–244 (2019) Rakshit, B., Bardhan, S.: Does bank competition promote economic growth? Empirical evidence from selected South Asian countries. South Asian J. Bus. Stud. 8(2), 201–223 (2019). https:// doi.org/10.1108/SAJBS-07-2018-0079 Savelyeva, N.K., Kuklin, A.V., Lapteva, I.P., Malysheva, N.V.: The investment attractiveness of a regional market of educational services as the basis of its global competitiveness in industry 4.0. Horizon 27(3–4), 239–244 (2019) Saveleva, N.K., Nagovitsyna, E.V., Lapteva, I.P., Shchinova, R.A., Koikova, T.L.: The necessity for developing the integrated system of economic information on the bank services market in the conditions of globalization. Espacios 39(28) (2018) Saveleva, N., Prokopenko, L., Zueva, N., Kuklin, A., Yanov, I.: Method of determining the efficiency of price and non-price competition in service sector. In: B cбopникe: MATEC Web of Conferences 2017, pp. 80–84 (2017) Sergi, B.S. (ed.): Tech, Smart Cities, and Regional Development in Contemporary Russia. Emerald Publishing Limited, Bingley (2019) Sergi, B.S., Popkova, E.G., Bogoviz, A.V., Litvinova, T.N.: Understanding Industry 4.0: AI, the Internet of Things, and the Future of Work. Emerald Publishing Limited, Bingley (2019) Shulus, A.A., Akopova, E.S., Przhedetskaya, N.V., Borzenko, K.V.: Intellectual production and consumption: a new reality of the 21st century. In: Lecture Notes in Networks and Systems, vol. 92, pp. 353–359 (2020) Standard & Poor: The world’s 100 largest banks (2020). https://www.spglobal.com/ marketintelligence/en/news-insights/latest-news-headlines/50964984. Accessed 26 Apr 2020 Sozinova, A.A.: Causal connections of formation of industry 4.0 from the positions of the global economy. Stud. Syst. Decis. Control 169, 131–134 (2019) Sozinova, A.A.: Marketing concept of managing the reorganization of entrepreneurial structures using the latest information technologies. Quality - Access to Success. 2018. vol. 19. No. S2. pp. 118–122 (2018a)

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Sozinova, A.A.: Effectiveness or reorganization: application of information technologies in solving marketing problems of modern companies. Espacios 39(28) (2018b) Sozinova, A.A., Nabokikh, A.A., Ryattel, A.V., Sanovich, M.A.: Analysis of “underdevelopment whirlpools” as a tool of managing the regional market of education in the conditions of Industry 4.0, 27(3–4), 173–179 (2019) Fokina, O.V., Fufacheva, L.A., Sozinova, A.A., Sysolyatin, A.V., Bulychev, L.L.: Information and communication technologies as a new vector of development. Espacios 39(28), 5 (2018) World Bank: Indicators (2020). https://data.worldbank.org/indicator. Accessed 26 Apr 2020 Zavyalova, E.B., Studenikin, N.V., Starikova, E.A.: Business participation in implementation of socially oriented Sustainable Development Goals in countries of Central Asia and the Caucasus region. Central Asia Caucasus 19(2), 56–63 (2018) Strelets, I.A.: Cartoon effects on the networks. World Econ. Int. Relat. 61(6), 77–83 (2017)

Establishment of a Public Administration Monitoring System Based on the Use of “Smart” Technologies Elena V. Loginova(&) , Natalia V. Loseva and Aleksander A. Polkovnikov

,

Volgograd State University, Volzhskiy Branch, Volzhsky, Russia {elena.loginova,loseva_nat,polkovnikov}@vgi.volsu.ru

Abstract. Purpose: The article justifies the applicability of deep learning neural networks as a forecasting method that allows monitoring of the formation of public administration in the regions of the Russian Federation. Design/Methodology/Approach: By identifying two groups of factors in the public administration - the outcome and the determinants - the authors have formed a database of indicators that reflect the quantitative values of these factors. The selected data were processed using a neural network, which training was based on a managed learning algorithm. Findings: Experience with the problem of determining the dependencies between the resulting and the determining factors of public management has shown that neural networks are more efficient than linear regression models, identify factors influencing the formation of public administration and forecast its dynamics. Originality/Value: Deep-learning neural networks are a promising method for the development of a public management monitoring system, which is necessary for the implementation of measures aimed at the establishment of the Smart Governance system in modern Russia. Keywords: Monitoring of public administration
Neural networks of deep learning
Prediction of transformations of social institutions JEL Code: C15


C52
R58

1 Introduction Technological development at the late 20th - early 21th centuries contributed to the digital transformation of public production based on the application of “smart technologies” with the main characteristics of a high degree of internal synergy and a large number of backward linkages. The changes taking place in public production have brought about a reform of political decision-making processes at all levels of government. As a result of this reform, public administration technologies have been applied in State and municipal administration, ensuring “interaction of citizens, public associations, business communities and state institutions, carried out through global © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1331–1339, 2021. https://doi.org/10.1007/978-3-030-59126-7_146

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and local social networks to establish a balance of interests regarding the goals of socio-economic development” (Loginova et al. 2018a). The idea of forming a system of public administration, in which “for the common benefit management decisions can be made by a majority” (Loginova 2016), is laid down in “politicians” Aristotle (Aristotle 1983). At the end of the 19th century, this idea was transformed into the need to build a system of “public administration” (Wilson 1887), which at the beginning of the early 21th century acquires features of Smart Governance (Sudan 2000). Smart Governance represents a system of political decision-making based on the principles of openness of the authorities and inclusion of the public in the process of government, from the development of policy decisions to the control of their execution (Smart … 2015). Compliance with these principles is ensured through the “digitization” of the system of state and municipal management. Smart Governance is based on the collection and digital processing of analytical data that allows monitoring the performance of management decisions. The conclusions drawn on the basis of the built-up monitoring system contribute to the realization of the potential of “regulation and social control, justifying the forms and methods of accountability of the structures of management to the society” (Men’shikova and Pruel’ 2018). Based on the above, it is possible to distinguish two aspects of the use of “smart” digital technologies in the practice of modern “smart” system of public administration: Firstly, digital technologies ensure the openness of decision-making and enable the general public to participate in the discussion of these decisions at the stage of decisionmaking and control, at the stage of implementation; Secondly, digital technology is a tool for monitoring public governance development, which assesses the potential of public participation in political decision-making.

2 Materials and Method On the basis of the results of previous studies, the authors have developed an information and analytical system for monitoring public management in the regions of Russia, based on a mathematical model that makes it possible to establish a regression between the determining factors, Defining the system of public administration, and the resulting factors reflecting the effects of public administration technologies (Loseva et al. 2017). The Python programming language and its library was used as a tool to construct a model and analyze quantitative values of determining and resulting factors. (Loginova et al. 2018a; Loginova et al. 2018b). However, it has been determined that applied regression models of analysis (linear regression, Lasso regression, and ARD regression) do not always produce satisfactory results, as linear regression models can only be used to model very simple problems, for example, there is a clear linear dependence of features, or two classes in the classification problem can be separated by a straight line. However, most of the problems that arise when analyzing the formation of the system of public administration in the regions of Russia are not linearly separated and do not contain linear dependencies.

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This has necessitated the expansion of research tools through the application of deep neural learning networks. The neural network method has proven to be an effective modeling tool, allowing the automatic processing of large amounts of data to highlight the existing relationships between them (Sozykin 2017). Deep learning refers to machine learning and is a way of presenting data that uses the study of successive layers of increasingly significant representations that are automatically determined by learning data. “In deep learning such multi-layered representations are studied (almost always) using models, so-called neural networks, structured in the form of layers superimposed upon each other” (Cholet 2018). In this way, neural deep learning networks, by taking the raw data and doing a chain of transformations called layers, get the result by learning from the data transformations. In each layer of the network, a parameter, called weight, is formed, which is part of the sequence of values at which the initial data are correctly displayed in the corresponding results. When a neural network works, it is customary to measure how much of its output is at variance with the expected output. This problem is solved by the network loss function, which is also called as “target function”. The loss function accepts the prediction given by the network and the true value and calculates the estimated distance between them, reflecting how well the network has handled this particular example. The main feature of the in-depth learning process is to use this estimate to adjust weights to reduce losses in the current example. A central deep learning algorithm is based on this: initially, the weights of the network are assigned random values, of course, the resulting result is very different from the one available for testing the sample, and the estimate of losses is therefore very high. Each network launch, called an epoch, serves to correct the weight in the right direction, and loss estimation decreases. These learning cycles are repeated many times, thus forming weights that minimize the loss function. “A network with minimal losses, returning results close to true, is called a trained network (Cholet 2018)”. The advantage of the Deep Learning Neural Network method is that it allows learning of a network with a relatively small data set. The result of the repeated application of the learning process will be the ability of the network to model the function of dependency of the resulting variables on the value of the defining variables, but without its formalized representation, that, nevertheless, it will be possible to predict the dynamics of the resulting factors in response to changing determinants.

3 Results The Southern Federal District region was used as an example to try to predict the dynamics of the resulting factors as a result of changes in the meaning of the determinants using neural networks. The resulting factors are: “number of registered organizations of territorial-public self-government”, “citizens participation in socially oriented non-profit organizations”, this allows to make a conclusion about people’s readiness to cooperate for resolving problems connected with a implementation of collective and/or public interests. The third result factor was the proportion of the population involved in interactions with

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State and local government bodies. This factor has not been analyzed in previous studies because it was intended to determine the implementation of public administration in municipalities for which it was not possible to obtain reliable quantitative data on the interaction of the population with the authorities. A detailed description of the determining factors is presented in the authors’ previous studies (Loseva et al. 2017; Loginova et al. 2018a; Loginova et al. 2018b). Based on the compilation of statistical indicators on the significance of the resulting and determining factors for the regions of the Southern Federal District for 2014–2017, database was created and stored in CSV format. It should be noted that the statistical indicators collected before 2014 were not considered, as their impact on the 2017 figures has already been considered. A deep-learning neural network was used to process the selected data, with two intermediate layers of 64 neurons each and a single one-dimensional layer to produce the data. MSE (Mean Square Error) is selected as the loss function, and MAE (Mean Absolute Error) is used as the function for observing prediction error (Cholet 2018). The model was evaluated by cross-checking with K blocks. In order to determine the relationship between the resulting and the determining factors, a managed learning algorithm (“tutoring with a teacher”) was selected, the essence of which is to learn the network using the known values of “input” data (indicators of determining factors) and “output” data (outcome factor indicators) that have been empirically linked. The study involved libraries written for the Python programming language: - Keras - contains implementations of widely used neural network building blocks, such as layers, target and transfer functions, optimizers, and many tools to simplify image and text processing. The library provides a simple and understandable interface for the construction and use of neural networks. In our research, it’s used to model a neural network and interact with it. - Pandas - is intended for the collection, storage, management, cleaning and initial evaluation of data on general indicators. This study is used to read and process data from an external source (table file). - Numpy - contains optimized mathematical algorithms. This study is used to work with strainers to assess the adequacy of the neural network model. Matplotlib - allows you to build graphics necessary to visualize model learning. Modelling of the relationships of the resulting factors to the values of the determining factors using the neural network method was carried out by repeatedly partitioning the data into teaching and training factors. As an example, consider determining the dependence of the resulting factor “the number of registered organizations of territorial-public self-government” on the dynamics of determining factors. Initially, 100 epochs (iterations based on learning data) were established for testing. The resulting dependence of the prediction error on the number of epochs is shown in Fig. 1. On the training data, the MAE average for K blocks was 1.06, which, given the relatively small amount of input values, it can be considered an acceptable result. To improve the result, the number of epochs was reduced to 50 (Fig. 2) and then to 30. The MAE average for K blocks was 0.82 for the former and 0.53 for the latter.

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Fig. 1. Prediction error dependent on the number of epochs-1

Fig. 2. Prediction error dependent on the number of epochs-2

On the training data, it was determined that 30 eras are sufficient for modelling. The resulting model was tested on test data (Table 1). Table 1. Results of the model verification on test data for factor “number of registered territorial-public self-government organizations” No. Predictions Actual data 1 [3.6608388] 6.02 2 [3.7308018] 2.13

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The absolute error increased slightly, which testifies to the good correlation between the determining factors and the resulting factor “number of registered organizations of territorial-public self-government” which leads to the conclusion that the model is adequate. Similar manipulations were carried out on the other outcome factors, but already with training data (Table 2–3). Table 2. Results of the training model testing for the factor “proportion of the population interacting with state and local government authorities” No. Predictions Actual data 1 [62.050335] 68.1 2 [67.504192] 73.6

The results presented in Tables 2 and 3 indicate that the model has started the retraining process, since the prediction of data on the training sets is more accurate than on the test. The next step in the model was to define a data set on which the resulting factor values are not dependent and therefore do not affect the forecast results. For this purpose, an estimate was made of the relative difference of the standard errors of the models with and without the variables included in the model, using the following formula: ðMAE þ  MAE Þ=MAE þ ; where : MAE + - data with a complete set of variables, MAE - - data without one variable. The model excluded, without risking a reduction of the prediction result, those variables for which the value of the relative difference of the mean quadratic error is greater than 0.1 (the error without the variable is 10% and better than the estimate with this variable). The results allowed excluding from the model indicators that were not correlated with the values of the resulting factors. These indicators include the following: According to the resultant factor “the proportion of the population that interacted with State and local self-government bodies”: – indicators of the educational level of the population of the region; – indicators that determine the extent to which information and communication technologies are being used in the region; – gross regional product; – investment in fixed capital; According to the resultant factor “citizens’ participation in the activities of socially oriented non-profit organizations”: – proportion of the population with secondary general, secondary vocational and higher education; – average per capita monetary income of the population.

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Table 3. Results of model testing on educational data for factor “citizens participation in socially oriented non-profit organizations” No. Predictions Actual data 1 [0.9690104] 1.01 2 [0.6505582] 0.68

For the resultant factor “the number of registered organizations of territorial-public self-government” all analyzed indicators of determining factors proved to be significant. The disparity of the results is due to the different nature of the dependence of the desired parameters on inputs and the learning bias associated with the small amount of data. After eliminating the insignificant indicators, the models were recalculated on the correct sets of parameters, the results of which are presented in Tables 4, 5 and 6. Table 4. Results of recalculation of models on correct sets of parameters for factor “number of registered territorial-public self-government organizations” No. Predictions Actual data 1 [4.9751985] 6.02 2 [1.9583646] 2.13

A comparison of the results presented in Tables 1 and 4, 2 and 5, 3 and 6, respectively, reveals that the quality of the forecast values has improved as a result of the overhaul of the neural network and, since the forecast values are reasonably close to the real data, The method of deep-learning neural networks can serve as a basis for the establishment of a system for monitoring public administration. Table 5. Results of recalculation of models on correct sets of parameters for factor “proportion of population interacting with state and local self-government bodies” No. Predictions Actual data 1 [66.050335] 68.1 2 [71,504192] 73.6

Table 6. Results of recalculation of models on correct sets of parameters for factor “citizen participation in socially oriented non-profit organizations” No. Predictions Actual data 1 [0.9890104] 1.01 2 [0.6605582] 0.68

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4 Conclusion “Smart” technologies increasingly penetrate into all spheres of human activity, producing qualitative changes in the technological basis of public production, which necessitate the development of an appropriate institutional environment, because rational change, however complex and improbable, is necessary, or our institutions will lose their flexibility and adaptability; they will not be able to resist new and difficult socio-economic challenges” (Noveck 2019). An institute that responds to the demands of modern technological challenges is public administration, which can be fully described as Smart Governance, that is, transformational governance “closed state institutions in open and oriented for active cooperation with citizens” (Noveck 2019). The process of shaping public administration is very complex, as it depends on many factors. Simulations of public governance formation, which consist in determining the extent to which its determinants influence the outcomes, can be carried out using neural deep learning networks. The advantage of neural networks is the reproduction of complex dependencies between input data, the basis of which is the automatic identification of the most important features needed to solve a given problem. The results obtained by the authors during the study demonstrated the applicability of the neural network method to the development of a public administration monitoring system.

References Appendix to the collection “Regions of Russia. Socio-economic indicators”. https://www.gks.ru/ free_doc/doc_2018/region/pril-reg-sep_2018.xlsx. Accessed 15 Dec 2019 Aristotle: Sochineniia. Mysl’, Moscow (1983) Cholet, F.: Deep learning in Python. Peter, St. Petersburg (2018) Development of territorial public self-government in Russia on 01 March 2019. https://www. dropbox.com/. Accessed 15 Dec 2019 Information about ongoing elections and referendums. http://www.vybory.izbirkom.ru/region/ izbirkom. Accessed 15 Dec 2019 Loginova, E., Loseva, N., Polkovnikov, A.: Model of the assessment of the implementation of public administration in the regions of Russia. In: Competitive, Sustainable and Secure Development of the Regional Economy: Response to Global Challenges Proceedings of the International Scientific Conference in Volgograd, Russia, pp. 364–369. Atlantis Press, Paris (2018a) Loginova, E., Loseva, N., Polkovnikov, A.: Model-methodical complex of analysis and forecasting of public administration implementation in regional practice. Trends Manag. (4), 17–24 (2018b) Loseva, N., Polkovnikov, A., Loginova, E., Kalinin, A.: Otsenka realizatsii publichnogo upravleniia v regionakh Rossii na osnove matematicheskikh metodov modelirovaniia”, [Evaluation of the implementation of public administration in the regions of Russia based on mathematical modeling methods”], Regional’naia ekonomika i upravlenie: elektronnyi nauchnyi zhurnal No 3 (2017)

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Loginova, E.: Neobkhodimost’ razvitiia publichnogo upravleniia v sovremennoi Rossii, [Necessity of development of public administration in modern Russia], Filosofiia khoziaistva 5(107), 233–241 (2016) Men’shikova, G.A., Pruel’, N.A.: Rezhimnye sravneniia kak sotsial’nye tekhnologii Smart Governance, [“Regime comparisons as social technologies Smart Governance”]. Vestnik Sankt-Peterburgskogo universiteta. Sotsiologiia 11(3), pp. 301–318 (2018) Noveck, B.S.: Smart Citizens, Smarter State. Olimp-Biznes, Moscow (2019) Number of socially-oriented non-profit organizations. https://showdata.gks.ru/report/277974/. Accessed 15 Dec 2019 Smart Governance in a Smart Nation: A Singapore perspective (2015). https://www2.deloitte. com/vn/en/pages/risk/articles/smart-governance-in-a-smart-nation.html. Accessed 20 Jan 2020 Sozykin, A.V.: Obzor metodov obucheniia glubokikh neironnykh setei, [“Review of methods of teaching deep neural networks”], Vestnik IuUrGU. Seriia: Vychislitel’naia matematika i informatika 6(3), 28–59 (2017) Sudan, R.T.: SMART Government: the Andhra Pradesh Experience. Indian J. Public Adm. 46, 401–410 (2000) Wilson, W.: The study of administration. Am. Political Sci. Q. 2(2), 197–222 (1887). http:// www.jstor.org/stable/2139277?origin=JSTOR-pdf&seq=1#page_scan_tab_contents. Accessed 03 Feb 2016

Smart Cities Today and Tomorrow – World Experience Ekaterina A. Khalimon1(&) , Elena A. Vikhodtseva1 and Vladimir Obradović2 1

,

State University of Management, Moscow, Russian Federation [email protected], [email protected] 2 University of Belgrade, Belgrade, Republic of Serbia [email protected]

Abstract. This article studies the role of projects and programs in solving many problems of smart cities development in the era of global digitalization. The first part of the article presents the main socially oriented values and characteristics of smart cities, digital technologies that make cities “smart”, as well as measures to implement them in the urban environment. The need to measure 17 key indicators to assess the performance of cities in terms of providing urban services and quality of life has been justified. The second part contains “international practice insight” on the main concepts of smart cities around the world (Rio de Janeiro, Jing-Jin-Ji, Berlin, Moscow, megacities of India and South Korea), each of which contains different concepts of development of these cities, successful partnership practices of: countries, governments and business, urban infrastructure and people living in megacities. The information collected is the key to solving the problems of inefficient management of modern cities development. Also, the article considers the technologies of management of smart cities, and suggestions which will allow solving the arisen difficulties have been given. Keywords: Smart city
Infrastructure
Development projects and programs Partnership
Development JEL Code: R580





F630
P480

1 Introduction The number of people is steadily increasing. By 2050, the world population is expected to reach almost 10 billion, about 80% of which will live in cities. This is a major challenge for all governments and leaders around the world. Public transport, water supply, sanitation, energy, food and security are just some of the challenges that Governments must address. It is critical to address these issues in an integrated manner, using existing know-how in project, program and portfolio management. This will help to make the vision of a smart city real and beneficial to people. People move from rural to urban areas, mainly hoping for a better life (through work, housing and social security). On the other hand, people leave their rural areas © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1340–1347, 2021. https://doi.org/10.1007/978-3-030-59126-7_147

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because of natural disasters, riots or military conflicts, hoping for a much safer life and peace. Migration is a global phenomenon; the first megacities in the world were New York and Tokyo, with a population of over 10 million in 1970. Today, megacities are growing steadily in countries such as India (e.g. New Delhi and Mumbai) and China (e.g. Beijing and Shanghai) as well as in developing countries, including but not limited to Nigeria, India, Mexico and Brazil. There are currently about 50 megacities worldwide, most of them in Asia.

2 Methodology The following general scientific methods were used in this work: search, collection, systematization, analysis, comparison of information, verification of the scientific hypothesis of classifying a megapolis as a class of smart cities, clustering. In addition, foreign sources of literature, development programs, foreign websites, standards and articles were analyzed. Thus, having analyzed the international standard ISO 37120 “Sustainable community development” (Shmeleva and Shmelev 2019), the following 17 key indicators for assessing the performance of cities in terms of urban services and quality of life can be given: economy, education, energy, environment, finance, fire and emergency response, governance, health, recreation, safety, protection, recycling, telecommunications and innovation, transport and logistics, urban planning, water treatment, water supply and sanitation. Each indicator may include several sub-indicators for different stakeholders such as city managers, politicians, researchers, business leaders, investors and other professionals. They are designed to develop and implement policies aimed at creating more livable, tolerant, sustainable, economically attractive and prosperous cities. Korea Agency for Infrastructure Technology Advancement (KAIA) is actively researching urban architecture and presents a picture of a smart city as a multi-layered system in which all the parts are connected with each other, both physically and informationally, and ICT platforms are a key tool for a smart city integrating the physical infrastructure of the city with services for citizens. However, digital technology is not the only driver for smart cities (Malyshkin and Halimon 2018). The question is how to develop and use technology for the real benefit of citizens (e.g., through innovative services and products, optimized infrastructure use, maintenance and renewal, and improved communication, cooperation and people living together). Thus, smart cities need a combination of three interrelated aspects: smart management, smart technical concepts, and digital technology. The “smartness” of the city can be described as the ability to combine all resources, effectively and seamlessly achieve the agreed goals and objectives that the city has set itself. It describes how effectively all the different urban systems, as well as the people, institutions, finances, facilities, and infrastructure involved, work together in an integrated and coherent manner to ensure that potential synergies are exploited and that the city functions in a holistic way that promotes innovation and growth.

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3 Results 3.1

Smart City Rio de Janeiro

Rio de Janeiro has a population of over 6 million and is the fourth largest city in Latin America. According to UN estimates, 65% of the world’s population is expected to live in urban areas by 2040 (Schreiner 2016). Thus, such cities as Rio de Janeiro will face problems with housing, road congestion, water supply, etc. Rio de Janeiro’s Smart City Program is a pioneering activity in Brazil. It provides a range of services: – – – – – –

Surveillance of the city 24 h a day, 7 days a week; Digital map of the city in the Center for Operational Decision-Making; Real-time monitoring of the situation; Monitoring and forecasting of weather conditions; Alarm sensors and regular training of residents in emergency situations; Collection and updating of demographic data (data on the population and families living in different regions) has been integrated; – Direct contact with the population through “Civic Service Center”, which is connected with the use of social networks and applications; – Presence of reporters from major media agencies. Brazil’s first Smart Cities Laboratory was opened in Rio de Janeiro to conduct research, testing and certification of technologies used in smart cities. The project aims to create a mini-city in the laboratory to test the technology of smart cities. In practice, the proposal aims to address challenges such as integrating public lighting with urban mobility and disaster prevention. Another possible activity could be to control over urban services such as energy, water, gas and sanitation supply in a reasonable and unified manner. The aim is to prepare the environment that allows the integration of as many technologies as possible, based on the definition of what is already available on the national market. The metropolitan region of Rio de Janeiro, after more than 40 years of existence, has undergone several changes. A large network of national and international partners has helped to bring together the Smart City of Rio to help in program and project management, providing solutions to technical, contextual and behavioral aspects of management with one goal in mind: to help the program succeed. 3.2

Smart Region Jing-Jin-Ji

The Chinese capital Beijing (the short name of the city is Jing) borders the municipality of Tianjin (the short name of the city is Jin) and Hebei (the region, the short name is Ji), together they constitute the very important region of Jing-Jin-Ji in China (Wenguang and Fei 2015). In total, the region is home to over 100 million people and has a total population of 7.98% of the country’s total population (Yang et al. 2017). Although the Jing-Jin-Ji region is geographically linked, the socioeconomic structure was fragmented, urban development was not balanced, and air pollution abatement techniques were not well coordinated. These policy and governance issues caused serious

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problems in Jing-Jin-Ji: severe air pollution in the region, Beijing’s overpopulation and poverty in Ji. Coordinated development issues in the Jing Jin Ji region are attracting increasing attention from the central government of China and were the beginning to initiate the Jing-Jin-Ji urban cluster development program based on the seven principles listed below: 1. 2. 3. 4.

Strengthening the strategic project thinking of top-level leaders; Setting up for coordinated development and conscious work on a common mission; Accelerating industrial regulation and coordination; Optimization of urban planning and structure and better integration of urban conglomerates; 5. Enhancement of environmental capacity and cooperation in the field of environmental protection; 6. Development of a modern transport network system and implementation of traffic management systems; 7. Acceleration of market integration. The Jing-Jin-Ji City Cluster Program is immense and complex. The first results have already been achieved, but there are still many problems to be solved in order to achieve the long-term goal of 2030 (Tang and Xi 2017). To make cities smart, it is necessary to make their people smart and useful. The challenge is how to maximize and balance the different demands and expectations of stakeholders in Jing, Jin and Ji in the short and long term. More detailed economic analysis, compensation policy development and communication are needed. It is expected that the program will play a leading role in the development of a smart region and regional development throughout China, and can also contribute to lessons learned around the world. 3.3

Smart Cities of India

Every year millions of people leave their traditional homes in rural cities and move to urban areas and towns. The transition from rural to urban life is not unique to India; it is occurring throughout the developing world. A UN report states that 500 million people now live in 31 megacities around the world (Morgunov and Mamaev 2017). India currently has five megacities: New Delhi, Mumbai, Calcutta, Bengaluru and Chennai. Other urban areas in India are growing rapidly as people look for jobs and financial security in cities, as well as better education for their children. This rural-urban migration will lead to two more cities becoming metropolises by 2030: Hyderabad and Ahmedabad. To address the challenges of “mass urbanization”, the government of India launched the Smart Cities Program in 2015, which focuses on urban renewal and upgrading, with the aim of developing 100 major cities across the country. The goal of the program is to promote cities that provide basic infrastructure and a decent quality of life for citizens, a clean and sustainable environment and smart technological solutions. The focus is on sustainable and inclusive development of small areas, creating a scalable model that will be a beacon for other growing cities.

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The strategic components of spatial development in India’s Smart Cities Program are urban beautification (modernization), urban renewal (redevelopment) and expansion (development of new territories), as well as a city-wide initiative that applies intellectual solutions to larger areas of the city. State and municipal authorities will play a key role in the development of smart cities. Good leadership and high-level strategic vision, as well as the ability to act decisively, will be important determinants of the success of the program. Understanding of the concepts of modernization, development of new territories and redevelopment by authorities, implementers and other stakeholders at all levels requires assistance in attracting various resources. The Smart Cities Program requires smart leaders who are actively involved in governance and reform. Citizen participation is much more than just formal participation in the management of the state, as they are involved in defining a Smart City, proposing solutions, participating in the implementation of urban reforms, overseeing the implementation of solutions to ensure the sustainability of Smart City development. 3.4

Smart Cities of South Korea

Over the past ten years, the Korean Government has made tremendous efforts to create Smart Cities. In the mid-2000s, the brand of Korean Smart Cities, ubiquitous city (UCity) (Smart City Strategy 2018), combined the word “city” with the term “ubiquitous”. In such a city, sensors or CCTV cameras are built into urban infrastructure such as roads, bridges and schools to connect these structures into a network built to prevent unwanted situations, including crimes or disasters, without the need for human intervention. Several ministries are currently working together to promote smart city policies at the national level. Let’s look at the example of the South Korean smart city Seoul, the country’s largest megacity with a population of over 10 million people, one of the most technically advanced cities in the world. The prosperity of its citizens is growing, and some of the problems that are considered in the city’s strategic development plan include: digital inequality, an elderly society, traffic congestion, unsustainable development. The following solutions are proposed to address these problems: – – – – –

Ensuring public access to ICTs and bridging the digital divide; Strengthening public health and safety; Participatory governance and improved delivery of public services; Improved commutation; Improvement of energy efficiency.

To overcome these challenges, the Korean Government has announced a specific strategic plan to create a smart city at the national level that is people-centered and smarter. Compared to public development projects (where decisions were taken unilaterally by the Government and managed by public institutions), the upcoming projects based on open governance will encourage the private sector to participate. In addition, the introduction of advanced services for civil society engagement and user

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empowerment in the area of innovation through the open data platform will stimulate sustainable growth at both the national and regional levels. 3.5

Smart City Berlin

The European Commission responded to the international Smart Cities movement by creating the European Innovation Partnership for Smart Cities and Communities (also known as the Smart Cities Initiative). Its aim is to encourage and support European industry, science and research in international cooperation to develop possible solutions for efficient production and supply of energy, urban mobility and smart city networks using modern information and communication technologies. There is a clear political commitment to Berlin as a smart city. In 2015, the Berlin Senate adopted the strategy “Smart City Berlin”. The concept is based on ICT to develop solutions that make the city more efficient, healthy, sustainable, livable and clean. In addition, citizens will benefit from climate protection, resource conservation and sustainable development. The idea is to create an organizational structure and networked decision-making processes in cities in order to implement intelligent technologies. Berlin has set itself the following goals in its smart city strategy: – Reduced use of organic resources; introduction of renewable energy sources; improved resource efficiency in Berlin by 2050; – Minimizing negative side effects of living in a densely populated urban environment, such as pollution caused by stress, disease or reduced sense of personal security; – Further developing the international competitiveness of the Berlin-Brandenburg metropolitan area; – Growing economic power and job creation; – Creating the leading market for innovative applications; – Strengthening the sustainability of urban infrastructure; – Long-term provision and optimization of public services through public administration, municipal enterprises and social bodies; – Increasing opportunities for more active participation in social life. Several interdisciplinary projects are already underway that generate and exploit synergies from the public sphere, science and research, and business. Thanks to its excellent research landscape and a large number of innovative companies, the city sees great potential in the following areas: energy technology; transport/mobility/logistics; information and communication technologies; medical industry; photonics. 3.6

Smart City Moscow

Moscow has not only quickly picked up the world trend for digitalization, but also quickly reached the first positions among the high-tech metropolitan areas, getting in recent years in the top three leaders in the number of free Wi-Fi hotspots, the top three in the number of startups, as well as in the top five cities which are best ready to implement innovations.

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From 2012 to 2018, the program “Information City” under the leadership of the Department of Information Technology was implemented step by step in the capital. The result was the expansion of the network of public services available to the citizens in electronic form. In 2019, “Information City” was replaced by a new program “Smart City – 2030”, whose development was supported by the residents, the business and foreign experts with their active involvement. This program defines priorities, goals and objectives of public administration and development in the field of digital technologies in Moscow until 2030. The very concept of Smart City is a system where the resources of city services are used in the most optimal way and provide maximum convenience to the residents of the city. The new state program will help to free Muscovites even more from everyday routine and to get rid of the need to waste time, as a significant part of the work will be done by artificial intelligence (AI). The number of smart things will continue to grow in the city: smart houses, transport, roads, production. Technologies of virtual and augmented reality, computer 3D modeling and 3D printing will be further developed (Khalimon and Guseva 2018). Smart city technologies should make people more mobile, and their movement should become safer, and it is not the driver, but the infrastructure that will interact with the transport, the street and road network will turn into an interactive map with markings, road signs, traffic lights, curbs, parking lots, etc. and unmanned cars equipped with special sensors for road analysis will be able to use these roads. Moscow is now developing an integrated traffic management system to support drones. The first tests showed that it can reduce the level of traffic accidents by 60% and increase the average speed on the roads of Moscow by 15% (Barshev 2019). Back in 2011, the state program “Safe City” appeared in Moscow, part of which was the creation of the information system “Unified Data Processing and Storage Center”. Now more than 170 thousand video cameras with facial recognition system are now connected to the system. In 2020, Moscow was included in the rating of the safest megacities in the world, taking 34th place.

4 Conclusion The purpose of a smart city is to make sure that all residents can quickly and at any convenient time receive the highest quality services, whether education, health care, social security or tourism and recreation. A smart city today must meet the following social values: – Liveability: cities that provide clean, healthy living conditions without pollution and congestion, with digital infrastructure that makes urban services instantly and conveniently available anytime, anywhere; – Workability: cities that provide the necessary infrastructure with energy, communications, computing operations, basic digital services to compete worldwide for high quality jobs;

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– Sustainability: cities that provide services without taking resources away from future generations. Smart city today is a city that is increasing the pace of improvement in its socioeconomic and environmental performance, responding to challenges such as climate change, rapid population growth, political and economic instability by fundamentally improving how it interacts with society, how it applies co-leadership, how it works in different disciplines and urban systems, and how it uses data information and modern technology to provide better services and quality of life.

References Barshev, V.: GAI, metry, sekundy [Traffic police, meters, seconds] (2019). https://rg.ru/2019/02/ 13/reg-cfo/kovalenko-v-moskve-sokratilos-chislo-avarij-iz-za-prevysheniia-skorosti.html. Accessed 15 Jan 2020. (in Russian) Malyshkin, N.G., Halimon, E.A.: Analiz urovnya razvitiya cifrovoj ekonomiki Rossii [Analysis of the level of development of the digital economy of Russia]. Vestn. GUU 8, 79–86 (2018). (in Russian) Morgunov, E.V., Mamayev, S.M.: Razvitie gorodov cherez prizmu kachestva zhizni naseleniya. [Development of cities through the lens of the population life quality]. Tomsk State Univ. J. Econ. 38, 26–42 (2017). (in Russian) Shmeleva, I.A., Shmelev, S.E.: Global’nye goroda: mnogokriterial’naya ocenka ustojchivogo razvitiya [Global cities: multiparametric evaluation of their sustainable development]. Biosfera 1, 1–18 (2019). (in Russian) Wenguang, B., Fei, C.: The coordinated development among Beijing, Tianjin and Hebei: challenges and predicaments. Nankai J. 1, 110–118 (2015) Yang, J., et al.: Air quality and meteorological conditions coupling analysis of the JingJinJi district. In: Advances in Engineering Research, vol. 114 (2017) Khalimon, E.A., Guseva, M.N., Kogotkova, I.Z., Brikoshina, I.S.: Digitalization of the Russian economy: first results, European production of social and behavioral sciences. In: International scientific and practical conference Global challenges and prospects for the development of modern economy. Future Academy, Samara, vol. LVII, pp. 199–213 (2018) Schreiner, C.: International case studies of smart cities. Inter-American Development Bank, Rio de Janeiro, Brazil (2016) Smart City Strategy. Smart City Council of Korea (2018). https://ec.europa.eu/programmes/ horizon2020/what-horizon-2020. Accessed 15 Jan 2020 Tang, S., Xi, X.: Analysis on Xiong an new area: a new pivot for Beijing-Tianjin-Hebei collaborative development. J. Yanshan Univ. 18(4) 2017

Optimal Control of Energy Pipeline Systems Based on Deep Reinforcement Learning Alexander Belinsky1(&)

and Valentin Afanasev2

1

2

PC Gazprom Promgaz, Moscow, Russia [email protected] State University of Management, Moscow, Russia [email protected]

Abstract. Modern pipeline energy systems are structurally complex and geographically distributed engineering installations with hundreds of thousands of interconnected process facilities. The optimal control of such systems is a highly responsible task that cannot be solved without applied decision support software and automated control systems. This article addresses the promising area for the development of intelligent systems of the pipeline energy infrastructure control based on deep reinforcement learning technologies. The authors suggested approaches to the learning of digital models and proved them using the examples of operating gas industry systems. Also, they considered the peculiarities of introducing new technologies and outlined further research prospects. Keywords: Artificial intelligence
Machine learning
Reinforcement learning
Digital twin
Optimal control
Pipeline systems
Energy industry JEL Code: O13


C61
C8

1 Introduction Modern pipeline energy systems (engineering infrastructure of heat, water, oil and gas supply) are the vital basis of the economic and social field. The living standard of the population and performance of enterprises are contingent on the reliability and efficiency of these systems. Pipeline systems have some common features. These are geographically distributed networks with a large number of facilities having individual specifications. Facilities interact through technological communications and form a single complex process flow pattern. Optimal operational control of such systems is a complex task. Managerial decisions are generated on the back of findings of information array analysis, and one of the main features is the high price of wrong decisions. Therefore, computer simulation of energy systems has been one of the priority areas for their development over the years. The industry has developed and implemented various decision support software packages. They allow developing digital models of systems, i.e. design diagrams containing information about the process pattern and interrelationships of elements, the values of © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1348–1355, 2021. https://doi.org/10.1007/978-3-030-59126-7_148

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their parameters, as well as calculating formulas and procedures connecting the parameters of items with each other. Digital models complemented by computational procedures for identification of pipeline systems based on real telemetry data make it possible to develop high-precision simulation models, which today is the mainstay of the digital twin technology. However, despite significant advances in a computer simulation, modern software packages have some conceptual problems. The major of them is that historically they had been developed in an ergatic system where a person is a central figure in developing and making decisions with a considerable amount of the computational complexities shifted on him. However, due to the technological features of modern systems, there is a great number of calculations during which optimal control actions can be developed, and search for optimal solutions is an intractable problem. People are not able to take on the computational complexity of real system optimization tasks, therefore solutions fall outside the optimum and lose efficiency. This makes seeking new approaches to control of energy systems. The use of modern reinforcement learning, which (according to Sutton and Barto 2018) in recent years has proven to be efficient in solving some multi-step optimization problems, is very high-potential. Major successes were achieved in games such as Atari and Go (according to the work of Mnih et al. 2015 and Silver et al. 2016), where the algorithms managed to excel human capacities. This success has also contributed to the development of energy control techniques. The value of this paper, in our opinion, consists in the following: • The authors proposed an approach to the development of pipeline systems control strategies based on deep reinforcement learning technologies and proved it using the example of a gas supply system. However, the common nature of the hydraulic circuits theory allows for its application to other systems (heat, water, oil supply). • Computational experiments that demonstrated the efficiency of deep reinforcement learning algorithms for the solution of urgent problems concerning optimal control of pipeline energy systems were also conducted. • The problems to be solved for the development of this direction were identified and the paths of further research were outlined.

2 Methodology 2.1

Indicative Example

As an indicative example, without narrowing the study, let’s consider a section of the gas supply system, the design diagram of which is shown in Fig. 1. The section consists of several gas trunk lines and three gas compressor stations. The design diagram is elaborated in specialized software for simulation of digital twins of gas supply systems and their operation modes.

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Fig. 1. Diagram of the gas pipeline system section

In this paper, we will tackle two typical problems of optimal control that have practical importance: 2:1:1. Determine the most suitable path of the transition from the current operating mode of the system to the target one that meets some established supply schedule of products (gas) to consumers (draw up an appropriate plan of equipment parameters control). 2:1:2. Estimate the most suitable transition path from the current throughput of the system to the highest possible one. Additional requirements are imposed on the target state of the pipeline system. For example, it should have the lowest possible level of energy consumption for its own technological needs. Also, the requirements of control cost minimization are posed on the path of transition between states. The cost may include material expenses (energy consumption for own needs) or impose indirect constraints (for example, minimization of equipment start-ups/shutdowns). Such problems are multistep, multicriteria with a discrete-continuous domain of variation of control parameters, include nonlinear constraints as systems of equations and one-sided and two-sided inequalities, and a high dimension. Universal methods providing an effective solution to these problems for real pipeline systems have not yet been developed. 2.2

Problem Statement

We will deal with the problem of optimal control of the dynamic operation modes of pipeline systems, which are described by nonlinear partial differential equations. As for our indicative example, the system of equations follows from the laws of conservation of momentum, continuity of flow and conservation of energy: Eqs. (1)–(3), respectively (Sardanashvili 2005; Sukharev and Karasevich 2000): ð1Þ

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ð2Þ

ð3Þ

where p is the gas pressure, Pa; q is the volumetric flow rate reduced to standard conditions, m3/s; T is the gas temperature, K; Tos is ambient temperature, K; qc is gas density under standard conditions, kg/m3; cp is the specific heat capacity of the gas at constant pressure, J/(kg K); z is the gas compressibility factor; R is the gas constant, J/ (kg K); g is gravitational acceleration, m/s2; k is pressure loss coefficient (actual); Dvn is the inner diameter of the pipe, m; x is the linear coordinate, m; H is vertical pipeline route profile, m; Kto is the heat exchange rate of pipe with the ambient environment, W/ (m2 K); t is the time, s. The system of Eqs. (1)–(3) in general terms can’t be solved analytically but using numerical methods. The target state of the system should correspond to a minimum of the criterial function under constraints imposed on the variables as equalities and inequalities. For example, for task 2.1.1, the target state should be characterized by a minimum of total costs criterion: X
Þ ! min;
T;
Q ð4Þ ci Ni ðP; i2I

where it is assumed that the structure of the pipeline system is defined by a graph; I is
T
are the set of active elements (arcs), which are compressor shops in our example; P;
vectors of gas pressure and temperature values at the graph vertices; Q is the gas flow rate vector along the graph arcs; Ni is power intake of the i-th active element; ci are specific expenses or energy costs for active elements. Kirchhoff’s laws are constraints as equalities and inequalities serve ones imposed on the pressure and temperature of the gas, as well as on the maximum power of the active elements:
min  P
P
max ; T
min  T
 T
max ; N
N
max ; P max 8k 2 G : Qmin k  Qk  Qk ;

ð5Þ

where G is the set of places to transfer products supplied to consumers. The objective function in task 2.1.2 (maximization of throughput) can be generally written as follows:

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X


T;
N
Þ ! max: Qk ðP;

ð6Þ

k2G

To solve unambiguously the system of Eqs. (1)–(3) and optimization problems, we should establish the boundary conditions in a sufficient number at the inputs and outputs of the system. Variables of both discrete (for example, start-up/shutdown of equipment) and continuous type (rotational speeds of centrifugal blowers, etc.) are to be sought. The task is to find a favorable trajectory in the phase space of variables to be sought that will lead to the target state and minimal control cost. 2.3

Reinforcement Learning

We will examine the solution of these problems in the context of reinforcement learning. The problem statement implies an autonomous agent (computer program) that interacts with the environment (pipeline system) E by sequential decision-making in discrete points of time. In each point of time, the agent as an initial data has an
from formula
T;
Q observation of the pipeline system state st (for example, vectors P; (4)), takes a control action at , after that gets a reward rt and switches to a new state st þ 1 . We are simulating the environment E as a finite Markov decision-making process (MDMP) with a set of states S, set of control actions A, distribution of the initial state pðs1 Þ, a deterministic model of transition between states, which is defined by the system of Eqs. (1)–(3), and the reward function rt ¼ r ðst ; at Þ. We are examining the general case of a hybrid control space as the Cartesian product of subspaces A ¼ A1  . . .AD , where each Ai is either a finite set or Ai ¼ ½. . .; . . .  R. Thus, at is represented by a D-dimensional vector with each component as an element of the corresponding subspace. The agent’s behavior is determined by the stochastic strategy p, which transforms the set of possible states to the probability distribution of control actions: ph : S ! P ðAÞ, where h 2 Rn is the vector consisting of n parameters, and ph ðat jst Þ is the conditional probability distribution at . The agent is interacting with the environment, generating a sequence of states, control actions, and rewards: s1 ; a1 ; r1 . . .; sn ; an ; rn B S  A  R, where n is the number of time intervals. The agent is aiming to find p strategy that provides the maximum expected value of 1 0 P the total reward Rt ¼ ct t rt0 , where c 2 ½0; 1 is the discount factor. It is assumed t0 ¼t

that the accurate environment model is not available to the agent. A wide range of algorithms has been developed to solve this problem, including ones using artificial neural networks to approximate the functions involved in the models.

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Machine Learning System Architecture

The conceptual approach to agent learning is the same as the common pattern of its interaction with the environment. However, in our example, the environment “E” is the digital twin of the pipeline system (a software prototype of a real pipeline system that simulates its behavior in the conditions of interest for us within a specific task (see Fig. 2).

Fig. 2. The chart of the agent’s interaction with the digital twin in MDMP

For the development of a digital twin and agent’s training, one can apply simulation software packages widely used in the energy industry.

3 Empirical Findings We conducted computational experiments and examined several components of a real gas pipeline system, the circuit diagrams of which are similar to Fig. 1. The experiments are intended to give knowledge of using the strategies for control of these systems and solving the problems of Sect. 2.1. The number of control actions ranged from 8 to 18. We examined continuous and discrete controls. The first type includes the number of revolutions of centrifugal blowers, through adjustment of which it is possible to change the gas supply, and the second one – operation of equipment. We employed a computer training complex designed to train the personnel of operations control services of oil and gas transportation and oil and gas production companies, according to Sardanashvili (2005), and real digital twins of the sections of the gas pipeline system under consideration. The mathematical models constituting the basis of the digital twins were adapted in advance to the actual operating conditions of the gas supply system.

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Task 2.1.1 presupposes the training in many goals. The target is the expected volume of gas transportation through the gas pipeline system. To solve this problem, we used the technology of retrospective experience, and SAC, DDPG, and TD3 algorithms. In all experiments, we resorted to a neural network architecture with two hidden 128-sized layers, ReLu activation, training step of 0.0001, and 64-th batch size. Figure 3 presents resulting learning curves showing the changes in the total rewards gained by the agent in the course of training on two examples of a real gas pipeline system. Growing rewards indicate the success of the agent’s training in the control tasks of these pipeline systems. We also compared the findings with the solutions of three independent experts. The analysis showed that, within the time constraints that are typical for real-time control, the algorithms in the examples under consideration exceeded the solutions of experts (the total control costs were used as a measure). This allows us to suggest that putting this approach into practice can bring a significant effect and enhance the control performance of real pipeline systems.

Fig. 3. Agent learning curves

4 Conclusions This article propounds a new approach to the problems of optimal control of pipeline systems in the energy industry based on deep reinforcement learning. The computational experiments revealed that the application of this approach helps to solve current practical problems with a quality superior to expert solutions. However, it cannot be implemented without solving the following problem: 1. Offline training of agents using retrospective data 2. Training based on examples of rare events

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3. Ensuring the performance of algorithms within high dimensionality of control space 4. Produceability of the recommended solutions, i.e. avoidance of violations of any technical constraints 5. Efficiency under fuzzy reward functions and multi-criteria tasks 6. Solvability 7. Quick response of agents in real time 8. Efficiency under noisiness or unmeasured process parameters 9. Capability of trained models to control specific pipeline systems and quickly adapt to new systems 10. Scaling-up of technology and multi-agent interaction within the control of large pipeline systems 11. Predicting the further situation with regard to managerial decisions of operational personnel. The above points can be the subject of further research.

References Mnih, V., Kavukcuoglu, K., Silver, D., Rusu, A.A., Veness, J., Bellemare, M.G., Graves, A., Riedmiller, M., Fidjeland, A.K., Ostrovski, G.: Human-level control through deep reinforcement learning. Nature 518(7540), 529 (2015) Sardanashvili, S.A.: Raschetnye metody i algoritmy: gazotransportnye sistemy [Computational methods and algorithms: gas pipeline transport]. Gubkin Russian State University of Oil and Gas, Moscow (2005) Silver, D., Huang, A., Maddison, C.J., Guez, A., Sifre, L., Van Den Driessche, G., Schrittwieser, J., Antonoglou, I., Panneershelvam, V., Lanctot, M.: Mastering the game of Go with deep neural networks and tree search. Nature 529(7587), 484 (2016) Sukharev, M.G., Karasevich, A.M.: Tehnologicheskij raschjot i obespechenie nadjozhnosti gazoi nefteprovodov [Technological calculation and provision of reliability of gas and oil pipelines]. Gubkin Russian State University of Oil and Gas, Moscow (2000) Sutton, R.S., Barto, A.G.: Reinforcement Learning: An Introduction. MIT Press, Moscow (2018)

Architectonics of “Smart City” Management System Elena E. Panfilova1(&) , Viktoria V. Borisova1 and Hendra Raza2 1

,

State University of Management, Moscow, Russian Federation [email protected], [email protected] 2 Universitas Malikussaleh, Aceh Utara, Indonesia [email protected]

Abstract. In the face of global challenges in the economy related to digitalization and the transformation of business models/tools, the issue of determining the architectonics of the “smart city” management system as a complex socioeconomic system becomes relevant. The aim of the work is to substantiate the possibility of using the network-centric management method and multi-level nested Petri nets to ensure a synergistic effect when interacting with resident companies of the technopole in the framework of the transition to operation, in accordance with the concept of Industry 4.0. The research methodology involves the consideration of the concept of “smart city” as an ecosystem of the mesoscale. As an object of study, a set of technopoles in Moscow (city), which is a micro level in the smart city management system, is adopted. When conducting research, statistical information processing methods were used (including a summary, grouping and comparison), as well as methods of an integrated approach and system analysis. The results of the study are recommendations for the formation of the architectonics of the smart city management system in the context of increasing processes of digitalization of the economy. The novelty of the obtained research results is to develop an approach to describing the features of the interaction among management companies and residents of their clusters with the external environment based on a single digital platform and cloud technologies. Keywords: Cluster
Resident company
Management system
Technopole
Smart city
Digital platform
Ecosystem JEL Code: M 210


R3

1 Introduction The transformation of economy, business models and the organization of inter-firm interactions to make products and services more competitive is taking place in countries of different intensity. This is due to the maturity of the information technologies used, the psychological readiness of people to use innovations in services, as well as the improved legislative framework governing relationships in the digital economy. © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1356–1365, 2021. https://doi.org/10.1007/978-3-030-59126-7_149

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Scientific and technical events in 2020, such as the International Scientific and Practical Conference “SMART NATIONS: Global Trends in the Digital Economy, 2020” (Russian Federation, Moscow) and the International Exhibition “Smart HOME + CITY 2020” (Indonesia, Jakarta) proves the need of expanding the range of technological solutions available for use in large metropolitan areas. E-government services and integrated digital platforms bring together participants in the business environment, allowing the building of qualitatively different value chains for the end-user. Corporate information systems of industrial holdings are being transformed to adequately respond to new emerging cyber security threats (Borisova et al. 2019). Blockchain, self-fulfilling contract and cloud technologies affect the level of risk in the provision of financial services to individuals and small and medium-sized business organizations (Panfilova et al. 2019). The new global challenges of the digital economy are also changing the banking sphere of interaction with small/medium-sized businesses. In order to solve the problems of efficient management of mega-cities it is necessary to form an architectonic system of management of “smart city”, the main elements of which will be a network of technopole functioning on a single digital platform.

2 Background and Methodology Technology parks, traditionally concentrating high-tech productions, are peculiar points of innovative growth and at the same time are basic elements for building the ecosystem of a “smart city” (Manousva 2017). Generalizing the approaches of domestic and foreign researchers to the interpretation of the concept of a “smart city” we take the view that by this definition we will understand an environment based on the integration of information and communication technologies, digital platforms, cloud services, The Internet of Things, Transportation, Energy and Other Urban Resource and Infrastructure Management Systems, to create a comfortable environment for both living and business (Ray 2015; Reddy and Mehta 2019). The nearest such interpretation of the “smart city” is to the understanding of it as meso-level ecosystems, which provides additional possibilities to investigate its structure and properties from the point of view of the theory of management of complex socio-economic systems. At present it is difficult to use the concept of “ecosystem” due to the lack of an established uniform approach to its definition. For example, in some of the works of domestic scientists a typing of this concept on two bases based on the generalization of the definitions of the ecosystem given by foreign authors (Karpinskaya 2018). The first type describes the ecosystem as a group of organizations that are interdependent in relation to factors of production and output (Jacobides et al. 2015). Within this context, ecosystem definitions include collaborative mechanisms as a form of relationship between related client-centered objects and entities (Adner and Kapoor 2010); Business ecosystems in the form of networks of interconnected entities (suppliers, manufacturers, distributors, etc.) involved in the value chain (Teece 2007); in the form of a group of objects having mutual dependence for production of products, services and technologies (Zaha and Nambisan 2012). The second type sees the ecosystem as a technological set of interconnected technologies and innovations that determine the trajectory of development

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(Adomavicius et al. 2007; Ceccagnoli et al. 2012). In definitions (Tiwana et al. 2010; Wareham et al. 2014) includes the concepts of platforms and modules as parts of a whole interacting with each other. The sectoral specificity of the constituent elements of the definition of the ecosystem was demonstrated in the work of a number of foreign scientists (Gawer and Cusumanj 2008).

3 Discussion and Results An ecosystem is essentially a complex socio-economic system where each element (facility, module, technology) is, by its nature, capable of generating new information, and, therefore, by exchanging information with the environment and exchanging information between the elements of the structure, gives the general structure the characteristic of openness (Wareham et al. 2014). Considering the ecosystem as a form of expression of the concept of the “smart house” it is worth noting that each component of the “smart house” enters the system with its weight (importance), generates new qualitative properties with the aim of interaction of the parts - achievement of higher end results. In addition to being integrated into the structure and being transformed by the new structure, these parts form correlative relationships among themselves, which correspond to the existence of relationships between parts of ecosystems, while allowing objects to develop independently, its structure and its own life cycle. The best description of this structure is an architectonics, understood as a compositional whole, represented in terms of synergy and its methodology. Assuming that a network component is a common property in the typing of ecosystem concepts, we generally deal with a complex large-scale network whose technological base in the post-industrial economy era is the concept of “Industry 4.0”. At the same time, the importance for “smart city” is not acquiring the “cyber physical systems” and the technologies underlying the fourth industrial revolution acquire special importance, but the level of coherence, coordination and integration of the various sectors of the city, which is achieved by using ICT and IoT (Alavi et al. 2018). The management of such structures should be based on the networkcentric methods based on the theoretical basis of self-organizing systems, which makes it possible to view the architectonics of the system of management of a “smart city” and its elements as a network-centric. A peculiarity of this approach is the possibility of distributing the complexity of the development and decision-making processes among all the participants of the network through the very interdependence of the links of the network, which is the basis of most definitions of the ecosystem as the main type of communication between objects. Each link as a micro model has its own intelligence and implements its own management methods (Gobillion et al. 2012). A network-centric approach to management requires a network structure (in the form of a node) that performs control functions. In fact, this link is either a multi-agent or an agent depending on the level of control, as each link can also have its own control system. The interaction of agents in a network is subordinated to a network structure, but their management system may remain hierarchical because of the need for synchronization in time and consistency in the nature of impacts.

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One of the variants of this web-based form of governance is the technopole, which are currently drivers of the innovative growth of the economy and initiators of the translation of the best management practices (Peklevannaya and Varlamov 2017; Jensen and Winiarczyk 2014). The study considered the subject of the Russian Federation, the city of Moscow, with a total of 8 technology parks on its territory. Consider the method of their evaluation from the perspective of the selection of key elements (management companies and clusters of resident companies) laid down in the basis of the construction of the ecosystem of the “smart city” (Danilov et al. 2019). The methodology proposes a scale for the assessment of technology parks to be divided into four major groups (Table 1). Table 1. Classification of technology parks from an ecosystem perspective “smart city” Group of technology parks 1st group 2st group 3st group 4st group

Group identification

Level of the technology park effectiveness, %

Decoding the performance level of the technology park

A+ A B C

over 110% 100%–109% 90%–99% 60%–89%

Highest High Moderately Sufficient

The final score of the Technopole rating as the basic element of the ecosystem of the “smart city” is determined by adding five sub-indices: 1. Innovative activity of residents (including the share of research and development costs of companies in total products/works (services) and intellectual property, registered residents per resident employee); 2. The quality of the economic performance of resident firms (including the number of high-productivity jobs created, the volume of exports, the rate of growth of resident earnings and the level of fixed investment); 3. The efficiency of the management company (including the cost of the management company’s services in issuing resident bills, the level of space occupied, financial sustainability, the number of newly recruited residents and the proportion of direct investments); 4. Investment attractiveness and information openness of the technology park (including the number of public infrastructure facilities, the degree to which residents are provided with various services); 5. Contribution to sustainable development (including the availability of career guidance programs). In order to reduce the impact of the resulting extreme values on private sub-indices for technopole, the source data are standardized by calculating the transformed values. They are obtained by dividing the initial value of the technopole indicator by the average value of the indicator in the sample analyzed and by taking the root in the degree of 2 to 4 (depending on the degree of information asymmetry).

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On the basis of the above-mentioned approach, we will present the results of the activities of the Moscow City Technopole in Table 2. As can be seen from the table in Moscow, the technopole belonging to the groups of the highest, high and moderately high level of efficiency are concentrated. All 8 objects of innovation infrastructure of Moscow: the nanotechnology center “TechnoSpark”, techno parks “Kalibr”, “Slava”, “Polius”, “ELMA”, “Mosgormash” and technopole “Moscow” have accumulated in total the final score from 3,344 to 5,092. The technology parks of Moscow as basic elements for the construction of the ecosystem of the “smart city” are located on the territory of Moscow with a total area of about 70,8 hectares, each occupying an average area of from 2,3 to 32,4 hectares. Total number of residents operating in technology parks of Moscow is 653. Each of the technopole has 29 to 131 residents. According to the sub-index S1 “Innovative activity of residents” the leading position is the nanotechnology center “TechnoSpark” with a value of 1,028. Similarly, the strong position of this same technopole on the sub-index S4 “Investment attractiveness and information openness” (value 1,047). According to the sub-index S2 “Economic activity of the residents in the first place with the value of 1,734 there is a technology park “Strogino”. The highest efficiency of the activities of the managing company according to the S3 sub index is demonstrated by the technopole “Moscow”. Technology park “Kalibr” according to the sub-index S5 “Contribution to sustainable development” occupies the first place with a value of 1,451. The research carried out shows that all technology parks-leaders of Moscow are characterized by an active policy in attracting foreign-resident companies for production and economic activities. In particular, foreign investment from Indonesia was facilitated by the conclusion of a long-term cooperation program between the Government of Moscow and the Governor of Indonesia’s capital, Anis Basvedan, from 2022 to 2022. The program includes the exchange of experience in building the architectonics of the system of management of a “smart city”, based on the realization of the potential of interaction between management companies and residents of their clusters in the process of digital transformation of business. The management of technopole as the basic element of the ecosystem of the “smart city” is based on the networkcentric architectonic, which at the territorial level includes divided sites (for example, for the technopole “Moscow” is “Alabushevo”, “Alabushevo”, “Mikron”, “MIET”, “Angstrem”, “Tekhnopolis” (Pechatniki)), and at the information level - questions of the formation of basic infrastructure, inter-system integration participants and risk assessment in the area of cyber security. Network-centric architectonic involves considering the interaction of multiagents and, as a consequence, the necessity of uniting in a “system of systems” arises. The problem can be solved by building a multi-agent system. The problem of distributed network construction, traditionally considered by the theory of software systems, is closest to this problem. Possessing all the properties of a distributed network (the absence of binding of network objects (agents) to a single time scale, the existence of mechanisms for the interaction of objects among themselves), the multiagent network exhibits another property, which is decisive for the Sethecentric architectonic of the “smart city” - the intellectual character of its actions (above noted the intellectual character of the actions of the agents as micro models of architectonics). In addition, the presence in the network-centric architectonics of the control system of the

8 9

6 7

5

4

3

2

Number of residents Square, ha

110 2.7

5.092 Highest (over 110%) A+

1,189

1.047

0.895

0.934

1.028

1

Subindex S1. Innovation by residents of technology park Subindex S2. Economic activity of residents of technology park Subindex S3. Performance of the technology park management company Subindex S4. Investment attractiveness and information openness of the technology park Sub-index 5. Contribution to sustainable development National technology park Rating Score Level of performance of the technology park

Technology parks Nanotechnology Center “TechnoSpark”

4.639 Highest (over 110%), A+ 119 11.5

1.451

0.860

0.855

0.718

0.756

of Moscow Technology park “Kalibr”

4.624 Highest (over 110%), A+ 131 32.4

1.376

0.879

1.108

0.970

0.292

Technopole “Moscow”

4.548 Highest (over 110%), A+ 36 2.3

1,189

0.614

0.685

1.734

0.326

Technology park “Strogino”

4,125 Highest (over 110%), A+ 79 2.8

1,214

0.633

0.738

0.985

0.555

3.712 Tall (from 100% to 109%), A 29 6.7

1,183

0.683

0.664

0.728

0.454

Technology Technology park “Slava” park “Polius”

3.445 Moderately (90% to 99%), B 89 6.0

1.273

0.196

0.674

0.743

0.559

Technology park “ELMA”

Table 2 Sample of Moscow City technology parks as a basis for construction ecosystems of the “smart city”

No. Parameter comparison

3.344 Moderately (90% to 99%), B 60 6.4

1,250

0.514

0.615

0.750

0.214

Technology park “Mosgormash”

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“smart city” such nodes as technopole, which have their own control system and structure, does not allow to use traditional models of processes in the modeling of the multi-agent network, on which the distributed systems models are based (Trákhtengertz and Pashchenko 2016). This implies finding ways to formalize such networks in other classes of information about network structures. A possible modeling solution lies in the representation of networks embedded by Petri net (Lomazova 2004). The attraction of this approach lies in the fact that in it the objects of networks can be the networks

Personal account of employees of management companies Information system for responding to equipment Public procurement information system Information system for land and property auctions Information system for “smart” management of infrastructure of buildings and equipment failures

Personal account of employees of resident companies

GIS for rental of premises on the interactive map within the industrial park for residents

Information system for the support of the execution of “smart (selfexecuting) contracts”

Information system for the provision of “onestop-shop” legal services Information system for the preparation of a business plan to be granted the status of the resident of the technopolis Information system of a free custom zone (logistics center)

Information system for the acquisition of BG (Big Data) under contracts of resident companies and the management company

Information system for the implementation of cooperation projects by resident companies of

Information system for the cyber security analysis of the technopolis

Project offices of the technopolis

Information system for the “smart” parking of vehicles within the technopolis

SINGLE DIGITAL PLATFORM

Information system of the Federal Service for State Registration, Cadastre and Cartography

Information system of the Federal Information system of the Service for Surveillance on Consumer Federal Service for Ecological, Rights Protection and Human Technological and Nuclear Wellbeing Supervision

EXTERNAL ENVIRONMENT

Information system of the Taxation Inspection

Cloud storage technologies (electronic archive of construction documents for the construction of works within the technopolis)

Fig. 1. Architectonics of the management of the special economic zone as a micromodel of the ecosystem element of a “smart city”

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themselves, which corresponds exactly to the formed architectonic system of management of the “smart house” as ecosystems. Based on the semantics of Petri net, each agent can be represented by Petri’s own net. The resulting relationships between the objects of a grid-centric structure are best described by the corresponding constructions in object-oriented approaches, which are seen as an extension of the formalism of Petri net in the representation of objects and their interactions to reflect the multi-agent structure. Thus, a common knowledge space for industrial business is formed under cooperative conditions of resident organizations of different clusters, which do not belong to the same technology park of Moscow within a single digital platform (Fig. 1).

4 Conclusions The architectonics of the management system of the “smart city” depends directly on the type of management companies of technopole, acting as integrators of other participants of the innovative structure of the city. The following are concrete recommendations for the practical implementation of a grid-based approach to the management of a network of technopoles consisting of a network of clusters and a network of resident companies. First, to take into account the specifics of the activities of clusters of technopole and, within a digital platform, to unite resident companies from the same industries or spheres of activity. This will make it possible to increase the synergistic effect achieved at start-ups, development of business incubators for creation of comfortable environment of “smart city”. Second, active development of public cloud services that allow the sharing of knowledge among resident firms that are highly innovative (S1 sub-index). Third, residents of technopole with high economic efficiency (S2 sub-index), to combine for realization of the fulfillment of the state order in the sphere of production of high-tech and knowledge-intensive products. Fourth, technopoles that demonstrate a high level of management efficiency (S3 sub-index) should focus on developing models for effective interaction with the executive in the delivery of public services to resident companies. Fifth, the efforts of a technopole integrator with a high level of investment attractiveness and information openness (S4 sub-index) are directed towards the development of applications related to the implementation of public-private partnerships and crowdfunding schemes. Sixthly, strengthen coordination of the activities of the resident companies of technology parks with a high contribution to innovative development (S5 sub-index) for the formation of a system of management of inclusive education in a “smart city”, expansion of vocational guidance services for young people choosing careers in the context of digital business transformation. The presentation of the architectonics of the management system of the “smart city” in the form of a multi-agent large-scale network allows to apply to the study of its structure the methods of analysis and modelling of nested Petri net, but requires further research to identify the behaviors of its agents, the formation of grid-based management mechanisms in such structures, aimed at forming an innovative way of development of the domestic/foreign economies under conditions of the fourth industrial revolution.

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5 Acknowledgments Elena Panfilova and Viktoria Borisova were supported in part within the framework of the state project No. 1 Analyzing Readiness of the Russian Society for Digitalization under the Terms of a Donation Agreement No. 1154, dated March 1, 2019.

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Danilov, L.V., Kashinova, Y.A., Kravchenko, Y.I., Bukharova, M.M. Labudin, M.A.: Pyatyyy ezhegodnyyobzor “Tekhnoparki Rossii – 2019”. Assotsiatsiya razvitiya klasterov i tekhnoparkov Rossii. AKIT RF, Moscow (2019) Ray, J.: Smart cities: technological challenges and issues. In: IEEE CS Keynote at 21st Annual International Conference on Advanced Computing and Communications (ADCOM), Chennai, India, Adcom-2020 (2015) Reddy, D.V.S., Mehta, R.V.K.: Smart traffic management system for smart cities using reinforcement learning algorithm. Int. J. Recent Technol. Eng. 7(6), 12–15 (2019) Teece, D.: Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance. Strateg. Manag. J. 28(13), 1319–1350 (2007) Tiwana, F., Konsynski, B., Bush, A.: Research commentary – platform evolution: coevolution of platform architecture, governance and environmental dynamics. Inf. Syst. Res. 21(4), 675– 687 (2010) Trakhtengerts, E.A., Pashchenko, F.F.: Setetsetricheskiye metody upravleniya v krupnomasshtabnykh setyakh. [Network-centric management methods in large-scale networks.]. Lenand, Moscow (2016) Usmanova, R.M.: Sozdaniye “osobykhzon” kak mera po uluchsheniyu urovnya zhizni naseleniya munitsipal’nogo obrazovaniya [Created “special zones” as a measure to improve the living standards of the population of the municipality]/R.M. Usmanova, A.K. Usmanov. Pravo i praktika. 3(1), 13–20 (2017) Valdeolmillos, D., Mezquita, Y., Ludeiro, A.R.: Sensing as a service: an architecture proposal for big data environments in smart cities. In: Novais, P. (ed.) pp. 97–104. Springer, Berlin (2020) Wareham, J., Fox, P., Cano, G.: Technology ecosystem governance. Organ. Sci. 25(4), 1195– 1215 (2014) Zahra, S., Nambisan, S.: Entrepreneurship and strategic thinking in business, ecosystems. Bus. Horiz. 55(3), 219–229 (2012)

“Smart” Technologies in Business Activity: from Digital Business to Business 4.0

Smart Contracts and New Technologies of Management in the Digital Environment of Organization Vladimir V. Godin(&)

and Anna E. Terekhova

State University of Management, Moscow, Russia {godin,anterehova}@guu.ru

Abstract. Changes in business under the influence of information and communication technologies could be described with the help of the chain “company of classical business” – “company of digital business” – “digital platform company” – “company of digital eco-system” within the corresponding economies: traditional, economy of digital business, economy of digital platforms, and economy of digital eco-systems. Under the influence of competition, companies have to move from creation of digital services to design of new digital goods and services, which form new means of satisfaction of customers’ needs. Appearance of new information and communication technologies and opportunities of their use in business form a new level of virtualization of business and the Internet economy of companies, which will require new technologies of management in organizations. The purpose of this research is to study smart contracts and their influence on management in companies of a new form. The theoretical basis of the research includes the works devoted to use of digital technologies – in particular, smart contracts. The information basis of the research includes the existing solutions for systems that use smart contracts and analysis of the practice of smart contracts application. Methodology includes general scientific methods that study reality. This paper considers the history and principle of work of smart contracts and practical application of smart contracts: opportunities for business and examples of use and formation of blockchain economy and smart contracts based on specific virtual companies with a special character of management based on smart contracts. A conclusion is made on the changes in managing certain functions in an organization by means of smart contracts, with the corresponding advantages for business; emergence of new business models and even formation of a new economy. The authors analyze the pros and cons of application of smart contracts in business and formulate tasks on further development of smart contracts application. Keywords: Distributed registers
Smart contracts management
Internet economy of companies JEL Code: M15


New technologies of


O32
D80

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1369–1380, 2021. https://doi.org/10.1007/978-3-030-59126-7_150

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1 Introduction Creation and development of technologies of digital transformation and competition made traditional companies turn into companies of digital business. In these companies, products and services, internal business processes, and processes of interrelations with customers were transformed into the digital form. Changes in strategy, business model, and organizational culture of companies were eventually aimed at creation of an opportunity for personalized offer for customer with the highest customer value. Further development of technologies and appearance of new opportunities for business, as well as high share of expenditures for IT in the cost of goods and services, formed a possibility for appearance of the platform economy and transformation of certain companies of digital business into platform companies. Development of technologies allowed creating a technological infrastructure (digital platform) for convenient and mutually beneficial unification of product manufacturers and suppliers of services with consumers of these products and services. Creation of digital platforms, by means of algorithmization of interrelations between the platform’s participants based on the common IT solutions and services, synergetic effect from the interaction, scale effect, use of digital channels for interaction, and use of personal data for decision making and formation of targeted personalized goods and services, allowed ensuring sustainable development and reducing expenditures of certain companies – participants of the platform. Activities of platform companies ensured accumulation of experience, on the one hand, and creation of a sufficient number of technological solutions for moving these solutions to non-profile spheres of business and other markets of goods and services, on the other hand. The economy of eco-systems emerged, Thus, companies passed a way from classical business to digital company, and then platform company (within the platform economy), and, as of now, from company as a digital eco-system (in the economy of digital eco-systems), with the corresponding infrastructural digital services, digital products and services, and other manifestations of digital transformation. All this time, companies were busy creating digital services, for the purpose of selling more goods and services. This process has a limit of improvement. In order to compete further on, companies have to use digital technologies to move to design of new digital goods and services which form new methods of satisfying customers’ needs. In these conditions, it is expedient to expect formation of a new economy – economy of Internet businesses or Internet companies. This new level of virtualization of business will require new technologies of management in companies. One of them is the technology of smart contracts. The purpose of this research is to consider smart contracts as a phenomenon and to determine their possibilities for management in companies of a new form within the economy of blockchain and smart contracts.

2 Methodology The theoretical basis of the research includes the works devoted to theoretical and methodological aspects of using digital technologies – in particular, smart contracts (Szabo 2006; Analytical review of the topic of “smart contracts”, 2018; Godin and

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Terekhova 2019; How smart contracts will change our lives, 2017; Wright 2014; Tapskott and Tapskott 2017). The information basis of the research includes open sources of information on the existing solutions for application of smart contracts (AIRA, 2020; Ethereum – a platform for creating decentralized blockchain-based applications, 2020; Smartcontract, 2019; How to use smart contracts for business (and not only), 2016; What are smart contracts in plain language, 2020) and analysis of the existing offers of developers in the sphere of smart contracts. Specialized publications in journals Management Science, Organization Science, Strategic Management Journal, Information Systems Research, Management Information Systems Quarterly were used.

3 Results 3.1

Smart Contracts: History and Principle of Work

Companies and individuals become interacting agents, exchanging non-material and material resources. They have to register this interaction in the form of contracts, which describe the agreements, and store the corresponding documents on their deals, with potential risks of loss of the documents and fraud. Thus, there is constant search for the methods of secure record and execution of contracts. One of the possible solutions of this task is the concept of smart contracts. N. Szabo (Szabo 2006) suggested concluding contracts with the help of a decentralized register, which envisages automatic audit and their execution. Such contract was set as a description of a list of obligations and the protocol of their execution in the digital form. Later, development of these ideas and new capabilities of information and communication technologies led to emergence of smart contracts. These contracts are recorded in the form of a program code, with further storing, copying, and execution in a specialized information system. Smart contract is a computer algorithm that describes terms of possession of material or soft asset and automatically performed actions on implementation or change of these conditions. This is an agreement between parties on the change of rights and obligations regarding something, recorded and executed with the help of a computer algorithm in a special computer environment. It is possible to distinguish certain terms, sequence of steps, and specific features of execution of a smart contract. 1. Participants of a deal – they determine the terms of a deal, based on their interests. 2. Terms of a deal must allow creating their precise and full mathematical description in the form of the logic of execution of the contract terms and its possible states, which reflect execution of the contract’s clauses. This allows encoding the contract terms in the form of a smart contract. The possible rules of contract’s logic are predetermined and limited by features of programming languages that are used for creation of smart contracts. 3. A decentralized environment of execution of a smart contract. This has to be a computer system, in which it is possible to program and execute the contract. As a rule, this is a decentralized platform (which implements a distributed register) for

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distributed storing of the smart contract. After creation of the smart contract, it is registered in the distributed register, with the following control over execution of its terms. Storing of smart contract in a distributed register ensures integrity and stability of the deal’s terms, as well as minimal disclosure of the information to third parties. 4. All participants of a deal have access to the distributed register via user’s interface for initiation, conformation, and tracking of each transaction, which allows controlling the contract execution. Application of open decentralized data bases for execution of smart contracts, which exclude the human factor, and electronic signature based on public and private keys creates a trustworthy environment for participants of deals based on smart contracts. In this environment, smart contracts have the following features: transparency, observation, verification, privacy, and integrity. 5. There are two types of platforms of distributed registers for smart contracts: with closed networks for execution of smart contracts and with open platforms. The data from external sources enter the distributed register through specialized services – “oracles”. The modern technologies allow ensuring authenticity of the sources of digital data. 6. Smart contract constantly evaluates the execution of the contract terms. During observation of the set terms of a deal, smart contract is executed automatically. Table 1 present a comparison of regular contracts and smart contracts. Based on the above, the following advantages of smart contracts could be noted: • automatic execution – the technology of distributed registers allows for automatic execution of all terms of smart contracts; • reduction of expenditures – possibility to reduce the expenditures of the deal’s participants, which emerge during its conclusion and execution (reduction of expenditures for operations and control as compared to regular contracts); • speed – increase of the speed of operations; • risks – reduction of risks of unfair actions of the contract’s parties; • reduction of the number of intermediaries – reduction or exclusion of intermediaries; • inclusiveness – the object of a contract could be selected at will: from exchange of stick or other financial assets to services and exchange of property. As has been noted, a decentralized environment is requires for execution of a smart contract. The following environments of application of smart contracts could be offered (How smart contracts will change our lives, 2017): • “classical” blockchain – Bitcoin. This is a blockchain platform for transactions with Bitcoin and limited capabilities for working with documents – so the opportunities for smart contracts in it is limited;

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Table 1. Comparison of regular contracts and smart contracts. Smart contract Virtual document. Computer program which uses distributed register It is based on a code and stored in distributed register Computer language No intermediaries and third parties Security of the deal is guaranteed. Contract terms cannot be changed. Fraud is impossible

Paper contract Document on paper It is based on law and regulatory acts Legal language Intermediaries (notary public, jurisprudent, government bodies) Risks of fraud and bribery. Law could be “bypassed”. Contract terms could be changed or interpreted differently Contract terms could be executed partially or improperly

Precision. Contract terms are controlled and executed automatically by all parties of the deal Necessity to pay for services of regular No necessity to pay for the services of intermediaries regular intermediaries. Expenditures for building new elements of business, SW, HW, training Reliability. Violation of contract terms leads Contract terms could be changed. In case of to automatic fines and sanctions, envisaged violation of contract terms the only option is by the contract going to court Fiat money. Payments and transactions are Cryptocurrency. Transactions are performed with the help of crypto currencies performed through banks. After execution of contract terms, exchange Exchange of assets is performed with certain of assets (values) is instantaneous delays Data on the contract parties are stored in Information about the contract parties is distributed register. They determine which closed, it is necessary to apply to the information is to be disclosed corresponding bodies in order to receive it Conclusion of smart contract does not Personal presence of the parties is required require personal presence for signing a contract Lawyers are required for compilation of a Smart contract requires an analyst, contract programmer, and lawyer for full and correct reflection of the contract terms in the program code Source: developed by the authors based on (What are smart - contracts in plain language, 2020).

• Side Chains. These are blockchain platforms that are similar to Bitcoin blockchain, with more opportunities for working with smart contracts, as compared to “classical” blockchain; • NXT – an open blockchain platform with a fixed number of samples of smart contracts. Smart contracts are created according to blockchain samples; • Ethereum – an open blockchain platform, which provides better opportunities for creation of smart contracts and their usage; • development of “personalized” smart contracts. Creating own blockchain platforms for working with smart contracts.

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4 Practical Application of Smart Contracts. Traditional Economy. At present, it is possible to distinguish two options of smart contracts application. Firstly, as a certain addition to regular contracts, which means partial automatization of certain phases of agreements. Secondly, refusal from regular “paper” contracts and full use of smart contracts for execution of deals. This envisages the corresponding development of the necessary infrastructure and platforms based on the distributed registers technology. Directions of use of smart contracts within state services and in business overlap a lot of spheres of blockchain application (Godin and Terekhova 2019). Government. Within state services, it is possible to distinguish the following uses of smart contracts: procedures of voting and elections based on smart contracts (token is used a voting right); registration of companies, tracking of shares’ movement, etc.; taxation; registration and transfer of property rights, etc. Finances. Financial organizations could use smart contracts for precise and transparent recording of financial data. Reacting to increase of the scale, complication of bank operations, and increase of attracted resources, financial organizations could use blockchain and smart contracts to get rid of intermediaries, raise the partners’ trust, exclude manual processing of data, reduce expenditures, decrease the cost, and increase the effectiveness of services. Banking. Within bank services, smart contracts allow automatizing the procedures of conclusion and execution of bank agreements, payments, and collection of fines and optimizing the tracking of the status of security assets and movement of assets. All this will lead to reduction of uncertainty of credit risks, reduction of costs, and decrease of the number of errors. Insurance. The role of smart contracts in insurance is connected to insurance accounting and document turnover, work with insurance claims and payment of compensations for typical insurance cases. The description of examples of practical application of smart contracts could be easily continued: simplification of post-trade processes, deletion of doubled processes by each partner for verification of deals, offering of standard set of contract terms, and optimization of processing of off-exchange derivatives. Digital identity. Control of own data, digital assets, and reputation. Consent for disclosure of information. Storing of documents in the form of various regulations, contacts, orders, and decrees. Reduction of the document turnover cycle in a company by means of decrease of the number of verifications and permits. What about the management functions in the above examples of application of smart contracts? Two contours of interacting functions could be distinguished (Fig. 1):

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Fig. 1. Management functions, hierarchy of organization, and hierarchy of information systems.

1. Internal contour of management, which includes the functions of planning, organization, motivation, coordination, and control. 2. External contour of management – marketing, advertising, supply, production, and sale. Information support for these two contours of management is provided by different classes of information systems, which work with different forms of information: data, information, and knowledge. These are the systems of computer-aided manufacturing; MES systems (Manufacturing Execution System), and separate modules of the ERP systems (Enterprise Resource Planning), BPMs (Business Process Management System), and EPM/PPM (Enterprise Project Management/Project Portfolio Management), which form organization’s data. BI – systems (Business Intelligence), part of modules ERP, BPMs, and EPM/PPM systems and separate specialized solutions of information systems turn them into information through analysis and processing of data. “Knowledge Management” systems, corporate portals, and systems of decision support ensure personalization of information and knowledge management in organization. Building smart contracts in the described contours of management and in the supporting information systems is possible based on application of open platforms of distributed registers with the use of special services (“oracles”) for information exchange between the platform of distributed registers and information system that supports the management functions. Functionality of application of smart contracts – which is seen from the above examples – is determined by the possibilities of application of the “deal” concept in a certain function of management and its algorithmization. The level of application of smart contracts in the information pyramid - data and information. Here it is possible to note partial automatization of the management functions, including by means of application of smart contracts. Apart from the change of the management paradigm, all this will lead to transformation of organizational culture, virtualization of managerial labor, significant decentralization of management, and use of the “turquoise organization” concept.

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5 Practical Application of Smart Contracts. Economy of Blockchain and Smart Contracts Up until recently, application of smart contracts in rather traditional spheres of economy has been discussed. However, appearance of blockchain and smart contracts led to the economic phenomena of a completely new type with a special role of application of the latter. ICO (Initial Coin Offering). ICO is a solution for attracting collective investments (analog of IPO, one of the forms of crowd funding – collective financing, but is much cheaper) by selling to investors a fixed number of crypto currency units that are obtained through emission. ICO is a company’s preliminary emission of its crypto currency outside of the procedures of mining or forging for further distribution of the emission among the interested parties. The role of smart contracts: smart contracts of token emission during their creation based on the platforms that implement the distributed registers technology (Ethereum, Waves, etc.); smart contracts of selling tokens by the emitting company for receiving investments in the project and purchase of the tokens by investors; smart contracts during use of tokens for different purposes (services, exchange for other tokens, exchange for fiat currency, establishment of legal relations, etc.). The next phenomenon of a new economy – formation of platforms for creation of decentralized online services based on distributed registers (primarily, blockchain) that use smart contracts. This is primarily Ethereum (platform for creating decentralized apps based on blockchain, 2020). It was created as a unified decentralized virtual machine, with its own exchange unit. Ethereum performs the role of not only crypto currency – it is also a means for exchange of resources and registration of any deals with any assets with the help of smart contracts, without the use of traditional legal procedures. Smart contracts in Ethereum are used in the form of classes, which could be written in various programming languages and which are compiled in a bite code for Ethereum Virtual Machine before the transfer to blockchain. Ethereum platform could be used for emission of currency and provision of work of decentralized investment funds, be the basis for decentralized hosting and storing of data, be a platform for monetization of ranking in games, provide decentralized exchange of options, etc. A Russian developer Bitfork Develop created a platform AIRA DAO based on Ethereum platform AIRA DAO (AIRA, 2020). The platform uses the Ethereum concept and allows working with any values (crypto currencies, key numbers with expanded description of any object, etc.). It uses AI in the form of a decentralized network of machines/computers, decentralized environment that consists of ndimensional blockchain (side chains). The platform AIRA DAO uses the following basic items: values, smart contracts, rules, and samples of trained machine. Values. The AIRA DAO platform uses a decentralized basis with the blockchain technology with a method of recording based on asynchronous data encryption. Users announce values in the project based on the AIRA DAO platform. A tree-like structure of values is used (regular values and the systemic value “time”). Smart contracts are to be used for creation, transfer, and spending of values.

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Smart Contracts. Smart contracts in the project are required for creating of digital values (items). The user creates an object of the system, which items could be further created with the help of smart contracts. Rules. Rules have a logic, which allows using Internet connection. There are segments of rules. Segment is a combination of rules, within which the uniqueness of titles has to be observed. Segments of rules are created by users. Samples of Trained Machine. A sample of trained machine has a unique identifier according to the form AIRA-{ID}. It has a segmented knowledge data base, which is responsible for provision of data on values, contracts, and rules, as well as logic of work, which is set by the user individually. Samples of trained machine could communicate, passing commands to each other – which ensures flexibility in the calculations’ needs and storing of data in a separate sample. The described architecture and qualities of the AIRA DAO platform allow creating an environment for the digital economy participants for quick creation and development of their projects – primarily, for creation of decentralized autonomous organizations (DAO). A user of the AIRA DAO platform could work with several typical values, create own types of values, invite agents, and build several types of interrelations within a DAO – between agents and values of the organization. The AIRA DAO platform allows for full automatization of simple financial organizations and crowd funding platforms. Automatization of business processes in such organizations stimulates the improvement of the company’s activities by eliminating personnel’s errors and reducing expenditures for information processing. Decentralized autonomous organizations are self-governing and are not controlled by external sources; they do not exist in a physical form and are located in a lot of computers around the world. Decision making in DAO is performed in the course of an automatized process, which is realized in smart contracts. This is implemented through decentralized voting of token owners. An example of such organization is BitShares (Wright 2014). BitShares is a platform for development of business, which helps other companies to provide better services and obtain more profits. It is a “closed” decentralized solution, which creates a decentralized exchange with own currency – without risks and costs related to the use of fiat money, but with small commission fee, transaction conformation in five seconds on average, and stability in a protected digital environment. BitShares used a concept of reliable and secure distributed register and applied it to a lot of profitable business models. Generalizing the above concepts of organizations, it is possible to conclude that within the digital economy, regardless of a company form (digital company, platform company, or company as a digital eco-system), organization preserves its digital core (basic business processes and information) and uses the basic and improved technologies of digital transformation for forming certain architecture of the company. Figure 2 shows the digital core of an organization and possible technologies of digital transformation. Their selection by the organization forms a certain form of business with the corresponding business model. Within the application of the blockchain technology, smart contracts will be used.

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Fig. 2. Digital core and technologies of digital transformation.

Among the possible forms of organizations’ business models, it is necessary to note the emergence of new forms of organizations, in which full automatization of the management functions is possible. AIRA DAO, BitShares, and similar companies could be considered as independent autonomous cells of a business network, which are a new stage of virtualization of business, which a higher level of automatization of management functions, including by means of smart contracts. This allows speaking of appearance of the beginnings of the economy of Internet businesses or Internet companies, in which goods and services will be produced by a network of such companies. When considering the solutions for business on creation of the described systems from software developers, it is possible to state that such market exists. At present, within the IT market there are developers of software for smart contracts. One example is Bitfork Develop. Another example of developers of smart contracts on Ethereum in the Russian market is the project SmartContract.ru (Smartcontract, 2019) of Belov IT Lab LLC, which was founded in 2012. It is offered to create software for ICO and for Security Token Offerings (STO). There are a lot of such examples – which shows the accessibility of the corresponding developments for business.

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The described phenomena of the economy of blockchain and smart contracts allow concluding on emergence of specific virtual companies with a special character of management based on smart contracts. Networks of such interacting companies form a new economy of Internet businesses.

6 Conclusions/Recommendations Smart contracts, as a tool of a new economy, create – by means of changes in the method of managing certain functions in an organization – a range of advantages for business. They allow reducing time and finances spent due to refusal from intermediaries; ensuring another level of security and reliability of deals due to specific features of the contracts and decentralized register; concluding deals with large speed and precision. Additional change of the character of management in the digital environment of organizations is growth of formalization of the management procedures. In certain directions of work, organization moves to automatic management with decision making based on data in real time. Creation and application of the smart contracts’ tools stimulate the appearance of new business models and even formation of a new economy. These achievements are based on the fact that smart contracts are strict algorithms. This means that they cannot have functional flexibility, which is often required during business. No organization or project is subject to comprehensive design, management, and forecasting. Nothing can simplify it to the level of fully manageable state. That’s why the advantages of smart contract could turn into drawbacks in certain situations. Using smart contracts, business creates procedures in which fraud by the parties of the deal is impossible. These procedures are created by programmers, who could move the problems of fraud to another dimension – program product, which implements the smart contact. This also concerns the problems related to unfair actions of the programmer and the complexities of reflecting all terms of a deal in the software. The next set of problem belongs to the sphere of law. The legal status of smart contract is not strictly established, and it is a problem in disputes regarding the use of smart contracts during deals. The next problem – who, based on what, and in which body could ensure fair resolution of disputes regarding execution of smart contract and interpret it in the legal terms. The next problem is coordination of smart contracts in the inter-country space. The order of collection of taxes from smart contracts is not envisaged. Of course, there are also the problems of information security. What is to be done? All these problems and related tasks have to be solved: 1. Defining the legal status of smart contract at the national and international levels. 2. Creating a regulatory body and assigning a status in the sphere of smart contracts. 3. Developing IT infrastructure and the systems of IT security for wide application of smart contracts. 4. Forming a system of training and certification of personnel in the sphere of smart contracts. 5. Creating and developing the infrastructure of smart contracts, including development of the system of the smart contracts templates and their typical elements;

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systems of modeling, construction, and visualization of logic; imitation of execution of smart contracts and similar systems. 6. Development of financial literacy of population, government and municipal officers, and representatives of business, including in the spheres of distributed registers, crypto currencies, and smart contracts.

References Mark, J.G., Wei, W.: Business Ecosystems in China. Paperback, Hong-Kong (2017) Rifkin, J.: The Third Industrial Revolution: How Lateral Power Is Transforming Energy, the Economy, and the World. St. Martin’s Press, New York (2011) Rong, K., Shi, Y.: Business Ecosystems: Constructs, Configurations, and the Nurturing Process. Science, Moscow (2014) Szabo, N.: A Formal Language for Analyzing Contracts. http://www.fon.hum.uva.nl/rob/ Courses/InformationInSpeech/CDROM/Literature/LOTwinterschool2006/szabo.best.vwh. net/contractlanguage.html. Accessed 13 Feb 2020 Genkin, A., Mikheev, A.: Blockchain. How it Works and What Awaits us Tomorrow. Alpine Publisher, Moscow (2018) Godin, V.V., Terekhova, A.E.: Blockchain: philosophy, technology, applications and risks. Vestn. Univ. 9(1), 54–61 (2019) Wright M. : BitShares 101 (2014). http://testzcrypto.gitbooks.io/bitshares101. Accessed 13 Feb 2020 Tapskott, D., Tapskott, A.: Blockchain Revolution: How the Technology Behind Bitcoin is Changing Money, Business and the World. Eksmo, Moscow (2017)

Innovative Technologies for Development, Justification and Adoption of Personnel Decisions Viktoriya I. Tinyakova1(&) , Ekaterina A. Alpatova2 and Inna A. Boldyreva3

,

1

State University of Management, Moscow, Russian Federation [email protected] 2 Don State Technical University, Rostov-on-Don, Russian Federation [email protected] 3 Novocherkassk Engineering Institute reclamation, Don State Agrarian University, Novocherkassk, Russian Federation [email protected]

Abstract. The article is concerned with the study of problems associated with the implementation of innovative technologies for the development, justification and adoption of personnel decisions in modern commercial and state organizations. In the course of studying the problem posed, the areas of scientific knowledge demonstrating innovation in the decision-making process in the field of personnel management as well as the features of the application of innovative methods for substantiating, developing and adopting personnel decisions in modern organizations were identified. In particular, the algorithm for express diagnostics with the use of metaphorical cards and psycho-geometric procedure for express assessment of team members, as well as for the assessment of individual potential during vacancy candidate interviews and for forming project teams in commercial organizations and public administrations (exemplified by voting station teams of the Election Commission of the Russian Federation) was proposed in the article. Moreover, the special role of building a “point” personal motivational mechanism and its importance for increasing the labor efficiency of each employee was considered. All these innovative technologies make it possible to transfer the human resources of an organization into human capital, and give the organization itself a status of Teal organization – organization of the future. The scientific novelty of the article consists in the authors’ proposal to combine a number of specialized tools (algorithmization of work and associative metaphorical cards, psycho-geometric express-diagnostics, etc.) in combination with the use of coach-methodology, which contributes to the optimization of the decision maker’s time resource and increase the efficiency in the development, adopting and justification of decisions in HR management. The scientific novelty of the work is also determined by the new field of research of the proposed combination – the adoption of personnel decisions and the management of the process of creating project teams from the personnel of polling stations of the Electoral Commission of the Russian Federation, where the use of traditional methods in the field of adoption and effective management of human resources is complicated. © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1381–1388, 2021. https://doi.org/10.1007/978-3-030-59126-7_151

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V. I. Tinyakova et al. Keywords: Human resources
Motivational mechanism
Team building
Employee personality potential
Employee psycho-geometric role
Coaching
Metaphorical cards JEL Code: M53


M54

1 Introduction The relevance of the research topic of this article is justified by the growing interest of business and the state in introducing innovative technologies in the field of human resources management, caused by understanding the importance of the role of human capital in a modern organization and recognizing it as one of the most important factors of organizations’ assets. A large number of researchers were engaged in the implementation of different combinations and types of innovative technologies in HR decision-making process in their research (Chack 2013; Guo 2014; Alpatova 2014a, b; Alpatova 2015; Alpatova 2016; Alpatova et al. 2019) etc. The close attention of the researchers was directed to an innovative approach based on the development of new algorithms for motivating the personnel, changing the personnel remuneration system, and the so-called adaptive-rational approach was proposed (Tinyakova 2013; Ovchinnikova and Tinyakova 2014), The approaches to the adoption of personnel decisions based on creation of new motivational mechanisms were considered, namely, in the study (Alpatova 2014a, b). According to the proposed algorithm (Alpatova 2014a, b) with the choice of identifying motivators, based on a pairwise comparison of a set of key statements offered to the test subject (15 in total – 3 for deciphering each of the steps of the hierarchy pyramid) during the training, designed to identify motivational leverage on the employees of the enterprise, often involved in personnel assessment. The transition in the minds of managers to the phase of accepting human resources as human capital requires, as confirmation, the introduction of new innovative approaches, methods and technologies in the process of personnel decision making to improve the management efficiency of this special type of organization’s capital. Building a “personal” motivational mechanism provides the organization management with an insight of the needs of their personnel and the possibility of introducing a system of incentives and motivation. Accordingly, the labor efficiency will be formed pointwise, personally, so that employees will not only effectively fulfill their tasks, but will also have the opportunity to unlock their personal potential, evolving from an element of human resources into full-fledged human capital. The declared development factor is the basis for shaping the organization of the future – an organically structured organization where one of the indicators of a company’s success is the introduction of a scale called “employee happiness level”. In the near future, such organizations will be maximally adapted to the dangers and threats imposed by the factors of the company’s external environment. It should also be noted that these are the companies that will have the highest degree of survival, because all their employees will be personally interested in the growth of organization where they work.

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A special role is played by the search of innovative approaches to personnel decisions in the sphere of public administration, associated with the sphere of production of various services, where civil servants form the basis of the quality of services and play the role of human capital in the assets of public institutions. The process of advanced training of civil servants at the present stage is subject to significant transformations associated with active introduction of interactive educational technologies in the methodological content of the educational process, in particular, in the form of using “brainstorming”, role-playing, metaphorical, business games and trainings. The basis of interactive educational technologies is the use of training technologies in the learning process (Alpatova 2015). The process of advanced training of civil servants should be considered as the process of generating new professional knowledge, skills or abilities by a civil servant in order to form an appropriate set of competencies that meet the challenges of the aggressive influence of environmental factors, as well as enshrined in the form of a legislative base as mandatory requirements for those holding positions. The article will propose algorithms and results of the introduction of innovative technologies as a modern psychological tool for identifying the potential of a person using project methods (Alpatova 2016; Burlachuk 2017; Dmitrieva 2014). The vector of the development of global economy is shifting towards the growing complexity of socio-economic system, functioning in a stochastic and highly dynamic environment, and the rate of change in it is increasing constantly and manifold, which complicates its structure. Therefore, organizations are forced to optimize the search for new business models and organizational management structures. In particular, there is an increasing rejection of managing hierarchical structures in favor of an adaptive network structure that can be quickly rebuild and the missing modules can be supplemented based on customer requests, innovations, and crises. (Tinyakova et al. 2019) As a research task in this work, we will use the establishment of the necessity to introduce a combination of innovative technologies from the field of psychology and sociology into the process of making managerial decisions to increase the effectiveness of personnel management in a modern organization. The approach to the definition of “human resources” as to “human capital” requires the introduction of special innovative approaches, techniques and technologies into the process of personnel decision making in order to increase the efficiency of managing this type of capital. The article will propose algorithms and results of the introduction of innovative technologies as a modern management tool for identifying the potential of a person using project methods (Alpatova 2016; Burlachuk 2017; Dmitrieva 2014). As a research objective, the compulsoriness of formation of combination and the necessity of introduction of innovative technologies from the field of psychology and sociology into the process of making managerial decisions in order to improve the efficiency and quality of management of a modern organization are put forward.

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2 Methodology Innovations in personnel decisions are usually associated with the use of knowledge about human potential from the related “personnel management” sciences – psychology, sociology etc. (Chack 2013; Jie 2014; Alekseev and Gromova 1991; Alpatova 2014a, b; Alpatova 2016; Alpatova et al. 2019; Jung. 1997; Burlachuk 2017; Dmitrieva 2014) and others. This knowledge will open a new perspective and enrich the human resources management toolkit in the organization, allowing to make more accurate predictions about the potential success/failure of a candidate for a vacant position during the recruitment process, as well as to understand the potential roles of each employee in the future team and during the selection of new candidates for an existing team, taking into account the identified role of the employee. Let us consider the example used The authors propose the following algorithmization of work with metaphorical associative cards as a convenient form for the company Management and decisionmakers in the personnel sphere: 1. The test subject (candidate for a vacant post or an existing employee) is invited to study visual material (in the form of a series of metaphorical associative cards or any material that performs their function) provided by the representative of the organization (human resources manager, personnel officer, director of human resources, coach). 2. The test subject (candidate for a vacant post or an existing employee) is proposed to draw a spreadsheet (in writing) consisting of 2 columns, the first of which must reflect the positive transcription of the seen material – through image, emotion, color and its combinations, form, figure, semantic metaphor, etc., and the second column must contain negative perception and visualization of the proposed material. 3. The researcher receives a general “express picture” (based on the previously stated points of the algorithm) of the presence/absence of stress factors and the ability (or possibility) to manage them in the workplace, as well as the level of stress of the test subject at the present time. 4. Drawing conclusions based on the results of express diagnostics to assess the level of stress resistance and the possibility of effective work in a team of a particular test subject. While working on the associative metaphoric cards (or material, performing their function) the test subject (employee) projects his/her psychological condition, diagnosing unconscious associations with the situation in which the employee is at the moment, focusing (in the second part (column) of the table) on the negative sources, being the personal “point” stress state indicators of the person. The column with positive interpretations forms the subjective personal collection of “remedies” for stress, which will also reflect the potential of the individual and promote the stress relief. This method can be explained and proposed for use by the employees of organizations as a proactive technology and self-diagnosis method aimed at identification of

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stress factors. This method can also be used to assess the psychological climate in the organization, and help identify personal potential and find positive leverage on improving the efficiency of every employee. In order to form an effective team necessary for the implementation of a specific project activity, we propose using the method of psycho-geometric research. Let us take a closer look at this algorithmic method of identifying employee’s psychogeometrical (Alekseev and Gromova 1991) role: 1. The test subject must take an express test, which involves the selection from the chain of the proposed following geometric shapes: “square”, “circle”, “triangle”, “rectangle” and “zigzag”. 2. The choice must be made in the form of a personal sequence from the combination of the proposed figures, guided by the principle of “sympathy-antipathy” to each specific form, so the first of the figures should be the closest to the employee’s potential, the next figures in the chain should be arranged as the sympathy decreases, therefore, the last of a series of figures is unknowingly antipathetic. 3. After reading the obtained chain of geometric shapes by the person making the personnel decisions, a psycho-geometric portrait of the candidate and his/her possible role in the team are formed taking into account the revealed personality characteristics. For a better performance of this procedure, it is proposed first to conduct a test with arranging a sequence of figures denoting psycho-geometric roles, and then carry out the explanation of the technique, since it is the spontaneous arrangement that allows you to get the most accurate conclusions about the potential of the test subject for further use of this information for making effective personnel decisions. The personnel decision-making process is also innovative due to the active use of a set of psychological methods and algorithms. First of all, it is necessary to consider such innovative projective technique, like the use of metaphorical associative cards (Ingerleib 2019; Dmitrieva et al. 2014; Kochetkov and Povorotova 2015; Alpatova 2016) as the technology for efficient express personnel assessment. With the introduction of this tool in the personnel management service, one can assess the level of involvement and attitude of team members to a new project or innovations, existing barriers, personality weaknesses, level of relationships in the team and potential level of contribution to solving organizational problems, etc. Currently, there is a large number of decks of metaphorical associative cards and unique interpretations and methods of thereof, which are not difficult to master for a competent HR manager with professional psychological training, but the main difficulty is to choose one of the hundreds of available options, and the necessity to purchase this tool may also be a problem. In our study, we suggest that managers (HR specialists and managers) use any open source materials that can be used as a visual aid to conduct staff testing aimed at identifying the stress levels and can serve as such associative metaphorical maps. These can be sets of tables with works of art, famous movie frames, book illustrations and even tables from the Internet in the form of “Yandex pictures”, consisting of events that are relevant to the time of research (New Year or Christmas cards or story photos, holidays or season pictures).

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3 Proposals and the Results of Implementations During the team building and stress tolerance training sessions with a group of 500 chairmen of polling stations in the Rostov Region (from June till August 2019), it was proposed to use randomly chosen material as metaphorical associative cards, as visual training manuals for work (tables). In particular, a selection from the Hermitage art gallery (St. Petersburg) was used. Through building cases for division of tables (visual training material) on the principle of sympathy/antipathy, defined personally by each participant, lists were formed, according to which there were tools, selected, in fact, by means of introduction of active coaching approach (Alpatova 2013), in order to create a personalized stress management self-diagnostics for each of the attendees individually. It should be noted that team work in project activities (which is the operation of polling station commissions) is often associated with a high degree of stress, which requires high stress tolerance from the members of such a team, and the express stress management technique makes it one of the most important tools when making personnel decisions. Notably, the presence of a stress factor, also defined by training participant independently, gives a very clear assessment about the degree of anxiety and its possible source, which later can serve as an important information for making effective personnel decisions for team building (for project work) by the chairpersons of the polling stations, as it provides the ground for reading the psychological characteristics of individual portraits, forming the teams of polling stations where the chairman has to form a team and to achieve effective work results, virtually without the right to choose workers. In these conditions, the chairperson of a polling station (as the team leader in the course of project activity) is often forced to rely on an intuitive understanding of the portraits of individuals. The chairpersons of polling stations were invited to run a rapid diagnostics of personality using such psychological tool as “psycho-geometry” (Alekseev and Gromov 1991). In the course of a series of “psycho-geometric” trainings potentially conflicting pairs in groups, working groups, leaders, and idea generators were identified; potential misunderstandings were identified, driven by different mindsets of employees with different “psycho-geometric” portraits, ways to solve their interaction, ways of conducting effective business negotiations, understanding their own potential role among the training participants, as well as awareness of each employee’s potential and further personnel decisions, based on the “psycho-geometric” roles in the team of training participants – chairmen of polling stations in the Rostov region.

4 Conclusion Having acquired the necessary skills during the training, the chairpersons of the polling stations were given the opportunity to conduct assessment for 5–10 min. After determining the psycho-geometric role and the potential of a person, the chairperson receives a basis for making effective personnel decisions. In particular, during the work at the training sessions, tendencies towards the necessary psycho-geometric roles in such teams were identified. (Alpatova et al. 2019) Such roles of main performers were

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“squares” for their working to pattern, algorithm and “circles” for their ability to build effective communication and “smooth out” complex conflict situations during the electoral process. Also the chairmen reacted with great caution to the potential presence of a creative “zigzag” psycho-geometrical role in the team, referring to the inability of “innovator” employees to work effectively in a strictly algorithmic (in terms of legislation) process of preparation of elections. Thus, the combination of techniques, proposed by the authors for the development, substantiating and adopting personnel decisions by the heads of organizations and HR specialists, and tested during a huge layer of training events, is innovative and is based on the acquisition of special skills for express typing of teams members and determining their roles in the team using psycho-geometric techniques, as well as to identify emergency methods (express means), making it possible to obtain the result from assessing team members within a limited period by “reading” the analogue of metaphorical associative cards through introducing coaching approach to stress management, and subsequently increasing stress resistance of polling stations personnel, has been successfully implemented in the operations of polling stations in the Rostov Region.

References Alekseev, A A., Gromova, L.A.: Psychogeometry for managers. Knowledge, Moscow (1991) Burlachuk, L.F.: Psychodiagnostics. S-P: Piter, p. 384 (2017) Ingilab, M.B.: Metaphorical Associative Cards: A Complete Course for Practice and Development. Rainbow, Saint Petersburg (2019) Jung, K.G.: Man and His Symbols. AST, Saint Petersburg (1997) Alpatova, E.A., Ilina, O.V.: Methodology for analyzing the state of the motivational mechanism of the transport company (for example, LLC “KVARTA-1”). In: Collective Monograph Innovative Methods of Corporate Culture, p. 100–138. Rostov state University of Railways, Rostov-on-Don (2010) Alpatova E.A.: Analysis of the results of training sessions on the use of metaphorical diagnostics of the state of activity of various departments of customs authorities. In: Actual Problems of Psychological Support of Practical Activities of Power Structures: Collection of Materials of the Third all-Russian Scientific and Practical Conference of Specialists of Departmental Psychological and Personnel Services with International Participation. Science, Saint Petersburg (2014a) Alpatova, E.A.: Methodology for identifying motivators that affect the efficiency of public servants work. In: Science, Education, Society: Problems and Prospects of Development: A Collection of Scientific Papers Based on the Materials of the International Scientific and Practical Conference, pp. 12–16. Science, Tambov (2014b) Alpatova, E.A.: The use of coaching technologies as a little-formalized method of psychodiagnostics in the practice of psychological services of power structures. In: Actual Problems of Psychological Support of Practical Activities of Power Structures in Modern Russia: Collection of Materials of the II all-Russian Scientific and Practical Conference of Specialists of Departmental Psychological and Personnel Services with International Participation, pp. 35–38, Saint Petersburg: Science (2013)

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Alpatova, E.A.: The process of advanced training of civil servants on the basis of modifications of projective techniques. In: Actual Problems of Socio-Labor Relations: Proceedings of the VI all-Russian Scientific-Practical Conference with International Participation, Dedicated to the 85th Anniversary of the Dagestan state University, pp. 18–20, Dagestan state University, Makhachkala (2016) Alpatova, E.A., et al.: Formation of the municipal education team in the process of strategic analysis of socio-economic development. Econ. Manag. Manag. Syst. 33(3), 4–9 (2019) Alpatova, E.A.: Features of the use of training technologies in the process of professional development of civil servants. In: Actual Problems of Psychological Support of Practical Activity of Power Structures: Collection of Materials of the Fourth all-Russian Scientific and Practical Conference of Specialists of Departmental Psychological and Personnel Services with International Participation, pp. 301–310. The St. Petersburg named after V. B. Bobkov branch of Russian customs Academy, Saint Petersburg (2015) Butseva, G.I., Gorshkov, V.G.: The Impact of personnel decisions on the efficiency of enterprise management. Pers. Manag. 10(1), 42–44 (2008) Chack, D.K.: Decision support system for human resource management of the organization. Int. J. Manag. Res. Bus. Strategy 2(3), 105–111 (2013) Dmitrieva, N.V., Buravtsova, N.V., Perevozkina, Y.M.: Use of associative maps in narrative psychotherapy of workaholism. Siberian Pedagogical J. 4(1), 166–172 (2014) Guo, J.: Intelligent human resources systems in the information technology era. Comput. Model. New Technol. 18(11), 934–939 (2014) Gildingersh, M.G., Dobrusin, M.E.: The mechanism of development and implementation of effective recruitment solutions. Bull. Tomsk State Univ. 400(1), 198–204 (2015) Guseinova, E.L., et al.: Locus of control as a factor of professional competence development. In: Actual Issues of Higher Education-2018: Materials of the International Scientific and Methodological Conference, pp. 39–41. Science, Ufa (2018) Ivanova, I.A.: Integration of economic and socio-psychological aspects in the development of personnel decisions in the organization. In: Modernization of Modern Society: Innovation, Management, Improvement: Economic, Social, Philosophical, Political, Legal, General Scientific Regularities and Trends: in 3 Parts Novosibirsk State Technical University, KAF. “Production Management and Energy Economics”, Armavir Institute of Social Education (f.l). Russian State Social University, pp. 105–107. LLC Academy of management, Moscow (2015) Kochetkov, I.G., Provotorova, A.S.: Experience of using the method of metaphorical associative maps in the selection of personnel. Internet Mag. World Sci. 2(1) (2015). http://mir-nauki. com/PDF/13PSMN215.pdf Kulkov, S.V.: Methodology of research of motivation of employees of a commercial bank. Econ. Bull. Rostov state Univ. 4(1), 181–185 (2006) Ovchinnikova, T.I., Tinyakova, V.I.: Motivational characteristics of labor resources. Rationing Payment labor Ind. 12(1), 27–31 (2014) Tinyakova, V.I.: Adaptive and rational approach to changing the staff remuneration system. Rationing Payment Labor Ind. 11(1), 18–24 (2013) Tinyakova, V.I., et al.: Transformation of the system of professional training of personnel who are competitive in a knowledge-based economy. Econ. Sustain. Dev. 1(37), 242–245 (2019)

Legal Basis for the Electronic Document Workflow in HR Procedures Svetlana E. Titor(&) , Anatoly Yu. Opimpiev and Nodari D. Eriashvili

,

State University of Management, Moscow, Russia [email protected], [email protected], [email protected]

Abstract. Digital economy is a quickly evolving area. The Internet today is present in every branch of economy and public administration. The benefits of electronic technology in everyday life inevitably affect their relevance in the world of work. Major employers already have some experience in converting individual HR documents into electronic form due to the introduction of HR corporate information systems. Modern digital technology cannot go past the world of work. Despite the fact that the labor legislation - or rather, personnel HR management procedures, are characterized by fundamental nature, they are quite archaic, they cannot remain unchanged in the process of global digitalization. The Ministry of Labor and Social Security of Russia has stated the need to conduct an experiment in the conversion to electronic document management in HR record management. The National Duma is considering several draft laws in this regard. However, life preceded these initiatives. During the period of restraining measures (quarantine), imposed to prevent the spread of coronavirus infection (COVID-2019) the need for transformation of labor relations towards their digitalization became relevant naturally. However, one should not forget that the employee in labor relations is always deemed an economically weak side. It is important that when introducing new technologies, the laborer does not become one of the cogs in this machine. His rights when introducing electronic documents must be reliably protected, including on the legislative level. Accordingly, the digitalization of the world of work requires legislative changes. Keywords: Labor relations
Electronic document management legislation
Labor contract
HR record management JEL Code: K31


Labor


J60
J68

1 Introduction The State Duma adopted in the third reading a bill on the electronic document workflow in HR record management by individual employers (bill No. 859678-7). The bill is based on the main directions of the National Program “Digital Economy of the Russian Federation”. Federal Project “Statutory Regulation of the Digital Environment” provides for statutory regulation of digital interaction of the business community and the state, including in terms of HR record keeping. © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1389–1396, 2021. https://doi.org/10.1007/978-3-030-59126-7_152

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Currently the National Duma is considering another bill (No. 736455-7) on legally significant communications by parties to an employment contract, which is proposed to be introduced into labor legislation. The main conclusion of employers, made at the parliamentary hearings on the peculiarities of labor relations in the digital economy,1 is that the decision to switch to electronic document workflow should be made exclusively by the employer. The use of electronic digital signatures and the complete transition to electronic document workflow in the HR is being questioned by the trade unions. First of all, unions attribute their doubts to the employee’s economic difficulties when switching to an electronic form of relations with the employer: the employee does not have the financial ability to bear the associated costs: paying for the Internet, purchasing technical means for using it, paying for an electronic digital signature, etc. It will be financially difficult for small and even medium-sized businesses to bear the costs of providing employees with electronic signatures2. Trade unions generally believe that today’s modern technology cannot guarantee the safety of electronic data3. Meanwhile, a number of procedures in social and labor relations have already been legislated. Federal Law No. 255-FZ on Compulsory Social Insurance for Temporary Disability and Cases Related to Maternity of December 29, 20064 provides for the possibility of receiving a temporary disability leave in electronic form, but only with the written consent of the employee. The Labor Code of the Russian Federation provides for such type of work as distance employment. Distance employment is remote work, implemented by the employee using the online resources and digital technology. However, the registration of labor relations is carried out in accordance with the law as yet in the form of an exchange of letters in hard copies. Almost all HR record management is tied to the written form with personal signatures of the employee and the employer. However, we believe, taking into account modern technologies, many processes should and can be converted to electronic format. The Federal Law No. 63-FZ On Electronic Signature, dated April 6, 2011, defines the notion of “electronic signature”. There are three types of digital signature: Basic electronic signature is the use of codes, passwords or other means by which the signature is confirmed by the person concerned. Encrypted non-certified digital signature is a signature created using information programs using a special private key.

1

2

3

4

Comment by the Ministry of Labor of Russia on the introduction of an electronic HR record keeping and electronic document workflow. Date of reference April 9, 2020. https://rosmintrud.ru/labour/ relationship/332. Peculiarities of labor relations in the digital economy. Date of reference April 9, 2020. https://law. hse.ru/news/214540782.html. Shmakov: there are questions regarding electronic employment books // January 29, 2018 // http:// www.medicalprof.ru/news.html?region=1&news=news3880. Federal Law “Compulsory Social Insurance for Temporary Disability and Cases Related to Maternity’ No. 255-FZ, dated December 29, 2006. Date of reference February 13, 2020. http://www. consultant.ru/.

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Encrypted and certified digital signature is a signature created with the help of using information algorithms and based on a public key infrastructure. Encrypted and certified digital signature is issued only by a certification center that is accredited by the Russian Ministry of Communications. Signature has a certificate in hard copy or in electronic form, approved by the order of the Federal Security Service of Russia no. 795, dated December 27, 2011. All three types of digital signatures have different legal meaning. Accordingly, their use in labor relations depends on the legal significance of the procedure. One of the ways to protect the labor rights of citizens is determined by the current legislation as the state supervision in the field of labor. With the introduction of electronic formats in labor relations, state supervision will have to restructure its origins, methods and formats.

2 Methodology The issues of electronic document workflow in HR procedures are understudied in the legal and scientific literature because of their novelty. New scientific views of this paper are based on researches of HR record management and digitalization of economic processes, such as: Abdullaev et al. (2019), Cherepantseva et al. (2019), Glotova (2019), Myshko and Kudryashov (2019), Olimpiev et al. (2018), Orlova (2017), Titor (2018), Titor and Svirin (2019), Tuktarova (2019), Vartanyants and Starokozheva (2018). Theoretical and practical provisions of articles devoted to the study of the legal framework of trends in the transition to digital technology in the HR record management. General and private scientific research methods, including dialectical, formal and logical ones, have been applied. Analysis and synthesis method and modelling method.

3 Results The experiment on introduction of electronic HR record management is aimed at forming and developing mechanisms for conducting and using electronic documents relating to employment relations with employees. The experiment is expected to take place from April 01 till December 31, 2020. The Russian Ministry of Labor and Social Protection will select a number of employers who voluntarily agreed to participate in the experiment. As part of the experiment, employers shall: – independently determine the list of documents that they are ready to keep in electronic form; – define the structural units involved in the experiment; – create an information system for processing and storing electronic HR records. All processes implemented as an experiment should be discussed and adopted within the framework of social partnership. The employer must develop and adopt local regulations relating to the experiment, taking into account the motivated body of the shop-floor union organization. The legislator recommends regulating the issues of

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electronic document workflow in HR record management in the collective agreement as well. The employer must work through all necessary actions with the employee: – to acquaint the worker with local regulation, determining the procedure of the experiment; – to notify the employee of the introduction of the experiment, request his consent to participate in the experiment. In this case, the employee has the right to refuse to participate in the experiment and the employer is not entitled to apply any measures of influence to him; – to prepare the necessary information media for the employee to participate in the experiment, including the acquisition of an electronic digital signature; – to make appropriate changes to the employment contract with the employee. The draft law on legally significant communications from the parties to an employment contract provides for the introduction of three new norms into the Labor Code of the Russian Federation and introduces a new concept of “legally significant communications”. It is proposed that any form of interaction between an employee and an employer that they engage in for the purpose of transmitting certain information, which entails the relevant legal consequences under labor law, shall be considered legally significant. It is proposed to codify transmitting such communications by electronic or other technical means as one of the means of providing such messages. The authors of the bill also propose to formalize in legislation a provision that would allow conclusion of an employment contract through the exchange of electronic documents and information transmitted by technical means. Recognizing an employee as a weak party to an employment contract, the authors of the bill provided for the right of an employee to choose a form of communication: paper or electronic. Moreover, in order to prevent possible abuses on the part of an employee or employer when concluding an employment contract in the manner specified in the bill, the authors have provided for amendments to the law in the form of “the duty to behave in good faith” for both parties to the employment contract. Indeed, labor legislation requires many HR procedures to be carried out in writing, against signature of the employee. For example: – notifying the employee of possible changes in the terms of the employment contract; – notifying an employee of a possible dismissal due to staff redundancy; – notifying an employee of a possible dismissal as not having passed the probationary period; – notifying an employee of dismissal at the end of the employment contract; – familiarization with the orders against signature: about employment; about disciplinary punishment; about dismissal; – notifying the employee of the provision of regular paid leave; – etc. Many of these personnel procedures can well be converted into electronic format. However, it is necessary to classify those procedures according to their legal

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significance and contestability in order to determine what kind of electronic digital signature should be used for their implementation. It is considered that the “written form” of a document provided for in labor law (e.g. employment contracts, full liability contracts, apprenticeship contracts, addenda to the employment contracts), when converted into electronic format, should be signed with a more legally significant electronic signature – enhanced encrypted and certified digital signature. This will give the document special, legislatively fixed guarantees, including the guarantees against falsification by unscrupulous participants in labor relations. Familiarization of an employee “against the signature” can also be replaced by an electronic signature. We believe that in cases where familiarization against signature entails no special legal consequences for the employee, a basic electronic signature would be sufficient. Such cases include: – familiarizing the employee with the upcoming leave in accordance with the leave schedule; – notifying the employee of the impending dismissal at the end of the period; – familiarizing the employee with orders for employment, dismissal (except dismissal by the employer), transfer to another job by the agreement of the parties, etc. These actions are always are always accompanied or confirmed by any additional documents, actions, i.e. the employee’s signature duplicates other types of familiarization. For example, when entering into a fixed-term employment contract, the employee is aware of its duration. Supplementary notice “against signature” only reminds him about it. When entering into employment relationships, an employee enters into an employment contract. Further reading of the employment order only duplicates the notice of employment. When an employee resigns, the employee voluntarily writes a resignation notice and signs it. Familiarization with the dismissal order against signature only duplicates the employee’s declaration of will. However, there are HR procedures that entail consequences for the employee. Electronic acquaintance with them should be carried out by means of a more legally significant electronic signature – an encrypted non-certified digital signature. For example, notifying an employee of an impending dismissal “against signature”. This notice is followed by certain consequences: duration of notice period, possibility of contentious situations. By analogy, when the rule uses the wording “written consent”, the legal effects of a can be classified into two groups: – cases where the employee’s written consent to certain actions is directly confirmed by the voluntary actions (e.g. going to work on a day off or public holidays, etc.); – cases where the employee’s subsequent actions may be considered as forced subordination of the employee to the employer, it is necessary to provide for consent with the use of an encrypted non-certified digital signature (for example, when transferring the employee to another job).

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Accordingly, electronic signatures of varying importance should be used. In the first case, it may be the basic electronic signature. In the second case, the encrypted non-certified digital signature should be used. Submission of “written application” provided for by legislation, may be replaced by an electronic notice by the employee. The electronic signature is used in a similar way depending on the legal significance of the application. For example, a letter of resignation must be signed with enhanced encrypted and certified digital signature. An application for transfer to another job can be signed using basic simple electronic signature, because this will be followed by the execution of such a transfer in the form of an addendum to the employment contract, which the employee will sign using enhanced encrypted and certified digital signature. Analysis of legal practice shows that the written form of HR procedures in the labor legislation should not be converted into electronic registration in full in certain situations that may lead to labor dispute: – when regulating relations with the participation of socially vulnerable categories of workers: disabled persons, women and other persons having and raising young children, persons under 16 years of age, in order to prevent risks of negative and disputable consequences. Physical, physiological, psychological and other features of the above categories of employees may hinder the execution of documents in electronic form. – during regulation of relations related to the resolution of individual and collective labor disputes, due to the high risks of disputed situations; – in regulating relations related to controversial situations that may result in an individual employment dispute (e.g., procedures for dismissing an employee, etc.).

4 Conclusion/Recommendations Changes in labor legislation in the transition to electronic HR record management should take into account the following points: – voluntariness of the parties to the employment contract for electronic document workflow in HR records management; – employer’s obligation to provide the employee with the necessary technical equipment to ensure remote electronic communication with the employer; – employer’s obligation to reimburse the employee for the material costs of electronic communication (payment for the Internet); – employee’s right to refuse electronic format of communication with the employer (if this is acceptable taking into account the employer’s technology and specifics of the work); – employer’s obligation to monitor and ensure the availability of all information systems, equipment, devices, etc.; – employee’s obligation to treat the provided technical means with care, to bear material responsibility for their loss or damage caused by the employee, to inform

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the employer in due time about the equipment malfunction, disconnection of the Internet resource, etc.; – mandatory participation of the elected bodies of the shop-floor union organization in the discussion and adoption of local regulations governing electronic document workflow; – employer’s obligation to issue documents at the employee’s request, including on paper. Legitimization of electronic digital signatures requires amending the legislation in force. It is proposed that the existing wording be replaced by new wording based on the following principles: – Replace the phrase “to familiarize employees against signature” with the phrase “to familiarize employees against signature (including using a basic electronic signature)”; – “written employment offer” be replaced by “written and/or electronic employment offer, signed using the encrypted non-certified digital signature”; – “written agreement between the parties” be replaced by “written and/or electronic agreement between the parties, signed using the encrypted certified digital signature”; – “with the written consent of the employee” be replaced by “with the employee’s written consent and/or consent obtained electronically through the official communication sources defined by the employer, signed using a basic electronic signature”; – “in writing” be replaced by “in writing and/or electronically by sending through official communication sources identified by the employer, signed using a basic electronic signature”; – “upon a written application of the employee” be replaced by “upon a written application of the employee and/or application in electronic form sent through official communication sources identified by the employer, signed using basic simple electronic signature”.

References Abdullaev, N.V., Avanesyan, N.V., Artyukov, A.V.: Tsifrovizatsiya otrasley rossiyskoy ekonomiki [Digitization of the spheres of the Russian economy]. In: Teslenko, I.B. (ed.) Stoletovs Vladimir State University. Rusayns, Moscow (2019) Cherepantseva, Y.S., Valitova, A.I., Starkova, D.V.: Tsifrovizatsiya i osnovnye napravleniya ee vozdeystviya na trudovye otnosheniya v Rossiyskoy Federatsii [Digitization and the main directions of its influence on the labor relations in the Russian Federation]. Works Orenburg Inst. (branch) Moscow State Acad. 38(1), 176–180 (2019) Glotova, S.A.: Tendentsii razvitiya kadrovogo deloproizvodstva v ramkakh programmy «tsifrovaya ekonomika» [Tendencies of development of HR document turnover within the program “digital economy”]. In: Larina, M.V. (ed.) Upravlenie dokumentami v tsifrovoy ekonomike Materialy nauchno-prakticheskoy konferentsii, pp. 98–103. Science, Moscow (2019)

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Myshko, F.G., Kudryashov, E.Y.: Ispol’zovanie elektronnykh dokumentov, podpisannykh usilennoy kvalifitsirovannoy podpis’yu, v organakh prokuratury Rossiyskoy Federatsii [Using electronic documents signed by qualified electronic signature in the authorities of the prosecutor’s office of the Russian Federation]. Zakon i pravo 4(1), 154–156 (2019) Olimpiev A.Y., Myshko F.G., Strelnikova I.A.: Tsifrovizatsiya ekonomiki v Rossiyskoy Federatsii: sostoyanie i perspektivy razvitiya [Digitazation of economy in the Russian Federation: the state and perspectives of development]. In: Tereliansky, P.V. (ed.) Shag v budushchee: iskusstvennyy intellekt i tsifrovaya ekonomika. Revolyutsiya v upravlenii: novaya tsifrovaya ekonomika ili novyy mir mashin Materialy II Mezhdunarodnogo nauchnogo foruma. Science, Moscow (2018) Orlova, E.E.: Zanyatost’ naseleniya kak pravovaya kategoriya: ponyatie i priznaki [Employment as a legal category: notion and features]. Trudovoe pravo v Rossii i za rubezhom 1(1), 14–17 (2017) Soyfer, V.G.: Problemy pravovogo obespecheniya dostoynogo truda i sovremennykh form zanyatosti [Problems of legal provision of decent labor and modern forms of employment]. Zakonodatel’stvo i ekonomika 5, 10–18 (2013) Titor, S.E.: Inspektsiya truda v Rossii: istoriko-pravovoe issledovanie [Labor Inspection in Russia: A Historical and Legal Study]. Izdatelskiy Dom GUU, Moscow (2018) Titor, S.E., Svirin, Y.A.: Tsifrovizatsiya v trudovom prave. Chernye dyry v Rossiyskom zakonodatel’stve [Digitization in labor law. Gaps Russ. Law] 2(1), 61–67 (2019) Tuktarova, Y.R.: Sovershenstvovanie kadrovogo deloproizvodstva s vvedeniem elektronnykh trudovykh dogovorov [Improvement of HR document turnover with introduction of electronic labor contracts]. In: V sbornike: Tsivilizatsiya znaniy: rossiyskie realii Trudy XX Mezhdunarodnoy nauchnoy konferentsii, pp. 779–785. Science , Moscow (2019) Vartanyants, T.A., Starokozheva, V.P.: Vnedrenie elektronnogo kadrovogo dokumentooborota: sushchnost’, riski, vozmozhnosti [Implementing online document turnover: essence, risks and opportunities]. Sotsial’no-trudovye issledovaniya 1(1), 145–156 (2018)

Modern Principles of Design and Modernization of Enterprise Production Systems in High-Technology Industries Ekaterina Yu. Kamchatova1(&) , Artur D. Bobryshev2 and Oksana E. Gudkova3

,

1

2

State University of Management, Moscow, Russia [email protected] Central Research Institute of Shipbuilding Industry “Center”, Moscow, Russia [email protected] 3 Ryazan State Radio Engineering University, Ryazan, Russia [email protected]

Abstract. The paper discusses the development of modern principles for constructing production systems of enterprises in high-tech industries in order to preserve and develop their production potential. An enterprise production system is a reasonably organized interconnected set of facilities, equipment, and other resources, technological and business processes, which, in conjunction with the social subsystem and under the control of the control subsystem, ensures the value adding and delivery to the consumer. The acuteness of the problem being solved is caused, on the one hand, by the need to develop market competencies for the efficient diversification of the activities of defense contractors, where high-tech production is mainly concentrated, and, on the other hand, by the challenges of the fourth industrial revolution, which radically change the composition of productive forces in the economy. Using the historical diachronic method, the authors reveal the dialectics of the organization development paradigm and the corresponding methodological tools together with the concepts of organizing production systems of industrial enterprises. Summarizing the results of the study makes it possible to formulate basic principles for the construction and modernization of production systems of enterprises in high-technology industries, which have not been embodied in management practice until now. These include: focus on democratization and involvement of personnel in solving a wide range of production and enterprise management tasks; summoning creative abilities of the production process participants to reduce losses and optimize production; reflection of innovations caused by the beginning of the fourth industrial revolution in the production system of the enterprise, introduction of CALS technologies into the production system. It is noted that the use of modern organizational and economic methods and concepts of improving production systems should be based on a gradual phased implementation of all spectrum of positive innovations contained within through implementation of successive projects based on building and using the methods of Six Sigma concept. Keywords: Industrial engineering
Industry 4.0
High technology industry Industrial plants
Lean Manufacturing
CALS-technologies © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1397–1405, 2021. https://doi.org/10.1007/978-3-030-59126-7_153




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L25

1 Introduction Similar to the change in technological structures depending on the stage of scientific and technological progress and the readiness of the personnel of enterprises and organizations to accept new ideas, the approaches to the production process management are also changing. In our opinion, their most relevant periodization is presented in the book by (Laloux 2017). Based on studies by numerous management specialists, philosophers, and social psychologists, such as (Maslow 2013), (McGregor 2006), (Semler 2018), (Torbert 2019), (Piaget 1969), (Graves 1970), (Senge 2018) and others, the author identifies several historically successive schemes of organization architectures – Table 1. Table 1. Organization development paradigmsa Paradigm Reactive Magic

Inception period Main features 100–50 thousand years BC Absence of organization model 15 thousand years ago Emergence of numerous tribes governance framework Impulsive 10 thousand years ago Authoritarian rule, based on the use of force Conformist 4 thousand years ago Formalized hierarchical pyramid organization Competitive XVIII century Competitive organization, aimed at enriching and social recognition Organization is a machine Pluralist XVIII century Cooperation-oriented organization encouraging involvement of employees in management Organization is a family Evolutionary XX century Self-governing organization, based on a holistic attitude to personality Organization is a living organism a Compiled by the authors based on (Laloux 2017).

In the context of a paradigm shift in the production engineering, methods and scientific and practical concepts of transformation of production systems, geared towards the principles of democratization and involvement of personnel in solving a wide range of production and enterprise management tasks were in demand. This was impossible earlier due to the competitive paradigm, dominating in the manufacturing industry that treated the worker as “lazy, thieving, requiring constant special control individuals” (Laloux 2017). The main content of these concepts is to summon the creative abilities of all participants in the production process to reduce losses and optimize production through automation in a constant quest for perfection against the background of maximum openness and transparency of the internal life of the organization, clarity of the conditions and procedures of its operation for each employee.

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2 Methodology The study is based on the review of foreign and domestic practice of applying modern methods and solutions in the field of industrial engineering at enterprises in high technology industries. Drawing temporal parallels between the dynamics of views on the organization’s role in social production and the methods used for engineering (modernizing) production systems makes it possible to identify useful generaltheoretical principles of this practice as a basis for preservation and development of the productive capacity of domestic enterprises.

3 Results From this perspective, let us consider two groups of modern approaches and formulate the principles of building production systems in high-technology industry enterprises. Group 1. Changes in the organization of production systems, associated with the beginning of the fourth industrial revolution. “Digital transformation - states I.V. Tarasov - is one of the major factors in the world economic growth. According to estimates by the McKinsey Global Institute, by 2025 up to 22% of GDP growth in China may occur due to Internet technologies. In the USA, the expected increase in value created by digital technologies is no less impressive – here it can reach USD 1.6– 2.2 trillion by 2025 … the potential economic benefit of digitalization of the Russian economy will increase the country’s GDP by 4.1-8.9 trillion rubles by 2025 (in 2015 prices), which will amount to 19-34% of the total expected GDP growth” (Tarasov 2018). The main innovations brought into the organization of production systems by the new stage of industrial development can be grouped into the following categories: integration of cyber-physical systems (CPS) or automated machines and mechanisms connected to the Internet into the manufacturing processes (Kupriyanovsky et al. 2016), functional human and machine compatibility, providing opportunity to interact through a global computer network; transparency of information and the ability of information systems to create digital models of physical processes; combining large amounts of data and performance of technical tasks unsafe for humans by technical facilities, the ability of information technology systems to independently take production decisions (Ipi 4.0, INNOPROM-2017). Figure 1 shows the basic concept of digital technology “Industry 4.0”. The introduction of these innovations and technologies requires changes in the organization of production systems of industrial enterprises capable of their development. First of all - the application of the provisions of the product life cycle management concept - PLM-systems (Product Lifecycle Management) - or CALStechnologies (Continuous Acquisition and Lifecycle Support). The emergence of this concept was the result of numerous contradictions between the automation systems designed for certain types of enterprise activities, created on different platforms (Sudov and Levin 2002). Combining these local systems into a single consistent whole served as the basis for the creation of CALS concept. The most significant changes in the enterprise production system, related to the implementation

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Fig. 1. The concept of “Industry 4.0” and the corresponding digital technology (World review of the implementation of “Industry 4.0” concept 2016)

of CALS-technologies include: a) formalization of market research processes and assessment of the conformity of engineering and manufacturing capabilities to customer requirements; b) automation of the processes of preparation for the production of new products; c) automatic informing the information measurement systems about the production processes flow, as well as about the accompanying material and financial flows; d) automatic control of quality parameters; e) automatic informing the manufacturer about the need for disposal and replacement of products that are out of service at the consumer’s site; f) the widespread use of describing and reengineering of business processes that form the basis for building a modern production system of an enterprise and a realistic organizational and economic model; g) formation of powerful data-processing centers (servers) with appropriate software. The use of CALStechnologies provides a fundamental minimization of the time of preproduction and the actual production of products, reduces the number of errors during product movement at the enterprise, and drastically reduces costs (Sazonov et al. 2018). According to the estimates of the Ministry of Industry and Trade of the Russian Federation, in 2020 the CALS technologies market will amount to 260 billion US dollars, by 2035-740 billion. The leaders in this area are Siemens PLM Software, IBM, 1C, SAP and Dassault Systemes (Implement and scale …, 2019). Domestic developers of PLM systems are represented by the RazvITie consortium (a union of domestic IT developers – Askon, Research and Software Development Centre “APM”, TESIS, ADEM and EREMEX) and Top Systems Company. Cumulatively, the total share of Russian software for these systems is 20-25% of the market. Currently, the state corporations Rosatom and Rostec jointly develop their own PLM platform, based on domestic developments and

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protected from outside interference. In Russia, the leading positions in the use of these technologies are held by companies from aviation and shipbuilding - Aviastar-SP JSC, PJSC Ilyushin Aviation Complex, JSC “Russian Helicopters”, OJSC “United Shipbuilding Corporation” (JSC “Baltic Plant”, JSC “Shipbuilding Company “Almaz”, JSC “Severnoye Design Bureau, JSC Central Design Bureau for Marine Engineering “Rubin”, JSC “Admiralty Shipyards”, JSC “Vympel” and PJSC “Severnaya verf” Shipbuilding Plant). Group 2. Modern concepts of improving industrial organization aimed at ensuring lower costs and improving product quality. Domestic economic science has significant historical experience in improving the industrial organization, labor management and business administration. Today in this area, as well as in many other areas of industrial and social life, solutions that have been developed and gained recognition abroad are used. Traditionally domestic plants strive to adopt to introduce complex, so-called “umbrella systems” for improvement of production systems, aimed at increasing customer satisfaction with the products. We are talking about product quality assurance measures or measures aimed at reducing prices through optimizing production costs and eliminating non-production losses. Such systems include ISO - quality management standards, Total Quality Management (TQM) and Lean Production (Lean Production (Manufacturing)). The basic premise for the introduction of a series of ISO standards is the assumption that the enterprise certification ensures compliance of its quality management system (or, in a very fair treatment by M.G. Kruglov - qualitative management (Kruglov 2009)) with that of the of international standard. And if it is not the case, then this minor flaw can be easily remedied during preparation for the certification. However, firstly, foreign partners, who are mainly focused on certified enterprises, are never limited to recognizing a certificate issued in Russia, but conduct an independent verification of the entire system using their own methods, which often exceed ISO requirements. Secondly, during the period of preparation for certification, it is impossible to completely transform all enterprise systems to regulatory requirements, if they were not initially created taking the standards into account. Therefore, the formal approach pursued by Russian enterprises to this very serious issue can in no way positively affect the solution of the task of optimizing the production system to fully satisfy customer needs. Which, however, clearly demonstrated by the share of Russia in world GDP, which is only 1.98% (World’s GDP by countries, 2019). During the implementation of the other concept - TQM - in Russian conditions there are also numerous obstacles caused by the existing gap between the domestic reality and the parameters of production systems necessary to start transformations in accordance with this umbrella concept. As noted by A.V. Kazintsev in that regard, national practice shows that: “International standards do not accord with Russia’s current situation; owners and managers see only costs in quality management systems, management does not take continuous development as a business target, the existing management structure cannot or does not want to initiate and maintain the necessary processes of improvement at the appropriate level” (Kazintsev 2009). The world-recognized concept of improving production systems, the Lean Manufacturing system, first developed by Japanese experts and implemented in the production of such complex multi-item products as automobiles, is less impeded by the

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above shortcomings. Its focus on the sequential elimination of all kinds of losses allows to design the manufacturing process in an optimal way and to minimize inventory and cycle time at each site and production stage. At the same time, substantively this concept requires a radical change in the psychology of the employees of the enterprise, development of a sense of ownership in them to obtain the final result of the production process, change in the motivation system to identify, rather than hide, deficiencies in work, which until now is an unsolvable task in our conditions. International experience has repeatedly proved the effectiveness of using such integrated umbrella systems for rationalizing the production systems of enterprises in various industries that are at a certain (high) level of technological and corporate culture development. However, at Russian enterprises, the gap between the required and the actual state of these parameters, even for the start of the implementation of these decisions, affecting all the main aspects of the enterprise, is still too wide. As a result, their implementation requires spending such an amount of financial, labor and material resources that in reality just cannot be found. As a result, the initiated transformations end at the pioneering stages of implementation or turn into fiction, like an ISO certificate, which is bought for a minor amount from a specialized consulting company. Therefore, for most Russian enterprises, experts note, a gradual path of improvement focused on building a hierarchy and consistent solution of problems of quality optimization, cost reduction, differentiation and other tasks of increasing efficiency using the project approach is more acceptable. In modern conditions, based on the accumulated experience, we should build our own system for optimizing production systems using the whole range of concepts focused on the operational modernization of production and business processes - Fig. 2 - that make it possible to get quick visible outputs and economic benefits, which, in turn, will provide an opportunity to form an ever-expanding circle of supporters of new methods of this work among enterprise personnel. The most acceptable concepts for solving this problem are “Six Sigma”, “Lean Production”, “TOC” (Theory of Constraints), “SPC’ (Statistical Process Control) and “5S” (Workplace Organization). Elements of such systems can me introduced in stages

Fig. 2. Useful production system optimization techniques and concepts (Kazintsev 2009)

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depending on the amount of resources available for these purposes. In addition, it makes sense to use the design and organizational capabilities provided by the Six Sigma concept as the core of such work. The main content of this concept is reduced to the formation of technology for special tuning of production and business processes at the enterprise, focused on reducing all types of losses through the implementation of projects on elimination of their key causes. The basis for the implementation of this technology is a comprehensive statistical quantitative study of production processes. Six Sigma concept is based on the fact that, if a process at some arbitrary stage can provide outstanding results, then, with certain efforts, it is possible to adjust its course in order to consolidate and stabilize these outstanding results. The projects on improvement of manufacturing and business processes within the framework of this concept are implemented according to the classical version of the sequence of stages: Define – Measure – Analyze – Improve – Control (DMAIC) (Watson 2006). Unlike other methods of improving production systems, the Six Sigma concept includes a well-developed organizational apparatus that allows for personalization of the steps of its practical application, as well as extensive personnel training programs. These features make it possible not only to solve the problems of improving production systems and business processes, but also to “radically change the corporate culture of the enterprise, directing the vector of professional, group and even personal interests of employees towards improvement of business processes and increasing the efficiency of all types of activities” (Kazintsev 2009).

4 Conclusion Thus, the fundamental principles of modern construction and modernization of manufacturing systems of enterprises in high technology industries include the following: a) focus on democratization and involvement of personnel in solving a wide range of manufacturing and enterprise management tasks, summoning the creative abilities of all participants in the production process to reduce losses and optimize production through automation in a constant quest for perfection against the background of maximum openness and transparency of the internal life of the organization, clarity of the conditions and procedures of its operation for each employee. b) reflection of innovations caused by the beginning of the fourth industrial revolution in the production system of the enterprise (integration of cyber-physical systems or automated machines and mechanisms connected to the Internet into the manufacturing processes, functional human-machine compatibility, making it possible to interact through a global computer network; transparency of information and the ability of information systems to create digital models of physical processes; combining large amounts of data and performance of technical tasks unsafe for humans by technical facilities, the ability of information technology systems to independently take production decisions); c) implementation of CALS-technologies which include formalization of market research processes and assessment of the conformity of engineering and

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manufacturing capabilities to customer requirements, automation of the processes of preparation for the production of new products, automatic informing the information measurement systems about the production processes flow, as well as about the accompanying material and financial flows, automatic control of quality parameters, automatic informing the manufacturer about the need for disposal and replacement of products that are out of service at the consumer’s site, widespread use of describing and reengineering of business processes that form the basis for building a modern production system of an enterprise and a realistic organizational and economic model, formation of powerful data-processing centers (servers) with appropriate software. d) the use of modern organizational and economic methods and concepts of improving production systems should be based on a gradual phased implementation of all spectrum of positive innovations contained within through implementation of successive projects based on building and using the methods of Six Sigma concept. Only in this case will it be possible to avoid discrediting the positive experience of reforming production systems that may occur in the case of attempts to make changes on the whole front of umbrella concepts in the absence of experience, staff support and the necessary financial resources.

References Laloux, F.: Otkryvaia organizatsii budushchego [Reinventing organizations: A Guide to Creating Organizations Inspired by the Next Stage of Human Consciousness]. Mann, Ivanov & Ferber, Moscow (2017) Maslow, A.H.: Motivatsiya i lichnost [Motivation and Personality], 3rd edn. Piter, Moscow (2013) McGregor, D.: The Human Side of Enterprise. Annotated Edition, 1st edn. McGraw-Hill Education, London (2006) Semler, R.: Maverik. Istoriya uspekha samoi neobychnoi kompanii v mire [A Success Story Behind the World’s Most Unusual Workplace]. Dobraya Kniga, Moscow (2018) Torbert, W.: Issledovanie deistviev. Liderstvo na ostrie nastoyashchego. [Action Inquiry: The Secret of Timely and Transforming Leadership]. Mann, Ivanov & Ferber, Moscow (2019) Piaget, J.: Isbrannyie psikhologicheskie trudy [La Psychologie De L’intelligence]. Prosveshchenie, Moscow (1969) Graves, C.W.: Levels of existence: an open system theory of values. J. Humanistic Psychol. Fall 10(2), 131–154 (1970) Senge, P.: Pyataya distsiplina. Iskusstvo I praktika obuchayushcheysia organizatsii. [The Fifth Discipline: The Art and Practice of the Learning Organization]. Mann, Ivanov & Ferber, Moscow (2018) Tarasov, I.V.: Industriya 4.0: poniatiyem kontseptsii, tendentsii razvitiya [Industry 4.0: notion, concepts and tendencies of development]. Strategii biznesa 6(50), 57–63 (2018) Kupriyanovsky, V.P., Namiot, D.E., Sinyagov, S.A.: Cyber-physical systems as the basis of the digital economy. Int. J. Open Inf. Technol. 4(2), 18–25 (2016) Ipi 4.0. INNOPROM-2017 (2020). http://frprf.ru/ipi/. Accessed 05 Feb 2020

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PWC: The world overview of implementation of the concept “Industry 4.0” for 2016 (2020). Available at: https://www.pwc.ru/ru/technology/assets/global_industry-2016_rus.pdf. Accessed 05 Feb 2020 Sudov, E.V., Levin, A.I.: Kontseptsiya razvitiya CALS-tekhologiy v promyshlennosti Rossii [The concept of development of CALS-technologies in Russia’s industry] NRS for CALS technologies. Applied logistics, Moscow (2002) Klochkov, V.V.: CALS-tekhnologii v aviatsionnoy promyshlennosti: organizatsionnoekonomicheskie aspekty [CALS technologies in the aircraft industry: organizational and economic aspects]. Moscow State Forest University Publ, Moscow (2008) Sazonov, A.A., Dzhamay, V.V., Povekvechnykh, S.A.: Analiz effektivnosti vnedreniya CALS tekhnologiy (na primere otechestvennogo aviastroeniya) [Analysis of effectiveness of implementing CALS technologies (by the example of the Russian aircraft industry)]. Organizator proizvodstva 26(1), 84–92 (2018) Kruglov, M.G.: Innovatsionnyy proekt: upravlenie kachestvom i effektivnost’yu: ucheb. Posobie. [Innovative project: managing quality and effectiveness]. Delo, ANKh, Moscow (2009) Kazintsev, A.V.: Shest’ Sigm v Rossii. Metodika snizheniya poter’, defektov, izderzhek. [Six Sigma in Russia. Methodology of reducing losses, defects and costs]. Novosti, Moscow (2009) Watson, G.: Metodologiya «Shest’ sigm» dlya liderov, ili Kak dostich’ 3.4 defekta na million vozmozhnostey [Six Sigma for Business Leaders. A Guide to Implementation]. In: Adler, Y. P.(ed.) RIA “Standarty i kachestvo, Moscow (2006)

The Role of Technological Entrepreneurship in the System of Regional Economy: Problems and Perspectives of Development Elza I. Mantaeva(&) , Viktoriya S. Goldenova , Inna V. Slobodchikova , and Inna V. Avadaeva Kalmyk State University, Elista, Russia [email protected], [email protected], [email protected], [email protected]

Abstract. Purpose: The purpose of the paper is to show the necessity for strengthening the role of scientific and educational establishments as centers of formation of technological, managerial, and innovative competencies and for forming an innovative ecosystem as an environment of technological entrepreneurship functioning. Methodology: The methodological basis of the research includes the key concepts and postulates that were developed within the theory of innovations and innovative behavior, the theory of technological modes, the theory of institutional economics, state regulation of economy, etc. Conclusions: It is shown – by the example of Kalmyk State University, a flagship regional university – which role could be performed by educational structures in formation of a region’s innovative ecosystem as an environment of technological entrepreneurship functioning. It is substantiated that government has to create conditions in which technological entrepreneurship will become not only the customer of skilled personnel, which have innovative, managerial, and technological competencies, but also the customer of scientific research conducted by educational establishments. That’s why business’s interest in financing of university’s scientific research should come to the foreground. Originality: It is proved that close cooperation between entrepreneurial, educational, and government structures is a foundation of increase of the investment and innovative activity in a region. It is offered to create a technological cluster, which key participant is a scientific & educational establishment – as a platform of development of technological entrepreneurship in a region, which is to consolidate the efforts of entrepreneurial, educational, and government structures. Keywords: Technological entrepreneurship
Innovative ecosystem Innovative development
Innovative policy
Regional economy JEL Code: O38





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1 Introduction The end of the 20th century saw a new stage of development of the leading countries of the world. Its specific feature was the transition to the Fifth technological mode, which is peculiar for active use of information and communication technologies, bio- and nano-technologies, genetic engineering, and renewable energy sources, which is reflected in top-priority directions of development of science and technology. At present, the world economy is at the threshold of the Sixth technological mode, which contours start forming in developed countries of the world – primarily, the USA, Japan, and China. The systemic feature of the new technological mode is the vector of development and application of science-driven – so called “smart” – technologies (Kablov 2010). In its turn, transition to the knowledge-driven economy leads to increase of certain problems of the world economy, which include sustainable development of economic systems, development and implementation of social innovations, development and implementation of renewable energy sources, etc. Thus, the demand for knowledgedriven technologies and products for satisfying the growing materials and social needs grows. All this predetermines the modern vector of development of human civilization in the near future. Structural change of the determinants of the external and internal environments of economic systems as a result of technological progress leads to domination of development of the technosphere, which is a totality of artificial systems that were created by human. The result of such development is appearance of a completely new type of founders of business, which have new technological, managerial, and innovative competencies. Economic subjects with such competencies become the representatives of technological entrepreneurship. One of the reasons of a rather low level of innovative activity of economic subjects in the Russian economy is low level of technological entrepreneurship. According to certain researchers, most technological startups end in bankruptcy in the first five years; in 80% of the cases, the causes of failures are problems of marketing and management, as well as capitalization of assets. As scientific and educational establishments are the centers of formation of technological, managerial, and innovative competencies, there appears a necessity for specifying their role in formation of an innovative ecosystem.

2 Methodology The necessity for increasing the role of technological entrepreneurship in region’s socio-economic development is proved has been proved in the works Bystrov (2019), Kalyazin (2019), Kichigin (2018), Korchagina (2019), and Ramazanova (2012). The necessity for consolidating the efforts of educational, entrepreneurial, and government structures in development of technological entrepreneurship in a region has been pointed out in Vershitsky and Vershitskaya (2019) and Volkov and Akimova (2019). The methodological basis of the research includes the key concepts and postulates that were developed within the theory of innovations and innovative behavior, the

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theory of technological modes, the theory of institutional economics, state regulation of economy, etc.

3 Results As a rule, public awareness does not see the connection between successful technological companies and higher educational establishments. However, universities have traditionally been the centers of generation of innovations and the places of appearance and transfer of new knowledge. The highest concentration of young people who have large demand for technological, managerial, and innovative competencies is also observed in universities. It should be noted that scientific research that are conducted in universities could be divided into the following types. Firstly, fundamental studies, which are the source of formation of completely new theories and directions of development of science and technology and which determine the directions of technological progress. This type of the research is very expensive and requires unique equipment and skilled personnel; however, it does not bring any profit. As a rule, only developed countries, which could allow financing fundamental science through large budget expenditures conduct such research. The results of fundamental studies are narrow scientific directions, which could be used in practice. Thus, applied science is formed; its results are more subject to commercialization and are to create new products or services or create new attributes of products and services that are required by consumers. The period of applied research is shorter and cheaper than the period of the corresponding fundamental study (Kichigin 2018). Thus, fundamental studies are the basis for applied science, which results are reflected in various types of technological entrepreneurship. A large potential of technological entrepreneurship for regional economic systems consists in creation of completely new technologies, products, and services, which do not have any rivals in the market (Bystrov 2019). This stimulates region’s economic growth, changes the structure of economy, and raises the territory’s investment attractiveness. Experience of developed countries confirms that the level of development of technological entrepreneurship is one of the most important indicators of the level of regional development. Therefore, it is necessary to strengthen the role of universities in development of technological entrepreneurship; government has to create favorable conditions for universities’ innovative activities and for commercialization of these innovations. In the modern conditions, creation of a system of flagship universities in Russia envisages their positioning as the centers of region’s innovative eco-systems (Korchagina 2019). In the Republic of Kalmykia, the central role in the region’s socioeconomic development belongs to the republic’s only university. As of now, the role of Kalmyk State University consists in its being the center of the system of higher education, advanced training and staff retraining, scientific and innovative activities, and cultural development of the territory. At present, regional universities face the tasks of not only provision of high-quality education and scientific research but also of independent attraction of resources for these activities. Thus, if a university has not acquired the status of federal or research university, it will have to change its

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specialization for the purpose of increasing its innovative potential. This leads to qualitative transformation of regional universities in the direction of more active cooperation with the local community and the search for resources for implementation of the set tasks. Kalmyk State University is the central research platform of the republic. It is oriented at formation of top-priority directions of socio-economic development of the region. The University has been cooperating with the Fund for Innovations Support. The University is the main platform for competitions “U.M.N.I.K.” and “START” of the annual forum “Innovative Kalmykia”, which gather the best innovators of the South of Russia. The University has a network of small innovative companies, which are vivid examples of technological entrepreneurship in the region. The University’s center for collective use “Biovet” is the only place in the region where it is possible to study genetic typing, perform identification of animals, immunogenotypic analysis of cattle breed, independent certificate analysis of samples of animal or vegetative origin, etc. (Report 2018). These are the elements of the innovative ecosystem that was formed based on the University. Apart from the above, Kalmyk State University has the leading role in the region’s socio-economic development. One example of this is the University’s participation in a range of strategic projects of the Republic of Kalmykia. The University’s scholars developed the Strategy of socio-economic development of the Republic of Kalmykia until 2030. The Strategy of socio-economic development of the Republic of Kalmykia until 2030 justified the role of scientific and educational establishments as the main driving force of formation of the region’s innovative ecosystem and of development of the region’s technological entrepreneurship. Innovative and entrepreneurial activities become a perspective direction of the University’s development in the current conditions. The tasks of this direction include formation of the region’s innovative ecosystem, stimulation of technological entrepreneurship’s development, support for innovative activities, search and development of talented youth as the basis of HR potential of technological entrepreneurship, and formation of technological, managerial, and innovative competencies of future entrepreneurs. A vivid example of these activities is the Fudnet project, which initiator is the Agency for strategic initiatives. Within this project, the following perspective innovative directions are to be implemented (Report 2018). • “Smart” agriculture. A segment of technological solutions for effective crop research and cattle breeding: automatization and robotization, navigation, AI, “Big Data”, and other digital technologies. • Accelerated selection. A segment of new sorts of agricultural plants and animal breeds, obtained with the help of the technologies of genetic modeling of organisms with the set requirements, as well as solutions and services of accelerated selection. • New sources of raw materials. A segment of products of processing of new types of biological resources, including biomass from sea weed and insects (fused protection), waste, pseudo-cereal and cell cultures (also for production of feed additives, bioplastics, and biologically active substances).

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• Accessible organics. A segment of biological substances for agriculture, including high-quality forage, feed additives, and drugs for veterinary use, as well as pesticides and agrichemicals of the biological origin and organic food. • Personalized nutrition. A segment of technologies of analysis of food and micronutrient status of human, including with the help of genome and post-genome methods, personalized food products, services of individual rations selection, and innovative services of delivery. The performed studies show that the share of universities in Russia that are partners in technological entrepreneurship is very small (Vershitsky and Vershitskaya 2019). As the external experience shows, the level of cooperation of technological entrepreneurship and higher educational establishments is much higher in developed countries. The possible mutually beneficial reasons of such high level of cooperation of technological business and universities in the world practice could be distinguished: 1) universities are the main supplier of skilled personnel, which could be trained according to the business’s demands; 2) educational establishments are the original source of scientific ideas and the basis for innovative developments; 3) universities could be a platform for creation of technological startups. Mutually beneficial cooperation of universities and entrepreneurship could bring significant social, cultural, and financial results (Kalyazina 2019). Educational establishments could perform an important role in regions’ socio-economic development, performing their direct tasks – in particular, training of skilled personnel for labor markets – and satisfying the technological needs of the territory and producing knowledge that will result in technological entrepreneurship. The world experience shows that increase of regional cooperation with education and business in the modern conditions becomes an important success factor. However, trust between the potential partners becomes the main problem of development of cooperation between universities and business (Badzicska 2016). This is seen in the modern relations of educational and entrepreneurial structures. Asymmetric information on the research conducted in higher educational establishments leads to mismatch between demand and offer in the market of technological innovations, which results in low commercialization of technological developments and low level of patenting (Vershitsky and Vershitskaya 2019). One of the main problems of technological development of Russia is lack of cooperation in technological business and absence of interest in cooperation between the participants of hi-tech market. Cooperation of science, universities, and technological companies allows increasing the share of private financing and replacing budget allocations with it. Fundamental science is the basis for applied innovative and hi-tech developments. The world economy has a lot of examples when startups based on universities became successful large businesses. A university that cooperates with real business becomes a driver of region’s or country’s economic well-being, and business involved in cooperation with the academic environment creates and realizes unique intellectual products.

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4 Recommendations Effective promotion of innovations could be ensured only on the basis of close cooperation with educational and entrepreneurial structures. The key role in this process should belong to government – however, just financing of scientific activities by means of the state budget is not enough. Government has to created conditions in which technological entrepreneurship will become not only the customer of skilled personnel with innovative, managerial, and technological competencies but also the customer of scientific research conducted by educational establishments. That’s why business’s interest in financing of university’s scientific research comes to the foreground. Here government could use such tools of state stimulation as state guarantees and orders and the measures on increasing the public status of research activities of universities for the territories’ innovative development. As for regions, the regional innovative policy should aim at formation of an effective innovative ecosystem, which would stimulate the dissemination and successful functioning of technological entrepreneurship. The positive consequences of such policy will include growth of competitiveness of local goods and services, increase of the number of created jobs, increase of territory’s investment attractiveness, and solving of a lot of socio-economic tasks of regional development. The main task is creation of a necessary institutional environment for innovative activities, which envisages creation of the corresponding regulatory basis, development of target programs, creation of a system of grant support, etc. The main tasks of regional target programs should stimulate cooperation of the subjects of demand and offer of research activities, dissemination of the best practices of creation of innovative products, and development of a common strategy of innovative processes in the region. If own resources for regional and federal financing of scientific research are not sufficient, government must create conditions in which entrepreneurial structures would gain profit from participation in the innovative processes that take place in universities. Close cooperation of entrepreneurial, educational, and government structures should become a guarantee of increase of the investment and innovative activity in a region. Another top-priority direction of development of technological entrepreneurship at the regional level is creation and development of a technological platform which would consolidate the efforts of entrepreneurial, educational and government structures. This could be implemented within the cluster approach by creating and developing a technological cluster, which activities’ directions will determine the vectors of development of top-priority spheres and complexes of region’s economy. University in the status of a flagship regional university could become the key participant of the technological cluster, solving the tasks of reproduction of intellectual potential of a region and its effective use in the innovative activities. The result of creation of a technological cluster could be formation of an effective innovative ecosystem of the region, increase of the territory’s investment attractiveness, reduction of educational migration, growth of revenues of the regional and local budgets, etc.

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References Alvedalen, J., Boschma, R.: A critical review of entrepreneurial ecosystems research: towards a future research agenda. Eur. Plan. Stud. 25(6), 887–903 (2017). https://doi.org/10.1080/ 09654313.2017.1299694 Badzicska, E.: The concept of technological entrepreneurship: the example of business implementation. Entrepreneurial Bus. Econ. Rev. 4(3), 57–72 (2016) Bailetti, T.: Technology entrepreneurship: overview, definition, and distinctive aspects. Technol. Innov. Manag. Rev. 2(2), 5–12 (2012) Montiel-Campos, H., Palma-Chorres, Y.M.: Technological entrepreneurship: a multilevel study. J. Technol. Manag. Innov. 11(3), 77–83 (2016) Nacu, C.M., Avasilcгi, S.: Technological entrepreneurship: success factors as perceived by potential young entrepreneurs. Adv. Mater. Res. 837, 639–644 (2014) Bystrov, O.F.: Tekhnologicheskoe predprinimatel’stvo: risk provala startapa (Technological entrepreneurship: a risk of startup’s failure). Ekonomicheskie i sotsial’no-gumanitarnye issledovaniya (Econ. Socio-Humanitarian Res.) 1(21), 25–30 (2019) Vershitsky, A.V., Vershitskaya, E.R.: Problemy kooperatsii mezhdu universitetami, naukoy i tekhnologicheskim predprinimatel’stvom (Problems of cooperation with universities, science and technological entrepreneurship). Servis v Rossii i za rubezhom (Serv. Russia Abroad) 13 (2), 162–170 (2019). https://doi.org/10.24411/1995-042x-2019-10215 Volkov, S.K., Akimova, O.E.: Opornye universitety kak tsentry razvitiya tekhnologicheskogo predprinimatel’stva [Flagship universities as centers of technological entrepreneurship development]. Universitetskoe upravlenie: praktika i analiz. 23(3), 30–39 (2019) Kavlov, E.N.: Shestoy tekhnologicheskiy uklad [The Sixth technological mode]. Nauka i zhizn 4, 2–7 (2010) Kalyazina, E.G.: Tekhnologicheskie trendy v predprinimatel’stve [Technological trends in entrepreneurship]. Colloquium-J. 11–4(35), 40–41 (2019) Kichigin, I.N.: K voprosu o molodezhnom tekhnologicheskom predprinimatel’stve [Regarding the issue of youth technological entrepreneurship]. Sotsial’nye i gumanitarnye nauki: teoriya i praktika 1(2), 298–303 (2018) Korchagina, I.V.: Molodezhnoe tekhnologicheskoe predprinimatel’stvo v ekosisteme innovatsionnogo razvitiya regiona. Korporativnoe upravlenie i innovatsionnoe razvitie ekonomiki Severa [Youth technological entrepreneurship in the ecosystem of region’s innovative development. Corporate management and innovative development of economy of the North]. Vestnik Nauchno-issledovatel’skogo tsentra korporativnogo prava, upravleniya i venchurnogo investirovaniya Syktyvkarskogo gosudarstvennogo universiteta 2(33), 96–103 (2019). https://doi.org/10.34130/2070-4992-2019-2-96-103 Report on self-research of Kalmyk State University for 2018 Ramazanova, A.K.: Tendentsii razvitiya innovatsionnoy deyatel’nosti v Rossiyskoy Federatsii [Tendencies of development of the innovative activities in the Russian Federation]. Intellkt. Innovatsii. Investitsii 3, 46–49 (2012) Strategy of socio-economic development of the Republic of Kalmykia until 2030 (adopted by the Decree of the Government of the Republic of Kalmykia on 29 December 2019)

Application of Fuzzy Inference Methodology in the Problem of Choosing an Effective Investment Project Pavel V. Tereliansky1(&) , Sergey Yu. Kuznecov2 and Anastasia V. Kostikova2

,

1

2

State University of Management, Moscow, Russian Federation [email protected] Volgograd State Technical University, Volgograd, Russian Federation [email protected]

Abstract. The paper considers the possibility of using the fuzzy set methodology in the problems of analyzing the effectiveness of investment projects. As an example, the authors provide a solution to the problem of comparative analysis of four investment projects: purchase of new equipment at their own expense, modification of equipment to reduce costs, purchase of equipment at the expense of credit funds, registration of equipment for leasing with subsequent redemption. On the basis of standard performance indicators (present value, payback period, profitability), the procedure for fuzzy logical inference based on the rules is implemented. The degree of satisfaction of alternative solutions is characterized by the membership functions of the corresponding linguistic variable from the term set. Using a sequence of transformations, point estimates are calculated that allow you to rank alternative projects by the level of efficiency. The composite inference rule in a fuzzy environment is used to calculate the satisfaction of each alternative. The task is to identify the most effective project based on the fuzzy inference methodology. As a basis for implementing this technique, the authors formulate a rule base that contains fuzzy statements in the form of “If-then”, and membership functions for the corresponding linguistic terms. The given calculations establish the applicability of the methodology of the theory of fuzzy sets in the problems of comparative analysis of the effectiveness of economic solutions. Keywords: Investment projects Point estimates JEL Code: C65


Fuzzy sets
Inference rules
Term sets



D81

1 Introduction The effectiveness of long-term capital investment projects is evaluated by a group of standard scores that are calculated based on cost value and profits from project implementation (Belyakova 2006; Neshitoj et al. 2007; Gel’cer 2018). The shortcoming of this methodology is the need to use certain input data values generated by © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1413–1423, 2021. https://doi.org/10.1007/978-3-030-59126-7_155

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averaging basic parameters of projects; this may lead to biases of the estimates of summary performance and risk indicators. Besides, the requirement as to determinacy of the input data ultimately makes the task easier: investment is characterized by uncertainties that are responsible for project risks (Andrejchikov et al. 2004; Valdajcev et al. 2005; Pivkin et al. 1995; Kuznecova 2018).

2 Background and Methodology We shall give consideration to the task of comparison study of the four P1–P4 investment projects. Short semantic description of the project activities is presented below. P1: P2: P3: P4:

Purchase of new industrial equipment by the owner through appropriation of his own funds; Modification of equipment and change of manufacturing flow charts for cost saving; Purchase of new equipment and process lines through the employment of loan funds; Leasing of new equipment and process lines with a purchase option.

Generally accepted criteria of investment performance have been selected for analysis: return on investment (ROI), net present value (NPV), payoff period (PP), profitability index (PI), internal rate of return (IRR) (Bogatin and Shvandar 2000; Podshivalenko et al. 2004), and, accordingly, initial investment volume (I). Numerical indicator values for projects P1–P4 are brought together in Table 1. We shall note that these values are not estimated values, and are presented as an example and initial data for the demonstration of methods. Table 1. Numerical representation of investment project parameters Project ROI, % 32 P1 P2 47 P3 23 P4 44 Source: compiled

NPV, million rubles 32.7 59.9 18.4 58 by the authors

PP, years PI IRR, % I, million rubles 5 1.7 36 18.8 4.4 2.3 48 25.7 5 1.4 31 13.14 4.4 2.2 52 26.36

The task is to identify the most effective project. The shortcoming of the classical methodology of investment analysis is the need to use certain input data values generated by averaging basic parameters of projects; this may lead to biases of the estimates of summary performance and risk indicators. Besides, the requirement as to determinacy of the input data ultimately makes the task easier: investment is characterized by many uncertainties that are actually responsible for the risk. In addition, it should be pointed out that the estimates are specifically chosen to highlight the

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diversity of projects being studied as strongly as possible. In the context of real economic objectives, no such clear data differentiation can be observed. In order to solve these problems, we shall turn to the theory of fuzzy sets, which is quite widely used in solving problems from various domain areas. This methodology is based on the concept of a fuzzy number. Any fuzzy number has a normal convex membership function in interval [0..1] and is a subset of a set of real numbers. When an applied problem is set up, the interval of values of indicator under consideration and is most expected value is taken as background information. These values define triangular fuzzy number Afuzzy = (amin, a0, amax). Further, the concept of fuzzy function can be defined as a display of a noncountable set of fuzzy numbers on the axis of real numbers R. If all fuzzy numbers from the range of values of fuzzy function will be defined as triangular, we can present this fuzzy function by three line functions that are constructed through reference points of specified membership functions: Afuzzy ðtÞ ¼ ðamin ðtÞ; a0 ðtÞ; amax ðtÞÞ In general, the implementation of the methodology of fuzzy sets involves the following steps: fuzzyfication – defining fuzziness; operations with fuzzy numbers; composition of fuzzy sets; de-fuzzyfication of the display of a fuzzy number on a set of real numbers R. The computation algorithms with the use of fuzzy expert estimates differ in methods of fuzzyfication/de-fuzzyfication, the type of rules and logical operations used. Fuzzyfication is a method of displaying a set of values of variable x by membership function lð xÞ on an ordinary carrier [0..1], that is, conversion of a set of values x into fuzzy form. We should particularly note that the membership degree should not be regarded as a certain presentation of statistical probability. Since the cumulative distribution function is a priori and a posteriori unknown, or statistical analysis of experiments is impossible. Values of membership function lð xÞ may only be presented as tacit knowledge based on experience or intuition of experts (Andrejchikov et al. 2004; Borisov et al. 1990). Quantification of resulting quantitative estimates in the problem-solving process can be done using different methods. In particular, this may be an additive convolution of fuzzy estimates of analyzed objects for all categories, taking into account different significance of these criteria. Another approach to the solution is based on the use of the fuzzy logical conclusion methodology. The basis for computation using this methodology is a logical rule base containing logical rule-oriented expressions in the form of “If - Then”, and fuzzy membership functions for the linguistic variables used. A specific rule is formulated for each linguistic term of the output variable, and there is a rule in which this term is used as the left member of the syllogism for any term of the input variable (Pospelov 1986; Tereliansky and Andrejchikov 2007).

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The rules look as follows: Rm: IF (X1 is Ai1, …) AND/OR (… xn is Amn) THEN (Y is Bm) Where xk, k = 1..n are input variables; Rm is the m-th rule; m is the power of the rule base (cardinality of a rules base); Y is the output value; Aik is a set of well-defined fuzzy sets with well-defined membership functions.

3 Discussion and Results In the course of fuzzyfication, alternative projects were referred to fuzzy term-sets, which determine the level of their effectiveness according to the selected criteria (indicators) (Table 2): Table 2. The membership of alternatives in term sets Criteria Projects P1 NPV Satisfactory PI Good IRR Satisfactory ROI Good I Good

P2 Excellent Good Good Good Satisfactory

P3 Bad Bad Satisfactory Satisfactory Excellent

P4 Good Good Excellent Good Bad

These term sets were presented in the form of triangular fuzzy numbers that allow finding quantitative values of membership functions (Fig. 1). The software used was the Microsoft Office Excel 2003 spreadsheet processor, build 11.8404.8405, which is a very powerful and convenient tool for different types of computation and visualization of inputs and outputs of financial objectives (Madera 2019). Further, we shall decide about the degree of importance or relevance of criteria. Thus, NPV values have been declared by experts as “highly important” for project evaluation, criterion (PI) has been declared as “quite important”, IRR has been declared as “important”, and ROI indicator has been declared as “not very important”. The corresponding membership functions are shown in Fig. 2:

Application of Fuzzy Inference Methodology

плохая

удов

хорошая

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отличная

1 0.8 0.6 0.4 0.2 0

0

0.2

0.4

0.6

0.8

1

Fig. 1. Membership functions of criterion scores of alternatives in the form of triangular numbers

не оч важный (ROI)

1

довольн важный (PI)

важный (IRR)

оч важный (NPV)

0.8 0.6 0.4 0.2 0

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

Fig. 2. Membership functions of indicator importance factors

Now we can pass on to the calculation of summary fuzzy estimates of the membership degree of alternatives in a set of effective investment projects. We shall deduce estimates by constructing the membership functions in the form of triangular numbers, coordinated of which were calculated using the additive convolution of values of membership functions of alternatives according to criteria obtained above, and membership functions of criterion significance factors. Thus, for the first alternative: R0 1 ¼ 0; 2
0; 6 þ 0; 4
0; 2 þ 0; 2
0; 4 þ 0; 4
0 ¼ 0; 28 R00 1 ¼ 0; 6
1 þ 0; 8
0; 6 þ 0; 6
0; 8 þ 0; 8
0; 4 ¼ 1; 88

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R1 ¼ 0; 4
0; 8 þ 0; 6
0; 4 þ 0; 4
0; 6 þ 0; 6
0; 2 ¼ 0; 92 For the second alternative: R0 2 ¼ 0; 6
0; 6 þ 0; 4
0; 2 þ 0; 6
0; 4 þ 0; 6
0 ¼ 0; 68 R00 2 ¼ 1
1 þ 0; 8
0; 6 þ 0; 8
0; 8 þ 0; 8
0; 4 ¼ 2; 44 R2 ¼ 0; 8
0; 8 þ 0; 6
0; 4 þ 0; 6
0; 6 þ 0; 6
0; 2 ¼ 1; 36 For other projects, in a similar way: R0 3 ¼ 0; 08; R003 ¼ 1; 36; R3 ¼ 0; 56; R04 ¼ 0; 56; R004 ¼ 2; 4; R4 ¼ 1; 32: The result is shown in the Figure below:

1

А3

А1

А4

А2

0.5

1

1.5

2

0.8 0.6 0.4 0.2 0

0

2.5

3

Fig. 3. Functions of the membership of alternatives in a set of effective projects

The values of membership functions for each project are determined according to the graph as the coordinates of the point of intersection of the right boundary of the corresponding triangular number with the left boundary of the triangular number which represents the membership function of a better alternative. We shall deduce the following: µ1 = 0,77, µ2 = 1, µ3 = 0,47, µ4 = 0,98. Hence, the second project, that is, “Modification of equipment”, is the best one. The fourth project, “Leasing of new equipment”, ranks second, the project “Purchase of new industrial equipment by the owner through appropriation of his own funds” ranks third, and the project “Purchase of new equipment and process lines through the employment of loan funds” ranks fourth. We shall give consideration to solving the same problem with the use of a fuzzy inference. After the analysis of the input data for the submitted projects, experts formulated the following logical rules (production rules):

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R1: “IF (NPV is satisfactory) AND (IRR is good) AND (PP is good), THEN project is satisfactory; R2: “IF (NPV is satisfactory) AND (IRR is good) AND (PP is good) AND (PI is excellent), THEN project is good”; R3: “IF (NPV is excellent) AND (IRR is excellent) AND (PP is good) AND (ROI is good) AND (PI is satisfactory), THEN project is excellent”; R4: “IF (NPV is satisfactory) AND (IRR is good) AND (PP is good), THEN project is very good”; R5: “IF (NPV is good) AND (IRR is good) AND (PI is satisfactory), THEN project is satisfactory”; R6: “IF (NPV is satisfactory) AND (IRR is bad) AND (PP is satisfactory) AND (ROI is bad), THEN project is unsatisfactory”. For formalized rule writing, let us denote the performance measures by variables X1 – X5, the degree of satisfactoriness of variable Y of alternative project. Variable Y is given on discrete set J = {0; 0,1; 0,2; 0,3; 0,4; 0,5; 0,6; 0,7; 0,8; 0,9; 1}. Final values of Y are fuzzified by membership functions (Table 3). Table 3. Fuzzification of expert definitions Verbal definition Unsatisfactory Satisfactory Good Excellent

Analytic entry Value at x € J Description of membership function US 1–x µUS(x) S x µS(x) W x2 µW(x) P 1, IF x = 1, µp(x) 0, IF x 6¼ 1

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The set of projects to choose from is most specified by objects: U = {u1, u2, u3, u4}. The membership degree of alternatives in determined term sets of indicator values is determined (as shown in Fig. 3) by fuzzy subsets {Ai}, where A1 – is the net present value “high”, A2 is the “desirable” yield index, A3 is the internal rate of return “above average”, A4 is the “fast” payoff period, A5 is the “acceptable” return on investment: A1 A2 A3 A4 A5

= = = = =

{0,82/u1, 0,99/u2, 0,18/u3, 0,98/u4}; {0,48/u1, 0,85/u2, 0,27/u3, 0,8/u4}; {0,7/u1, 0,88/u2, 0,62/u3, 0,92/u4}; {0,36/u1, 0,47/u2, 0,36/u3, 0,47/u4}; {0,74/u1, 0,88/u2, 0,64/u3, 0,86/u4}.

The next stage is the calculation of the membership function µм1–µм6 for left parts with introduced rules R1–R6, as follows: Ri : lmi ðuÞ ¼ min ðlA ðuÞ; lB ðuÞ; lC ðuÞÞ; For example, see Fig. 3 for R1: µм1 (u) = min (µA (u), µB (u), µC (u)), we shall deduce M1 = {0,48/u1; 0,85/u2; 0,18/u3; 0,8/u4}. Mi for R2–R6. can be calculated in a similar way. Following the conversion, the base of used rules should be written down algebraically as analytic expressions (the authors use C-similar notation): R1: if (X == M1) then Y = S. Table 4 presents the correspondence of arguments and values of a function (Table 4) to form C-similar notations. Table 4. Consistency of arguments, values of a function and their verbal definitions Rule R1 R2 R3 R4 R5 R6

Equality of X to value… Assignment of value… to Y Verbal definition M1 S Satisfactory M2 W Good M3 P Excellent M4 US Unsatisfactory M5 S Satisfactory M6 US Unsatisfactory

The process of transformation of the applied rules, which are given in the form “If X == VERBAL_VALUE_1 or POINT_VALUE_1, then Y = VERBAL_VALUE_2 or POINT_VALUE_2” is carried out with the help of Lukasiewicz’s implication (Andrejchikov et al. 2004; Borisov et al. 1990): lD ðu; jÞ ¼ minð1; 1  lM ðuÞ þ lY ð jÞÞ:

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Each pair (uj) € U  J allows forming a number of fuzzy relations on a given set U  J, J = {0; 0,1; 0,2; 0,3; 0,4; 0,5; 0,6; 0,7; 0,8; 0,9; 1}: D1 ½ði; jÞ ¼ Min½1; 1  lMi ½ðiÞ þ J ½ð jÞ; where i = 1..n; n is the cardinality of a discrete set J (number of intervals in set J). j = 1..m; m – cardinality of a discrete set J (number of intervals in set J). Similar constructions are carried out for R2 – R6 rules to form relations D2, D3, D4,, D 5, D 6. As a result of the relational intersection D1, D2, D3, D4,, D5, D6 we obtain a general functional solution: D0 ¼ ½0; fn; mg; where n is the cardinality of a set U; m is the cardinality of a discrete set J (number of intervals in set J). In order to determine the degree of satisfactoriness of each alternative from the presented set of alternatives, we should use the rule of compositional conclusion in a fuzzy environment (Nedosekin 2003; Borisov et al. 1990): Ek ¼ Gk
D where Ek is the value of the degree of satisfactoriness of alternative k; Gk is the presentation of alternative k as a fuzzy subset on set U; D is the solution which is predetermined by a particular function. Then, the maximin convolution value should be determined lEk ð jÞ ¼ maxðminðlGk ðuÞ; lDk ðu; iÞÞÞ: It should be noted that in this case: lGk ðuÞ ¼ 0; u 6¼ uk ; lGk ðuÞ ¼ 1; u ¼ uk : Hence: lEk ðiÞ ¼ lDðuk; iÞ: In other words, in matrix D each k-th line will be the final fuzzy subset E1, E2, E3, E4 for projects from set U. According to the calculation procedure, the best alternative would be the one that has the maximum point estimation value. In this example, the maximum estimation value of 0.77 is given to the second alternative (P2: Modification of equipment and change of manufacturing flow charts for cost saving), which in the logic of our calculations will be taken as the optimum (best). The fourth project (P4: Leasing of new equipment and process lines with a purchase option) ranks second with the estimation

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value of 0.73. Project P1 (Purchase of new industrial equipment by the owner through appropriation of his own funds) ranks third. The worst alternative is project No. 3 (P3: Purchase of new equipment and process lines through the employment of loan funds). It should be noted that, although all estimated values of the degree of satisfactoriness of alternatives appear to be the values given in the interval scale, it is in fact a scale of a lower order – order scale (rank scale). And it is the rank of the decision that must be discussed in analytic reasoning.

4 Conclusions It is apparent that results that were obtained using the two methods give the same result. Hence, inference should be drawn that the methods of the fuzzy sets theory can be applied for solving problems that require evaluation of alternatives according to several criteria of a different nature. Considering the long-term implementation of investment projects, expert satisfaction with the values of indices of project effectiveness may vary over time due to external and internal factors. The authors proposed a concept of dynamic fuzzy sets for solving dynamic problems of assessing the indicators of complex systems (Kostikova et al. 2016). Fuzzy inference is complemented by a dynamic rule base, in which the primitive rule that was initiated at the moment in time to will be transformed: added, removed, or partially changed by the new moment in time tn (Kostikova and Skiter 2018). The dynamic solution to the problem of analyzing the efficiency of investment projects will be presented in further papers of the authors.

References Nedosekin, A.: Nechetkij finansovy`j menedzhment [Fuzzy financial management]. Audit i finansovy`j analiz, Moscow (2003) Pivkin, V.Ya., Bakulin, E.P., Koren`kov, D.I.: Nechetkie mnozhestva v sistemax upravleniya: uchebnik [Fuzzy Sets in Control Systems: A Textbook]. Science, Moscow (1995) Tereliansky, P.V., Andrejchikov, A.V.: Informacionny`e texnologii prognozirovaniya texnicheskix reshenij na osnove nechetkix i ierarxicheskix modelej: monografiya. [Information Technologies of Forecasting of Technical Solutions on the Basis of Fuzzy and Hierarchical Models: The Monograph]. VolgGTU, Volgograd (2007) Kostikova, A.V., Tereliansky, P.V., Shuvaev, A.V., Parakhina, V.N., Timoshenko, P.N.: Expert fuzzy modeling of dynamic properties of complex systems. ARPN J. Eng. Appl. Sci. 11(17), 10222–10230 (2016) Andrejchikov, A.V., Tereliansky, P.V., Shakhov, A.M.: Nechetkie modeli i sredstva dlya prinyatiya reshenij na nachal`ny`x e`tapax proektirovaniya monografiya [Fuzzy Models and Tools for Decision-Making at the Initial Stages of Design: The Monograph]. Science, Volgograd (2004) Belyakova, M.Yu.: Metody` ocenki i kriterii e`ffektivnosti investicionnogo proekta [Methods of evaluation and criteria for the effectiveness of an investment project]. Spravochnik e`konomista 3(1), 18–24 (2006)

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Bogatin, Yu.V., Shvandar, V.A.: Investicionny`j analiz: Uchebnoe posobie dlya vuzov [Investment Analysis: A Textbook for Universities]. YuNITI-DANA, Moscow (2000) Borisov, A.N., Kroumberg, O.A., Fedorov, I.P.: Prinyatie reshenij na osnove nechetkix modelej: primery` ispol`zovaniya: uchebnik [Decision-Making Based on Fuzzy Models: Use Cases: A Textbook]. Zinante, Riga (1990) Valdajcev, S.V., Vorob`ev, P.P.: Investici: ucheb. [Investments: A Textbook]. izdatel`stvo «Prospekt», Moscow (2005) Podshivalenko, G.P., Laxmetkina, N.I., Makarova, M.: Investici: uchebnoe posobie [Investments: A Textbook]. Knorus, Moscow (2004) Pospelov, D.A.: Nechetkie mnozhestva v modelyax upravleniya i iskusstvennogo intellekta: uchebnik [Fuzzy Sets in Control Models and Artificial Intelligence: A Textbook]. Nauka, Moscow (1986) Neshitoj, A.S.: Investicii: Uchebnik: 5-e izd., pererab. i ispr. Izdatel`sko-torgovaya korporaciya «Dashkov i K», Moscow (2007) Gel’cer, Yu.G.: Osnovy predskazuemoj ehkonomiki: Ehkonomika v svete obshchej teorii sistem [Fundamentals of Predictable Economics: Economics in the Light of General Systems Theory]. Lenand, Moscow (2018) Kostikova, A.V., Skiter, N.N.: Formirovanie dinamicheskoj bazy znanij sistem nechetkogo vyvoda dlja ocenki obektov, izmenjajushhihsja vo vremeni [Formation of a dynamic knowledge base of fuzzy inference systems for estimating changing in time objects]. EManagement 1(1), 52–59 (2018) Kuznecova, N.V.: Metody prinyatiya upravlencheskikh reshenij: Uchebnoe posobie [Methods of Making Managerial Decisions: A Textbook]. Infra-M, Moscow (2018) Madera, A.G.: Kolichestvennye metody razrabotki i prinyatiya reshenij v menedzhmente: Komp’yuternoe modelirovanie v Microsoft Excel. Praktikum [Quantitative Methods of Development and Decision-Making in Management: Computer Modeling in Microsoft Excel. Practicum]. Lenand, Moscow (2019)

Clickbaiting: Special Features of Advertising Communication Natalya F. Krylova1(&)

and Dybys S. Tashimkhanova2

1

2

The State University of Management, Moscow, Russia [email protected] L.N. Gumilyov Eurasian National University, Nur-Sultan, Kazakhstan [email protected]

Abstract. Consideration of the growing influence of the flow of information on human awareness implies the interest of researchers in studying the means, techniques and procedures used in manipulative texts, which may include interactive advertising. Modern communication conditions related to the digital environment trigger the formation of a new structure and composition of the advertising text, which uses expressive, creative headlines, often created in violation of language norms, to draw attention to its content. The digital advertising field, the key feature of which is its interactivity, is characterized by a wide range of ways and means of promoting a product or brand characteristic of the Internet communication. This paper presents the results of the study of clickbait headlines, special elements of the advertising text, whose task is not so much to update the content, the core of the subsequent news opportunity, but to rouse the curiosity in the users, to provoke them into seeing certain Internet content. Clickbait headlines have substantial manipulative potential and are of practical interest. The data for the research was the data of the Oknews website (http://oksnews.me/news/back#), where clickbaits are present in great numbers and variety, as contrasted with other websites or search engines that have their own advertising systems and moderate all advertisements. The analysis of studied clickbait headlines made it possible to describe their lexico-grammatic and pragmatic properties, identify and systematize linguistic means and language techniques of influence on the customer behavior of the readership, identify subject-based segments of the most active use of advertising clickbait. The study of the relationship between the headline and the rest of the advertising text made it possible to reveal a number of manipulative techniques and certain tactics of clickbaiting. Keywords: Clickbait headline
Clickbaiting Advertising
Manipulative techniques


Internet communication


JEL Code: Z13

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1424–1431, 2021. https://doi.org/10.1007/978-3-030-59126-7_156

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1 Introduction Digital technologies actively invade all areas of business, including advertising. The modern technology-centric environment is gradually actualizing the special communication features of advertising, which are related to its key feature – interactivity, possibility of direct interaction of the consumer with advertising. “For the successful promotion of a good or service, it is no longer enough to learn the target audience, it is important to communicate with it based on its digital preferences” (Gordin and Terekhova 2019).

2 Background and Methodology The following methods were used: general scientific methods of analysis and generalization of concepts, classification method, and linguistic methods of semantic-stylistic and interpretative analysis. New communication conditions related to the digital environment trigger the formation of a new structure and composition of the advertising text. A linear narrative is gradually replaced by a fragmented, fractional narrative. In the context of a vast amount of advertising information (“information noise”), a modern user is not able to comprehend everything offered to him/her, he/she “consumes” only the message that interested him/her, and does so by following the link. Internet platforms “allow to fragment content to the level of small units (nodes, nests) with a variety of links between them – links that make up the dispersed information space” (Sladkevich 2019). The number of “clicks” to links is an indicator of the success of advertising. This is precisely why headlines are very important and should attract attention of a person immediately. Language is able to adapt to modern communication conditions. Language researchers note the following trends in the development of the language of mass media – precedent text, simplification, the use of language game and evocative syntax (Nikolaeva 2017). All of these language peculiarities are primarily manifested in advertising headlines. It should be pointed out that vibrant, evocative headlines are characteristic of many literary and publicist texts, where authors use all linguistic means of expression to create vibrant images and achieve certain stylistic goals. News and advertising headlines that are expressive, creative, and sometimes even violate the language norms, are always interesting to readers as well. Headlines and sets of headlines are the subject of intense linguistic research. Scholars point out that headlines perform primarily a contact-establishing function. The most common methods of creating the first part of texts – headline – are personalization of the message, imitation of friendly communication, and irony (Kornilova and Prokhorova 2012). According to the mode of expression of semantic elements in the headlines, the scholars distinguish between the fully informative elements, which make semantic component fully actual, and partially informative, which do not make content and headlines fully actual (Shostak 1998). The second type of headlines is the so-called clickbait headlines (the term is derived from two words – “click” and “bait”),

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characterized by the highly evocative nature of expression, saturation with the evaluation vocabulary and often distortion of the meaning of the text, biased interpretation of facts. Hence, a clickbait headline becomes a “hook”, a “trap” for readers. Such headlines are aimed at persuading users to go to certain websites with information. The reference character of Internet advertising, when the text of the advertisement is perceived by the addressee as a system of references, is indicated in several research papers (Lazareva 2008, 2009). Successful, efficient clickbait ensure frequent attendance of website, web resource, generating profit (Bartysh 2017). The clickbaiting process is described as “creation of preliminary information as a “bait” for Internet users with a view to achieving the maximum number of “clicks” for click-through and attraction of audience to certain web resources” (Solov’ev 2018). In our opinion, clickbaiting may also refer to the process of jumping from one website to another using “nodes”, fragments of a clickbait network of advertising content proposed by its creators. Characteristics of clickbaits take into account the psychological qualities of an ordinary person: the headline should attract attention and maintain this interest; the next clicking step should be even more tempting and promising, and all information should intensify the personal attitude towards the advertisement, create the illusion of personal selection of information (Chanysheva 2016). The current attitude to clickbaits is highly ambiguous. In many countries, including Russia, clickbait headlines cause negative attitude, primarily because they misinform readers and often violate ethical norms. However, according to some scholars, vibrant and descriptive headlines respecting ethical norms and related to the subject of the text “do not cause rejection” (Sladkevich 2019) and may become “a good instrument for drawing of attention of readers” (Nikolaeva 2017). Scholars, in their study of clickbaiting, explore the provocative strategies of headlines in the ethical aspect (Frolova 2018), describe the means of creating false information (Vol’skaya 2018, 1; 2), characterize information technologies of semantic distortions (Chanysheva 2016), consider the features of clickbait headlines in various discourses (Gavrikova 2018), describe the possibilities of using clickbaiting in SEO (Vrublebsky 2020). The impact of the ever-increasing information flow on awareness and consumer interests of the readership, coupled with consideration of the manipulative potential of mass media discourse, necessitate the study of linguistic means, techniques and procedures used in manipulative texts, in scientific community. Identification, definition of linguistic and language manipulation tools will make it possible to develop effective ways to overcome or avoid manipulative influences on the readership. However, linguistic literature lacks a single, established and one-of classification of information manipulation methods and techniques. The study of clickbaiting as a powerful tool for manipulating interests, behavior, and world view of the readership, is a relatively new line of linguistic research, which is in its early stage of development in domestic science. The novel nature of our research is that, as a result of the analysis of previously unexamined empirical information used in interactive advertising of websites, linguistic means and language techniques of manipulation of the customer behavior of the readership have been identified and systematized, subject-based segments of the most

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active use of advertising clickbait have been identified, manipulative clickbaiting tactics have been identified and described. The results of our research, containing descriptions of lexico-grammatic and pragmatic properties of clickbait headlines of websites, manipulative techniques and tactics of clickbaiting, can contribute to the definition of the linguistic nature of clickbait, clarification of mechanisms for manipulating the interests and behavior of Internet users.

3 Discussion and Results Advertising clickbait is mainly used by the network of banner and contextual advertising for online shops and websites. On resources such as Yandex and Google, clickbaits are virtually absent, since these search engines check advertisements. Clickbait headlines for the target audience can be found in social media, but there are no apparent inconsistencies between the headline and the content of other texts (Sopina 2020). Oknews website data (http://oksnews.me/news/back#), where clickbaits are present in great numbers and variety, as contrasted with other websites or search engines that have their own advertising systems and moderate all advertisements, were used as an empirical basis of our research. A fairly large number of studied clickbaits are relevant to advertising of pharmaceuticals. All headlines are emotional and are usually accompanied by a photograph of a well-known media personality. Of course, headlines play a leading role in the context of the struggle for the attention of users, since they arouse interest in information that is hidden behind a clickbait, and are directly related to the number of “clicks”. The lexico-grammatic characteristics of clickbait headlines include: 1) 2) 3) 4)

inclusion of vibrant, visual epithets; use of exaggeration; use of fixed phrases, especially colloquial phrases; communication with readers on a first-name basis, creating the atmosphere of trust and intimacy; 5) imperative verb forms having the meaning of advice, recommendation, or wish; 6) often unmotivated use of punctuation marks drawing attention to “abnormality” in the first place; 7) conversational syntax, especially incomplete exclamation sentences conveying such emotions as excitement, surprise, joy of discovery. A number of manipulative techniques associated with clickbait headlines can be distinguished: – a mention of the efficiency of old, natural home remedies, referring to experience, positive and verified: “Shock! An ancient, long-forgotten remedy was revealed that has helped in curing diseases for generations”; – a mention of the efficiency of a drug for people who managed to preserve health in their declining years “an 83-year-old pensioner from Germany gave a recipe for

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joint pain”,: A 113-year-old Russian woman: “I always stay well because I’m regularly cleaning my blood vessels!”; – a mention of typical “age-specific” problems: heart diseases, blood vessel diseases, joint diseases, hearing diseases, vision diseases; excess weight; high blood pressure, baldness; – focus on the fact that the user will not be able to assess the reliability of the resource; – the use of “hook words” (cheap, free, pennyworth) that may catch the interest of a low-income user. Researchers point out that human curiosity serves as the psychological basis for creating headlines in network services, both news and advertising ones (Sladkevich 2019). This is confirmed by the results of the study of 100 million clickbait headlines on social networking platforms Facebook and Twitter conducted by Buzzsumo. According to the service, the most inviting phrases in the headlines are “Will make you…” and “This is precisely why…”, which are the link between the content itself and the potential impact on the user. Vibrant expressive words, emotional phrases such as “shock”, “will cheer you up” attract attention to the advertising text. The user engagement is much influenced by phrases that pique curiosity: “an incredible thing happened…”, “what happened next…” (According to our analysis…, 2017). Interested users click the links and are taken to resources, the names of which are fairly convincing at first glance, for example, “Portal of medical programs of Russia”. These portals are often faked, as evidenced by the following indicators: – use of colloquialisms; – presence of nonexistent interviews with actual medical experts who are well-known even to an ordinary person; – statistics on the incredible healing of patients who used the drug (conclusion of the falseness of statistical data can be made from a complete lack of information on the body that conducted the research and the time frames of this research); – presence of a claim that the product can be received absolutely free or at a great discount, which cannot be true as well. A mandatory component of such advertising clickbait network is a page with a great number of very emotional positive feedbacks from people whom this drug (or product) has helped. In addition, it provides information that can cause anxiety and even fear in the user, for example, claiming the absolute ineffectiveness of all other drugs and the possible a sad outcome if the drug advertised on the website is ignored. The creators of the advertisement assure users of the wide range of effects of the drug and the absence of side effects. Advertising clickbaits of a website are mainly (about 80% of headlines we have studied) related to human health, to living facilities in constant demand. In addition to medicinal or health products, there are clickbaits that are intended for users who would like to improve their financial situation. Products that can be easily used to allegedly make huge profits without effort are advertised most often.

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Another feature of this website is the falsification of regional news resources. The links contain specific geotags that track the location of the user’s device, so the advertisement includes the name of the city where the reader is actually located. Any links to the website, including its sections, “accounts” of users who wrote the comment, signing-in to the personal account (the architecture of such advertising texts and the means of “clustering” information are quite diverse) eventually refer to the same web page, where online order forms for goods or services are presented. Such urgency is clearly aimed at manipulating the will of a person with reduced critical thinking. The material we’ve been studying enabled us to reveal some of the clickbaiting tactics. 1. Inclusion of a reference to the opinion of famous media personalities (TV presenters, actors, etc.), who are certainly trusted by the public, in the advertising text. 2. The use of falsified fragments of top-rated TV shows about the advertised product in a clickbait chain. Such inclusion of a fake story in a real TV show allows maximizing the attention of users and increase their confidence in the advertised product. 3. Tactics of unexpected discovery of a product, and more often a new property of the already existing product. These tactics of presenting advertising information are based on strong positive emotions associated with the joy of learning, with the satisfaction of natural curiosity of a person. 4. The use of the most accurate quantitative index of effectiveness of a product, and the numbers that can be found in such advertising texts (e.g., 78%, 6 days, 14 drops, 63 kg, etc.), create the illusion of a thorough research performed by professional experts. 5. Quotations of speech of an expert in this field – a doctor, economist, athlete, etc. Lack of emotional component, use of certain terminology, precise data handling, and a certain restraint of presentation brings advertising text closer to informative. This presentation is certainly interesting precisely because of its “otherness” as compared to the rest of content. 6. Engaging in a possible dialogue. When this technique is used, the advertising “construct” includes an interrogatory sentence, and implies either a potential user response, which creates an atmosphere of intimacy and trust, or a click-through which introduces the reader to the opinion of another person. It can be either an ordinary person whom the user finds similar to himself/herself, or a famous person who has a certain credibility. 7. “Mr. Nice Guy” tactics which consist in the maximum emotional proximity between the user and the creators of the advertising text. As can be seen from the above, clickbaiting is an ethically controversial phenomenon of modern Internet communication in the field of advertising, which is associated with falsification of information and manipulative influence on the user, but, without doubt, is used actively. It is aimed at searching for unusual, contradictory, but effective forms, techniques and methods of cohesion of information segments of the advertising content. However, it should be mentioned that the Internet resources that advertise and promote products need to bear in mind that costs in public image from the misuse of clickbaits may lead to a loss of consumer trust.

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4 Conclusion The modern period of development is characterized by the ever-increasing flow of information, and the society is found involved in information exchange not only as a passive consumer of information received, but also as an active producer of information services. In a competitive information technology environment, senders need to find ways and techniques of drawing attention to published information, new forms of interaction between producers and consumers of products. The digital advertising field, the key feature of which is its interactivity, is characterized by a wide range of ways and means of promoting a product or brand characteristic of the Internet communication. Clickbaits may be referred to one of these means. The analysis of clickbait headlines of Oknews website made it possible to distinguish several manipulative techniques, to identify certain tactics that are used in clickbaiting. The data of this kind can be used in the practical study of Internet discourse in the mass media.

References Bartysh, R.: Clickbait in the media and on Youtube: how to attract audiences by goading curiosity? (2017). http://burguasia.com/chto-takoe-klikbejt-primery-i-opisaniya/. Accessed 13 Feb 2020 Vol’skaya, N.N.: Clickbait as a means of creating false information in internet communication. Electronic academic periodical “Mediaskop”, no. 2 (2018). http://www.mediascope.ru/2450. Accessed 13 Feb 2020 Vol’skaya, N.N.: Clickbait as a means of falsifying information in internet communication. Science and education. Collection of research papers, Moscow, pp. 121–124 (2018). https:// www.elibrary.ru/download/elibrary_35218068_41630685.pdf. Accessed 13 Feb 2020 Vrublebsky, S.: The use of clickbaiting in SEO (2020). http://great-world.ru/ispolzovanieklikbejtinga-v-seo/. Accessed 13 Feb 2020 Gavrikova, O.A.: Semantic distortion of information in clickbait headlines in political media discourse texts. Bull. Bashkir Univ. 1, 173–179 (2018). http://bulletin-bsu.com/archive/2018/ 1/28/. Accessed 13 Feb 2020 Gordin, V.V., Terekhova, A.E.: Digital advertising as a tool of promotion of a good or service. Project implementation experience. E-Manag. 2(3), 13–21 (2019). https://doi.org/10.26425/ 2658-3445-2019-3-13-21. Accessed 13 Feb 2020 Kornilova, N.A., Prokhorova, K.V.: Phatic markers in the headlines’ media test set. Bull. Univ. Perm. Russ. Foreign Philol. 4(20), 138–143 (2012). https://www.elibrary.ru/download/ elibrary_18241303_39091470.pdf. Accessed 19 Apr 2020 Lazareva, E.A., Tel’minov, G.N.: Internet advertising as an expression of intertextuality. Bull. South-Ural Univ. Ser. Linguist. 2(135), 19–23 (2009). https://www.elibrary.ru/download/ elibrary_11740682_31076943.pdf. Accessed 19 Apr 2020 Lazareva, E.A.: Constitutive features of internet advertising. Politicheskaya Lingvistika 3(26), 142–148 (2008). https://www.elibrary.ru/download/elibrary_11684851_70835091.pdf. Accessed 19 Apr 2020 We analyzed 100 million headlines. Here’s something that we managed to find out. http:// madcats.ru/mad-cats/clickbait_headlines/. Accessed 14 Feb 2020

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Nikolaeva, A.A.: Clickbait: defining the concept. Aktual’nye Problemy Stilistiki 3, 146–151 (2017). https://www.elibrary.ru/download/elibrary_36515725_54050729.pdf. Accessed 13 Feb 2020 Sladkevich, Zh.R.: Advertisement headlines in network media services: between information and clickbaiting. Medialingvistika 6(3), 353–368 (2019). https://doi.org/10.21638/spbu22.2019. 306. Accessed 13 Feb 2020 Solov’ev, A.: Clickbait headlines in advertising: use impossible to ignore. In: The Journalism 2018: Current State, Problems and Prospects, XX International Research-to-Practice Conference, Minsk, pp. 253–255 (2018). https://www.elibrary.ru/download/elibrary_ 36418229_35555245.pdf. Accessed 13 Feb 2020 Sopina, D.: Clickbait - what it is it? Examples of making a megaheadline (2020). https://postium. ru/klikbejt-chto-eto-primery/. Accessed 13 Feb 2020 Frolova, V.I.: Provocative strategies in the headline set of the mediatext: the ethical aspect. Bull. Volga Univ. Tatishchev 1(1), 152–162 (2018). https://cyberleninka.ru/article/n/ provokativnye-strategii-v-zagolovochnom-komplekse-mediateksta-eticheskiy-aspekt/viewer. Accessed 13 Feb 2020 Chanysheva, Z.Z.: Information technologies of semantic distortions in clickbait headlines. Bull. Perm Natl. Res. Polytech. Univ. Problemy Yazykoznaniya i Pedagogiki 4, 54–62 (2016). https://cyberleninka.ru/article/n/informatsionnye-tehnologii-smyslovyh-iskazheniy-vklikbeyt-zagolovkah/viewer. Accessed 13 Feb 2020

Corporate Portal of a Technopark as a Unified Communication Platform Valentina G. Smirnova1(&) , Zhanna K. Baziyan2 and Gabdelakhat R. Latfullin1 1

,

State University of Management, Moscow, Russian Federation [email protected], [email protected] 2 The Office of the Artsakh Republic President, Stepanakert, Republic of Armenia [email protected]

Abstract. The paper is concerned with justification of the need for creating a corporate portal of a technopark as a unified communication platform for the knowledge transfer between science, education, and business, which is a new stage in developing their integration and increasing the operating efficiency. The authors performed an analysis of tasks and functions of corporate portals used by Russian organizations. Features of technoparks were identified which served as a basis for the determination of the goal of creation and the key functions of the portal of a technopark. According to the goal of creating a portal of a technopark, which consists in enhancing integration through the knowledge transfer between its residents, the authors identified the following key functions of the portal: developing and maintaining a culture focused on exchange of knowledge, networking, learning. Based on the monitoring of modern products in the software market for the development of web portals and their user experience, basic tools were proposed that are required for the performance of the key functions. One of the most complex tasks that should be solved in order to turn the technopark into an innovative ecosystem and ensure the knowledge transfer between its residents, is the formation of special organizational culture, and primarily identification of its key values. According to the authors, that developing and maintaining a culture focused on exchange of knowledge, by means of a corporate portal of a technopark, should be based on the following key values: cooperation, openness, trust, team spirit, and creativity. Developed proposals for the creation of a corporate portal for technoparks, including the key functions, basic tools, the structure of the project for the development and implementation are notable for their novel nature, are of practical importance and can be used in Russian technoparks. Keywords: Technopark
Corporate portal
Communication platform Organizational culture
Knowledge transfer
Digital economy UDC: 005.5 JEL: O360


005.94


O320

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1432–1439, 2021. https://doi.org/10.1007/978-3-030-59126-7_157




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1 Introduction Technoparks are one of the most commonly encountered and effective forms of organizations worldwide that integrate science, education and production. Technopark is an organization consisting of universities, research institutions, big, medium-size and small companies, startups, venture capitalists, and other participants aimed at implementing all stages of the innovation process - from generation of ideas to their implementation, commercialization and manufacturing application of high-tech products - within a single territory (Baziyan and Smirnova 2018). Today, Russian technoparks offer their residents well-developed infrastructure with laboratories, expensive equipment, special-purpose premises, and manufacturing areas. In addition, residents are provided with various services such as consulting, assistance with registration of intellectual property rights, finding venture capitalists, market promotion of high-tech products, etc (Smirnova et al. 2019). However, conditions referred to above are not effective enough, if there is no innovative technopark ecosystem, that is, that special environment in which all its participants closely interact and form a community on the basis of a common communication platform. Such ecosystem increases the operating efficiency of every participant of a technopark due to a synergetic effect, which, in turn, is achieved during formal and informal interaction and the transfer of knowledge between them. It is the innovative ecosystem that makes the technopark a unique platform for creating innovations, where the best higher education institutions, research institutions and companies want to establish their branches. The transformation of Russian technoparks into innovative ecosystems is a pressing issue requiring a special solution. The creation of corporate portals and social media is one of the leading trends in the digital economy and has long been practiced by many companies, higher education institutions, public authorities and local self-government authorities as an effective tool of optimization of business and management processes as well as exchange and dissemination of knowledge. Not only big but also medium-size and small companies create corporate portals, giving precedence to less costly and complex technical solutions. However, the experience of their use in Russian technoparks is currently scant. According to the authors, the growing potential of modern communication platforms will allow bringing the integration and interaction of residents and partners of Russian technoparks to a new level, imparting a new quality to them, and intensifying the processes of knowledge creation and transfer. This task requires a study of the basic capabilities of the corporate portals that are already used by various organizations and, on this basis, development of recommendations for adapting them to the needs of technoparks according to their specifics.

2 Background and Methodology The creation of corporate portals traces its roots to the late 1990s with the development of information technologies as part of the implementation of the Web 2.0 concept (O’reilly 2007). Back then, a corporate portal was created as software designed

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exclusively for solving business tasks of an organization (Paquette 2005). Over two decades of their use, the range of tasks to be solved has significantly expanded, allowing to ensure the knowledge transfer, access of all corporate employees to knowledge, to develop communications, to carry out training. The most general definition of a corporate portal (or an “enterprise portal”) was formulated by the wellknown research and consulting company Gartner, according to which the corporate portal is an Internet technology which provides unified access to information, applications and processes of an organization (Gartner 2020). It should be noted that the terms “business portal”, “entrepreneurial portal”, and “business information portal” are often used in scientific literature along with the term “corporate portal” (Benbya et al. 2004). A modern “ecosystem approach” was used as the basic research method, which made it possible to examine a technopark as an innovative ecosystem, including scientific, educational and business organizations, as well as auxiliary structural elements (Ayres 2004; Isenberg 2010; Maxwell 2009; Moore 1993). According to it, all organizations of a technopark belonging to such an ecosystem interact on the basis of the principles of cooperation and collaboration and thus achieve a higher level of innovative development. In the course of the research, such methods were used as analysis and synthesis, scientific abstraction, systematic and complex approach, formalization, monitoring, etc. The authors used research papers of Russian and foreign scholars in the field of knowledge management and modern information technologies, as well as sources and materials, such as news and press releases of companies, proceedings of forums and conferences in which the following authors took part: Annual International Forum of Innovative Development “Open Innovations” in Skolkovo, All-Russian Forum “Mentor-2018”, Second International Scientific Forum “Step into the Future: Artificial Intelligence and the Digital Economy”, and others.

3 Discussion and Results Universities, research units of transnational corporations, research organizations, hightech companies, and startups operate in technoparks. All these organizations are legally independent, have different goals and objectives, different management structure and organizational culture. Moreover, they represent different stages of the innovation process. For example, a challenging idea that was generated in a student business incubator of the university can be materialized in the design and experimental department, and a large resident company can apply the off-the-shelf technology in manufacturing. If users of the corporate portal of a company or other organization are united by its mission, vision and goals, potential users of the portal of a technopark will represent a diverse community of scholars, entrepreneurs, researchers and developers with different goals and priorities. It is therefore necessary to define a common goal that would unite them. According to the authors, it is reputed that the goal of creating a corporate portal of a technopark consists in enhancing integration through the knowledge transfer

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between scholars, entrepreneurs, researchers and developers, employed in universities, resident companies and research organizations, or partners of a technopark. The portal of a technopark should be designed to facilitate implementation of this goal. Within this framework, the authors identified the key functions which must be performed by a corporate portal of a technopark. In addition, based on the monitoring of modern products presented in the software market for the development of web portals and their user experience in various companies, the basic tools were offered that are necessary for implementing them. The key functions of the corporate portal of a technopark are as follows: developing and maintaining a culture focused on exchange of knowledge, networking, learning. Developing and maintaining a culture focused on exchange of knowledge. Although each single resident organization has its own culture, a technopark plays a significant role in the establishment of an environment that would facilitate the mutually beneficial knowledge transfer. Organizational culture of a technopark can have a significant impact on motivating people working there to exchange knowledge. A study showed that currently no attention is paid to the issue of formation and maintenance of culture in Russian technoparks. The efforts of management, public authorities and institutes for development that are engaged in the management of a technopark are more focused on the activities of providing specialized services to the residents, as well as creating a convenient and modern physical infrastructure. The core of the culture of any organization is its values shared by all its members. They guide behavior of people and act as conditions for their interaction (Smirnova 2017). It is important to understand that companies, higher education institutions and research organizations have different cultures with its specific values. Furthermore, the values that are adopted, for example, in a higher education institution, can be fundamentally different from those of a private company. Things get complicated due to the fact that future values of culture of a technopark must be positively perceived and shared by all of its residents. Shared values determine the individual attitude to possession of knowledge and its subsequent transfer to another individual or entity. The choice of values for the formation of organizational culture of a technopark is determined by its mission to create innovations based on the deep integration of participants in the innovation process. According to the authors, the core values of culture of a technopark, focused on its implementation, should be cooperation, openness, trust, team spirit, creativity and commitment to results, and the corporate portal must contribute to their promotion. For example, posting news on the portal that employees of a research organization, working in a technopark, achieved significant results in their research, or the startup project under development in a technopark gained support of investors and entered the international market, can have a positive impact on the motivation of other residents to create, generate ideas, and intensify the research activity. In the context of development of a culture focused on exchange of knowledge, we should also emphasize a substantial potential of web forums, chat rooms, chats and other modern platforms. Here, the specialists working in a technopark, can hold “brainstorming sessions” and exchange experience, resulting in the generation of ideas, development of team spirit and trust. In addition, forums interface in modern corporate portals allows placing polls and votings in them, which turns them into interactive

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discussion spaces (Kozko 2017). It should be emphasized that the web forum becomes a kind of knowledge base over time, in which residents of a technopark can find answers to their questions which were already discussed at some time. In a general sense, networking implies establishing and maintaining relationship for the effective implementation of personal, business and organizational goals (Mararitsa 2014). Networking, as the basic function of the corporate portal of a technopark, represents the processes of establishing and maintaining mutually advantageous links of long-term partnership and cooperation, which are fundamental for the formation of the innovative technopark ecosystem. Formal and informal relations facilitating knowledge creation and transfer, as well as mechanisms and schemes of cooperation of participants, are established in a technopark. These may be either mechanisms of public and private partnership, commercialization of research results, contract studies, provision of consultation services to companies by the academic community of the university, creation of university spin-offs, etc. Thus, the creators of the startup from the academic setting are looking for an investor for their project, while venture capitalists and major companies are interested in buying them, because the development of an innovative technology or product by inhouse research units often requires relatively large financial, intellectual and time assets. Examples seem to indicate that high-tech companies that exercise their activity within a technopark are much more involved in cooperation with scientific and educational organizations than companies outside it. Another example may be the way companies that are interested in attracting highly skilled employees and young talents tend to place their branches and offices in a technopark, near well-known universities, thus becoming part of the growing innovative ecosystem. For potential residents, the prospect of placement in a technopark is of interest precisely due to the great networking opportunities it can provide. While networking was only possible through real-life communication prior to the development of information and communication technologies (see “Six degrees of separation” by Milgram and Travers as an example), today, it can be implemented within a portal of a technopark. The social network of a technopark can be a key instrument for performing this function, which will help to catalyze teamwork and facilitate the integration of the personal and professional circles of contacts of employees (Ellison et al. 2015; Ellison and Boyd 2013), which will facilitate the knowledge transfer within a technopark. The profiles of university employees should be presented here; scholars from research organizations, employees of resident hightech companies, as well as all those who work on the implementation of their business ideas and start-up projects in a technopark. The profile of each user may contain information about current projects, position held, competences, professional qualifications, experience, skills, as well as scientific and professional interests. All this is the so-called “metaknowledge”, which is knowledge about who has the right knowledge (“knowledge of who knows”) and knowledge of somebody who knows who has the right knowledge (“who knows of who knows”). According to some researchers in the field of knowledge management in organizations, it is the possession of such “metaknowledge” that contributes to the generation of new ideas and innovations (Leonardi 2015). From the perspective of socialization, it is important also to provide information

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about interests and hobbies of people working in a technopark, which can facilitate in organizing communities and interest and affinity groups within the corporate portal. In addition, the corporate portal will allow users to come to know about popular events in a timely manner. Thus, the portal may contain information on the services of a technopark, information on new residents, news about changes in legislation affecting the activities of residents, etc. Moreover, announcements of future events may be posted there. Thus, today, foreign and Russian technoparks regularly hold various events both for their residents and for a wide public: forums, conferences, roundtable discussions, trainings, master classes, workshops, presentations, exhibitions, etc., as well as various informal events facilitating communication and networking. Learning. A prerequisite for the implementation of the innovation process and the knowledge transfer within a technopark is the training of its participants. Today, leading Russian technoparks regularly hold various training events, such as conferences, lectures, seminars, webinars, workshops, trainings, courses, master classes, for those who would like to gain knowledge in the field of business activity, intellectual property protection, commercialization of research and development results, etc. It is common practice when entrepreneurs who passed a difficult path of creating their own technology, product or business in a given technopark, and seeking to transfer their knowledge and experience to newcomers, as well as scholars, university professors, representatives of state and municipal authorities, speak at such events. Today, the technical and software features of modern portals make it possible to hold most of these events online. Moreover, this format is often more convenient and efficient for participants, because it provides relatively more opportunities for interactivity and remote participation. Modern technoparks differ in size, income structure, number of residents and their employees, industry specialization and other parameters that will be determinants in the design of the corporate portal of a technopark. Based on the analysis of experience of other organizations and taking into account the characteristics of a technopark, the main stages of the project for the development and implementation of the portal of a technopark were defined. 1. Requirements Definition. At this stage, we should identify the needs for the corporate portal. Many developers of software for corporate portals offer a free license with limited functionality or a trial license for a certain period of time. Following the identification of needs, it is necessary to identify the goals, tasks, functional and technical requirements to the portal, its structural components, criteria and indices of effectiveness. In this case, it is extremely important to involve the residents of a technopark, since it is they who are the potential users of the portal. Residents should be interested in working with such software, and it should correspond to their preferences. Otherwise, there is a risk that it will be non-demanded. The residents can be involved in various forms, such as online polling and votings, questionnaires, discussions, and brainstorming sessions. 2. Platform Selection. It can be done on the basis of requirements for technical characteristics such as the cost of a license, the ability to work with web services and applications, the degree of integration of existing programs and applications, supported

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number of users, etc. For example, Microsoft (Microsoft Sharepoint), Oracle (Oracle Webcenter Suite), IBM (IBM Websphere) and SAP (SAP NetWeaver) are the top companies in the corporate portals market today, offering commercial licenses. At the same time, open platforms (Drupal, Jive, Plone, Jboss, Joomla!) - the so-called “opensource software”, which is a constructor for creating applications and programs, and users are free to use it without limitations. 3. Development and Installation. At this stage, the platform is actually developed, installed and configured; the information architecture of the portal is created, its structural components and interface tools are configured according to the results of the first stage, consultations with the platform manufacturer are held, design is elaborated, and the finished portal is tested. 4. Content Creation. In order to get the residents interested in working with a corporate portal, it is important to fill it with the necessary and topical content. It should be noted that the management of a technopark can initiate content creation only at the initial stages of its implementation. In the future, this should be done by users, because, like all other Web 2.0 systems, the portal will be improved and developed in proportion to how users contribute to its content. 5. Promotion. This is the most difficult stage, since there is a need to train and motivate potential residents and employees of a technopark to use the portal in their activities. For training, one can develop online manuals, guides, hold training seminars and much more. One of the ways to motivate is to develop a rating system. The latter implies awarding “stars”, rating points or expert titles to users who are most actively engaged in content creation and participate in the discussions of the web forum. 6. Feedback. Feedback is needed to improve operation of the portal, eliminate errors and problems that may arise during operation, and evaluate its effectiveness. Here, as in the first stage, it is important to hold online polling and votings to find out the opinion of users directly by communicating with them or by posting with the possibility of commenting on the social network. Furthermore, it is necessary to regularly analyze statistical data based on results of operation of the portal: number of connected users, topics on a web forum, created communities; number and quality of information specified in user profiles; time spent in the portal, posting activity, etc. This data will be indicative of the relevance of the portal among residents of a technopark and the effectiveness of its operation.

4 Conclusions The analysis of foreign and Russian experience in the creation and use of corporate portals in various organizations has shown that they can become an efficient instrument in the creation of a technopark as an innovative ecosystem. The presence of the basic components of the corporate portal as a single communication platform of a technopark proposed in the paper will make it a kernel of the innovative ecosystem, since it will contribute to strengthening cooperation ties between the scientific, educational and business organizations. Moreover, the creation of a corporate portal in a technopark

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will enhance informal communications between employees of organizations of a technopark and individual entrepreneurs implementing startup projects. Recommendations for the project structure and for the development and implementation of the portal of a technopark, as well as justification of its implementation stages, are of practical importance for Russian technoparks and can be used in Russian and foreign technoparks to improve the integration of scientific and research organizations, universities and companies.

References Ayres, R.: On the lifecycle metaphor: where ecology and economics diverge. Ecol. Econ. 48(4), 425–438 (2004) Baziyan, Zh., Smirnova, V.: Technopark as the innovation ecosystem of the digital economy. In: Proceedings of the 2nd International Science Forum “Stepping Into the Future: Artificial Intelligence and the Digital Economy”, Moscow, Russian Federation, vol. 2, pp. 127–132 (2018) Benbya, H., Belbaly, N., Passiante, G.: Corporate portal: a tool for knowledge management synchronization. Int. J. Inf. Manage. 24, 201–220 (2004) Ellison, N., Gibbs, J., Weber, M.: The use of enterprise social network sites for knowledge sharing in distributed organizations. Am. Behav. Sci. 59, 103–123 (2015) Ellison, N.B., Boyd, D.: Sociality through social network sites. In: Dutton, W.H. (ed.) The Oxford Handbook of Internet Studies, pp. 151–172. Oxford University Press, Oxford (2013) Gartner Glossary, Gartner Inc. https://www.gartner.com/en/information-technology/glossary/epenterprise-portal. Accessed 07 Jan 2020 Heymann, P., Garcia-Molina, H.: Collaborative creation of communal hierarchical taxonomies in social tagging systems. InfoLab Technical report (2006) Isenberg, D.: How to start an entrepreneurial revolution. Harv. Bus. Rev. 88(6), 41–50 (2010) Kozko, A.: Informational support of decision-making based on intellectual adaptive forum. Bull. South Ural State Univ. Ser. Comput. Technol. Autom. Control Radioelectron. 17, 5–14 (2017) Leonardi, P.M.: Ambient awareness and knowledge acquisition: using social media to learn “who knows what” and “who knows who”. MIS Q. 39(4), 747–762 (2015) Mararitsa, L.: Networking ability and behavior: understanding the phenomenon and its assessment. Petersburg Psychol. J. 9, 71–96 (2014) Maxwell, I.: Managing Sustainable Innovation: The Driver for Global Growth, vol. VIII. Springer, NewYork (2009). 200 p. Moore, J.: Predators and prey: a new ecology of competition. Harvard Bus. Rev. 71(3), 75–86 (1993) O’Reilly, T.: What is web 2.0: design patterns and business models for the next generation of software. Int. J. Digital Econ. 65, 17–37 (2007) Paquette, S.: Corporate portals for supply chain collaboration. J. Internet Commer. 4, 69–94 (2005) Smirnova, V., Latfullin, G., Baziyan, J., Sundukova, G., Shramchenko, T., Seidina, M.: Transfer of knowledge and its impact on integration processes in the technopark. In: International Conference on Man-Power-Law-Governance: Interdisciplinary Approaches (MPLG-IA 2019), pp. 214–219. Atlantis Press, New York (2019) Smirnova, V.G.: Organizational Culture: Textbook and Workbook for Academic Baccalaureate. Jurait, Moscow (2017)

Information and Networking Technologies in the System of Promotion of Hotel Services Mariya V. Maltseva(&) , Yuliya O. Tsunaeva Artur M. Arakelian, and Svetlana S. Galazova

,

State University of Management, Moscow, Russian Federation [email protected], [email protected], [email protected], [email protected]

Abstract. The paper discusses the role of information network technologies in hotel product promotion. The Interaction of companies with potential and actual customers in a virtual environment is deemed to be the basis for the development of modern hotel business. In the context of digitization of the economy, an efficient model of promotion of hotel services should be based on the introduction of advanced Internet marketing technologies, which increases confidence and efficiency of communication with customers, and allows involving users in content creation. Well-established communications with real and potential consumers via social media have high potential for the hotel business development, where the customer-oriented approach is a key factor of efficient activity of an organization. The task of finding customers and doing business via social media has long become a top-priority for modern companies. The analysis of corporate webpages of international hotel facilities based on social networking platforms Facebook and Instagram, as well as evaluation of their indices of marketing effectiveness in social media showed, that content quality is an overarching factor in increasing user engagement and community attractiveness. The use of user generated content by hotel operators, as well as the hybrid form of user generated content and professional content (Co-generated Content technology) in social media appears to be promising for the development of customer loyalty and engagement. User generated content creates confidence of the target audience, adds emotionality to the resource, and saves product promotion costs, while professional solution to technical issues ensure the quality of the created content. This yields a significant increase in efficiency of online communications as compared to traditional user involvement mechanisms through the use of higher-quality content and its conceptual integrity. Keywords: Promotion of hotel services
Internet marketing
Social media Social media marketing
Consent
Hotel chains
Marketing strategy JEL Code: L83


M31

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1440–1450, 2021. https://doi.org/10.1007/978-3-030-59126-7_158




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1 Introduction One of the trends determining the development of modern business is the interaction of companies with potential and actual customers in a virtual environment. The number of active users of social media and messengers increases from year to year by an average of 9%. Thus, in 2018, the number of social media users has reached 3.48 billion people, while in 2019 virtual space numbered 4.39 billion people (Wearesocial.com 2019). Communication with consumers via social media is an essential tool for the development of business for modern companies. This is particularly important in the hotel business, where focus on customer is a key factor of efficient economic activity of the organization. According to a survey held by Booking.com in 2019, 73% of Russian travelers are guided by online algorithms when choosing new travelling directions. The use of Internet technologies in the hospitality sector significantly improves the performance of communication with customers and leads to significant resource savings. Most contemporary hotel facilities exercise promotion via online channels, and maintaining communication with customers in social media is an effective marketing tool.

2 Methodology The methodological basis of the research consists in general scientific methods of the research, the method of statistical analysis, the method of quantitative and qualitative analysis, the method of comparative analysis, content analysis, as well as correlation analysis and the method of Spearman’s rank correlation. The target of the research is technologies of social media marketing of hotel facilities. The data posted on official web pages and corporate webpages in social media of hotel facilities, statistical data of the World Travel and Tourism Council, as well as results of research presented in academic papers, proceedings of research-topractice conferences, public web resources, and foreign sources, serve as the information base of the research. Popsters service for the collection of statistics and analysis of the information content of social network communities was used for the acquisition of information. The working hypothesis of the research is that in the modern context characterized by digitization of the economy, an efficient model of promotion of hotel services should be based on the introduction of advanced Internet marketing technologies, in particular, social media marketing, which increases confidence and efficiency of communication with customers and allows involving users in content creation.

3 Results Information technologies are invading all areas of public life. In the hotel business, these changes are particularly drastic. When choosing means of accommodation, a modern traveler focuses primarily on the availability of online feedback of the hotel, its Instagram account of the hotel and its presence in popular social media.

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Feedback in hotel industry is considered 48% more important than in other areas. The advantages of social media are that they function primarily as “word-of-mouth”. 76% of respondents will share photos of the hotel where they are staying, with friends, family and followers, while 83% of modern young people will book a hotel room if they have seen its photos on pages of their friends in social media (Siteminder.com 2019). Social media communications give the hotel such advantages as significant time savings, increased informedness of potential customers due to unlimited accessibility of information about hotel and its services, as well as the opportunity to promote its services worldwide, increasing the range of customers (Kotova et al. 2018). Each platform provides unique options for the use of social media. For example, Instagram visualizes hotel product, while Facebook and Twitter audiences respond actively to hotel news and guest surveys. Trust in the Internet source of information is pivotal in consumer choice and decision-making and should be used by companies in building social media communications. Travelers not only read and use information from social communities when choosing a hotel, but also post their comments in a virtual environment (Shen and Yeh 2020). The use of social media as a means of online communication allows completing several tasks at once: • • • • •

creation and promotion of brand image; building of brand awareness; expanding customer base, including via direct sales; quick propagation of viral information by means of repost mechanism; social proof, i.e. presence of hotel guests in communities that are created by the company itself (Gubareva and Simonova 2019).

Furthermore, the use of social media also affects corporate governance by changing approaches to information handling, supporting sales and loyalty, making it possible to analyze the effectiveness of marketing activities, and reducing costs for hotel product promotion. The increasing popularity of the use of social media in hotel and tourist industry clearly influences the portrait of a consumer service. An important feature of modern travelers is the high level of informedness, as well as the ability to get oriented quickly in market offers (Kalashnikova and Khanakhok 2019). This, on the one hand, increases the efficiency of marketing communications, since the target audience is already present in the information environment where the hotel can attract the attention of potential customers. On the other hand, this has a significant impact on competitiveness, because by browsing through pictures in Pinterest or Instagram, the traveler can quickly shift his/her attention to pictures of competitors and, consequently, their offers. The high level of informedness complements the profile of a modern traveler with such trait as sociability. Social media users more often than not contact not only hotel representatives but also other travelers to find certain information about the hotel. One of the most frequent queries in search engines is reviews of hotels, or questions asked in comments to photos and videos. It is at this stage that hotel facilities need to build

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successful communication with a potential customer to make him/her decide on purchasing a tourist service. The use of hashtags, which not only point to the webpage of the hotel, but also create a certain image of the network user, is a sufficiently effective means of attracting customers. For example, some travelers, in addition to a hashtag with the name of the hotel, can put a “hotel_name life” hashtag in their Twitter and Instagram accounts. Thus, other network followers will not only recognize the location where the photo they liked was made, but will also associate the hotel with a certain type of relaxation, which will have a positive impact on brand image. An important aspect of the modern world is the fact that trends appear spontaneously under the influence of the audience. For some hotel chains, it may be useful to monitor hashtags that are most relevant at a certain point in time. An important feature of the information space is that it combines diverse human activities into a common sociocultural and spatial-communicative environment. This gives marketing communications via social media such advantage as involvement of the off-target audience. For example, Pinterest photohosting service can provide photos of hotels by offering content-related subject collections and searching for semantic groups of keywords related to recreation or relaxation. In this research, consideration was given to indicators of Internet activity of the leading international hotel chains in social media: – – – – – – –

Accor Hotels; Four Seasons Hotels and Resorts; Hilton Hotels & Resorts; Hyatt Hotels Corporation; Inter Continental Hotels Group (Holiday Inn); Marriott International; Radisson Hotel Group.

The authors performed the analysis of corporate webpages of these hotels based on social networking platforms Facebook and Instagram. Popsters service for the collection of statistics and analysis of the information content of social network communities was also used for the acquisition of information. Consideration was given to such indicators of SMM promotion as the number of followers, the number of posts, the number of likes, reposts and comments. The user activity data are presented for 2019 (from 01.01.2019 till 31.12.2019). Analysis results are presented in Tables 1 and 2. The analysis showed that the number of followers of corporate web pages of hotel facilities based in social media is not a determining indicator of involvement of audience and communication performance.

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Table 1. Analysis of the content of corporate web pages of hotel facilities based on the social networking platform Instagram Hotel chain

Number of followers

Number of posts, 2019

Number of likes, 2019

Number of comments, 2019 75 34,972

Accor Hotels Four Seasons Hotels and Resorts Hilton Hotels & Resorts Hyatt Hotels Corporation Inter Continental Hotels Group (Holiday Inn) Marriott International Radisson Hotel Group

295,930 1,056,501

9 354

8,715 13,855,355

309,505 61,031 60,221

95 321 43

1,509,571 215,018 309,505

6,881 2,016 452

449,000 206,550

167 3 412

284,335 370,162

12,183 3,412

Table 2. Analysis of the content of corporate web pages of hotel facilities based on the social networking platform Facebook Hotel chain

Accor Hotels Four Seasons Hotels and Resorts Hilton Hotels & Resorts Hyatt Hotels Corporation Inter Continental Hotels Group (Holiday Inn) Marriott International Radisson Hotel Group

Number of followers 178,954 844,795

Number of posts, 2019 67 357

Number of likes, 2019 46,104 9,523,817

Number of reposts, 2019 2,886 107,746

Number of comments, 2019 548 30,951

1,889,500

27

4,565

150

52

678,624

309

1,490,349

30,790

7,850

1,078,254

55

9,847

446

1,039

2,612,301

99

15,240

783

4,322

130,964

104

166,466

3,122

1,430

In addition, consideration was given to indices of SMM effectiveness of hotel chains based on the social networking platform Facebook. The following indicators were determined: 1. Love Rate = Number of likes/Number of followers; 2. Talk Rate = Number of comments/Number of followers; 3. Amplification Rate = Number of reposts/Number of posts (Eremenko and Yu 2019). Table 3 presents the calculation data.

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Table 3. Evaluation of indices of SMM effectiveness of hotel chains based on the social networking platform Facebook Hotel chain

Number of followers

Accor Hotels Four Seasons Hotels and Resorts Hilton Hotels & Resorts Hyatt Hotels Corporation Inter Continental Hotels Group (Holiday Inn) Marriott International Radisson Hotel Group

Number of posts, 2019

Indicators reactions Love Rate 0.258 11.274

that reflect users’ Talk Rate 0.306 0.037

Amplification Rate 43.07 301.81

178,954 844,795

67 357

1,889,500 678,624

27 309

0.002 2.196

0.003 1.157

5.56 99.64

1,078,254

55

0.009

0.096

8.11

2,612,301 130,964

99 104

0.006 1.271

0.165 1.092

7.91 30.02

Evaluation showed that hotel chains that have large number of followers, but neglecting content of web pages and its quality have very low SMM effectiveness indices. The scattering graph was plotted to confirm the conclusions about the lack of direct connection between the number of followers and the engagement of the user audience (Fig. 1)

Fig. 1. Scattering graph (number of followers – propagation factor).

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The chart illustrates the lack of direct correlation between the selected variables (number of followers – propagation factor). Passive followers do not yield sales and reduce the engagement of the account. Table 4. Assessed rank correlation Hotel chain

Number of posts, 2019

Rank

Level of attractiveness to users

Rank

Deviation (d)

Accor Hotels Four Seasons Hotels and Resorts Hilton Hotels & Resorts Hyatt Hotels Corporation Inter Continental Hotels Group (Holiday Inn) Marriott International Radisson Hotel Group Total

67 357

3 7

0.258 11.274

4 7

1 0

Squared deviation ðd 2 Þ 1 0

27

1

0.002

1

0

0

309

6

2.196

6

0

0

55

2

0.009

3

1

1

99

4

0.006

2

2

4

104

5

1.271

5

0

0 6

Spearman’s rank correlation coefficient was then calculated for the following pair of indicators: the number of posts and the community attractiveness level (Table 4). h X  i rs ¼ 1  6  d2 =n n2  1 rs ¼ 1  ½6  6=7 ð47  1Þ ¼ 0:89 Spearman’s rank correlation coefficient was 0.89, having shown a fairly high relationship between the number of posts and the community attractiveness level. Thus, in SMM-promotion of hotel services, it seems promising to focus not so on the number of passive followers, but rather on increasing the level of activity and engagement of users due to qualitative content of social media pages. The content analysis of Instagram accounts of hotels revealed that vivid images and photographs were indeed an effective sales tool. Followers most frequently respond to images of other travelers. For example, in Instagram accounts of such hotel chains as Sofitel, about 80% of publications are photos of guests in various interiors of the hotel,

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and it is these photos are given the largest number of likes (7000 to 9000 likes of a post on average). In Instagram profile of the Marriott hotel chain, images of guests account for about 40% of the total number of photographs, and guests mainly focus on the views from the hotel room or on the pictures of locations, which is reflected in a much lower number of likes (an average of 1,700 likes per post). The Instagram profile of the Radisson Blu hotel chain shows only the interiors of the hotel, and each post is given 700 likes on average. However, it cannot be argued that there is a direct relationship between the presence of guests in the photographs and the activity of social network users. For example, Instagram profiles of Hilton hotel chain (309 thousand followers) and Ritz Carlton hotel chain (588 thousand followers) show more photos of locations and hotel design, but the photos receive different number of likes (about 16 thousand and 4 thousand followers on average respectively). Such difference in virtual activity indices in Instagram profiles is rather indicative of the importance of correct positioning of the hotel in social media. It is essential that the visual appearance and the design of the webpage correspond most accurately to the image of the hotel. For example, Ritz Carlton, a premium hotel chain, posts photos of sunlit locations with luxury items on its page, while Holiday Inn, a hotel chain which is popular among business and family travelers, post photographs that mainly depict parents with children and people who engage in outdoor sports activities. Thus, by using social media, hotel facilities emphasize their competitive advantages by carefully selected content.

4 Conclusion The use of social media for promotion of hotel services is an effective marketing tool. It is reasonable to expect that the behavior of travelers will continue to change towards increasing digitization. This charges hotel facilities with a task of not only building successful communications based on social networking platforms, but also moving much of the business process management into a virtual environment. Of course, the visual component is the defining one when choosing means of accommodation. Personalization is an important aspect of presence of hotel facilities in social media. When building online communication with guests, it is important to pay attention not only to correct targeting of photos and videos, but also to feedback from guests. Guests are more likely to leave a complaint or a positive comment on the page in the social media than to inform the hotel staff personally. For example, on the Facebook page of the Holiday Inn hotel chain, the complaints of hotel guests about services and interior of the rooms account for a fairly high percentage of posts. It should be noted that the hotel’s customer support service immediately responds to feedback of each guest. This not only gives guests an insight into the hotel, but also emphasizes highly-valued opinion of each customer, and thus proves their customer-oriented approach. In contemporary highly competitive environment, hotel operators are looking for new channels of communication with customers to increase their loyalty. Studies show that a great number of advertising posts repel customers. It is important that travelers

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feel engaged in a virtual environment and have a good time. As the media sphere develops, the behavior of users changes, since now they are not only seeking and using information, but also generating it through the use of new interactive technologies (Molchanova 2017, Shen and Yeh 2020). Therefore, modern marketing strategies aim at switching from content that is created and posted directly by the manufacturer of products and services (Producer Generated Content, PGC) to content that is created and posted directly by users independently of the manufacturer (User Generated Content, UGC). Such content includes photos and videos, comments, opinions, reviews, and feedback from customers. The resulting content was called Peer Generated Content, or P2P Content (personto-person). The term User Generated Content (UGC), and its alternative version - User Created Content (UCC), i.e. content generated, provided or created by users, are widely used at present. The following characteristics can be distinguished as the main distinctive characteristics of UGC: • content should be posted on a website or on a social network page, that is, be accessible to other users; • content should be the result of real creative efforts by a single user or a group of users; • content should not be created as a result of daily professional activity and should be aimed at making a commercial profit. Information posted by individuals is characterized by a higher level of perception and usefulness. The desire to be heard and make a difference motivates users to create new content. User generated content is also highly effective from the perspective of companies’ interests, since it enhances the confidence of the target audience, adds emotionality to the coverage of events, and saves product promotion costs. This may be due to the fact that the availability of product feedback has a significant impact on the growth of traffic on long-tail queries, since the feedback of each user increases the relevance of the website. Additional unique content will have the most positive impact on the increase of traffic. In addition, the customer feedback system can deter potential customers from going to other websites. A number of studies have shown that three fourths of users try to get acquainted with feedback from previous buyers before making a purchase. And if there are no feedbacks on the company’s website, the probability of the customer leaving to look for it elsewhere naturally increases. Electronicword-of-Mouth (eWOM) is sometimes used as a synonym to UGC. eWOM meets the requirements of the first and second characteristics of UGC to the highest possible extent. When we analyze content in the context of the third characteristic of UGC, another term should be mentioned, namely, Consumer Generated Content (CGC), which distinguishes between the concepts of “consumer” and “user”. CGC has some features in common with UGC: it is published by individuals and is almost always available to other users. But unlike UGC, which encapsulates almost everything that the user creates and shares with others without a commercial incentive, CGC focuses exclusively on products or services. Therefore, user generated content is

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any content that is created by end users of the online system, and customer generated content is the content that is created by consumers of products. This is particularly important in the context of the adverse trend of recent years, when companies are trying to replace content that was created by independent consumers with Professionally Generated Content (PGC). In order to develop Producer Generated Content, companies engage specialized agencies and professional authors. It is a different story when they try to publish content that was created by professionals and experts on a commercial basis under the guise of consumer content, disguising it to correspond to the style and personal information of real users. Companies often deliberately misinform their customers about the quality of services or the competitive advantage of the manufacturing company. Services to create such unreliable content on a commercial basis are currently provided by both specialized content agencies and content exchanges, as well as individual marketing experts, copywriters, etc. By motivating customers to write feedback on their real customer experience of purchasing and using the product/service, the company largely solves the problem of reliability of feedback and, consequently, the problem of the trust of potential buyers in the company and its products/services. Feedback adds unique content which contrasts with the standard specifications of the product. Moreover, the customer feedback system can deter potential customers from going to other websites. When users see that their opinion is important to the company, they become even more motivated to actively engage in communication. A hybrid form of working with consumer content has recently been developed in the market — content that is created by a professional together with users (CoGeneratedContent, Cogc). Users are still content creators, and technical issues of content creation are handled by professionals representing the company that delivers products or services, which ensures the quality of content generated. It is safe to say that UGC is the latest technology that will be further developed. In comparable situations, the CGC approach yields a significantly higher increase in efficiency of online communications as compared to traditional user involvement mechanisms through the use of higher-quality content and its conceptual integrity. Potential customers are given access to the experience of real customers and the opportunity to make more informed decisions, while the hotel business is given the opportunity to turn potential buyers into real customers in a more efficient way.

References All.accor.com (2020). https://all.accor.com//. Accessed 01 Feb 2020 Booking.com (2019). https://news.booking.com/. Accessed 13 Jan 2020 Cheung, C., Lee, M., Rabjohn, N.: The impact of electronic word-of-mouth: the adoption of online opinions in online customer communities. Internet Res. 18(3), 229–247 (2008) Digital in 2019 (2019). https://wearesocial.com/global-digital-report-2019/. Accessed 27 Jan 2020 Eremenko, Yu.: Choice of channels for promoting organic products in the Internet environment. Reg. Econ. South Russ. 3, 151–161 (2019)

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Ewing, M.: 71% more likely to purchase based on social media referrals (2019). https://blog. hubspot.com/blog/tabid/6307/bid/30239/71-More-Likely-to-Purchase-Based-on-SocialMedia-Referrals-Infographic/. Accessed 01 Feb 2020 Fourseasons.com (2020). https://www.fourseasons.com/. Accessed 01 Feb 2020 Gubareva, O., Simonova, M.: Digital technologies in the hospitality industry, tourism industry: opportunities, priorities, problems and prospects 1(14), 229–234 (2019) Hilton.com (2020). https://www.hilton.com/. Accessed 01 Feb 2020 Hyatt.com (2020). https://www.hyatt.com/. Accessed 01 Feb 2020 Intercontinental.com (2020). https://www.intercontinental.com/. Accessed 01 Feb 2020 Kalashnikova, S., Khanakhok, Z.: The role of social networks in the promotion of hotel services. In: New Technologies, vol. 1, no. 47, pp. 262–269 (2019) Keshelava, A., et al.: Introduction to the “Digital” economy, Geo-systems All-Union Scientific Research Institute, Moscow, 28 p. (2017). http://spkurdyumov.ru/uploads/2017/07/vvedeniev-cifrovuyu-ekonomiku-na-poroge-cifrovogo-budushhego.pdf. Accessed 04 Feb 2020 Kotova, N., et al.: Digital technologies and tools in promoting the services of the hospitality industry. In: Health-Saving Technologies in the University: State and Prospects Scientific and Practical Conference, Russia, Orel, pp. 127–130 (2018) Marriott.com (2020). https://www.marriott.com/default.mi. Accessed 01 Feb 2020 Molchanova, O.: User content as a result of transformation of the media sphere. Inf. Soc. 4–5, 101–106 (2017) Radissonhotels.com (2020). https://www.radissonhotels.com/. Accessed 01 Feb 2020 Shen, C., Yeh, C.: Destination attracting from online imagination. J. Tour. Res. Hospitality 6(4). https://www.scitechnol.com/peer-review/destination-attracting-from-online-imaginationqRYH.php?article_id=6964. Accessed 17 Jan 2020 Siteminder.com: The complete guide to hotel marketing in 2019 (2019). https://www.siteminder. com/r/hotel-marketing-this-year/#. Accessed 20 Jan 2020 Statista.com (2019). https://www.statista.com/statistics/197869/us-hotel-companies-by-numberof-properties-worldwide/. Accessed 23 Jan 2020 Travelline.ru (2020). https://www.travelline.ru/blog/pochemu-otelyam-vazhno-ispolzovatsotsialnye-seti/. Accessed 19 Jan 2020 World Travel & Tourism Council (2019). https://www.wttc.org/-/media/files/reports/economicimpact-research/regions-2019/world2019.pdf. Accessed 19 Nov 2019

Protection of Information Resources in Industrial Enterprises Marina N. Oreshina(&) , Anna V. Badina and Andrey A. Dashkov

,

State University of Management, Moscow, Russian Federation [email protected], [email protected], [email protected]

Abstract. This paper describes the main types of destructive software tools (RPS), their classification depending on the environment, methods and algorithms for influencing the elements of the information system (is), Describes the mechanisms of interaction between the RPS and the elements of the IP. Based on the theory of sets and elements of system analysis, a mathematical model of the interaction of IP objects is proposed from the point of view of the destruction (distortion) of these objects. In this case, objects are considered as computer elements, data, and programs. Many elements of the information system and many destructive actions performed by malicious software (VPO) in the form of functions on IP objects are described mathematically. The change in the States of IC elements in the case of HPE damage is described. It is argued that the States of IP elements change exponentially as a result of destructive effects (distortions). The use of this model allows to reduce the risk of information leakage and destruction of information resources in enterprises. The article also discusses measures for the use of methods of protection against malware. Main results:

1. A theoretical study of methods of destructive impact on the elements of IP was conducted. 2. Vulnerabilities of existing anti-virus tools and shortcomings of existing methods of protection against computer viruses (KV) are investigated. 3. A mathematical model is proposed that uses set theory and system analysis elements to describe the relationship between IP and HPE objects. 4. The measures that need to be carried out at enterprises in order to protect the computer network from destructive software impacts are proposed: control over access to confidential information, by monitoring the state of information system elements, control over Internet access, use and update of anti-virus licensed programs, and use of verified licensed software at the enterprise. Keywords: Digital information protection software tools JEL code: C3


Malicious software
Disruptive


C6
C8

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1451–1460, 2021. https://doi.org/10.1007/978-3-030-59126-7_159

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1 Introduction The present level of economic business management stipulated by the creation of digital counterparts of an enterprise, the use of information technologies in all branches of the company structure, at all production stages, from the market analysis and product design, production process, to storage and sales of products, aggravates the vulnerabilities of protection of information resources; that said, qualitatively new requirements apply to digital information protection (Eremenko et al. 2015). Almost all enterprises have their own network architecture of information systems; the larger the enterprise, the more layers this architecture includes; a two- or three-level network architecture is generally used (Eremenko et al. 2012). The requirements of modern age necessitate the use of SCADA systems, PLM products life cycle management systems, the use of the “Internet of Things”, the use of Web technologies and mobile applications for control and regulation of manufacturing parameters, in the production process (Eremenko et al. 2011). Systems that can be classified according to the level of artificial intelligence in them are used for business management: transactional systems, data storages and datamarts, OLAP systems, analytical applications that include BPM, CRM systems, planning and budgeting systems, etc. Many enterprises have recently been moving to multifunctional management systems that integrate the functions of information systems referred to above (Eremenko et al. 2012a). The wide use of digital technologies is due to the extensive development of microprocessor technology based on recent research in electronics and nanotechnologies, creation of high-end computers with user-friendly interface, creation of applied software and programming languages that can be understood by multidiscipline engineers (Eremenko et al. 2012b). At present, mastering new programming languages does not require special skills in programming, since the programs have subject libraries and subprogram units, so any person who has knowledge of general technical disciplines is able to work with them. However, the widespread occurrence of digitization gives rise to a new approach to the protection of digital information resources, since the destruction and corruption of digital information can severely damage business activities of an enterprise (Eremenko et al. 2012c).

2 Methodology A subject-oriented and functional approach to process description, simulation approaches, regularities of the theory of sets, and elements of a system analysis were used in the implementation of theoretical research. (Minaev et al. 2008).

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3 Results Based on a comprehensive approach to the study of this domain area, it has been found that malicious software (disruptive software tools) can be considered as worms, trojan horses and viruses. Computer viruses, which are called so for their similarity with biological viruses, affect information systems, corrupt or erase information contained in various computer facilities. The vast variety of computer viruses can be classified depending on the environment, methods of influence on computer RAM, features of action algorithms, etc. Classification of viruses according to the main classification criteria is shown in Fig. 1. Viruses

Environment - file viruses - boot viruses - network viruses

Method of influence on RAM

Action algorithms

Macro viruses

- resident viruses - non-resident viruses

- stealth algorithms - self-encrypting algorithms - polymorphous algorithms

- Excel viruses

macro

- Word viruses

macro

Fig. 1. Diagram showing the distribution of computer viruses according to criteria of their classification

Depending on the environment, viruses can be file, boot, network, etc. File viruses infect information in files. Boot viruses invade deep into the computer and when the computer restarts, they boot instead of the operating system. Algorithms that are called macro-viruses corrupt information in programs that handle macros, such as Word or Excel. Network worms are transmitted and propagated via networks using protocols or commands of computer networks for their propagation (Eremenko et al. 2012d). Depending on the mode of transmission, viruses can be resident and non-resident; that said, resident viruses have the ability to leave its copies in computer memory being embedded in a computer, which are also characterized by features by that are malicious for the system. The activity of resident viruses continues until a computer is shut down or restarted. Non-resident viruses usually act when a computer is booted and make no copies in computer memory. As for the specifics of operation algorithms of viruses, we can distinguish the use of stealth algorithms, the use of algorithms focused on self-encryption of information, and algorithms with polymorphism, defined by the ability of existence of malicious software in different states with various structures and different forms during its life cycle. The use of stealth algorithms allows viruses to be partially or completely invisible to

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the system, since these algorithms are able to intercept queries from the operating system to read infected codes of the program, memory, and other system objects. Viruses with self-encryption algorithms are able to encrypt the main body of a virus and to modify various programs. Virus varieties include worms; worms differ from common viruses in terms of locality of action and type of code; the worm has a self-sufficient code (it is a separate file posing a threat to elements of the information system), while the code of a virus is embedded in existing computer files (Eremenko et al. 2007). We shall give consideration to the destructive power of viruses by the example of the “Trojan Horse”; the virus received its name due to its mode of action that is similar to the hero of the ancient Greek mythology - Trojan Horse. The Trojan program is a malicious code which is illegally embedded in computer software and is focused on erasure, change and theft of information (Minaev et al. 2008a). Antiviral programs are created in order to protect computers against the devastating effects of viruses, but their main shortcoming is that they are created following the emergence of viruses; generally speaking, a similarity with biological systems can also be observed here, because virus vaccines are usually created after viruses are detected. Vulnerabilities of existing antivirus tools and shortcomings of existing methods of protection against computer viruses (КB) are shown in Fig. 2. In this paper, we have proposed a mathematical model using the theory of sets, describing the relationship between objects of a computer system and malicious software. The analysis of the theoretical research and the mathematical model with the results of the numerical experiment constitute the novel nature of the work done. The fundamental principles of a system analysis are used when considering objects of an information system: the system is divided into subsystems; functional relationships are established between subsystems; each subsystem is in turn divided into subsequent levels; that said, the level of detail is determined by the statement of problem. In the consideration of this task, we have proposed to actually single out the computer, software and data as subsystems of the information system. We shall consider the computer as subsystems: IO device, control device, arithmetic and logical unit, and storing device. Software is understood as the system and applied programs. It is proposed to treat system software within the scope of task set as system utility programs and protection systems. System utilities are computer programs that ensure the interaction of the operating system with various computer components. Application programs constitute the implementation of the problem-solving algorithm in a specific programming language (Minaev et al. 2008). By “data”, we shall mean digital information contained in the information system. We shall give consideration to disruptive software tools in the form of worms, trojan horses, viruses; each type is characterized by specific area of action and nature of damage.

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Vulnerabilities of existing antivirus tools ↓

↓

Vulnerabilities related to the solution of the major problem – protection against computer viruses

Vulnerabilities related to peculiarities of software implementation

Vulnerabilities related to limited capabilities of methods used

↓

Vulnerabilities related incorrect implementation incorrect methods

use

of ↓

to or

Software errors

protection Availability of vulnerabilities such as buffer overflow, format string etc., making it possible to

Fig. 2. Vulnerabilities of existing antivirus tools and shortcomings of existing methods of protection against computer viruses

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functioning

algorithms,

obtain

Administrator permission, etc. Frequent occurrence of errors of the first, second., and third kinds Shortcomings of existing methods of protection against computer viruses ↓

↓

↓

↓

↓

Signature

Heuristic

CPU

Monitoring

analysis

analysis

emulation

and

Modification

blocking detection

potentially dangerous actions ↓

↓

Impossibility to

↓

Impossibility

detect to

↓

Reduced

Is not efficient Impossibility

detect performance when

unknown

computer

computer

viruses

with searching

viruses

totally

new complex

↓

for

routine to detect some

operations due stealth viruses for to

false

activation

mechanisms of computer Impossibility to

operation

viruses

Purposely-

Purposely-

Purposely-

Impossibility

detect created virus is created virus is created virus is to

complex polymorphic

detect

able to cheat able to cheat able to cheat viruses heuristic emulator monitor make

that no

and amorphic analyzer

changes in the

computer

disks

viruses Purposely-

Is not efficient

created virus is

for protection

able to cheat

against

signature

computer

analyzer

viruses that are characterized by incubation period

Fig. 2. (continued)

long

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Functions of subsystems and operations on them: – data can be read, processed, and stored; – Computer performs data operations using the available software; – Depending on the algorithm, the software gains access to data and its processing by the elements of the computer system. We shall include in mechanisms of action of disruptive software the capture of computer elements, for example RAM, changes in program codes which are expressed, for example, in unauthorized launch of programs, corruption of data stored in files, data erasure. We shall give consideration to the model of interaction of elements of the information system with malicious software, from the perspective of damage caused to these elements. We shall define the sets of elements of the information system as follows: ME = {mei| i = 1…I} is the set of elements of the information system which form a computer; MD = {mdr|r = 1...R} is the set of data stored in files of the information system. MP = {mpk|k = 1…K} is the set of computer programs of the information system. We shall give consideration to many disruptive effects that are caused by malicious software (viruses) in the form of functions on objects of the information system, which can be characterized by the following dependencies: DVe= {fj(mei)|j = 1...N} is the set of actions of viruses aimed at damaging computer elements; DVd = {fj(mdr)|j = 1...S} is the set of actions of viruses aimed at infecting data of the information system; DVp = = {fj(mpk)|j = 1...Q} is the set of actions of viruses aimed at crashing the programs of the information system; The union of these sets – set A = DVe [ DVd [ DVp is fully characteristic of the disruptive effect on the information system. Description of distortions of subsystems of the information system; we shall treat the changes in the state of these elements as dependencies: Ce = Ce0e−as, Cd = Cd0e−bs, Cp = Cp0e−cs, where Ce0, Cd0, Cp0 are the initial states of elements of the information system, respective computer elements, data, programs, at point in time s = s0; a, b, c are the coefficients of distortion of computer elements, data and software respectively. Sign “-” shows that the state of the system deteriorates over the course of time. The analysis of presented dependencies shows that the state of the IS elements as a result of disruptive effects (corruption) change exponentially. Modern methods of protection against disruptive software effects are shown in Fig. 3. Depending on the state of the system, the probability of threats is described as unlikely, low, medium, and high. The probability of hazards is low, medium, high (Kartashevsky and Semenov 2001).

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Advanced methods of protection against disruptive software effects ↓ Stegoanalytic methods for detecting unauthorized attachments for protection against stegoviruses Introducing uncertainty in the operation algorithms of objects and means of protection Creating decoys for attack (Honeypot, Honeynet) Creating a file system which tracks data authenticity Steganographic methods of protection, aimed at making the potential target of attack invisible to the enemy Steganographic methods of self-control of software integrity Use of safe programming technologies that exclude the occurrence of vulnerabilities such as buffer overflow etc. Use of virus technologies (polymorphism, metamorphism, etc.) for protection of software Fig. 3. Modern methods of protection against disruptive software effects

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The analysis of modern methods of protection against disruptive software effects has shown that the most important thing is to create a file system with the data authenticity monitoring, introducing uncertainty in the operation algorithms of objects and means of protection, stegoanalytic methods for detecting unauthorized attachments for protection against stegoviruses, etc. In order to secure the corporate computer network from disruptive software effects, it is proposed to take the following measures: exercise control over access to confidential information, exercise control over internet access, use and update licensed antivirus programs, use approved licensed software in a business environment.

4 Conclusion The use of this model allows increasing the security of information resources of enterprises, reducing the risk due to information leakage and destruction of information systems. When initial and boundary conditions are specified, the analysis of the state of the information system described by this model makes it possible to control the actions of embedded software, for example, control access to programs, data, computer elements of the corporate computer network, control Internet connection, determine the probability of threats and hazards of the system, assess the probability of security and reliability of the system. The authors of the paper say thank you to Doctor of Engineering, Professor of Orel State University, Yeremenko, V.T. for the significant advice in the preparation of this paper.

References Eremenko, V.T., Minaev V.A., Oreshina M.N.: Theory of information and information processes: textbook for Universities, State University – UNPK, Orel (2015) Eremenko, V.T., Afonin, S.I., Krasnov, D.A., et al.: Mathematical model for evaluating the performance of a wireless computer network of an enterprise’s ACS. Inf. Syst. Technol. 5, 11–20 (2011) Eremenko, V.T., Afonin, S.I., Kuzmina, L.V., et al.: Methods for solving problems of information flow distribution in enterprise data transmission networks based on resource reservation. Inf. Syst. Technol. 1, 78–84 (2012a) Eremenko, V.T., Afonin, S.I.: Creation of theoretical bases of automation and construction of the technological component of ACS of geographically distributed enterprises. Inf. Syst. Technol. 2, 99–105 (2012) Eremenko, V.T., Kuzmina, L.V., Plashchenkov, D.A., Krasnov, D.A.: A recursive algorithm for estimating the minimum value of a channel resource in a data transmission network. Inf. Syst. Technol. 4, 97–102 (2012b) Eremenko, V.T., Officers, A.I., Cherepkov, S.A.: Method of designing data transmission networks compatible with non-blocking routing. Bull. Comput. Inf. Technol. 4, 38–46 (2012c)

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Eremenko, V.T., Anisimov, D.V., Plashchenkov, D.A., Krasnov, D.A., Cherepkov, S.A., Georgievsky, A.E.: Solving problems of network resource management in the conditions of dynamic changes in the configuration of a wireless network. Inf. Syst. Technol. 6, 114–119 (2012d) Eremenko, V.T., Lachinov, S.Y., Tretyakov, O.V.: Methodological, technological and sociocultural aspects of Informatics, orags Publishing house, Orel (2007) Eremenko, V.T., Rytov, M.J.: Fundamentals of information security of networks and systems: textbook for higher professional education. State University-UNPK, Orel (2015a) Eremenko, V.T., Rytov, M.J., et al.: Cryptographic methods of information protection: textbook. State University-UNPK, Orel (2015b) Eremenko, V.T., Rytov, M.J., et al.: Mathematical foundations of cryptology: textbook. State University-UNPK, Orel (2015c) Minaev, V.A., Fisun, A.P., Skryl, S.V., et al. Computer science. In: Conceptual Foundations: Textbook. 2 vols ed 2nd-extended and additional, vol. 1, Maroseika, Moscow (2008) Kartashevsky, V.G., Semenov, S.N.: Mobile communication networks, ECO-TRENDS, M (2001) Minaev, V.A., Fisun, A.P., Skryl, S.V., et al.: Computer science. In: T. 2 Means and Systems of Data Processing: Textbook, 2 vols ed. 2nd-extended and additional, Maroseika, Moscow (2008a) Nielsen, M., Chang, I.: Quantum computing and quantum information, Mir, M (2006)

The Prospects for Using Distributed Ledger Technology in the Russian Insurance Sector Olga I. Larina(&) , Natalia V. Moryzhenkova and Nadezda S. Kukanova

,

State University of Management, Moscow, Russian Federation [email protected], [email protected], [email protected]

Abstract. Insurance is an essential financial instrument of a risk management system that helps to reduce uncertainty about future financial performance and mitigate consequences of various undesired events. However, the low level of financial literacy in general, and the insurance culture in particular, severely limits insurance market development in Russia. The development of new insurance products that would be understandable and transparent to a consumer is the most relevant issue in this area. The development of the insurance market in the short term is oriented towards the application of new technologies in companies seeking to establish themselves as leaders in the market. Distributed ledger technology (the so-called blockchain technology) is among them. Blockchain technology has characteristics such as stability and equity of participants, the ability to draw up “smart” contracts, which enables its use in the Russian insurance sector. The paper analyzes the possibility and the prospects for the use of the blockchain technology in the insurance sector, and presents available cases of development of insurance products based on technology referred to above. Such products may have a decisive superiority in the market since they reduce time and financial expenditures for the consumer. The insurance sector also has a number of advantages of using blockchain in the form of reduced organizational costs and simplified internal and external interaction with contracting parties. The paper contains an authors’ study of the risks that accompany the use of the blockchain technology in the insurance sector. The risks identified on the basis of expert opinion have been identified and ranked, their forms of appearance and vulnerable actors have been presented. In accordance with research findings, the authors conclude that there is a need to develop methods to manage and mitigate new risks which accompany the introduction of digital technologies. Keywords: Insurance
Blockchain
New technologies in the insurance sector
Insurance market analysis
State regulation of the insurance sector Distributed ledger technology JEL: G22


O30

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1461–1470, 2021. https://doi.org/10.1007/978-3-030-59126-7_160




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1 Introduction Development of the Russian system of insurance activities can be conditionally divided into several stages: Stage 1 – stage of formation of the insurance system and the system of regulation of insurance activities; period from 1988 till 1996, when regulation was first carried out by the Ministry of Finance of the Russian Soviet Federated Socialist Republic, and subsequently (since 1992) by the Russian Insurance Supervision Service; Stage 2 – stage of restructuring, transfer of regulation functions first to the Ministry of Finance of the Russian Federation (1996), and subsequently to the Federal Service for Financial Markets (2011); Stage 3 is a modern stage (since 2013) which is characterized by the expansion of the regulatory functions of the Bank of Russia, the creation of a mega-regulator of the financial market, and the transfer of the insurance sector regulation and management powers to it. However, the current development of the insurance sector is characterized by the following data: the majority of Russian citizens (63%) favor insurance as a financial service. And this population group has been constant for the last 4 years. Nonetheless, we shall note that a significant part of Russians (29%) disapprove of insurance services. This is the share of those who trust no insurance organization at all (Analytical Center of the National Agency for Financial Studies 2019). As has been noted above, the existing insurance market structure went through several stages of development. At various development stages, conceptual moments that influence the insurance market development can be distinguished. The most important factor that guides the insurance market development, is the system of regulation of insurance activities. Thus, the National Program “Digital Economy of the Russian Federation” is focused on eliminating the technological inferiority of Russia and introducing new high technology for increasing the efficiency of the economy (Passport of the National Program “Digital Economy of the Russian Federation” 2018). Distributed ledgers (the so called blockchain technology) were distinguished as one of the Program’s advanced technologies. Thus, Development of the insurance market in the short term is oriented towards the application of new technologies in seeking companies to establish themselves as leaders in the market. For example, there is an investigative research that identifies digital technologies as the most likely insurance growing point (Blinova 2018). Of all digital financial technologies that are usable based on the results of research of the activities of a number of Russian companies, the most in-demand is the Big Data technology – “Big Data Analysis and Predictive Analysis”. Many companies are interested in “Optical Data Recognition”, “Chat Bots” and “Robotization” technologies. Financial institutions are characterized by more considerable interest in the use of distributed ledger technology – “Blockchain” (KPMG in Russia 2019).

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2 Methodology 2.1

Analysis of the Structure, the Current State, and the Concept of Insurance Market Regulation in Russia

The modern insurance market structure includes 2 levels: managing and managed. In the management structure, we can distinguish between the Government of the Russian Federation, which makes conceptual decisions affecting the development of the financial market, and the Bank of Russia – the main regulator of insurance activities at the present moment. The managed level includes: insurers and various insurance organizations and auxiliary links of the insurance sector (Federal Law “On the organization of insurance business in the Russian Federation” 1992). In addition, it is worth mentioning other players in the insurance market who do not directly provide insurance services but influence the market indirectly; these include audit companies, analytics and ratings organizations. Thus, the modern insurance system is based on the following key principles: the hierarchy of composition, i.e. the existence of the managing level and the managed level; the combination of the state management of the system and its self-government; the existence of subsystems; the dynamism of the system; the combination of openness and closedness of the system, (openness – interaction with the external environment, closedness – the need to have a special permit (license) for the right to carry out such activities). The contemporary system of state regulation of the insurance market and its individual players is a capacious, multifaceted and comprehensive system which includes both the organizations affiliated with the system and interacting within it, i.e. insurance market infrastructure, and areas, tools and methods that are used for the impact – i.e. regulation process, as well as regulation principles – i.e. regulation “ideology” or concept. The entities that regulate insurance activities in the Russian Federation, include the President, the Government and the Central Bank of Russia, the latter being officially charged with functions of the regulator of non-credit financial activities (Federal Law “On the Central Bank of the Russian Federation” 2002, Article 56) (see Table 1). Each of these entities has its own powers and defined fields of regulation – individual areas of state regulation. At the same time, there are certain areas of state regulation that are elaborated in a cooperative, complex and unified way (formation of a strategy of development of the insurance sector, financial and insurance law). These areas are immediately interconnected. Depending on the goals to be achieved, as well as the economic situation, the State may modify the regulatory impact of individual areas. The above areas (see Table 1) are regulated by certain instruments of influence on the insurance market. Since a wide variety of areas of regulation can be identified, the particular methods of influence that are used in these conditions are characterized by a wide diversity. Depending on the object of state regulation of activities of insurance organizations, consideration may be given to the following regulation: macro-level regulation – the impact on the economic processes in general; micro-level regulation – the impact on the activities of insurance organizations through the norms of general

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Table 1. Entities and areas of state regulation of insurance activities in the Russian Federation

Areas of regulation

Entities President Government Bank of Russia Financial market development strategy, including insurance system development Financial and insurance law Making policy decisions Taxation Macroprudential regulation of that concern all other areas policy the insurance sector Budgetary Insurance supervision, including policy licensing of insurance activities Restructuring and rehabilitation of organizations Shutting down and liquidation of organizations

civil law and special norms and standards expressed in the relevant legislative acts of regulatory authorities. If we analyze the levels and elements of regulation, the contemporary system of regulation of the insurance market and its individual players includes the following subsystems (which have their own structure and elements): – comprehensive state regulation of the entire system to achieve general objectives of financial market development; – regulation of activities of the Bank of Russia itself – the dominating element of the system, effective performance of which determines performance of all other elements of it; – regulation of the current operation and development of all insurance organizations with a view to creating an efficient and competitive system that meets the needs of society for high-quality insurance services at affordable prices (the so-called insurance supervision); – operational regulation of activities of individual problem (recessionary) insurance organizations; – regulation of activities of auxiliary elements for the creation of advanced infrastructure that would contribute to the improvement of quality of insurance activities (for example, actuary activities); – self-regulation, which includes: internal management of each individual organization, as well as the regulatory activities of associations, unions and self-regulatory organizations. When analyzing quantitative indicators of the current state of the insurance market, we shall point out the following. As of July 19, 2019, there were 268 insurance entities in the Russian insurance market (Official website of the Central Bank of the Russian Federation 2019). In 2018, the total amount of insurance premiums (contributions) under insurance contracts was 1.479.5 billion rubles, having demonstrated growth by 15.7% as compared to 2017. The share of insurance premiums for types of voluntary insurance in

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2018 was 83%, and for types of compulsory insurance – 17% (in 2017 - 81% and 19% respectively). In the structure of insurance premiums for types of voluntary insurance, 37% accounts for life insurance, while property insurance ranks second (29%). The least popular types of insurance are still financial risk insurance (less than 1%) and insurance of entrepreneurial risks (1%). In the structure of insurance premiums for compulsory types of insurance, the majority (90%) traditionally account for the compulsory insurance of the civil liability of owners of means of transport, while compulsory personal insurance ranks second (8%). In 2018, personal insurance for the first time accounted for more than half (54%) of the total amount of collected insurance premiums, which is due to an increase in the total amount of insurance premiums collected from life insurance (to 30.6%) and personal accident insurance (to 11.5%). It should be noted that the share of voluntary property insurance, liability insurance, and compulsory insurances, has decreased. Personal accident and sickness insurance showed the maximum growth rate (39.8%). The total amount of insurance payouts under contracts of insurance was 522.5 billion rubles, having shown an increase of 2.5%, including court-ordered payouts of 16.8 billion rubles. The total amount of insurance payouts under property insurance contracts has increased, exhibiting the growth of 12.3%. The number of contracts concluded has increased as well - by 19.2% - from 38.2 million pcs to 45.7 million pcs. This segment was developed due to mortgage insurance and full packaged products. In these conditions, the total amount of insurance payouts under property insurance contracts has increased by 8.9%, having reached 9 billion rubles. The downward trend could be seen in the total amount of insurance premiums under corporate property insurance contracts, which has decreased by 7.8% to 88.5 billion rubles. That said, the number of insurance contracts concluded has considerably increased – by 72.2% from 423.6 thousand pcs to 729.7 thousand pcs. The total amount of insurance increased by 5 trillion rubles, having reached the value of 137.7 trillion rubles, which is indicative of the reduction of insurance tariffs. The insurance payouts under corporate property insurance contracts have increased by 12.7 billion rubles (12.9%), constituting 49.3 billion rubles. We should point out that the number of personal accident and sickness insurance contracts concluded has decreased by 2 million in 2018; however, this segment of the insurance market has demonstrated the highest possible growth – the total amount of insurance payouts has increased from 121.2 billion rubles to 169.5 billion rubles (39.8%). The total amount of insurance payouts was 16.4 billion rubles, which is 2 billion rubles (14.2%) higher than in 2017. The MOD insurance segment has been supported by an increase in the volume of sales of new cars, associated with the growth of lending to individuals. The number of insurance contracts concluded has increased by 798 thousand (20.3%), having reached 4.73 million. The total amount of insurance premiums has increased by 3.8% to 168.7 billion rubles. It should be noted that the total amount of insurance payouts is almost unchanged as compared to the previous year and constitutes 83.3 billion rubles. In conclusion, the following main trends in the Russian insurance market can be identified:

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1. The market growth continues mainly due to the growth of personal insurance segment. For the first time, personal insurance accounted for more than half of the total amount of insurance premiums. 2. The number of market participants continues to decline, including in the course of mergers and acquisitions. 3. Small insurers are driven out of the market by competitors. Not all insurance companies will be able to bring their share capital into compliance with the new requirements of the regulator. 4. Strong market concentration. 5. More than half of intermediate sales accounts for banks. 6. The Internet sales mainly progress due to electronic insurance policy of third-party liability insurance.

3 Results 3.1

The Prospects for the Use of the Blockchain Technology

The main problems that market participants will face, include the market digitization, the need to increase share capital, changes in the valuation of assets, and the liberalization of third-party liability insurance tariffs. The remarkable thing is that distributed ledger technology is an advanced technology for both the financial market and the insurance market. There are studies and forecasts of development of abovementioned technology in a financial environment. Thus, for example, it is expected that by 2027, 10% of the world’s GDP will be stored in blockchain systems. There is a forecast of development of the market of distributed ledger technologies, according to which it is expected to grow by almost 10 times in the space of a decade (Abdrakhmanova et al. 2018, p. 248). The applicability of this technology is not wide at the moment, and it is used by only about 1% of organizations (Gartner Inc. 2019). In addition, the introduction of the blockchain technology may have beneficial effect in terms of reduction in prices for many financial products, in particular, by reducing operating expenses, automating acquisition of information and payments, and reducing fraud. Thus, according to FBI’s estimates, in the United States alone, losses from risk insurance fraud amounted more than 40 billion US dollars per year, costing an average American family $400 to $700 (Insurance Information Institute 2020). In Russia, in 2019, insurers sent 12,250 police statements on the subject of fraud to law enforcement agencies. The rate of instituted criminal proceedings was about 19%. The amount of claimed damage exceeded 8 billion rubles (Finmarket 2020). However, in order to implement distributed ledger technology into civil circulation, it seems expedient to introduce corrections in Federal Law No. 149-FZ of July 27, 2006 “On information, information technologies, and protection of information”. This need arises from the emergence of blocks in information systems that store the so-called “collective information”. The concept of “collective information” is not currently regulated. This information is marked by the fact that each information user can see the consequences of operations of other users. All users still have the option to access the

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history of operations, and addition of new information must be agreed with all participants, that is, the so-called “distributed consensus” is used. Distributed ledger technology will make it more difficult to apply corrupt practices in the delivery and execution of works, improve the quality of the implemented projects, and reduce costs. Accordingly, organizations gain the opportunity to increase the number of potential contracting parties, both in procurement and in project implementation, and to reduce the costs of verification and control of the fulfilment of obligations by contractors and contracting parties. Thus, distributed ledger technology (blockchain) can be an effective solution in the financial sector, given that the following features are taken into account: – it is necessary to consider copyright compliance in storing the database of the domain area (with the use of technology referred to above); as well as current legislation, regulatory practices. and corporate requirements when using technology in information systems; – assessing the possibility of conducting an IPO with the use of the blockchain technology. It should be taken into account that new customers (participants) become new participants of the blockchain network; – it is necessary to assess the prospects for increasing the operating efficiency with the use of blockchain (taking into account the possibility of using smart contracts). Since the organizations usually constantly use cyclic projects, the introduction of distributed ledger technology should lead to reduction of expenses in projects and time required for certain activities; – one should assess the possibility of increasing the operating efficiency of individual organizations due to the use of distributed ledger technology. The work of financial organizations is based on the use of information and the formation of new information, which basically enables the use of distributed ledger technology. However, it should be borne in mind that some information will be available to many employees. The technology under consideration can be used for testing at a separate stage in the project cycle. Consideration may be given to the possibility of creating temporary, local blockchain networks. For example, a network is created to implement an individual project, and once it is completed, such network will cease to exist. In this case, the undesirable dissemination of information will be minimized. One should decide on the exact type of blockchain that is needed in each particular case. Thus, depending on who can access the register, the following blockchain versions are distinguished: closed private blockchain (register reading and writing access for authorized users only); closed public blockchain (reading access for all users, writing access for authorized users only); and if all users have access, such a network becomes public. When assessing the need for the application of a particular type of abovementioned technology, the issues of information security and assessing the level of protection of personal data must be resolved. When we analyze the type of distributed ledger technology in each particular case and project, we should focus primarily on what technology influences improvement of relations with customers and participants for increasing the degree of their satisfaction. The essence of the technology allows the customers and participants of the project to receive all necessary

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information and participate in decision-making in a timely manner. In particular, the project participants will be informed about the status of the next stage and the percentage of completion of the immediate task. At the same time, despite various obvious advantages of the technology under study, there are also substantial risks in its application; the identification of these risks and development of methods to control them will determine the effect from this technology. Thus, based on the analysis of expert opinions made by the authors, we can distinguish and rate the following most significant risks that accompany the use of blockchain in the insurance sector: 1 – operational risk; 2 – risk of information loss; 3 – social risk; 4 – legal risk; 5 – liquidity risk; 6 – risk associated with laundering of income. Table 2 presents identified risks, their manifestations and actors that are vulnerable to these risks. Table 2. Risks associated with the use of blockchain in the insurance sector Risk

Risk manifestation

Operating risk

Technology dependency. The need for expenditures connected with the system upgrade and evolution. Possibility of system failure. Possibility of fraud. Information becomes accessible to many entities. Loss of personal information.

Risk of information loss

Social risk

Job cuts in the insurance sector.

Legal risk

Lack of legal regulation can lead to ambiguous interpretation and lawsuits

Liquidity risk

Entities exposed to risk Consumers Insurance sector State Consumers Insurance sector Insurance sector Consumers Insurance sector Consumers

Irreversibility/irrevocability of the transaction makes it impossible to revoke or contest the payment made State Risk associated with Autonomy and lack of state control create laundering of opportunities for fraud, money-laundering, income/financing of terrorism and financing of criminal transactions, including terrorism Source: compiled by the authors on the basis of a system analysis and polling of experts.

We should note that the operational risk posed due to the dependence of the operating processes on the technology used is the most significant of all risks identified. Special emphasis should be placed on the legal risk, since the State may generally not recognize the lawfulness of the use of the blockchain technology. Thus, blockchain can be used to reduce the overhead expenses of insurance companies associated with manual data entry and verification of new customers, because new customers can be identified by means of a unique address, which is locked, for example, to their

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cryptocurrency wallet (KYC-Chain 2020). This would reduce the time and cost of acquisition of information. However, this requires amending existing legislative acts with a view to recognizing customer identification based on the blockchain. However, other risks are also substantial and require the development of ways of regulating and mitigating them.

4 Conclusions/Recommendations Blockchain is potentially a technology that will make it possible to significantly modernize the insurance sector. Even now, there are projects which use distributed ledger technology in certain types of insurance. For example, Etherisc startup based on Ethereum blockchain developed a decentralized insurance platform and launched a product for insurance payouts in case of flight delays. Teambrella startup provides users with P2P insurance services. If an insured event occurs, the decision of payment of insurance money is made by discussion and vote. Everledger sells insurance policies to purchasers of diamonds to indemnify them from episodes of fraud. Dynamis uses social network Linkedin to assess risks in unemployment insurance of customers (Digital Forest 2019). There are projects of building more complex systems to collect predictors from the real world. For example, periodic collection of information on adverse weather conditions and the transfer of this information to chain block with a view to using it in agricultural insurance for automatic insurance payouts to insured parties in case of continued adverse weather conditions (Gatteschi et al. 2018). It should be noted that banks around the world are increasingly actively implementing distributed ledger technology and have long been analyzing the blockchain technology to issue their own cryptocurrency for payments, settlements and clearing for securities between financial institutions (Larina and Moryzhenkova 2019). Russian insurance organizations have been wary of introducing digital technologies so far, because, on the one hand, this will lead to considerable cost saving, and on the other hand, this will cause unemployment of hundreds of thousands of people involved in drawing up insurance policies. Acknowledgments. The authors say thank you to the Russian Foundation for Basic Research for supporting their project No. 20-010-00346 on the subject “Investigation of the impact of modern digital technologies on the institutional development of the financial market and the system analysis of consequences of digitization of the financial market”.

References Analytical Centre of the National Agency for Financial Studies: Every tenth Russian has taken out an insurance policy via Internet (2019). https://nafi.ru/analytics/kazhdyy-desyatyyrossiyanin-oformlyal-strakhovoy-polis-cherez-internet/. Accessed 10 Feb 2020 Blinova, O.: No blockchain: the future of the insurance market in Russia//Invest Foresight: Startups, technologies, investment/Under the editorship of Genkin, A.S., Nikulin, S.S., Frumkin, K.G. – M. Izdatel’skie Resheniya, p. 394 (2018). ISBN 9778-5-4493-6618-4

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Abdrakhmanova, G.I., Vishnevskiy, K.O, Volkova, G.L., Gokhberg, L.M. et al.: Digital economy indicators: 2018: statistical compendium/I60 National Research University “Higher School of Economics”. – M. National Research University - Higher School of Economics, pp. 268–300 (2018). ISBN 978-5-7598-1770-3 (regional) KPMG in Russia: Digital technologies in Russian companies. Research results, January 2019. https://assets.kpmg/content/dam/kpmg/ru/pdf/2019/01/ru-ru-digital-technologies-in-russiancompanies.pdf. Accessed 12 Feb 2020 Larina, O.I., Moryzhenkova, N.V.: Trends in the use of electronic and digital money. Bankovskoe Delo 2, 6–12 (2019) Presidium of the Presidential Council of the Russian Federation for Strategic Development and National Projects: Passport of the National Program Digital Economy of the Russian Federation of 24 December 2018 Statistical indicators and information on individual entities of the insurance sector: Official website of the Central Bank of the Russian Federation. https://www.cbr.ru/finmarket/ supervision/sv_insurance/?utm_source=w&utm_content=page. Accessed 12 Dec 2019 Federal Law No. 86-FZ of July 10, 2002 “On the Central Bank (Bank of Russia)” [Electronic resource]. http://www.consultant.ru. Accessed 10 Feb 2020 Federal Law No. 149-FZ of 27 July 2006: On information, information technologies, and protection of information”. http://www.consultant.ru. Accessed 11 Feb 2020 Federal Law No. 4015-1 of 27 November 1992: On the organization of insurance in the English Federation. http://www.consultant.ru. Accessed 12 Feb 2020 Finmarket: In 2019, a trend of fraud in life insurance and online insurance was outlined. http:// www.finmarket.ru/news/5188455. Accessed 07 Apr 2020 Gartner, Inc.: Top 10 Strategic Technology Trends for 2020 (2019). https://www.gartner.com/en/ doc/432920-top-10-strategic-technology-trends-for-2020 Gatteschi, V., Lamberti, F., Demartini, C., Pranteda, C., Santamaría, V.: Blockchain and smart contracts for insurance: Is the technology mature enough? Future Internet 10(2), 20 (2018). https://doi.org/10.3390/fi10020020 Digital Forest: Top 5 blockchain startups in the insurance sector (2019). https://digiforest.io/blog/ top5-insurance-blockchain-startups. Accessed 12 Feb 2020 Insurance Information Institute: Background on: Insurance fraud (2020). https://www.iii.org/ article/background-on-insurance-fraud КУC-Chain, KYC-Chain Web Page (2020). https://kyc-chain.com/#

Specifics of Company Management’s Digital System Creation Ilya V. Pshenichnikov(&) , Veronica S. Epinina , Svetlana I. Korobova, and Anatoly D. Karabanov Volgograd State University, Volgograd, Russia {pshenichnikov-iv,econmanag,Korobova_svetlana, BIb-181_547769}@volsu.ru

Abstract. Purpose: The purpose of this paper is identifying the specifics of formation of company management digital system which takes into account transformation of the elements of external and internal “digital contour” of company; factors that influence the level of company’s digital maturity and creation of a special “digital field”, which distributes the centers of responsibility of company’s digital transformation. Design/Methodology/Approach: The methodology of this research is a synthesis of scientific and practical view at the problem of industrial companies’ digital transformation. Results: The paper studies the preconditions of using the elements of digital transformation for increasing the industrial companies’ effectiveness. The authors distinguish and formulate the specifics of transformation of the production processes’ management system under the influence of digital transformation. The main provisions of methodological substantiation of the transformation of the production and organizational structures of an industrial company are determined, which envisages using the system of distinguishing structural departments as separate centers of financial and production responsibility, which interact with each other with the help of “smart contracts”. The importance of using smart contracts, which allow for self-regulation of production and managerial business processes of economic subjects is proved. Stages of digital transformation of industrial companies’ effectiveness are offered: identification of the level of company’s digital maturity; determination and development of the tools for implementing company’s digital transformation; evaluation of effectiveness of the transforming actions, aimed at digital transformation of an economic subject. Conclusions/Recommendations: The authors develop the conceptual foundations of digital transformation of a system of company management with division into centers of digital responsibility and formulate and offer recommendations for formation and development of company’s activities’ “digital field”. Keywords: Digital system of management Industrial company JEL Code: M15


Digital contour
Digital field



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1 Introduction Active development of information and communication technologies within the Sixth technological revolution and the necessity for search for innovative ways of creation of communications between economic subjects create preconditions for virtualization of economic subjects and digital transformation of their activities. For successful adaptation of industrial companies to the modern economic realia, digital transformation should cover the following: organizational and managerial sphere of economic subjects’ activities; transfer of material flows within a company; means of interaction and conclusion of contracts between economic subject and market participants. According to certain scholars (Khan et al. 2016; Kovalchuk and Alekseev 2017; Kozlov and Zhang 2015; Paulus-Rohmer et al. 2016; Popov and Semyachkov 2017; Spartak 2018; Trachuk and Linder 2017; Trachuk and Tarasov 2015; Vertakova et al. 2016), increase of industrial companies’ competitiveness in the modern economic conditions envisages not only wise and effective use and reproduction of the resource potential of an economic subject but also transformation of information flows and the array of data for accelerating the implementation and increasing the value of the company’s business processes. In the modern economic realia, sustainable internal and external competitive advantages of industrial companies cannot be achieved only with the traditional methods that are oriented at reduction of material expenses and optimization of company’s staff schedule (Vasin 2018). Transformation of external environment under the influence of technological revolution and high turbulence of consumer preferences’ development forms strict requirements to speed of making of managerial decisions and communications within the company and with the external environment. Formation of a digital system of company management allows economic subject to achieve the necessary parity in transactions of information and material flows (Huseynov 2018). Creation of a digital system of company management envisages destruction of the traditional forms of authorities’ delegation and coordination of actions of structural departments. Formation of a digital system of management allows creating the basis for independent business entities among the structural departments of an industrial company, which interact with each other through “smart contracts”, which record the responsibilities of each business entity and determine the value of this interaction. Development of the tools of digital transformation of the economic system’s elements, including blockchain technologies, allows accelerating the process of virtualization of industrial companies’ effectiveness and forms a new image of interrelations between economic subjects (Galimova and Gileva 2017). A large role in implementation of these processes belongs to a smart strategy of digital transformation of industrial company, which is based on application of the methodological postulates of economic subjects’ digital transformation (Gorodnova 2018).

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2 Materials and Method A large contribution into development of an idea of industrial companies’ digital transformation was made by the scientific works of such Russian scholars as Alekseev I.V., Arenkov I.A., Fedotova G.V., Galimova M.P., Gileva T.A., Gorodnova N. V., Huseynov Sh.R., Kondratev V.B., Korobov S.A., Kovalchuk Yu.A., Kozlov A.V., Plotnikov V., Popov E.V., Spartak A.N., Semyachkov K.A., Smirnov S.A., Trachuk A.V., Tarasov I.V., Vasin N.S., and Vertakova Y. Foreign scholars who dealt with the problems of economic subjects’ digital transformation include T. Bauernhansl, N. Khan, N.V. Linder, G. Lunawat, D. Paulus-Rohmer, A. Rasul, H. Schatton, and Zhang Xia. Analyzing and generalizing the scientific and practical views of the problem of digital transformation of economic subjects, we determine the main problems of creation of a digital system of company management: search for landmarks of structural transformation of a company for increasing the level of susceptibility to digital transformation; identification and standardization of the methods of determining the levels of company’s digital maturity; search for methods for determining a contour of company management digital system, which envisage determination of external and internal factors that influence the form and contents of company’s digital transformation and create it foretype; selection of the optimal tools of formation of a company’s “digital field”, which are connected to distribution of areas of competencies between the company’s departments within digital transformation and development of optimal digitalized forms of economic and organizational interactions.

3 Results Creation of a digital system of company management envisages implementation of certain stages of actions that are aimed at determining the capabilities of digital transformation of economic subject and searching for effective tools of digitalization of company’s business processes (Fig. 1). Each economic sphere and each company have their own individual susceptibility and infrastructural basis for digitalization of business processes. The level of company’s digital maturity allows determining the risks and strategic perspectives of creation of a digital system of company management. Insufficient development of the level of digital maturity of company’s activities could cause a reverse effect and form the conditions at which the economic subject will lose its market and economic sustainability. All levels of company’s digital maturity could be divided into the following categories (Table 1). Identification of companies by the correspondence to the level of digital maturity should be conducted with the help of a specialized matrix form that allows determining the criteria of assigning to the level of each economic subject and determining the strategies that form – in view of positive and negative factors – the company’s transition from one level to another (Fig. 2).

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Identification of the level of company’s digital maturity Determining factors that influence the level of company’s digital maturity Formation of a contour of company management’s digital system

Creating a “digital field” within company’s internal environment Distribution of company’s structural deраrtments in the “digital field” Development of effective tools of departments’ interaction within the “digital field” Evaluating the effectiveness of creation of a digital system of company management Fig. 1. Stages of formation of a digital system of company management Source: compiled by the authors.

The offered matrix method allows – based on the criteria of economic subject’s need for digital transformation and company’s resource potential for digital transformation – determining the company’s level of digital maturity. Each level of digital maturity is subject to changes and the possibility of improvement of the strategic position in the process of digital transformation. In order to raise the level of digital maturity from “Oasis” to “Digital mainland” and “Digital continent” it is necessary to implement the strategy of “stretching of digital potential”, which envisages redistribution of the company’s resources for increasing the accessibility of digital services for all structural departments and strengthening the process of all employees and structural departments’ involvement in the process of digital transformation. In order to move from “Digital mainland” to “Digital continent” it is necessary to implement the strategy of “leveling of digital potential”, which envisages development of elements of business processes’ digitalization which not only cover the company’s activities on the whole but also allow strengthening the company’s competitive advantages by means of releasing resources and reducing expenditures for creation of value offers.

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Table 1. Levels of company’s digital maturity. Level of digital maturity “Desert”

Used digital technologies

“Oasis”

Systems of preparing and second financial reports to government bodies; systems of electronic document turnover, CRM systems

«Digital mainland”

ERP, CRM, PLM systems

“Digital continent”

Business processes are absent, except for the ones that are strictly regulated by government (conducted “manually”)

ERP, CRM, PLM systems, IoT, elements of machine learning, smart grids and smart contracts Source: compiled by the authors.

Short characteristics of the level of digital maturity Company is at the basic level of automatization with a high level of transaction costs and low level of contracting with external intermediaries Certain structural departments of the company use digital technologies for increasing the effectiveness of interaction with the external environment and execution of processes Company has the basic level for digitalization Company is fully susceptible to digital transformation

Barriers and opportunities for further digital transformation Absence of the digital infrastructure at the company, conservative managerial approach to digital transformation

Opposition to changes and implementation of digital technologies reduces. The limitations are connected to diffusion of digital technologies

Excellent starting positions for further digitalization Maximum digitalization and refusal from manual labor

In order to keep the position “Digital continent”, a company has to implement the strategy of “well-balanced digital potential”, which envisages targeted use of digitalization for the activities’ directions that have the highest profitability. Companies at the “Desert” level have to implement the “transformation strategy”, which requires deep reconsideration of their business processes and effectiveness of their execution from the point of view of value chain support – as the absence of timely digitalization could lead to the effect of rejection of the consumer segments due to high cost of the offered services or products and the impossibility to build effective marketing communications and implement corrections in the process of product creation. This strategy is peculiar for gradual passing of the stages of company’s digital development with the evolutional approach and for expensive tools that are aimed at implementation of abrupt revolutionary change of the digital development level for transition to the “Digital continent” level. The main factors of resource potential that predetermine the level of company’ digital maturity include the following: digital technologies that are used by the

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“Digital continent” 1

2

“Digital mainland”

“Desert”

3

“Oasis”

Low

High

Need for digital transformation

Low

4

High

Resource potential for digital transformation

Fig. 2. Matrix of identification of the company’s digital maturity level. Source: compiled by the authors.

company; personnel’s attitude towards the digitalization processes; processes that are adapted to digitalization (Korobov 2017). For each level of company’s digital maturity, these factors could mean positive or negative result (Table 2). Each factor and its creative or destructive influence forms a contour of a digital system of company management, which is a foretype that has been formed with the help of forecast values determined by the mechanisms of machine learning (Kondratev 2018). Using neural networks for creation of a forecast map of industrial company’s digital transformation allows determining pros and cons of the offered scenarios of economic subject’s digital transformation. This stage allows selecting the optimal variant of industrial company’s digital transformation in view of possible development of the external and internal environment of the economic subject. Using neural networks will allow economic subjects to form a dynamic forecast of digital transformation of the management system with constant correction of the system’s initial data as a result of change of the external environment and to neutralize the negative influence of these changes’ turbulence. Formation of a foretype of the contour of company management’s digital system is conducted with the help of “weak signals” about possible changes of the requirements to the digital system of company management from the external and internal environment; it creates preconditions for company’s creating a “digital field”, which is a totality of processes and structural departments that undergo digital transformation. Company’s “digital field” could include the following directions of development of digital transformation: “smart accounting”, which envisages application of neural networks for creation of an automatized system of management and implementation of company’s accounting functions; “smart marketing”, which allows forecasting scenarios of development of the external environment with the help of machine learning and forming an automatized system of sample modeling; “smart production”, which is a digital system of distribution of organizational decisions by AI. “Smart contracts” is

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Table 2. Factors that influence the company’s digital maturity. Level of company’s digital maturity “Desert”

Processes Destruction

Creation

Growth of expenditures, loss of personnel’s trust to digital technologies Imbalance of competitiveness with high and low levels of digitalized processes

Appearance of new growth point

“Digital mainland”

Incompetent creation of the process model and low effect of automatization

“Digital continent”

“Overheating” of the process model due to complications of the processes under the influence of a large number of digital technologies

Integration in the single digital space of external and internal business processes of the company Reduction of expenditures for issue of separate exclusive types of products and flexible adaptation to the market changes

“Oasis”

Transfer of the process digital model to other departments

Personnel Destruction

Creation

Sabotage of use of new technologies and loss of general competitiveness Refusal to pass the obtained skills of digital technologies application to other public officials Reduction of labor efficiency under the influence of opposition to changes

Creation of demand for new digital technologies

Reduction of the level of motivation and increase of personnel turnover in the conditions of rejection of a new digital system of company management

Involvement in the process of further digitalization and reduction of the level of “manual labor”

Formation of a general pool of competencies in the sphere of digitalization

Universalization of personnel’s competencies

Source: compiled by the authors.

the tool for creating the interconnection between the company’s structural departments within the creation of a digital system of company management. Application of “smart contracts” will allow industrial companies to raise the effectiveness of decentralized management of economic subject, strengthening the role of separation of structural business entities at a company, and reducing transaction costs through increasing the speed of making of managerial decisions and reducing the

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number of administrative barriers. The basic principles of “smart contracts” application in the conditions of industrial companies’ digital transformation are shown in Table 3. Table 3.

Principles of “smart contracts” application at companies.

Principle Transparence

Balance of interests

Trainability of company management’s digital system

Conversion

Characteristics Interaction between industrial company’s structural departments takes place only in the digital form of contractual relations with the help of blockchain technologies. These conditions of interaction could be learned by all structural departments of the company, not only by participants of the contractual relations Application of “smart contracts” allows finding an optimal balance between all interests of the company’s structural departments that participate in digital transformation In view of forecasts and scenarios of future development of company management’s digital system – creation of a system of smart contracts that conforms to digital transformations Each action of company’s structural departments is assigned a cost estimate, which allows identifying the efficiency of a business entity and which influences the aggregate cost contribution into general development of the economic subject

Source: compiled by the authors.

Within the use of the “smart contracts” system, an industrial company implements the following stages: 1. Formation of a system of electronic arbitrage of the conducted interrelations between the company’s structural departments. This stage envisages formation of criteria and indicators that will become the basis for determining the level of execution of the contractual relations by each structural department of the economic subject for the following virtual value payment. 2. Creation of initial blocks of records envisages creation of individual blockchain platforms of the company in which “smart contracts”, which are available for identification and verification, are placed. 3. Creation of company’s internal business models allows determining all participants of “smart contracts” at the company and distributing their responsibility areas and competencies in the process of interaction and execution of contractual relations. 4. Cost estimate for all contractual relations at an industrial company is determined. Virtual financial assets, which are obtained within execution of a “smart contract”, reflect the efficiency of each structural department and its influence on formation of the cost offer of company management on the whole.

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5. Organization of the interaction of the company’s structural departments via the “smart contracts” system envisages creation of a decentralized system of economic subject management with provision of freedom in managerial decisions for the structural departments.

4 Conclusion The offered vision of creation of company management’s digital system allows achieving the following: – determining the stages of industrial companies’ digital transformation, which envisage the use of “smart contracts” as the basis for virtualization of the industrial company’s management system, and “smart jobs” – the foundation of transition from partially machine labor to full authomatization of the production processes; – identifying the directions of industrial companies’ digital transformation that are based on determining the “foretype” of contour and digital field of a new system of company management; – substantiating the use of “smart contracts” in the process of digital transformation of industrial company’s management system, which allow minimizing the transaction costs of the economic subjects’ activities. Identification of the scenario selection of a business model for effective digital transformation of industrial company is very important for future studies. The search for optimal business models will allow putting scenario forms of organization of interaction between the participants of these digital relations in the process of “smart contracts” creation.

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Kovalchuk, Y.A., Alekseev, I.V.: Digital potential of regional markets as a new strategic development factor franchising companies. Bull. South Ural State Univ. 11(2), 149–158 (2017) Kozlov, A.V., Zhang, X.: Innovative potential of industrial enterprises. Bull. Transbaikal State Univ. 5, 100–109 (2015) Paulus-Rohmer, D., Schatton, H., Bauernhansl, T.: Ecosystems, strategy and business models in the age of digitization – how the manufacturing industry is going to change its logic. Procedia CIRP 57, 8–13 (2016) Popov, E.V., Semyachkov, K.A.: An assessment of readiness of branches of the Russian Federation for formation of digital economy. Innovations 4, 37–41 (2017) Spartak, A.N.: The fourth industrial revolution and international trade. Int. Trade Policy 2, 5–21 (2018) Trachuk, A.V., Linder, N.V.: Distribution of e-business tools in Russia: results of an empirical study. Russ. J. Manage. 15(1), 27–50 (2017) Trachuk, A.V., Tarasov, I.V.: Research on the effectiveness of innovative activity of organizations based on the process approach. Prob. Manage. Theo. Pract. 9, 52–61 (2015) Vasin, N.S.: Enterprise sustainability management in the digital economy. Econ. Anal. Theo. Pract. 6, 1100–1113 (2018) Vertakova, Y., Plotnikov, V., Fedotova, G.: The system of indicators for indicative management of a region and its clusters. Procedia Econ. Finance 39, 184–191 (2016)

Organizational and Economic Aspects of Innovative Digital Project Management Liudmila P. Goncharenko(&), Irina V. Sokolnikova, Anzor U. Soltakhanov, and Sergey A. Sybachin Plekhanov Russian University of Economics, Moscow, Russia {Goncharenko.LP,Sokolnikova.IV,Soltakhanov.AU, Sybachin.SA}@rea.ru Abstract. Purpose: The aim of this work is to demonstrate, which organizations should be created and which approach to assess economic efficiency of innovative projects should be used to ensure effective promotion of digital technologies into the Russian economy. Design/Methodology/Approach: Methodology of the research is based on the methods of logical analysis and synthesis to establish elements and connections of the ecosystem’s integrated platforms as well as real options to assess the criteria of economic efficiency of an innovation project. Findings: Our work offers organizational solutions for building integrated platforms of industrial innovation management systems, demonstrates the benefits of economic effectiveness assessment methods, which take into account the uncertainty inherent in digital projects, which is not only a risk factor, but also potential for future revenue growth with good management. Keywords: Innovative projects
Real option Digital technologies
Ecosystems JEL Code: О-22


Technological platforms



О-31
О-32

1 Introduction Modern economy develops dynamically thanks to intensive creation of new hi-tech solutions. At the same time the companies should be ready not only for successful development of hi-tech innovative solutions, but also to creation of new comprehensive infrastructure to ensure their successful market promotion, a good financial result and safe and flexible economic ties between all participants of business processes. This means that creation of digital ecosystems and technological platforms have become an integral part of IT companies. Faster digital transformation is to a great extent ensured thanks to businessmen’s internet initiatives. In this case an integrated ecosystem platform becomes an important basis for public-private partnership (PPP), which promotes digital transformation of the Russian economy as new developers of software, digital products and services, state and private investment programmes, companies interact with a common goal. However, poor preparation of possible development scenarios of innovative projects produces an artificially low forecast cash flows when assessing their economic effectiveness. © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1481–1488, 2021. https://doi.org/10.1007/978-3-030-59126-7_162

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2 Materials and Method Digital technologies, which reshaped operations of producing, retail, financial organizations and state agencies have become one of the key drivers of modern economy. These changes are of a conceptual nature. Artificial intellect, also part of digital technologies, require new organization of business processes, changes the principles of interaction between companies and what is most important creates new challenges for employees and the humankind as a whole. Russian technological platforms appeared in April 2011 on the initiative of a government hi-tech and innovation commission (Maltseva 2011). Creation of Russian technological platforms became the result of studying new foreign organizational and economic instruments of innovative economic development and transfer of the positive experience to the national innovative activities. The European Commission introduced the ‘technological platform’ term in 2003 meaning integration of technological knowhows, industries, regulating agencies and financial organizations on the key R&D directions (Kosov and Akhmadeev 2015). However, development of technological platforms created as a result of state innovative programmes is closely linked to ecosystems. Ecosystems can be created by companies as they become popular with the managers who attain a new vision of their companies’ development. Previously all companies aimed at as high as possible financial results, while now building mutually beneficial relations with suppliers, servicing and transportation companies, marketplaces, payment systems and in fact all the market players, who can produce mutual benefits, is the only way of increasing business efficiency (Järvihaavisto and Smeds 2018). A research of Moscow’s digital ecosystems singles out the following distinctive features – the possibility of interaction between all participants of the united information environment, which is supported by omniaccessible information and technological infrastructure; openness, the possibility of switching on new participants; operational interaction processes have an algorithm; the relations are good for all participants (the win-win principle) and mutual benefits can be attained in this ecosystem; the size of the system matters; its organizational principles help its participants to cut costs (Department of Information Technologies of Moscow 2019). At the same time several researchers point to the fact that initially the platforms help the ecosystems to appear, while later sectorial ecosystem platforms appear to manage ecosystems of companies and chains (Babayan et al. 2019). The new platforms are to be responsible for the growth, development and management of the ecosystems. The global economy develops faster by the day. New solutions will prompt the need of their modernization and adaptation to new conditions as early as tomorrow, while in some cases the leaders of yesterday will have to disappear paving the way for new breakthrough technologies. For example, Uber introduced totally new taxi technologies making taxi operators redundant. However, the blockchain technology will soon make Uber redundant. This is the way technological platforms create ecosystems, which require new integrated platforms for their management.

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This work calls for offering an organizational structure of digital economy projects based on a sectorial technological platform of an ecosystem. We should apply the methods of logical analysis and synthesis to design future development of digital ecosystems. We should first analyze managerial solutions taking into account possible scenarios of a digital innovative project development to ensure implementation of the best innovative projects on the basis of this structure. Second, we should define volatility of the project’s cash flows. Thirdly, assess economic effectiveness of a project with the help of the Black–Scholes option pricing model in Merton modification taking calculated volatility into account. Synthesis of organizational and economic solutions on the market of digital innovative projects will help us understand how the infrastructure for innovative solutions of digital transformation should change and increase objectivity of economic assessment given the future’s uncertainty and variability.

3 Results At present, both scientists and practical people are of the same opinion that success of digital projects roots ineffective interrelations between a great number of partners – scientific and educational establishments, producing science-intensive organizations from special economic zones and technoparks, venture funds, banks and private investors, state agencies, individual and corporate clients, companies and courts. Although Russian venture funds’ investment has risen from U.S. $166 mln to $195 mln in the last seven years, this translates into a modest 2.3% annual rise (CAGR). Besides, in 2019, Russia maintained its 46th place in the Global Innovative Index based on analysis 129 states (Cornell University et al. 2019). This means that the national economy needs innovative solutions for various industries. The use of digital technologies is quite high in Russia’s financial, telecommunications and retail companies, while many producing companies are not susceptible enough to digital technologies, primarily robotic intellectual sets, cloud technologies, additive technologies, industrial internet of things (IIoT), big data processing systems, radio-frequency identification technology (Lola and Bakeev 2019). This means that the industries, which have successfully implemented several digital projects will continue to ramp up their hi-tech potential, while those lagging behind will have to plan and launch such projects in an emergency regime or get ready to leave the market gradually, because the dawning era of artificial intellect will render such companies vulnerable from any point – from the margins to client and employee satisfaction as well as technology-related risks (Dubovik et al. 2018). The results of innovative projects directly depend on how relations within the chain of company-participants are built. The government has a significant role in creating a successful system by building a long-term strategy aimed at selecting and allencompassing support of priority development directions for transferring to an innovative economy, the economy of knowledge. Russia has undoubtedly created measures to promote science-intensive technologies in different industries. Growth of the intellectual potential should aid national security and competitiveness of the country. Leading digital solutions should become one of the key growth drivers.

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Chart 1 offers an organizational solution of building an integrated platform of industry ecosystems. The government here is the backbone, it forms legislative, tax, infrastructure and financial support to the innovative projects. Russia has created special economic zones, technoparks, business incubators, pays a lot of attention to science development in universities, state support has the form of grants, subsidies, guarantees, there are technological platforms (marked 1 on the chart) to remove bureaucratic barriers and ensure faster implementation of innovative projects. This is the way of forming effective and mutually beneficial connections between science and business based on state support. Innovative projects appear in incubators with support of highly qualified specialists and necessary resources. Initially, when there is only a business idea, the number of investors is limited to business angels and special funds operating at a ‘preseed’ stage, which can offer funds to develop a commercial version. This is a period when professional help to preparation of aminimally viable product, the first manual sales, assessment of the market size, understanding of how to present the project to an investor are more important than investment. Chart 1 depicts the fund, which provides primarily modern scientific, technical and economic instruments of support and development, and not financial resources as a fund*. The idea turns in to a commercial product in an incubator. Later preaccelerators and accelerators use the synthesis of scientific, managerial, financial technologies to boost sales. Investment in the project at this stage usually amounts to no more than $10,000– 30,000 for 7–14% of company value (Miloud et al. 2012). After a successful launch of the startup, at the stage of growth, the project is ready to become a resident of technoparks and technology-innovative special economic zones (SEZ) and receive financing from venture funds. Any business has to grow, branch out in to new related industries and expand geographically, while its product or service should improve and adopt to the changing market conditions to attain its margin targets. Here the direct investment funds, industrial parks and producing SEZ help the companies. We should note that there are several forms of quitting business for investors and businessmen. This is also important because investors have to get their return on investment for new investment in innovative projects. To sell a company under the first form, the sales to an investor, who raises debt, or leveraged buyout (LBO), or under a management buyout (MBO), it has to have a high credit rating. The second form of return on investment for investors or investment funds is an initial public offering (IPO) and an initial coin offering (ICO). The third form is mergers and acquisitions (M&A). This is how a system of digital entrepreneurship is formed, including the state, scientific organizations and universities, incubators and accelerators, SEZ and technoparks, initiatives to support startups in the PPP format, venture funds and direct investment funds, specialists and businessmen as well as consumers of digital services and companies temporarily playing several roles – of a customer, a developer, a resource supplier. A good example of successful creation of an ecosystem on the digital services market is the Internet Initiatives Development Fund (IIDF), which picks about 7,000 projects for participation annually; other funds include the Moscow Seed Fund, The Preseed Investment Fund of St Petersburg. We can see these ecosystems on Chart 1 under Fig. 2.

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Government’s strategy for innovative activities 1

• Programmes and plans to support innovative activities • Legislative, tax, infrastructure support, public-private partnership • Investment in science and education, subsidies, guarantees, risk distribution, creation of funds science funds* incubators coworking business angels mentors concept, idea

business

funds* incubators accelerators coworking business angels mentors Creation of prototype

accelerator venture funds consultants technoparks special economic zones Startup launch

Growth stage

New ideas and technologies, professional staff

Direct investment funds consultants industrial parks special economic zones

LBO/ MBO IPO/ ICO M&A

Expansion stage

Exit stage

2

Consumers of innovations

State

Universities

4 Scientific organizations

Corporations Resources

Entrepreneurs

5 Individuals

Chart 1. An integrated platform uniting participants of the innovation projects ecosystems Source: developed by the researchers on the basis of (Internet Initiatives Development Fund 2019) and (Akatkin et al. 2017)

This way the funds form a digital ecosystem, and if there is a model, which generates profit for all participants and unites them into an information environment with clear operational algorithms, successful innovative projects can crate ecosystems

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of their own. An ecosystem is not the goal, but it often becomes an optimal instrument to launch and develop an innovative project. Some corporations can form ecosystems of their own (for example, Russia’s leading banks), which are denoted by figures four and five on Charter 1. Consequently, the ecosystems of different technological solutions will have to be merged. All the aforementioned will lead to the need to form integrated platforms, which would unite and manage sectorial ecosystems. This is the example of Chart 1. Besides solving organizational issues, we should offer approaches to assessing economic effectiveness of innovation projects with a nonlinear approach for forecasting future systems and complexes, consideration of uncertainty not only as a risk factor, but also the possibility of obtaining a higher profit and cash flow on the back of scaling, switching to new resource-saving technologies and on the whole active management of innovative digital technologies (Pinto et al. 2010). The real options methodology should be used for this approach (Schwartz and Trigeorgis 2001). Following is a short description of the approach we suggest. First, there should be a decision tree with analysis of different scenarios of project development. We can take the choice of time for the start of commercialization as an example of a managerial decision. In this case, possible scenarios can be pessimistic, basic and optimistic. Another managerial decision is the choice of technology and resources used for the project. For instance, digital technologies on 5G mobile networks help improve navigation systems of vehicles significantly thanks to qualitative growth in the speed of data processing and make the appearance of self-driving cars more realistic, some samples are already tested by, for instance, Yandex company. Consequently, profitability, success of the project depends on scientific solutions of the project and readiness of technological infrastructure. Expansion of the project, its replication or in case of the absence of the necessary market, its reduction or termination of the project with the ensuing asset sale are also managerial decisions. The project manager will take all the aforementioned decisions as the project is implemented, when economic calculations are over and the financial model is built. This means that real options become the necessary condition for DCF project assessment to avoid mistakes in rejecting projects with a high potential on condition of active and professional actions of a project manager responsible for their implementation (Bukhalov and et al. 2018). Second, let’s consider how the net present value (NPV) of the project changes, if we use the approach. Let’s take a financial model of a 10-year project with a zero net present value received with the help of traditional discounted cash flow (DCF) methodology to see the effect of a real option. We will consider quotes of traded investment fund FinEx of the U.S. IT-segment (FinEx MSCI USA Information Technology UCITS ETF)1 calculating a monthly share yield for a 5-year period from January 2015 to January 2020 to assess volatility to assess cash flow volatility and the ensuing use of the Black-Scholes Option Pricing Model in Merton modification. This fund was chosen because of its holding shares of the largest internationally profitable

1

Investing.com – Financial markets platform. ``FinEx MSCI USA Info Tech UCITS USD'', available at: https://www.investing.com/etfs/finex-msci-usa-info-tech-ucits-usd (accessed 14 January 2020).

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IT-shares: Microsoft, Apple, Facebook, Alphabet, Visa, Mastercard, Intel, Cisco systems, Adobe system; the companies are of a great influence on the international digital market. Statistics-based calculations demonstrated that annual yield volatility of the index amounted to 14.92%. We will take the yield of Russian Federation’s 10yearbonds trading at 6.30% (the yield of the federal bond, according to central bank’s January data) as a risk-free yield. Third, calculations using the Black-Scholes formula in Merton modification produced a net present value of the project under consideration using the real options methodology of 468,090 rubles with initial investment of 1,000,000 rubles, while the Profitability Index amounted to 1.47. Let’s not forget that under the standard DCF methodology the project as NPV of 0, and PI - 1. As we see, calculations of discounted cash flows using linear models, which do not account for managerial flexibility and variability of the future reduce the real end result significantly. The bulk of the funds use the scoring model, which includes assessment of the team of the project, the existence of MVP, the size of the market, demand at the first stage of innovations. They use the DCF model at the second stage. Like we have seen, the standard approach underestimates the possibility of a project to produce positive cash flows, which will, in turn, trigger rejection of promising innovative solutions. Theresultswereceivedtakingintoaccountvolatilitycalculatedbasingonthe quotes of the leading IT firms confirmed the need of practical use of the real options methodology when assessing economic effectiveness of innovation digital projects.

4 Conclusions/Recommendations Our analysis of organization a land economic solutions of innovative digital project management allows us to make the following conclusions: 1. The ecosystems building effective and mutually beneficial links between all the participants and ensuring comprehensive help, support and promotion of innovative ideas at all stages from the idea to business scaling should function for successful implementation of innovative solutions. At the same time, both the innovative projects under construction and existing corporations can create ecosystems of their own. Apple, Microsoft, Google were one of the first to create ecosystems. The ecosystems of Russia’s leading banks are also quite known. The ecosystems cover more and more activities thanks to new digital technologies, but intersectorial ecosystems should be merged. The problem of competition between ecosystems for investment funds, specialists, scientific and producing assets becomes pressing. This triggers the need for building integrated platforms for industrial ecosystems to ensure manageability and support of their effective development. 2. We suggest using real options accounting for active management to strengthen all positive features of innovations and reducing the negative when assessing economic effectiveness of innovative projects in the sphere of digital technologies. The uncertainty inherent in innovative projects can become the source of both losses and profit, which are much higher than the plan. Thus, the organizational and economic solutions will help companies implement more innovative projects and transform the Russian economy in a digital way.

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References Akatkin, Y.M., Karpov, O.E., Konyavskiy, V.A., Yasinovskaya, E.D.: Digital economy: conceptual architecture of a digital economic sector ecosystem. J. Bus. Inform. 4(42), 17–28 (2017) Babayan, E.B., Timirgaleeva, R.R., Grishin, I.Y.: “Distributed infrastructure of the industrial region digital economy ecosystem” (In Russian). Int. J. Open Inf. Technol. 7(7), 120–128 (2019) Bukhalov, A.V., Loukianova, A.E., Nikilin, E.D., Okulov, V.L.: A real options model for analysis of industrial R&D expenditures. Russ. J. Manage. 16(3), 393–406 (2018). (in Russian) Cornell University, INSEAD, and WIPO: The Global Innovation Index 2019: Creating Healthy Lives—The Future of Medical Innovation (2019). https://www.wipo.int/global_innovation_ index/en/2019/ Department of Information Technologies of Moscow: Digital ecosystems of Moscow (2019). (in Russian). https://static.ict.moscow/static/cifrovye-ekosistemy-moskvy.pdf. Accessed 22 Jan 2020 Dubovik, M.V., Novikova, E.S., Sigarev, A.V.: The role of information communications technology in the development of companies’ business strategies: the Russian experience. Int. J. Civil Eng. Technol. 9(10), 1131–1139 (2018) Järvihaavisto, U., Smeds, R.: From technology platform to innovation ecosystem. In: Academy of Management Annual Meeting Proceedings, vol. 1, no. 17531 (2018). https://www. researchgate.net/publication/326275556_From_Technology_Platform_to_Innovation_ Ecosystem Internet Initiatives Development Fund Annual report: Performance of Internet Initiatives Development Fund. (in Russian) (2019). https://www.iidf.ru/upload/iblock/81c/IIDF_ Annual_Report_18.pdf. Accessed 14 Jan 2020 Kosov, M.E., Akhmadeev R.G.: Foreign experience of tax stimulation of innovative activity. In: The Ninth International Conference on Economic Sciences 2015 proceedings of the conference in Vienna, Austria, 2015, “East West” Association for Advanced Studies and Higher Education GmbH, pp. 67–73 (2015) Lola, I.S., Bakeev, M.B.: Digital transformation in the manufacturing industries of Russia: an analysis of the business tendencies observations results. J. Vestnik St. Petersbrg Univ. 35(4), 628–657 (2019). (in Russian) Maltseva, S.: Technology platforms as a trend in information systems development (2011). https://bi.hse.ru/data/2011/07/07/1214596211/Maltseva_TechnologyPlatforms.pdf. Accessed 12 Jan 2020 Miloud, T., Aspelund, A., Cabrol, M.: Startup valuation by venture capitalists: an empirical study. Venture Capital Int. J. Entrepreneurial Finance 14(2), 151–174 (2012) Pinto, J.E., Henry, E., Robinson, T.R., Stowe, J.D.: Equity asset valuation, 2nd edn. Wiley, Hoboken (2010) Schwartz, E., Trigeorgis, L.: Real Options and Investment and Uncertainty: Classical Readings and Recent Contributions. The MIT Press, Cambridge (2001)

Site Appeal Model of a Commercial Organization Ilya V. Germashev1(&) , Victoria Dubovskaya1 , Evgenia V. Derbisher2 , and Elena A. Markushevskaya3

3

1 Volgograd State University, Volgograd, Russia [email protected], [email protected] 2 Volgograd State Technical University, Volgograd, Russia [email protected] Volgograd State Social and Pedagogical University, Volgograd, Russia [email protected]

Abstract. Purpose: The purpose of the work is to develop a content management model that optimizes the site appeal for solving a specific commercial problem, based on an analysis of the conditions for its implementation, for a specific circle of consumers. Design/methodology/approach: The main idea of the approach is that the parameters of a particular system are presented in the form of fuzzy numbers. This allows you to distract from the subject area and correctly apply mathematical models to achieve the goal. The choice of parameters and methods for calculating their values for the systems under consideration are carried out by the most typical options, which are described in the authors’ early works. An illustration of the use of the proposed model, namely, the assessment of appeal for a potential client, was carried out on the example of sites of two retail chains: Auchan (auchan.ru) and Lenta (lenta.com). The main idea of the approach is that the optimization of a specific system occurs according to implicitly specified parameters, i.e. the problem is formulated in fuzzy numbers. This allows you to escape from the subject area and make the choice of a mathematical model to achieve the correct results. The choice of parameters and methods for calculating their values for the systems under study are carried out by the most typical options, which are described in the authors’ early works. A demonstration of the use of the proposed model, namely the assessment of appeal for a potential client, was carried out on the example of the sites of two retail chains: Auchan (auchan.ru) and Lenta (lenta.com). Conclusions: The perspective and effective direction of the application of the fuzzy mathematics apparatus for formalizing data in complex systems and the new possibilities of using fuzzy mathematics in process control in order to solve specific commercial problems are shown. Originality/Value: The proposed management model can be used as a tool for monitoring the state of content in a given area of parameters. The presented technique and the fuzzy mathematical model are universal in nature and can be used to control a complex system, estimated by a variety of various parameters.

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1489–1497, 2021. https://doi.org/10.1007/978-3-030-59126-7_163

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Appeal model system
Fuzzy mathematics


Company website
Complex

JEL Code: C65

1 Introduction In modern science, the concept of the commercial appeal of an organization is not adequately covered. However, the analysis of local and foreign literature allows us to highlight the main factors that characterize this concept: 1. properties that distinguish this organization from others by a higher degree of customer satisfaction; 2. public and commercial performance; 3. adaptation to market conditions; 4. development and implementation of economic development strategies. One of the key points in the process of assessing commercial appeal is the presence of demand, both existing and potential, from the corresponding category of consumers. Many authors emphasize that the client is the most important part of any business (Juga et al. 2010), (Jayawardhena 2010). Management of the commercial appeal of the company, in turn, is a set of measures aimed at improving the product line provided, searching for new sales channels, new consumers on an ongoing basis, expanding the service and advertising campaign, promoting using new tools. At the moment, the Internet has firmly taken the place of one of the most important business tools. Modern commercial organizations often use the opportunities provided by information technology to promote their products and services. One of these areas is filling the official site with such information and in such a way that acquaintance of the user with such a site allows him to draw conclusions that would be conducive to the commercial appeal of this organization. In this sense, an interesting task is to assess the appeal of the site for a certain circle of consumers. This will allow you to identify the strengths and weaknesses of the site in relation to a specific target audence and to regulate the structure and content of the site so that it meets the expectations of the visitor to the maximum extent. The official website is a marketing tool through which the representation and implementation of the policy of disseminating information about the organization in the outside world is implemented. A business organization’s website provides new opportunities for operational and strategic benefits (DeLone and McLean 2003). Using this intangible asset provides the company with the following benefits: 1) 2) 3) 4)

creating the effect of presence and direct interaction with customers; simplification of the collection of statistical information; increasing the productivity of the company; the development of new market niches.

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Using sites in commercial activities allows us to solve the tasks of strategic management, brand management, business development, studying the behavior of consumer categories and implementing customer service (Androsov et al. 2010). One of the significant factors affecting the appeal of the site for consumers is the “demonstration of reliability.” The site should be based on a corporate image and reputation that exists outside the Internet (Dou et al. 2002). The process of developing and filling sites for commercial organizations that meet user requirements remains a difficult task (Piccoli et al. 2004), (Lightner 2004). Incomplete or distorted knowledge can cause problems in the conduct of business activities of organizations. The actions of companies aimed at achieving a competitive advantage may be inadequate to the general development of business sectors on the Internet. Thus, on this basis, a content management model can be proposed that optimizes the appeal of the site for solving a specific commercial problem. The informational basis of such a model is the formal presentation of fuzzy data characteristic of a given subject area. One of such approaches to data analysis is given in (Germashev et al. 2018), which allows controlling a complex system. The introduction of fuzzy logic eliminates problems with sharp boundary variables and leads to a more natural perception of tasks. Many scientists dedicated their work to the use of fuzzy logic in managing business processes, in which there is uncertainty that complicates or excludes the use of accurate quantitative approaches and methods, for example, in decision support systems (Bezděk 2011). Fuzzy control is resorted to when working with complex systems for which there is no sufficiently simple mathematical model, with non-linear processes of high orders, and also when it is necessary to process expert knowledge. As part of the proposed study, a model is proposed to assess the appeal of the site, based on the abstract requirements imposed by the commercial task. The formulation of specific requirements is made when solving a real problem, based on an analysis of the conditions for its implementation. Further, the obtained requirements can be used in the model to obtain specific results.

2 Statement of the Problem Let site S be given. There is a certain set of Q1, …, Qm requirements for S, which is regulated by current market conditions and organization goals. Moreover, it is determined from the same conditions P that the significance level of these requirements is a1, …, am, respectively, where m j¼1 aj ¼ 1; aj  0. It is necessary to calculate the estimate m of the appeal of the site S in accordance with the requirements of Qj, j = 1, …, m.

3 Site Appeal Model To build the model, we will use the approach that has been successfully used to evaluate complex systems (Germashev et al. 1999), (Germashev et al. 2001). The main idea of this approach is that both weakly and strongly formalized system parameters are represented in the form of fuzzy numbers. This allows you to abstract from the subject

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area and correctly apply mathematical models. Based on this approach, we formalize the source data. For each requirement Qj, we define a parameter xj whose values make up the set Gj, j = 1, …, m. When choosing a parameter, it must be borne in mind that its values allow you to set the requirement to a specific value and calculate the parameter value for the site. The parameter value itself can be represented by a completely arbitrary type. Without specifying the problem, it is quite difficult to give some universal recommendations on choosing the parameter xj. But the work (Germashev et al. 2018) provides some of the most typical options: a real number, a set of real numbers, a linguistic value, and methods for calculating their values for complex systems. Let Qij denote the value of the parameter xj for the requirement Qj (for i = 0) and the site S (for i = 1), j = 1, …, m. Further the parameters should be unified. For this, it is proposed to use fuzzy numbers, which can be obtained using the operator proposed in (Germashev et al. 2018): 8 < A1 ð xÞ; if x 2 R  R þ nf0g; Að xÞ ¼ A2 ð xÞ; if x 2 vik yik 0 ≤ vik

ð12Þ

In general, the adjusted problem of expanding production bottlenecks can be written down as follows:
 Pk ¼ Y k0  V k H k ! max

ð13Þ


 Q1 Bk þ H k  0

ð14Þ

Hk  0

ð15Þ


T Column matrix H k ¼ hk1 ; hk2 ; . . .; hkm is the optimal solution to this problem and will be a plan for procurement of scarce resources. In this case a new, corrected plan of production regarding the solution of the problem of expanding the production bottle
 k k T . It can be calculated by the necks, can be denoted through X k ¼ xk 1 ; x2 ; . . .; xn formula:
 X k ¼ Q1 Bk þ H k0

ð16Þ

The expected profit from the Xk* plan will be equal:
 k Z k ¼ Zmax þ Y k0  V k H k0

ð17Þ

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Thus, the profit growth at the k company will be equal to (Yk0 – Vk)Hk0. It should be noted that this increase in profit will be provided by the fact that in case of obtaining additional volumes of scarce resources for itself and the new adjusted production plan (16) the enterprise uses in the production process those types of resources (possibly part of them), which according to the optimal plan of the problem (1)–(3) remained underutilized. The second variant of the solution of problems of expansion of production bottlenecks can be offered by the analytical group to the firm management if the firm does not have financial possibilities for implementation of the first variant. In this case the analytical group ranks all the enterprises according to theoretically possible values of profit increase on them, i.e. according to the results of solving the problems of expansion of narrow productions (7)–(9). Further, the analytical group should single out the group of enterprises with the largest possible profit growth and try to satisfy the demands of these enterprises in scarce resources at the expense of the balances of resources at those enterprises, which will be recognized as unpromising for the correction of the production plan, calculated as a result of the solution of the problem (1)– (3). These enterprises will be a kind of donors to supply the remainder of their resources to those enterprises where bottlenecks are to be expanded. For these enterprises specialists should choose such routes of delivery of resources from the donorenterprises, transportation costs on which will be less than dual estimates of corresponding resources received in the optimal solution of a problem (4)–(6) for the enterprises selected for expansion of bottlenecks of production. The algorithm of actions here can be similar to that used in the first variant. Since the resources are transferred from one enterprise of the firm to another enterprise of the same firm, it can be assumed that the resources are transferred to the addressee free of charge. In this case, the designation vki used in the first variant will be equal to the cost of transporting only the unit of i-th resource to the k-th enterprise. Obviously, specialists should choose k only those transportation routes, for which the inequality yk0 i [ vi will be performed. Like in the first variant of correction of conditions of the problem of expansion of
T production bottlenecks, we introduce V k ¼ vk1 ; vk2 ; . . .; vkm – column matrix of the cost of delivery (in this case, we speak only about delivery) for unit i-th resource to the k-th enterprise. The further algorithm of the solution coincides with that used in the first variant. The column Vk introduced here is inserted into the target function (13) and the problem (13)–(15) is solved. Using the same designations, as in the first variant of expansion according to formulas (16) and (17), we find the plan of production for the kth enterprise, corrected according to the solution of the problem of expansion bottlenecks for this enterprise. Such calculations are carried out by the analytical group for all those enterprises, for which the balances of resources at the donor-enterprises will be sufficient. The solution of problems of expansion of production bottlenecks (both on the first, and on the second variants) will result in the plans of manufacture calculated for all enterprises of the firm, and the amount of profit which the firm will receive at realization of these plans of manufacture. 50. The analytical group carries out the analysis of the plans received after the solution of problems of expansion of production bottlenecks, counts possible resource balance which can remain at the enterprises after performance of the corrected plans of

Scenario for Production Planning in Industry

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production, and estimates prospects of possible second iteration of all calculations, beginning with a problem (1)–(3) in which in matrix inequality (2) the right part is equal to (Bk+ Hk0). The process may continue until production plans are received in which resource balances at the enterprises become so small that they are not sufficient to solve the problem of expanding production bottlenecks for any of the branches. The analytical group may consider the second iteration to be inefficient and recommend to the management of the firm to approve plans for procurement (or supplies from donor
T enterprises) of scarce resources H k0 ¼ hk1 ; hk2 ; . . .; hkm and adjusted production plans Xk* = Q−1(Bk+ Hk0). The expected profit for the Xk* plan will be Zk* = CkXk*. This k , i.e. more profit obtained when implementing the optimal profit will be larger than Zmax k0 solution of X problem (1)–(3), by the value of Pk = (Yk0 – Vk)Hk0. The total profit that the firm was able to make from the initial optimal plans is the K P k Zmax . Having solved the problem of expanding the production bottleamount of k¼1

necks for each of the branches, the company as a whole will get a profit, the value of K K P P k Zmax + Pk . which will be equal to k¼1

k¼1

4 Conclusion New technical possibilities, provided by volumes and speeds of data transmission and processing, allow to solve new problems, in which the apparatus of duality principle can be used to the full extent. The iterative algorithm of planning of optimal volume of production of the company (firm, branch, ministry) which structurally has some coordination (managing) center and a network of the enterprises (branches) is offered. According to this algorithm, using the classical formulation of the problem of optimal production planning, the Center finds the optimal production plan for each branch. Further for each of them the Center, solving a problem of expansion of bottlenecks of manufacture, defines volumes of deliveries of resources which are in deficit for the enterprise. The Center supplies the enterprises with scarce resources and forms a new adjusted production plan for each of the enterprises. For the company which has limited possibilities and resources, scenarios of the most perspective models of planning, at which total industry profit will be the greatest, are offered. The implementation of the proposed planning scenarios becomes real only in the transition to digital production management methods.

References Voevodin, V.V., Voevodin, Vl.V.: Parallel computing [Parallel’nye vychisleniya]. BHVPetersburg, Saint Petersburg (2002) Golovashkin, D.M.: Models in the theory of parallel computing [Modeli v teorii parallel’nyh vychislenij]. Publishing House of Samara University, Samara (2019)

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Holstein, E.G., Yudin, D.B.: New directions in linear programming [Novye napravleniya v linejnom programmirovanii]. Sovetskoe radio, Moscow (1966) Gorelov, M.A., Ereshko, F.I.: On models of centralization and decentralization of management in a digital society [O modelyah centralizacii i decentralizacii upravleniya v cifrovom obshchestve]. Digit. Econ. 1(1), 37–45 (2018) Kantorovich, L.V.: Economic calculation of the best use of resources [Ekonomicheskij raschyot nailuchshego ispol’zovaniya resursov]. Science, Moscow (1960) Karandaev, I.S.: The solution to the dual problems in the optimal planning [Reshenie dvojstvennyh zadach v optimal’nom planirovanii]. Statistics, Moscow (1976) Karandaev, I.S., Malykhin, V.I., Solovyov, V.I.: Applied mathematics [Prikladnaya matematika]. INFRA-M, Moscow (2002) Kitova, O.V., Bruskin, S.N.: Digital business transformation [Cifrovaya transformaciya biznesa]. Digit. Econ. 1(1), 20–25 (2018) Kolemaev, V.A. (ed.): Mathematical methods and models of operations research [Matematicheskie metody i modeli issledovaniya operacij]. UNITY-DANA, Moscow (2008) Pisareva, O.M., Perekalsky, V.A.: Scenario modeling in the practice of industry strategic planning [Scenarnoe modelirovanie v praktike otraslevogo strategicheskogo planirovaniya]. Sci. Tech. Statements St. Petersburg State Polytech. Univ.: Econ. Sci. 4(246), 238–251 (2016) Ershov, A.A., Gubareva, E.A., Nol’de, E.L., Efimova, M.V.: Scenarij primeneniya teorii dvojstvennosti pri planirovaniya proizvodstva v otrasli. [Scenario for applying the duality theory when planning production in the industry]. E-Management 3(1), 54–67 (2020)

Case Analysis of USA Anti-dumping to China’s Color TV Sets Larissa N. Talalova1(&) 1

and Jiamin Tian2

State University of Management, Moscow, Russian Federation [email protected] 2 Ningbo University, Ningbo, People’s Republic of China [email protected]

Abstract. As a developing country, China’s low-price export strategy has become one of its foreign trade strategies. Export destination countries, especially developed countries like the United States, use anti-dumping and other trade barriers to inhibit China’s export enterprises to export products to the country, thus affecting the development of China’s enterprises, not conducive to the development of their own economy. Since China’s accession to the WTO, foreign trade has developed rapidly. The low price caused by the low cost of China’s commodities has led to an increasing number of anti-dumping investigation cases against China’s export products in various countries, especially in the United States. Anti-dumping, the most frequently used non-tariff barrier in trade protectionism has become one of the focuses of global trade. The article reveals the essence of dumping and anti-dumping through the analysis of the Chinese color TV anti-dumping cases, it studies the causes and the effects of this sort of procedures as well as the feasible countermeasures and skills to deal with anti-dumping for reducing and avoiding the problem of frequent anti-dumping to China in the United States. Keywords: Non-tariff trade barriers
Color TV industry
Export competitiveness
“Diversified trading conglomerate”
Anti-dumping investigation JEL Code: B17


F13
F53

1 Introduction World Trade Organization classifies dumping as the following: “if a company exports a product at a price lower than the price it normally charges on its own home market, it is said to be “dumping” the product.” (World Trade Organization: Anti-Dumping 2020). The General Agreement on Tariffs and Trade (GATT), now the WTO Agreement “does not regulate the actions of companies engaged in “dumping”. Its focus is on how governments can or cannot react to dumping – it disciplines anti-dumping actions, and it is often called the “Anti-dumping Agreement” (World Trade Organization: AntiDumping 2020).

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1507–1515, 2021. https://doi.org/10.1007/978-3-030-59126-7_165

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“An anti-dumping duty is a protectionist tariff that a domestic government imposes on foreign imports that it believes are priced below fair market value. Dumping is a process where a company exports a product at a price lower than the price it normally charges in its own home market. For protection, many countries impose stiff duties on products they believe are being dumped in their national market, undercutting local businesses and markets.” (Kenton 2020).

2 Methodology and Background Several methodologies were used. Historical analysis explores the structure between China and the United States and searches for correlation with modern issues. A contemporary account of the ongoing trade war examines actions taken by both sides. The strategies of each side are critically examined in the light of contemporary general trade strategy frameworks (Watson 2016, 2020). A cause-and-effect analysis was the most productive in studying the impacts of trade barriers. Strong criticism of Ha-Joon Chang for his famous “ladder-kicking” (Chang 2003) and “Bad Samaritans” (Chang 2007) by a large number of authors (Blustein 2008; Cerisier 2012, etc.) was also valid for us, because as one of these critics Antoine Cerisier said, it “epitomised the lack of honest and balanced debate on the issue” (Cerisier 2012), nevertheless, Chang’s position gave “a glimpse for a lively debate that still flowers.” (The Economist 2007). In 2003, Five Rivers Electronic Innovations (the US electronic maker and operating unit of contract manufacturer Taylor-White, a pioneer in virtualization and systems management technology for enterprise and embedded systems) and two trade unions filed an anti-dumping complaint against Chinese and Malaysian exports of color television sets to the United States. The application alleges that some imported color TV sets from China and Malaysia were sold at prices lower than their normal value in the domestic market of the United States and violated section 731 of the Tariff Act – 1930 of the United States. The petition also alleges that the imports have caused or threatened material injury to the same industry in the United States. The U.S. Commerce Department immediately launched a preliminary investigation into some imported color TV sets from China and Malaysia to determine whether the imported products were sold at less than normal value in the U.S. market. Color TV receivers with cathode-ray tubes covering a range of more than 21 inches, including common cathode-ray tube color TV sets, high-definition digital color TV sets and rear projection color TV sets, of which 83% are produced by Sichuan Changhong Electric Co., Ltd., a Chinese consumer electronic company (the second largest manufacturer of televisions in China). The U.S. International Trade Commission was quickly sued. The preliminary and final ruling by the U.S. Commerce Department found that the dumping margin of color TV sets from Malaysia in this case was negligible, and therefore the anti-dumping investigation against the color TV sets from Malaysia was terminated. In this case, only the color TV sets from China were involved in the final anti-dumping duties (May 15, 2004, according to the U.S. International Trade Commission in Washington).

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Among them, Changhong’s anti-dumping duty rate is 26.37%, TCL (the 6th position among the Chinese manufacturers of electronic products), Konka Group Co., Ltd. (the 7th position) and Xiamen Media Group are 21.25%, 9.69% and 5.22% respectively, and the weighted average duty rate of other enterprises responding to lawsuits is 22.94%, and the uniform duty rate of enterprises not responding to lawsuits is 78.45%. Lasted for 377 days, the United States China color TV anti-dumping finally came to an end. So far, there have been many anti-dumping cases against Chinese products from the United States. Because the color TV industry in China is a small profit industry, so anti-dumping duties as long as more than 10%, basically killed the possibility of China’s color TV exports. At the same time, because the Chinese enterprise did not use them vigorously in an effort to maintain their own rights and interests, so the International Committee eventually ruled that Chinese dumping established in the United States. This led the EU to launch an anti-dumping investigation into China’s color TV industry, which ended with the same determination of dumping in the EU, and the EU imposed an antidumping duty of 44% on China’s color TV industry. Economies, led by the United States and the European Union, adopted the anti-dumping investigation on China’s color TV industry, and ultimately decided that China is dumping. Due to the failure of anti-dumping cases against Chinese and American color TV industry, a series of chain effects have been triggered, making China’s color TV industry struggling in international trade. 2.1

Reasons for Chinese Color TV Anti-dumping Case (from the Perspective of the United States and the World)

2.1.1

Competitive Pressures Lead to the Unemployment of Color TV Workers in the USA When the American color TV producers profit is damaged, the first affected are the industrial workers, due to the shrinking market share, it had to make the American color TV producers reduce the production scale, at the same time due to the reduction of the production scale, the required labor factors are also reduced, at this time the American color TV producers began laying off workers for escaping the profit loss. With the increasing competition pressure, the number of unemployed workers is also increasing rapidly. On the other hand, the increase of unemployment rate is not only a great pressure on the U.S. government, but also the fundamental problem to be solved by antidumping. Therefore, the high consumption and low employment color TV industry mode forced the U.S. government and American color TV manufacturers to open the anti-dumping road. 2.1.2

The Adjustment of Global Industrial Structure Makes Backward Industries Suffer In the context of economic integration and economic globalization, global resources have been optimally allocated worldwide, the international industrial structure has been constantly improved, and many labor-intensive industries have been transferred from

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developed countries with high labor costs to developing countries. However, developed countries still have a part of labor-intensive industries, and have not achieved industrial transfer. For developing countries with lower labor costs, products are in the ascendancy. However, when developed countries are at a competitive disadvantage, they will resort to anti-dumping trade remedies instead of adjusting the industrial structure of their imports. As the world’s largest economy, the United States is bound to be in a disadvantaged position in labor-intensive industries. China is a typical developing country with abundant cheap labor, and a large number of low-cost labor-intensive products in China have impacted similar enterprises in the United States. 2.1.3

The Reduction of Tariff Barriers Makes Anti-dumping an Ideal Policy Choice With the acceleration of economic globalization and the further reduction of tariffs, it is impossible to protect domestic industries by means of tariff barriers. The tariff concession is bilateral, but the application of anti-dumping measures is unilateral. With the weakening of tariff barriers, the new wave of non-tariff barriers is rising, and antidumping is becoming one of the main means to protect American industries. 2.1.4

The Slowdown in Economic Growth Has Led to the Abuse of Antidumping Measures Anti-dumping is a means of resisting unfair trade behavior permitted by the world trade organization. However, due to the slowdown of economic growth in some countries in recent years, the United States is also one of the countries slowing down economic growth, coupled with the accelerated development process of the world regional economic organization, anti-dumping has been abused by some countries as a tool to implement trade protectionism, to protect the domestic competitiveness of the lower and backward industries. 2.1.5 Unreasonable Political System Aggravates the Anti-dumping Case First, foreign countries regard China as a “non-market economy country” and implement the “surrogate country” policy towards China. The arbitrariness of the choice of surrogate country often leads to the unfairness in the determination of dumping. For example, in the several trials and rulings of the EU’s anti-dumping cases against Chinese color TV sets, the EU respectively used South Korea, Singapore and Turkey as surrogate countries (the scheme is the following: the normal value of the color TV producers in these countries vs. the normal value of Chinese color TV sets). The wage level of Chinese industrial workers is much lower than that of workers in Singapore and South Korea, and also lower than that of workers in Turkey, which inevitably leads to the conclusion that Chinese color TV companies have serious dumping practices. Then there is the EU’s “one country, one tax” system. The so-called “one country, one tax” applies the same anti-dumping duty to all the alleged dumped products from “non-market economy” countries. Regardless of whether the product is investigated or not, regardless of the anti-dumping range of the product, even the products that are not dumped will be subject to high anti-dumping duties. Only by submitting written application and providing sufficient data materials, the Chinese color TV enterprises that are subject to anti-dumping have the opportunity to obtain market economy

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treatment or individual treatment. Obviously, these unfair policies lead easily to China’s color TV to be a subject to anti-dumping duties, and to extremely unreasonable tax rate. Secondly, changes in the political situation also have exacerbated anti-dumping. Economic development, as the mainstream of the 21st century, is playing a more and more important role in world exchanges. 2.1.6 Anti-dumping Knock-on Effect With the continuous development of economic globalization, the connection between the markets of various countries is increasingly close. Once a commodity is antidumping in one country will cause a chain reaction in other countries, yes, antidumping has an international chain effect.

3 Discussion and Results 3.1

Better Solution for the Case from the Perspective of the Government

3.1.1 The Correct Understanding of the Nature of Anti-dumping Traditionally, anti-dumping has been regarded as a means to safeguard fair trade. In the long-term trade practice of developed countries, it has been found earlier from the perspective of game, from the rules of mutual restriction and mutual influence between the two sides in the decision-making process of dumping and anti-dumping that the anti-dumping strategy is not only defensive in nature, but also more effective in protecting the domestic market. And nowadays, the anti-dumping that puts forward to China is also the anti-dumping name more, the fact that carries trade protection. The government should guide the enterprises to know clearly the essence of anti-dumping in the country, should not always meet with anti-dumping charges, and should be actively involved in the anti-dumping lawsuits, fight for the legitimate rights and interests of Chinese enterprises, guarantee the wide respect and fair treatment for the country enterprises in the international market. 3.1.2

Get Rid of the Treatment of Non-market Economy Countries as Soon as Possible Over the past 20 years since the reform and opening up, China has basically realized the market-oriented operation of most industries. However, some countries, including the United States, have ignored the objective reality and assumed that China is a nonmarket economy country, and initiated an anti-dumping lawsuit against China based on the uncertain “surrogate country” standard. According to the calculation by 2001, the marketization degree of China’s economy was about 69%, while the internationally recognized critical level of market economy was 60%. It shows that China is already a developing market economy country and should not be regarded as a “non-market economy country”. However, up to now, the United States and other countries and regions still regard China as a non-market economy country and implement the “one country, one tax” system on China. Therefore, according to the WTO accession agreement, China can make full use of the

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WTO to solve the problems of “non-market economy country” and “one country, one tax” system as soon as possible. At the same time, the Chinese government should use the media at home and abroad to strengthen the propaganda and to publicize the marketization process of China, and to entrust relevant experts or authoritative institutions at home and abroad to appraise the transition degree of China’s market economy, so as to enhance the persuasion and avoid discriminatory treatment. 3.1.3

Strengthen the Coordination and Management of Foreign Trade Export and Standardize the Order of Export Competition First, it is necessary to strengthen the research work of the American market, to understand and master the production capacity, market sales volume and price level of its counterparts, adjust commodity prices flexibly, and to improve the international competitiveness of Chinese products export. Secondly, China should optimize the structure of industrial organizations, strengthen macro-control and coordinated management of enterprises, and prohibit export enterprises from competing for sales at low prices to avoid cannibalism among export enterprises. Aiming at the existence of China’s current foreign trade export overstretched as well as at the excessive competition leads to serious problems of the campaign at a lower price. For alleviation of this problem, the country should strengthen the construction and improvement of the industry association, the rational optimization of industrial organization structure, set up something similar to the Japanese model which marketed the products of Japanese companies overseas. This contributed greatly to Japan’s ascent as an economic superpower. It is called the sogo shosha (“diversified trading conglomerate”), and it is a brand name in Japan. In fact, the sogo shosha are quite renowned in Japanese society and operate at the top of Japan’s business pyramid. They “are unique, diversified and complex organizations that are known to have played a significant role in Japan’s modern economic rise. Following World War II, the sogo shosha, as super wholesalers/suppliers/distributors, optimized the supply chains of Japanese industry by providing for the raw material, energy and technological needs of upstream and midstream manufacturers in Japan, while also rationalizing distribution between the manufacturing sector and the downstream retail sector.” (Ryan 2017, p. 1). These general trading companies, in analogy with the above-mentioned Japanese conglomerate, that trade in a wide range of products and materials, must be the large industrial companies, the mainstay of China’s foreign trade import and export. They must do “small openings, open mouth”. This oligopoly type of industrial market structure can improve greatly the transparency of the market, because the inferior products are difficult to fish in troubled waters. With the decrease of the number of enterprises, the collective behavior of the industry is no longer difficult, and it is easy to reach an agreement, which is conducive to the self-discipline mechanism of the industry in order to alleviate the current competition situation of enterprises in price reduction that can use scale effect, aggrandizement famous brand product is famous brand effect on international market.

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3.1.4

Tighten Control Over the Price and Quantity of Color TV Sets Exported The Chinese government should earnestly implement the provisions on penalizing lowprice export sales and severely punish low-price dumping enterprises. To deepen the reform of foreign trade system and to follow the rules of market economy, the export economic and trade departments should play the role of coordination and guidance within the framework of WTO principles, and should not be confused with each other. In foreign countries, a policy warning mechanism is established to play the role of the government, which mainly tracks foreign trade policies and grasps the trade policies of major exporting countries in the first time. In view of the host country to China’s color TV anti-dumping litigation, some representative data will be put forward, so we can refer to these data to establish China’s color TV anti-dumping litigation warning indicator system. When some representative characteristic data reaches a certain point, it should send warning signals to China’s export-oriented enterprises and let them check whether their goods are likely to be dumped in the host country market. Taking the U.S. market as an example, according to the research of relevant scholars, these indicators can include: total Chinese exports to the U.S., total U.S. imports, total Sino-U.S. trade, U.S. GDP contraction rate and Chinese exports, etc. 3.1.5

Strengthen the Cultivation of Professional Talents and Publicity of Relevant Laws and Regulations China should strengthen the anti-dumping laws and procedures, common sense and propaganda education work, intensify the research work and the cultivation of professional talents, and on this basis to build China’s anti-dumping early warning mechanism, and to establish regional anti-dumping information centers gathering the international market information in time, paying close attention to analyze market changes and providing information consultation. When there is a danger of antidumping with some goods in China, the country must notify the relevant domestic situation in time, make necessary adjustment to the production and export (export prices) as soon as possible, and to give rewards to conform to the norms of enterprises. The enterprises which export with too low price or do not answer lawsuit actively should be given corresponding punishment according to the harm of their behavior, accomplishing reward and punishment clear. 3.2 3.2.1

Better Solution for the Case from a Business Perspective

Increase Investment in Scientific Research and Optimize Export Structure Chinese enterprises should develop from a single goods trade to the field of technology trade, at the same time they should upgrade the technical content of export color TVs. At present, the export of China’s color TV enterprises is still mainly in the low-end. Improving product quality, upgrading product grades, and adjusting product structure is the real way for China’s color TV industry. For example, the proportion of liquid crystal and plasma TVs of Xoceco exports to America since August 2003 has increased month by month. These high-tech HD flat-

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panel TVs are not affected by this anti-dumping. In addition, Chinese enterprises should be reasonably priced, i.e. it is an important issue in the success of China’s antidumping lawsuits. 3.2.2 Transforming the Marketing Strategy of the Company Adjust the market structure of export products. China’s color TV exports are concentrated in the United States, the European Union, Japan and other markets, antidumping will cause incalculable losses. Therefore, it is necessary to develop the national market in an all-round way and realize the diversification of the export market. While consolidating the existing European and American markets, China will actively explore to emerge to overseas markets, especially to strengthen the development of markets in the Eastern Europe, Latin America, Africa, etc. 3.2.3 Establish an Anti-dumping Litigation Fund Due to the lack of cooperation between domestic enterprises in the same industry, they are often unable to response to anti-dumping. Once the foreign anti-dumping lawsuit against China is successful, China’s same products and similar products will be hit hard in this market, and may even completely withdraw from the market. This will cause a huge impact on the foreign trade of this industry in China. Therefore, domestic enterprises should cooperate to defend the legitimate rights and interests. They should establish relevant responding funds and encourage enterprises involved in litigation. 3.2.4 Strengthen Ties and Cooperation with Foreign Companies In anti-dumping cases, the interests of the prosecutor are often diversified. Therefore, Chinese enterprises should promote deep understanding and cooperation between the two sides of the trade to reach relevant agreements in order to be accused of dumping products in China. Some relevant enterprises in the country can participate in litigation together, provide relevant certificates that are beneficial to China, and even persuade the prosecutors to withdraw their complaints. This is already one of the important ways to resolve anti-dumping investigations.

4 Conclusions In order for China’s color TV enterprises to achieve global development, they must understand the rules of competition on the international stage. For example, trying to avoid anti-dumping problems they can build a base in a third country. It requires companies to master the origin policy and special talents of the country. Therefore, Chinese color TV companies should establish a Human Resources to deal with international rules. At the same time, one or more overseas companies can understand the laws, regulations and policies of the country and provide timely feedback to relevant institutions and enterprises in China to form a fast and efficient information network and improve China. The early warning mechanism is sufficient for winning antidumping lawsuits.

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References Blustein, P.: “The Case against Globalization”: Review, The Washington Post, 17 February 2008. Accessed 25 Nov 2016. https://www.washingtonpost.com/wp-dyn/content/article/2008/ 02/14/AR2008021402674.html. Accessed 10 Feb 2020 Cerisier, A.: Book Review: Bad Samaritans by Ha-Joon Chang. socialjusticefirst.com, 31 March 2012 (2012). https://web.archive.org/web/20150926082846/https://socialjusticefirst.com/ 2012/03/31/book-review-bad-samaritans-by-ha-joon-chang/. Accessed 12 Feb 2020 Chang, H.-J.: Kicking Away the Ladder: The “Real” History of Free Trade. Foreign Policy in Focus, 30 December 2003. https://fpif.org/kicking_away_the_ladder_the_real_history_of_ free_trade/. Accessed 9 Feb 2020 Chang, H.-J.: Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism. Bloomsbury Press, London (2007) Kenton, W.: Anti-Dumping Duty. What Is an Anti-Dumping Duty (2020). https://www. investopedia.com/terms/a/anti-dumping-duty.asp. Accessed 12 Feb 2020 “Pistols at Dawn”: Review, The Economist, 30 August 2007. Accessed 5 Oct 2017. https://web. archive.org/web/20151016014933/http://www.economist.com/node/9719506. Accessed 10 Feb 2020 Ryan, P.: The Soga Shosha – An Insider’s Perspective (Updated Version). Marubeni Research Institute, 29 June 2017. https://www.marubeni.com/en/research/report/political_economy/ global/data/shoshaexp-20170629_003.pdf. Accessed 11 Feb 2020 Watson, M.: Global trade and finance. In: Baylis, J., Smith, S., Owens, P. (eds.) The Globalization of World Politics: An Introduction into International Relations, 7th edn., pp. 444–457. Oxford University Press, Oxford (2016) Watson, M.: Rethinking the Market: Challenging Orthodoxies to Put People First. Research Project of the Department of Politics and International Studies of University of Warwick. Project Lead: Pr. Matthew Watson (2020). https://warwick.ac.uk/fac/soc/pais/research/ researchcentres/ipe/rethinkingthemarket. Accessed 10 Feb 2020 World Trade Organization: Anti-Dumping (2020). https://www.wto.org/english/tratop_e/adp_e/ adp_e.htm. Accessed 10 Feb 2020

Preconditions and Driving Forces for the Development of Electronic Commerce in the Context of Digitalization of the Economy Marina E. Buyanova(&) , Alla E. Kalinina and Irina S. Averina

,

Volgograd State University, Volgograd, Russia {buyanovame,AverinaIS}@volsu.ru, [email protected]

Abstract. Purpose: This article was prepared in order to identify the main problems and prospects for the development of the Internet sales market, which is based on a theoretical study of the functioning of the domestic e-commerce market, and to make a practical analysis of the activities of the world’s leading electronic discounters. Design/Methodology/Approach: To achieve this goal, the authors, developing the content of the article, methodologically relying on a materialistic, positivist worldview, and using comparative and descriptive methods of analysis to study these issues, reveal the main social and economic prerequisites and the driving forces of the development of electronic commerce in Russia in the era of digitalization of the economy. Findings: E-commerce in Russia is affected by the same factors and driving forces as the entire global e-commerce: the formation of an e-commerce ecosystem at the intersection of industries; large-scale penetration of Internet coverage in the regions; transition from electronic to mobile trading; acceleration of development of marketplaces; large-scale investments in logistics (warehouse real estate and post-office network); the accelerating introduction of digital technologies based on artificial intelligence; transition to omnichannel communications with the consumer. Originality/Value: Based on a comparative analysis of the situation in the Russian and regional e-commerce markets, current directions are proposed and substantiated for improving the regulation of the e-commerce market: introducing tax incentives to support online retailers, modernizing the system of statistical accounting of the market, reducing the personnel shortage of the industry, and measures to popularize electronic trade, and they also identifies the most important promising trends in the development of electronic commerce, which have a significant impact on all market entities. Keywords: Digital economy
E-commerce
Information and Internet services
Online sales
Electronic discounters
Online retailers JEL Code: L81


L86
M15
N70

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1516–1525, 2021. https://doi.org/10.1007/978-3-030-59126-7_166

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1 Introduction E-trading is a trading activity, the object of which is a product, and the transaction of sale is carried out through electronic communication channels. E-trading is a component of e-commerce, mainly sold in the B2B, B2C segments. Forms of organizing electronic commerce are diverse, and their hybrids forms allow you to maximize adapt the company’s trading activities on the Internet to the needs of the market. The rapid development of online sales requires appropriate legislative regulation, but at the moment, it doesn’t even have a legalized definition of the term «electronic commerce». The sphere of trade has entered an era of serious transformations caused by the influence of universal digitalization (digitalization). These trends have a positive impact on the efficiency of trading activities and on the development of the entire economic system of the country.

2 Materials and Methods The tasks of a comparative and descriptive analysis of the social and economic prerequisites for the development of electronic commerce on the Internet in the era of digital transformation are solved on the basis of a set of sources in this article. The scientific basis of this article was formed on the basis of domestic research (Skrug 2018; Fomichenko 2019; Krasilnikov 2019; Naumkin 2019; Ishchenko 2019; Bakharev 2019a, b; Chugunov et al. 2016) and foreign (Reynolds 2010; Sebastian et al. 2017; Kokkinakos et al. 2018; Lee et al. 2017) scientists and also from federal and regional laws and regulations; statistical materials of the Federal and regional services of state statistics; reports and accounts of regional authorities; industry reviews. The scientific development of the content of the study was carried out on the basis of the universal scientific method of historical materialism from the position of a positivist worldview. Such methods as collecting and processing, generalization and systematization of information, comparison and analogies, and the methods for constructing diagrams, diagrams and tables were used. The study also used special methods: the method of specific sociological research, statistical, mathematical, etc.

3 Results In recent years, it has become increasingly apparent that offline hypermarkets are losing the war: in economically developed countries, traditional-format retail is characterized by a consistent drop in sales. The number of customers in super- and hypermarkets is reduced, consumers are moving to online retail. Two multidirectional trends are observed - small purchases in traditional retail (especially grocery) are moving from large malls to convenience stores (1–2 times a week). And large purchases have moved from the physical environment to online. Thus, business is actively moving into the electronic segment, forming local

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ecosystems. In Russia, as in most states, a local ecosystem of electronic commerce is also being actively formed. It should be noted that its rapid growth doesn’t occur within the industry, as it usually happens in classical industries, but at the junction with other sectors of the economy (like clusters). As a result, new electronic business lines are forming in the ecosystem and related financial and technical service business units (Reynolds 2010). In addition, the domestic ecosystem is an open subsystem of the global e-commerce ecosystem; therefore, the processes of globalization and glocalization have a significant impact on the domestic sector (Digital Transformation and Global Society, 2016). These processes significantly affect the formation of the landscape of the Russian ecommerce market. So, in the short term, the alignment of forces on it may change significantly. Besides of this, there is a decrease in the cross-border share of electronic commerce because the threshold for duty-free import of goods from foreign online stores has been reduced from 1000 to 500 euros since January 2019. The Federal Customs Service of the Russian Federation claims that this had practically no effect on the crossborder, but industry experts believe that this directly affected the decrease in the interest of Russians in foreign retailers. At the same time, Russian online retailers today received a law facilitating online retail export: from April 1, 2020, they will be entitled to apply a zero VAT rate when sending goods abroad. Thus, Tmall has already announced the opening of a platform for the export of Russian products, WildBerries is also planning to open an online store in Slovakia and build a logistics center there (Kokkinakos 2018). The consolidation process will continue among Russian players - large online retailers will absorb other players (large and medium) and oust small participants from the market. In addition, completely new players who weren’t previously present in this segment: Dixy, Magnit, Vkusvill, Obuv Rossii, Sberbank and Russian Post are already actively joining the e-commerce segment. The implementation of the project of the Internet site «Lenta» is expected. Medium-sized stores (over 900 organizations) also adhere to the strategy of expanding and strengthening market positions. The most successful stores can move to another weight category. The position of small participants in the future remains uncertain. According to experts, most online points are closed in the first year of their existence, due to the high level of competition in the market even in more favorable economic conditions. According to forecasts, no more than 30 major players will remain on the Russian market in the next 5–7 years. The trend of accelerated development of marketplaces, which are specialized intermediary Internet portals, including in Russia, and this closely related to the consolidation processes, which indicates the development of the Russian market in line with global trends. The given trend becomes inconvenient for them to search and compare products and prices on an infinite number of sites, due to the fact that the requests and preferences of consumers are constantly becoming more complicated; they prefer large universal Internet resources on the principle of «all in one place».

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Wholesale purchasers are even more difficult, because it’s necessary to coordinate all the accompanying documentation, build a payment system, and negotiate with logisticians. The key goal of marketplaces is to unite all sellers in one place, both wholesale and retail, to give them access to buyers. Therefore, the business purposefully goes to the marketplace. For the owner of the marketplace, this is an effective way to expand the business, the range of goods and services, and, therefore, generate additional profit without significant investment in the purchase of products and the development of the corresponding logistics infrastructure. At the same time, when organizing such a universal trading platform, basically two standard models are used - a pure electronic marketplace and an online store with marketplace elements (selling your own goods with placing offers of other online stores). Currently, there are already a significant number of marketplaces, both foreign (for example, global giants - the Chinese «Alibaba» and «TaoBao», the American «Amazon» and «eBay»), and Russian diverse platforms: «Yandex. Market», «Google Merchant», «Price.ru», «Toвapы@mail.ru», «WildBerries», «Ozon», «Beru», «Goods» and many others. In 2019, narrow-profile retailers began to launch their own marketplaces. For example, in the children’s theme of children’s goods, Detsky Mir became a trendsetter, which in 2020 plans to launch a pilot version of a new marketplace for clothes and shoes (Krasilnikov 2019). Own omnichannel marketplace launches «Obuv Rossii». It will cover such product categories as shoes, household goods, decorative cosmetics, small household appliances (Pavlova 2019). Golama opens its marketplace service in the product category and Leroy Merlin in the construction category (Naumkin 2019). The driving forces of the e-commerce market include the active development of logistics: retail space is declining, and the demand for warehouse real estate is growing. Large retailers are building large-scale warehouse complexes and distribution centers. E-commerce today is one of the key catalysts for the growth of absorption of commercial space, according to forecasts by Knight Frank analysts, by the end of this year, the segment’s share in the total volume of transactions will increase both in Moscow (up to 10–12%) and in Russia - up to 30–35% (Fomichenko 2019). Another goal for online retailers to invest in logistics is to expand post networks. Postamat (originally - the post office) is an automated station or terminal for the delivery of goods ordered through an online store. They are installed, as a rule, in places of the most intense flows of citizens. Advantages of postamates are: lack of queues and speed of receiving a parcel, no need to wait for a courier; 24/7 round-theclock work format, the ability to pay for the package on the spot, a convenient SMS delivery notification system. Today, Sberlogistics, Dixie, X5, Megafon and other players have voiced their plans for creating postamates networks, and those retailers, who already have similar networks (for example, Ozon), are actively expanding them. Thus, 2020 will be the «year of postamates» (Bakharev 2019a, b). In parallel, a trend is developing for the issue of goods at the box office. It’s logical to take advantage of the existing chains of stores near the house. Such stores today are

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located almost every 300–500 m. So, «Aliexpress» began delivery to the box office «Pyaterochka» and «Perekrestok». The logistics service Sberlogistics will deliver orders from Beru to Sberbank branches (Ischenko 2019). World trends that determine the vector of electronic commerce development are also closely related to digital technologies (Fig. 1).

Digital Technologies Wireless and Mobile Technologies

Augmented Virtual Reality

Face and image recognition

Artifical intelligent

Cloud technologies

Mine training

Social networks

Big Data

Abilities Omnichannel interaction

Real-time shopping

A new level of automation

Individualization of goods

Fig. 1. World trends in trade (Skrug 2018)

The accelerated growth of the e-commerce market is caused, first of all, by the global spread of broadband Internet access and the processes of globalization of the world economy. The growth of Internet commerce is greatly influenced by the widespread penetration of the Internet throughout the country. Another growth driver of the Russian e-commerce market is the intensive development of its regional segments. According to experts, by 2020, the regions will account for up to 80% of Internet shoppers and about 65% of the total Internet commerce market. This will be facilitated by the reduction of the «digital gap» between the capital and the regions, the growth of the general technical literacy of the population, the digital audience (generation Z, which grew up with information technologies), and the solvent age. At the same time, there is an active growth of the mobile Internet in almost all macro-regions (Buyanova 2018). A single 4G network coverage has transferred a large share of potential buyers to the mobile sales sector. For businesses, the adaptation of sites for mobile devices today is becoming a key task of Internet marketing. According to World Bank forecasts, another 1 billion new users of mobile gadgets will have already gained access to the global network in 2020. Thus, the mobile network segment is transformed into a key channel of communications, pushing access from desktops. Such a transformation transforms the Internet space into the «Anyplace, Anytime, Everything» configuration (everything anywhere, anytime), including electronic Internet trading services (Lee 2017). Thus, electronic commerce in Russia is influenced by the same factors and driving forces as the entire world electronic commerce. In the Russian Federation, as in most countries of the world, a local ecosystem of retail Internet trade is also actively forming, while the Russian system isn’t closed and is subject to the influence of modern

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processes of globalization and glocalization. These processes significantly affect the formation of the landscape of the Russian e-commerce market. So, in the near future, the alignment of forces on it can change significantly: many foreign players will come, and among Russian players consolidation will continue, the segment of foreign and domestic marketplaces is actively developing. The driving forces of the e-commerce market include the active development of logistics: retail space is declining, and demand for warehouse real estate is growing, extension networks are expanding, and delivery of goods to the cash registers of convenience stores is developing. The development of digital technologies has a significant impact on this area: the ubiquitous development of mobile Internet, omnichannel technologies, social media, artificial intelligence, etc. The global e-commerce market is growing rapidly: in 2018, its volume increased by 18%, and the total value of all online orders amounted to $ 2.86 trillion. The volume of the global e-commerce market in 2019 can reach $ 3.5 trillion, follows from the results of the Internet Retailer study. According to expert analysis, the volume of online retail sales in 2016–2019 grew by an average of 20% per year, while retail sales increased by only 3.5% per year. Respectively, the market is growing, mainly due to online commerce, experts conclude. At the same time, the share of online retail sales increased from 10.5% in 2016 to 16.4% in 2019. If this trend continues, then the global e-commerce market would exceed traditional retail volumes by 2036. As far as consumers gain confidence that they have a good online shopping experience, they search the Internet for higher quality products at lower prices. There are more than 50% of online shoppers in the Middle East, Africa, Europe and Latin America have already chosen products on sites based outside their own countries, as 48% of consumers in the Asia-Pacific region do, according to a PayPal survey. There are also positive trends in Europe, the volume of electronic commerce will have increased by 13.6% and amount to 621 billion euros by the end of 2019 (Fig. 2). Such a forecast follows from the latest Ecommerce Foundation report on e-commerce in the region. The study showed that the Scandinavian countries continue to occupy the highest positions in important indicators of electronic commerce. For example, Denmark is the country with the highest ranking in Europe for ease of doing business, while Sweden, Denmark and Finland are in the top 10 of the global logistics efficiency index. According to the Ecommerce Foundation, most of the e-commerce turnover is concentrated in Western Europe (66%). Eastern Europe accounts for only 23 billion euros of the total (547 billion euros) in 2018. In Switzerland, the UK, and Denmark, the proportion of online users who shopped online last year is more than 85%, while in countries like Romania and Ukraine, less than 26% visited online stores last year. The leader is Switzerland, where 88% of buyers make purchases through the online channel. The highest costs per Internet shopper are in Northern Europe. They average 2045 euros per year there. For comparison: the average cost of online shoppers across Europe last year was 1346 euros, and by the end of this year, growth is projected up to 1464 euros.

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€ 621.00 € 547.00 € 489.00 € 429.00 € 386.00 € 328.60 € 279.30

2013

2014

2015

2016

2017

2018

2019

Fig. 2. The dynamics of the electronic commerce market in Europe for 2013-2019. in the B2C segment, billion euros (Bakharev 2019a, b)

In Europe, customers prefer to buy goods from European sellers. The exception is Montenegro, Macedonia, Serbia and Iceland, where buyers are loyal to sellers not from Europe. The B2B sector in Europe also has a high proportion of companies that have already had their own online sales platform (77%). 70% of them have been selling online for 1–2 years, 40% of manufacturers have their own e-commerce staff of 10 or more employees, 5% sell on B2B marketplace like Amazon Business. In Russia, the market size reached $ 13.54 billion in 2018 and, according to the research company Data Insight, already $ 30.6 billion in 2019. At the same time, Russia is in 9th place in the top ten largest e-commerce markets (Fig. 3). Currently, the share of online trading in Russia’s GDP is 1.3%. For comparison, in the UK this indicator is 2.8%, and in the USA - 2.6% (Fig. 4). Thus, we can conclude that the domestic e-commerce market is a fast-growing market with great potential. Currently, about 84 million people are involved in it, while in the European Union the average level of consumer involvement in online sales is 77%. If our country achieves the same indicator, it would add about 26 million new Internet users to the market. The e-commerce market will grow with the increase in the number of users involved.

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Fig. 3. The volume and growth of the e-commerce market in 2019, million dollars (Report «Internet trading in Russia 2019», 2019)

Fig. 4. The share of online trading in the GDP of countries (Report «Internet trading in Russia 2019», 2019)

4 Conclusion A comparative analysis of electronic commerce in Russia and abroad showed that we can distinguish the following trends in the development of the Internet commerce market at the moment:

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1) every year the number of e-commerce entities increases on the demand side and on the supply side; 2) the number of mobile purchases is increasing, which can lead to the replacement of electronic commerce with mobile; 3) electronic commerce is spreading in social networks and instant messengers. It should be noted that, while earlier Russia was noticeably behind the foreign countries in all respects, now the backlog, including the technological one, is noticeably and rapidly decreasing. All promising areas of electronic commerce development can be grouped into two clusters (Buyanova 2018): 1. The using of marketing tools in the area of online sales. 2. Active using of the latest digital technologies. The activation of marketing is due to a significant increase in the number of subjects of the proposal, which leads to increased competition for the consumer. The focus of the marketing concept is always the consumer. The key marketing trends of 2020 are an individual approach and customization of offers, the active using of social media and instant messengers as an effective marketing channel for online sales. At the same time, it’s impossible to satisfy the modern digital consumer without the latest technologies. Today, more than ever, lead scoring, blacklist services, personalization of advertising content based on BigData, voice search and Augmented Reality technology Augmented Retail, total automation, chat bots and omnichannel communication with the consumer are relevant.

References Bakharev, I.: Internet commerce is preparing for take-off. Kommersant Newspaper (2019a). https://www.kommersant.ru/doc/4187706. Accessed 11 Dec 2019 Bakharev, I.: eCommerce in Europe: detailed analytics by the Ecommerce Foundation (2019b). https://e-pepper.com/news/ecommerce-v-evrope-podrobnaya-analitika-ecommercefoundation.html. Accessed 10 Nov 2019 Buyanova, M.E., Shiro, M.S.: Analysis of the effectiveness of approaches to clustering a regional economy by the example of the regions of the Southern Federal District. Reg. Econ. South Russ. 3(21), 80–87 (2018) Ishchenko, N.: Pyaterochka will issue parcels of Sberlogistics at the box office (2019). https:// www.vedomosti.ru/business/articles/2019/12/25/819672-pyaterochki. Accessed 26 Dec 2019 Krasilnikov, S.: Detsky Mir will launch in 2020 a pilot version of the marketplace for the sale of clothes and shoes (2019). https://tass.ru/ekonomika/7006148. Accessed 11 Dec 2019 Naumkin, M.: E-commerce 2019–2020: 15 main trends (2019). https://e-pepper.ru/news/ elektronnaya-kommertsiya-2019-2020-15-osnovnykh-trendov.html. Accessed 11 Dec 2019 The report “Internet trading in Russia 2019”: Data Insight Agency (2019). http://datainsight.ru/ sites/default/files/DI_Ecommerce2019.pdf. Accessed 12 Dec 2019 Pavlova, O.: Obuv Rossii will make offline marketplaces from its stores (2019). https://www. kommersant.ru/doc/4171805. Accessed 14 Dec 2019 Skrug, V.S.: Innovative technologies in trade. Russ. Entrep. 19(8), 2291–2300 (2018)

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Fomichenko, K.: According to Knight Frank forecasts, by the end of the year, the demand for warehouses among online retailers will reach 35% (2019). https://kf.expert/news/poprognozam-knight-frank-k-koncu-goda-spros-na-sklady-sredi-onlayn-riteylerov-dostignet-35. Accessed 11 Dec 2019 Buyanova, M.E., Mikhaylova, N.A.: Risks of entrepreneurial activity in a region: assessment and regulation. Adv. Econ. Bus. Manag. Res. 39, 635–640 (2018) Chugunov, A.V., Bulgov, R., Kabanov, Y., Kampis, G., Wimmer, M. (eds.): Digital Transformation and Global Society: First International Conference, DTGS 2016, St. Petersburg, Russia, June 22–24, 2016, Revised Selected Papers, pp. 96–105. Springer, Cham (2016) Kokkinakos, P., Markaki, O., Koussouris, S., Psarras, J.: Digital transformation: is public sector following the enterprise 2.0 paradigm?, pp. 411–421. Springer (2018) Lee, M., Lee, Y., Chou, C.: Essential implications of the digital transformation in industry 4.0. J. Sci. Ind. Res. 76, 465–467 (2017) Reynolds, J.: The Complete E-commerce book: Design, Build & Maintain a Successful Webbased Business, 2nd edn. CRC Press, Boca Raton (2010). 374 p. Sebastian, I., Ross, J., Beath, C., Mocker, M., Moloney, K., Fonstad, N.: How big old companies navigate digital transformation. MIS Q. Exec. J. 16(3), 197–213 (2017)

The Application of Digital Technologies in Financial Reporting and Auditing Olga Ageeva1(&)

, Marina Karp1

, and Anton Sidorov2

1

2

State University of Management, Moscow, Russian Federation [email protected], [email protected] «Academiya-Bazis» OOO, settl. Kraskovo, Moscow, Russian Federation [email protected]

Abstract. The authors of the papers are trying to answer the question concerning the innovative digital technologies that would facilitate the digitalization of accounting, financial reporting, and auditing. To this end, the authors carried out an analysis of global trends on the application of digital technologies in related fields and also prepared a summary of findings presented in reviews of consulting agencies and the articles of famous scientists. The article describes the methodology of distributed ledger technology (blockchain) as well as justifies the urgency and feasibility of using blockchain technology in financial reporting and auditing. Findings: 1. Key trends in the development of financial reporting and auditing have been revealed, namely integration into the digital environment, a description of big data working methods, the transition to online reporting and its continuous audit. 2. An algorithm for the application of blockchain technology in accounting, reporting, and auditing has been proposed. 3. A classification of fraud cases in financial reporting in Russia has been provided and blockchain-based preventive measures have been outlined. Keywords: Financial statements
Accounting
Auditing
Digital technologies
Digitalization
Distributed ledger
Transactions
Blockchain Online reporting
Book-cooking
Misrepresentation of information
Continuous audit JEL Code: M21





M41
M42

1 Introduction Today, the notion of “digitalization” is of great importance in ensuring the competitiveness of the Russian Federation at the modern economic stage. The digital economy has become an essential part of the professional life of a man affecting all the areas. It also dramatically transforms accounting and financial reporting. In this article, we examine innovative digital technologies that would be the most suitable for accounting and financial reporting, their essence, and applications in this field.

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1526–1534, 2021. https://doi.org/10.1007/978-3-030-59126-7_167

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2 Background and Methodology Studying the declared topic, one cannot but pay attention to the joint research on the technological future of audit conducted by the international consulting company Grant Thornton and ACCA (The Association of Chartered Certified Accountants) in different countries of the world, including Singapore, China, the United Arab Emirates, the United Kingdom, the European Union and the South African Republic (Analytical GRI review). The article concludes that one should search for new innovative solutions in financial reporting and auditing due to upsurge in the scope of information used by business and the rate of transfer thanks to innovative digital technologies. A business should be responsive to changing conditions, particularly online because the financial reports to be audited quickly become up-to-date. While the number of information sources for business and its diversity is growing every day. In a point of fact, all corporations have their own websites with constantly updated information available for each user. New information requires from investors and management new solutions that can be delivered through business transactions changing accounting and financial reporting. Thus, when choosing new innovative methods the global community of auditors is only left to use digital technologies enabling the collection, processing, accounting for a large bulk of data, online presentation of recorded information in financial reporting items and its online auditing. The topic of the study has already been covered by us in the following works (Ageeva 2008, 2020a, No. 4, b, No. 5; Ageeva et al. 2018, 2019; Bogoviz 2019). The topic keeps on sparking the interest of other authors. Many celebrated Russian scientists in financial auditing have started to pay much attention to the discussion of the problems posed in this article. For instance, it’s Professor Pankov V.V. who noted in his writing (Pankov and Kozhukhov 2019, No. 12) that digital tools are now able to predict the development path of different areas of professional activity, including financial auditing. Among the key areas of audit development, he enumerates integration into the digital environment, seeking big data working methods and the transition to the so-called “continuous audit” defined by him as the capability of providing continuous online monitoring of all changes in the digitized information of financial statements in the audited company against conventional time-taking samples and evaluations of information, as well as its retrospective analysis. In the above conditions for submission and audit of financial statements, it is necessary to find new methods for evaluation of assets and liabilities constituting the “capital” index, as well as revenues and expenditures, new approaches to confirmation of accounting information. Thus, the time issue in the audit turns from retrospective one into the current, or, more specifically, online. Alongside, in the innovative digital technologies, retrospective storage of information as of each calendar date should be provided, thereby leaving the opportunity to estimate its dynamic trend. Automated audit procedures have become independent of the auditors themselves, that is, new methods of data processing and storage are much superior to human intelligence. However, we believe that the final decision will be made by a professional who relies on digital data and the alternative options offered by the network.

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The digitalizing facts of economic life, in our opinion, will lead to the situation that the audit functions will also be built into the network. The audit will be carried out rather on the back of the analysis of automatically generated protocols than on an evaluation of the information making up the financial statements. By big data in an audit, we mean information bulk flows with a high rate of acquisition and transfer, as well as high-tech innovative methods of processing and presenting this information in various forms in a digital network that automates the decision-making process. Our attitude to online maintenance of accounting records and financial statements online and the related transformation of accounting methods, chart of accounts and other accounting tools are represented in earlier works (Ageeva 2008, 2020a, No. 4, b, No. 5). We suppose that Distributed Ledger Technology is the most interesting for the digitalization of accounting information. This one has become widespread among users of digital tools with the advent of cryptocurrencies and efforts to develop an alternative to a current payment system that would have unrivaled advantages over traditional systems, including enhanced security of information. A distributed ledger is a technology designed to independently distribute information between a great number of communication nodes for data storage purposes in contrast to ordinary technologies that perform these procedures through a central service. Each node can enter changes to the ledger without coordination with other hubs. After that, all nodes are voting. In the event of consensus, the changes will be introduced within a few minutes. Blockchain toolkit is a type of distributed ledger technology. Only a few distributed ledgers are blockchains, however, both technologies provide decentralized data storage by means of the consensus between members or communication nodes. Information in the ledger can be recorded in different ways. For example, in the blockchain, information is recorded by blocks. Thus, we understand blockchain as some digital register where transactions (operations with assets between network nodes corresponding to each other) can be recorded by information blocks connected into a single blockchain. On the one hand, blockchain is a source of reliable information as of current date, and, on the other hand, it allows getting a history of transactions with assets (the full list of transactions). The interests of the parties registered in the blockchain are usually coordinated through a special consensus protocol common to all network members and, along with it, cryptographic hashing algorithms, as well as electronic digital signatures to ensure integrity and reliability of the transaction. A consensus agreement is a guarantee of the accuracy and reliability of distributed ledger copies. It minimizes the risks associated with fraudulent transactions. In fact, the hash is a token that provides access to the blockchain node, and electronic digital signatures guarantee that transaction parties are legal. The risks are low because transactions can’t be changed and disputed by anyone after reaching consensus and entering data into the register. The scope of members is the widest (from profit-making companies and public agencies to individuals). The blockchain repository can contain various data, including information making up the financial statements.

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In our opinion, over time this digital tool will be able to change the whole world since it has hefty advantages over conventional storage technologies. They, first of all, include intermediary-free settlements between digital network members (without banks). In the distributed ledger there is no central source of information origin. In this regard, blockchain technologies provide higher trust, faster contract execution, reliability and integrity of information flows, well-timed contract settlement, as well as lower risks and audit costs. Further, let’s dwell on the study of current book-cooking methods and preventive algorithm delivered through control and audit using the distributed ledger technologies, particularly blockchain. The problem of fraudulent actions committed by accounting services staff in making up accounting (financial) statements (book-cooking) is persisting. The above is associated with the complication of economic relations, utilization of many financial reporting standards, as well as the development of digital technologies. By book-cooking, we mean willful actions committed for personal gain and in breach of established legal rules. Fraud can be implied as concealment of particular revenues and expenditures or their partial presentation in accounting (financial) statements. Fraud, as a rule, is a willful act, an intention to evade taxes and gain the unjustified benefit, with the dishonesty of particular employees. For unveiling and preventing fraud in financial statements, business owners, sometimes top management, apply for a voluntary audit. Due to changing economic conditions change, in particular, introduction or replacement of additional legal rules, amendment or updating of accounting standards, the transition to new rules for tax base computation, etc., more sophisticated approaches to the distortion of information in financial statements emerge. In view of the foregoing, conventional auditing methods to combat fraudulent actions should be transformed in accordance with the new conditions of business operation. The most widespread book-cooking methods are: – substitution or distortion of information for personal gain entailing breach of legal rules; – unfull disclosure of information from primary documents for personal gain; – distortion of financial statements through the false interpretation of content and evaluation of its articles; – direct violation of accounting and tax laws; – illegal methods of accounting and tax administration; – manipulating the performances of financial statements and non-compliance with the adopted accounting policies for tax mitigation; – substitution of accounting information to disguise the financial status and financial performance, in particular, when entering stock exchanges or selling a business. Accounting staff can overrate profits, undervalue the liabilities, and specify ambiguous receivables in reports to present the company’s state of affairs in the most favorable light to business owners and get a rewarding incentive from the gain. In particular, you know the type of profit overrating as deferred payments under the terminated contract, which increases the receivable of customers to the organization in

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the balance sheet and inflates the profit in dynamic reports respectively. Current expenditures can be underestimated through their capitalization in the value of assets, which contravenes legal rules that allow for the capitalization of expensive investment assets only. Summarizing the above stated, let us classify the methods of data fabrication in financial reports by some features to ensure their formalization using the opportunities provided by innovative digital technologies, including blockchain. One of the book-cooking methods is used by the contractor: 1) owner and management; 2) employees; 3) conspiracy at different levels. This method makes it possible to conclude contracts at the highest level with economic content that does not correspond to their legal form and distorts the information of primary documents at the level of employees respectively. Another feature of classification is its scope: 1) individual financial statements of one company; 2) consolidated statements of a group of companies. A feature of the classification can also be fraud methods Among them are: 1) entering into the accounting ledgers unconfirmed data that do not correspond to the information of the primary documents; 2) unjustified corrections in the primary documents. It is known that information from primary documents, passing through analytical, synthetic and mixed registers, comes to accounts the balance of which is formed by a static financial report – balance sheet, and turnovers – by three dynamic reports (profit and loss statement, cash flow report and statement of changes in the owner’s equity; 3) entering into contracts unfavorable for the company in anticipation of material benefits in the form of cash kickbacks from customers or other fraudulent acts. Types of distortion are as follows: 1) a direct distortion of the static report items – the balance sheet (unreliable disclosure of company’s assets and liabilities), as well as dynamic report items; 2) unfull disclosure of information in the explanatory note, omission of substantial facts of financial activity affecting the value of performances in financial statements. The most extensive feature of the classification is fraud targets. Let us provide the examples: 1) the endeavor by all means to ensure meeting the applicable statutory requirements, criteria, ratios, threshold indicators in a particular field; for example, for banks, insurance companies; for agencies applying the simplified tax system (STS) and others; 2) demonstrating to customers or owners overestimated market performances and the quality of products and services, which allows either to attract more customers in the competition or to get bonus payments from owners, supplementary benefits from profit, to climb the career ladder; 3) avoiding planned mergers and acquisitions or illegal takeovers, distortion of financial statements by altering the market value of a business; 4) personal gain and withdrawal from liability for fraudulent acts in the event of expected change of management; 5) underdeclaration of profits within a monopoly in a particular field to mislead the antimonopoly service and justify the inflated selling prices of goods, works, services, transportation tariffs, and gain excess profits; 6) understatement of profits to increase competitive advantages, for example, over import manufacturers by attracting state support; export enterprises often do the same; 7)

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reaching investment attractiveness, often when entering an IPO (Initial Public Offering) and placing own shares on the stock exchange for public sale for the first time. In this situation, companies, as a rule, overstate assets and consequently balance sheet by the illegal capitalization of current expenditures for the attraction of new prospective investors; 8) assuring an illegal (by a bribe) victory in competitions for state order, fishing quotas, mineral extraction permissions, construction, etc. Besides, the company conceal the facts of the corruption of public officials, encouraging and employing it for personal gain; 9) personal gain in the form of material benefits by stealing the company’s funds, starting with the usual theft from a warehouse, office or in another way, paying for goods and services for private consumption at the expense of the company and ending with the embezzlement, for example, using transport and driver services when transporting relatives or personal property. Such fraud can be reached through fabrication of primary documents; 10) illegal deduction of the tax burden, except for tax planning and justified utilization of gaps in tax legislation, lowering the overall amount of tax payments through various schemes and methods of tax evasion; fabrication of the right to tax benefits, reduction of tax rates, deduction of tax bases through distortion of financial reporting information; understatement of cash-desk money constituting the company’s revenue. It should be noted that there will be discrepancies in the information: the number of stock goods will be lower than ones sold through the cash desk, suppliers’ invoices will have to be reprinted. In these circumstances, unscrupulous business representatives often use the seals of ghost suppliers or fly-bynight companies (Gul’kova et al. 2019a, No. 4, b, No. 12). The above list of book-cooking purposes is not exhaustive. As we have established, fraud regarding misrepresentation of information in financial statements may be an illegal and shadow strategy of the entire company and its management or may be associated with low internal control and delivered by employees. Anyway, these problems can be overcome by strengthening internal control in the company or engaging statutory auditors for voluntary inspection. Every day, we see new methods of fraud that have not yet detected by law enforcement agencies. It is not surprising that the continuous application of innovative digital technologies will help in financial reporting and auditing will help to prevent them. Technical capabilities are available and described by us above.

3 Discussion and Findings Let us return to distributed ledger technologies and try to combine their capabilities with the pressing audit problem consisting in the detection of book-cooking cases and fraudulent acts of interested parties. The point is that innovative digital technologies shouldn’t identify distortions in financial statements since their application will allow preventing and avoiding them. Let us describe such preventive starting from the stage of financial report generation and ending with the audit. Along with that, we assume that over time, an audit of financial statements, as a function of reliability confirmation, will not be wanted at all, since no one can interfere at any stage thanks to digital technologies.

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To overcome the above-indicated problems, we propose to introduce a digital audit model that will interact in a digital network with a decentralized accounting system and online financial reporting. Accounting and online financial reporting should be arranged in a way that all new accounts will be executed in a distributed ledger chain, which technological capabilities have been described above. For arrangements, specialized software and a single digital accounting unit (DAU). Today, all economic agents keep records and each event is recorded several times, for example, the customer-seller chain. A unified data register, which is suggested to develop based on innovative digital technology of a distributed ledger, will allow companies to record transactions in one blockchain, which will ensure the reliability of all accounting operations. If another interacting party (statutory auditor and (or) the supervising body is given access to the indicated blockchain, then the continuous audit and control mentioned in the discussions can be provided. In the suggested plan of actions, the main source of information for inside and outside users will be rather records of all interacting parties in the register than financial statements. This approach will reduce the time spent on audits, as well as allow auditors and (or) supervising authorities audit the entirety of companies of a particular industry or even region since the audit of financial statements is transformed into a continuous inspection of all previous and current online records (transactions) in a digital blockchain. Figure 1 presents a piece of a digital blockchain that contains information about all business transactions between companies A and B. This blockchain will be accessible to auditors and (or) supervising bodies who can automatically get information from it.

Fig. 1. Audit model of financial statements in a decentralized accounting and reporting

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The issue of developing decentralized accounting has been discussed many times in The Association of Chartered Certified Accountants) (FASB). The most urgent and controversial issues discussed were data security and accessibility, as well as the necessity for standards amendment. Researchers over the world are studying the feasibility and prospects of distributed ledger technologies in the financial sector, in particular for accounting, financial reporting and auditing. In our opinion, the Canadian PayPie project should be recognized as the most forward-looking and substantial developments of our time. According to the concept, information about every fact of economic life is recorded into a unified register automatically or in hand. Such chains are further used to calculate revenues, expenditures, accounts payable, accounts receivables and other indicators of financial statements. The system also provides for credit risks assessment and automated checks of the financial status of the company based on transaction history.

4 Conclusions Thus, we believe that the transition to decentralized accounting, online reporting, and continuous audit is feasible. It should be understood that during the first several years the transition will take place alongside with application of the conventional accounting system. With that, it is necessary to establish conditions for this transition, i.e. develop and introduce a single digital accounting unit (DAU) and an innovative digital platform using innovative digital technologies of a distributed ledger, in particular blockchain. In general, we see an accounting and reporting system as follows: – each transaction with a digital accounting unit will be recorded in a distributed ledger; – information is arranged and supplemented by data entered in hand with the help of programming tools; – the program generates financial statements, which are automatically delivered to the server of the audit company and (or) supervising bodies. It should also be borne in mind that the transaction register should provide equal rank access to information. Audit companies and (or) supervising bodies can continuously monitor the financial activities of companies subjected to audit and supervision. Summing up, let us remark that the system of accounting, online reporting, and its continuous audit developed using digital technology of the distributed ledger, will make it possible to considerably reduce errors, abuses, and inaccuracies when making up financial statements and further prevent all types of fraud occurring in this field and described by us in the article.

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References GRI analytical review: Sustainable development and reporting trends in 2025: preparing for the future. https://www.accaglobal.com/content/dam/ACCA_Global/Technical/audit/ea-futureof-audit.pdf. Accessed 11 Feb 2020 Ageeva, O.A.: Metodologiya obespecheniya edinstva buhgalterskogo ucheta otchetnosti: dis.doct.econ.nauk: 08.00.12 [Methodology of Ensuring the Uniform Financial Accounting and Reporting: Thesis by the Doctor of Economics (Habilitation Doctorate)], Moscow, pp. 252–262 (2008) Ageeva, O.A.: Improving the Russian Chart of Accounts in the Digital Economy. Publishing House of the State University of Management. University Bulletin, no. 4 (2020a) Ageeva, O.A.: Transformation of Accounting Methods in the Digital Economy. Publishing House of the State University of Management. University Bulletin, no. 5 (2020b) Ageeva, O.A., Bogoviz, A.V., Osipov, V.C., Kletskova, E.V., Makuscyenko, L.V.: Unreadiness of society for information economy. In: Models of Modern Information Economy: Conceptual Contradictions and Practical Examples, pp. 115–125 (2018) Ageeva, O.A., Tolmachev, O.M., Prodchenko, I.A., Kirova, E.A., Zakharova, A.V.: Current Applications of Mobile Technologies in the Scientific and Educational Process. Studies in Computational Intelligence, vol. 826, pp. 933–939 (2019) Bogoviz, A.V., Rycova, I.N., Kletskova, E.V., Rudakova, T.I., Karp, M.V.: Tax Awareness and “Free Rider” Problem. Studies in Systems, Decision and Control, vol. 182, pp. 117–1238 (2019) FASB: Topics of FASAC meeting. https://www.fasb.org/jsp/FASB/FASBContent_C/ AdvisoryGroupsPage&cid=1176169727447. Accessed 11 Feb 2020 Gul’kova, E.L., Karp, M.V., Tipalina, M.V.: Tax Challenges of the Digital Economy. University Bulletin, no. 4, pp. 89–95 (2019a) Gul’kova, E.L., Karp, M.V., Tipalina, M.V.: Improving the performance of tax audits in the context of economic digitalization. Financ. Econ. (12), 435–438 (2019b) Ezerskiy, F.V.: Fraud, Errors and Losses Disguised in the Correct Balance Sheets of the Double Italian Accounting System and Evidence of Accuracy of Russian Triple System. Schetovod, Saint-Petersburg (1876). 78 p. Pankov, V.V., Kozhukhov, V.L.: Transformation of the Audit Institution in Terms of Digital Technology Application. Audit, no. 12 (2019). https://gaap.ru/articles/Transformatsiya_ instituta_audita_v_usloviyakh_primeneniya_tsifrovykh_tekhnologiy/. Accessed 11 Feb 2020

Marketing Technology of Testing the Demand for a Mobile Application Gennady Azoev1(&), Kato Shizuko2, and Ekaterina Sumarokova1 1

State University of Management, Moscow, Russian Federation {gl_azoev,ev_sumarokova}@guu.ru 2 Meiji University, Tokyo, Japan [email protected]

Abstract. Nowadays, the market potential of new digital products is assessed on the back based on expert reviews, which are highly personal and always statistically insignificant. Therefore, investors (who are responsible for commercialization) are suspicious about such an assessment. The authors set a goal to solve the recurring problem of inaccuracy (approximation) of such an assessment concerning digital products at the design stage. A marketing testing technology with statistically significant and representative target groups of potential Internet users as the main source of information on the demand for innovation served a methodological background. This helps to avoid personal expert evaluations, minimizes the measurement error, thereby allowing for a reasonable assessment of market potential at the first stages of making decisions on project funding. The presented technology is exhibited using the example of a designed mobile application with health care functions. In general, such a technology, in addition to higher accuracy of measurements, can be a useful tool of selection and classification of projects applying for the development of digital products. Its introduction in the expert assessment carried out by Russian investment funds, banks, consulting and analytical agencies will mitigate the financing risks and focus it on the market at the early stages of the project development and lay conditions for a profitable web business in the future. Keywords: Digital product
Mobile application
Health care
Smartphone Demand assessment
Marketing testing JEL Classification Codes: M31





M37

1 Introduction The new digital product (unlike offline products) is exposed to a wider range of market risks, mainly due to a weak understanding of Internet users’ behavior and the higher novelty of digital products. The use of conventional methods for demand assessment (using standards of consumption; purchasing power index; purchase frequency and standard consumption rates; primary sales, resales, and after-sales, etc.), described, for example, by (Azoev et al. 2018, pp. 93–101) is usually constrained due to the orientation of these methods to products manufactured and sold offline. They do not take © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1535–1543, 2021. https://doi.org/10.1007/978-3-030-59126-7_168

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into account the specific features of the webspace, the peculiarities of digital products and the behavior of Internet users. These constraints can be overcome by distinguishing special target groups among Internet users that could be interested in the suggested product and focused testing of product parameters in this environment.

2 Background and Methodology A study of models and methods suggested today to enhance the accuracy of assessing and forecasting market capacity and demand for new digital products presented by modern theorists in works on innovation management and digital marketing revealed two major constraints to the development of integrated and efficient technology of demand for new digital products: 1. The prevailing conventional approach to the assessment of the demand for new products is aimed as a rule at assessing novelty and/or conformity to international standards, in other words, on expert evaluation of the product competitiveness. Current concepts and approaches (Antonets et al. 2010; Pérez-Astray and Babío 2011; Kashirin and Semenov 2009; Kashirin 2015; Kashirin et al. 2016; Khomkin 2009; Kozlovskaya and Radionova 2015; Yakovleva and Demidenko 2014; Yakovleva 2015, et al.) pay less attention to assessing how target groups of real and regular consumers treat such products. This especially increases the risks of developers when it comes to unique knowledge-intensive digital products with highly-specific features and dynamic trend of market diffusion. 2. Available model and methodology tools for market assessment and forecasting of demand for the results of projects on development of new (including digital) products (Aniskin et al. 2017; Antonets et al. 2010; Azoev et al. 2011; Geni 2017; Giannella 2015; Kormishkin et al. 2016; Kotler and Keller 2015; Lyasnikov et al. 2017; Zobov et al. 2016, et al.) is largely limited by expert assessment mechanism of product diffusion implications in market. Despite the importance of expert assessment, one cannot but mention its personal nature and statistical invalidity (insignificance). The last point is confusing investors who want to get a reliable assessment of market potential, as their resources are put at risk. It should be stressed that some successful (as a rule, foreign) solutions to the problem of forecasting the demand for digital products are developed by consulting and analytical companies and agencies (for example, BCC Research and Lux Research in the USA, Cientifica in Great Britain). However, they are rarely published, as they are protected by copyright as sources of revenues from consulting in the high-tech industry. The search for solutions to the presented problem is continuing, unfortunately abroad. The experience makes technologically developed countries to deal with this problem both in theoretical and practical terms. The scientific idea of the suggested technology is to develop a unique methodology of testing the demand for new digital products focused on (potential) consumer’s

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assessment of the market prospects of digital products (in contrast to the currently used expert assessments and theoretical calculations of competitiveness). The problem to be solved is to make demand estimates more accurate and mitigate the funding risks related to the development of digital products. The problem is expected to be solved through an examination of data on potential consumer’s behavior. The marketing testing technology suggested in this article is presented using the example of a digital product, a designed mobile application offering individual health recommendations to the user. The purpose of testing lied in assessing the features of potential user’s behavior determining the demand for mobile application: – the extent of relevance of health-related values (relevance of the product); – awareness of own state of health (knowledge of the problem); – interest in a free application offering individual recommendations (potential demand); – reasons for declining the application (potential rejection of the application); – willingness to pass tests as recommended by application (readiness to use the product); – preferences for application name options (joint product design). The testing methodology has been developed using a descriptive, field quantitative marketing study, conducted through a face-to-face poll of Moscow residents using various mobile applications. We polled 820 people (50% of men and 50% of women) of 25–45 years old who have used some mobile application over the last 3 months (the general population serving the basis for sample selection in Moscow is about 1.8 million people). The above sample parameters provided a statistical error ±3.4% under a 95% confidence level, which is acceptable for using test results in marketing practice.

3 Discussion and Findings Testing the relevance of health-related values (Fig. 1) is important for the minimization of errors associated with the application concept, its framework, and the main content. All listed elements of the application should meet the consumer’s priorities. During the test, we have proved the initial hypothesis on “the best recovery during sleep” as the most relevant value. The last thing all respondents want is to think about the prevention of life-threatening diseases. From a practical point of view, it is important to lay emphasis on the general health effect when presenting an application. Developers should avoid mentioning dangerous diseases, as this causes bad feelings and a negative attitude to the application respectively.

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I want to prevent cancer

21%

I want to prevent heart stroke

23%

I want to prevent heart disease

25%

I want to know about foods that are really suitable only for me I want to check whether I am really healthy, whether there are any risks to my health in the future that can be prevented

7%

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1%

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I want to strengthen my immunity and be less vulnerable to viruses

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I want to make my sexual life brighter

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I want to increase my productivity I want to be more goal-oriented and committed to the things that are really important to me

54%

I want to have more energy for outdoor activities and work

55%

I want to live longer

57%

I want to be sure that the health of my family members is good (for example, I want them to pass a medical check)

59%

I want to be smarter, think faster, and learn better

61%

I want to have a high-quality sleep and better recover during sleep

Very relevant

21% 1%

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No answer

Fig. 1. Testing the relevance of health-related values

It has been also found that women are more concerned about their health than men, but this difference is not critical (the same is about different ages). Therefore, the promotion strategy of the application should be aimed at both men and women of different ages. A significant finding is that ill people are also more concerned about the health of their families. In this connection, the following promotion options can be used when marketing a product: 1) presenting the application for healthy people (general health care/prevention of diseases); 2) developing a special version of the application for ill people.

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Fig. 2. Testing awareness of one’s state of health (including available survey findings)

Testing awareness of one’s state of health (Fig. 2) unlocks the potential for the introduction of an application operating these parameters. According to the poll, this potential is quite high. Only 12% do not know any health parameters of their body. The respondents interested in the application are more aware of their body parameters than those who are not interested. Moreover, the more severe the health problems, the higher the awareness. In general, testing showed that there is no need to alter the parameter entry form due to the user’s sex, and most users will be able to work with the application immediately after download, which will speed up product introduction. Testing an interest in a free application (Fig. 2), which is the main marker of the potential demand, showed a high willingness to use the application (over 70%). Besides, 25% of respondents (more than 200 people) have been ready to download the application at the time of demand testing. If we take into account that the general population which served the basis for the sample selection is 1.8 million people in Moscow, about 450 thousand people are ready to download the application. (with the sampling error ±3.4% (434–465 thousand people)). But in general, over 1.3 million Moscow residents are interested in such an application, provided being kept informed of an offer. Thus, it can be argued that under the fee-free monetization scheme, the prospects for launching the application in the market are very optimistic. The testing technology also involves understanding the reasons for the decline of application download (Fig. 4).

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Fig. 3. Interest in the free application (with individual recommendations)

Fig. 4. Reasons for the decline

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As testing revealed, 27% of people didn’t want to use the application, including ones who didn’t answer (Fig. 3). Therefore, it is expediently to overcome the following objections: • “I have no health problems” (emphasis on the prevention of diseases, signs that seem insignificant); • “It’s better not to waste time, but go to the doctor immediately” (it’s timeconsuming and expensive, it’s hard to find a good doctor. In real life, most people postpone a visit to the doctor, and the application can early identify the problem); • “I do not trust the technique” (telling users about the technique and its scientific validity. It will not replace a doctor, but very likely indicate the right direction, save time and money). Testing the readiness to pass tests as recommended by the application (Fig. 5) demonstrates the intentions of potential users to follow the recommendations of the application, that is, use it in practice. The majority of the respondents interested in the application (68%) are ready to pass tests in the laboratory using the recommendation of the application. The group which answered “surely yes” is not numerous and consisting of ill people. As for a larger segment with “rather yes than no” answer the application should persuade the users to pass a preventive medical examination. Obviously, it will be hard to prove the expediency of the application for healthy users.

Fig. 5. Readiness to pass tests (for example, in Invitro) as recommended by the application

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Fig. 6. Application name option preferences

Testing the preferred name options of the application (Fig. 6) estimates the level and quality of potential users’ involvement (by participating in person) in the product setup with regard to individual preferences. Among three tested options of the application names, the respondents least liked DigMe, and more liked HealthUpp in comparison with BioData (the difference is slight). Given the findings, it is necessary to evaluate the marketing and stylistic requirements for the name. The HealthUpp against BioData has several disadvantages that will affect the quality of communication with consumers. For example, difficult pronunciation and way of writing the brand; unclear translation into Russian (word-play), ambiguous oral comprehension (for example, in speech or radio advertising), complicated Latin-Cyrillic transliteration. In terms of marketing and advertising opportunities, BioData is more competitive over HealthUpp.

4 Conclusions The main conclusion of our study is in the high efficiency of marketing testing technology of digital products for the assessment of potential demand and other important parameters of product web-diffusion. Such an assessment makes it possible to make the measurements more impersonal and aim the development at the needs of future customers, as well as employ the findings in justification of funding (or rejection) of such projects. However, it should be highlighted that this approach, unlike conventional methods, takes additional time and money. It is especially useful in the accomplishment of largescale projects at the pre-design stage, which dramatically reduces the risk of failure. The provided example of using mobile app testing technology enabled us to establish key demand features with a minimum statistical error.

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Acknowledgments. The reported study has been funded by the RFBR under project 20-01000233.

References Aniskin, Yu., Moiseeva, N., Rygalin, D., Sedova, O.: Developing the modules of the innovative activity management mechanism using the system integrator. Int. J. Econ. Res. 14(4), 469– 479 (2017) Antonets, V., Nechaeva, N., Abubakirova, K.: Arranging R&D costs management by various actors in the research and development market. Econ. Anal. Theory Pract. 11(176), 19–31 (2010) Azoev, G., Afanasiev, V., et al.: The Nanomarket: From Nanotechnology to Nanoproduct. BINOM, Moscow (2011) Azoev, G., Aleshnikova, V., Tokarev, B., et al.: Marketing: Occupation: A Textbook for High Education Institutions. Piter, Saint Petersburg (2018) Geni, L.: Determination of competitive advantage and its impact on marketing performance. Int. J. Econ. Res. 14(10), 389–401 (2017) Giannella, E.: Expert judgment versus market accounting in an industrial research lab. Sci. Technol. Human Values 41(3), 402–437 (2015) Pérez-Astray, B., Babío, N.: Analysis of the interface systems as mediating agents in university/industry relations. Proposal of the relationship promoter as a strategic role in the R&D transference. Eur. Res. Stud. J. 14(1), 55–74 (2011) Kashirin, A., Semenov, A.: On the foreign and Russian experience of attracting upfront innovation investments. Manag. Bus. Adm. (1), 98–121 (2009) Kashirin, A.: Purchasing innovative products or innovations? Innovation 5(199), 13–21 (2015) Kashirin, A., Semenov, A., Ostrovskaya, A., Kokuytseva, T., Strenaluk, V.: The modern approach to competence management and unique technological competences. Qual. Access Success 17(154), 105–109 (2016) Khomkin, K.: What Do Hinder the Promotion of Innovative Projects? Initiatives of the 21st Century, vol. 2, pp. 13–15 (2009) Kormishkin, E., Sausheva, O., Gorin, V., Zemskova, E.: Innovation and investment safety as the condition for neo-industrial development. Eur. Res. Stud. J. 19(3), 94–109 (2016) Kotler, P., Keller, K.: Marketing Management. Piter, Saint Petersburg (2015) Kozlovskaya, E., Radionova, Yu.: Developing a mechanism for innovation strategy management and commercialization of innovations through the cost approach. Sci. Tech. Bull. St. Petersburg State Polytech. Univ. Econ. 1(211), 111–117 (2015) Lyasnikov, N., Frolova, E., Mamedov, A., Zinkovskii, S., Voikova, N.: Venture capital financing as a mechanism for reinvigoration of innovative activity. Eur. Res. Stud. J. 20(2), 111–122 (2017) Yakovleva, E.: Analysis of the return on innovation using the cost approach. Creat. Econ. 9(11), 1385–1396 (2015) Yakovleva, E., Demidenko, D.: Theory and practice to assess the economic efficiency of R&D and intellectual property. Sci. Tech. Statements St. Petersburg State Polytech. Univ. Econ. 3(197), 194–206 (2014) Zobov, A., Degtereva, E., Starostin, V., Chernova, V.: Innovative strategies of transnational companies and synergy effect of technologization. Indian J. Sci. Technol. 9(39), 39–44 (2016)

The Basic Factors Determining Communicative Efficiency of an Online Store Irina Aleksandrova1(&) 1

, Marina Orlova2

, and Svetlana Silina2

State Agrarian University – Moscow Timiryazev Agricultural Academy (MTAA), Moscow, Russian Federation [email protected] 2 State University of Management, Moscow, Russian Federation [email protected], [email protected]

Abstract. The article addresses the problem of the low communicative efficiency of online stores in the Russian market; reveals and classifies the determining factors of the high psychological comfort of the consumer when making an online purchase. Findings: the authors have identified, examined and specificated the basic determinants of the communicative efficiency of the online store. Each determining factor is presented in the form of a model that includes a relevant system of local communicative effects to be controlled by the developer of the online store. An integrated model of a communicatively useful online store has been also developed. Keywords: Marketing web communications
Online customer
Online store
Communicative efficiency JEL Code: M31

1 Introduction One of the foreground areas of digitalization in the Russian economy is the development of Internet marketing, which assumes the sale of goods and services by companies in virtual space, and or sometimes their full immersion into the web medium. From the standpoint of American researchers, a dramatic situation is unfolding in ecommerce at the global level, in particular, this is evidenced by a sharp increase in consumer activity in the web environment over the past few years (20–25% of the global annual growth rate) (Flaherty 2018). However, domestic developers managing the design of marketing Internet sites for companies and monitoring their performance, as a rule, do not pay due attention to the psychological convenience of the marketing web interaction form being established, which, inevitably, has a highly negative impact on the economic performances of the company in the online medium.

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1544–1552, 2021. https://doi.org/10.1007/978-3-030-59126-7_169

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2 Background and Methodology The psychology of the Internet user, acting as a potential consumer of goods and services offered for sale in a market web space has peculiar features. Therefore, awareness of these features is an essential condition of fruitful marketing web communication. However, shifting the focus of developers from the technological and technical parameters of system performance to the psychological ones is a rather complicated process. Research and development concerning this problem are mainly devoted to solving various ergonomic issues of the user interface, including empirical research of UX (user experience) (Krug 2017; Cooper 2019; Budiu 2018; Nielsen 2018, 2012; Harle et al. 2018). However, the question of a comprehensive study of the communicative efficiency of the online store remains open. Hence, the purpose of our study is to reveal, examine and classify the basic determining factors of the communicative efficiency of an online store. Among the research methods employed are analysis, synthesis, induction, deduction, abstraction, and simulation.

3 Discussion and Findings An examination of various domestic and foreign studies on online stores shows that their communicative efficiency is mostly unsatisfactory. We can see it in a bad state of impersonal statistical indicator of web analytics such as website conversion. Low conversion indicates that the visitor leaves the site of the online store, interrupting the purchase process. One of the typical reasons is the strong discontent of online customers with web marketing communication. Psychological discomfort, expressed in tension, negative emotions, and irritation, make the Internet user decline the purchase of the product/service he needed. This situation causes damage both to the seller and the buyer, who not only did not satisfy his current need but also felt neglected on the part of the company. It is possible to overcome this problem through the professional design of a communicatively useful online store knowing and understanding the factors that determine the high psychological comfort of a consumer making an online purchase. The following tasks have been solved to achieve the purpose of the study: 1. Relying on the analysis of the findings of our empirical study on the perception of the online store by Russian online customers (Aleksandrova 2019), we revealed the following basic determining factors of the communicative efficiency of the online store: 1) a friendly user interface, 2) communicatively useful marketing content, 3) communicatively efficient graphic representation of an online store. 2. Each determining factor has been explored and presented in the form of a model that includes a respective system of local communicative effects to be controlled by the developers of the online store. 3. After integrating the findings, we have developed an integrated model of a communicatively efficient online store. Further, let us address the findings in more detail.

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User-Friendly Interface To designate a user interface that is perceived by online customers as one meeting their demands/expectations and efficiently satisfying their needs, we use the term “friendly interface”. It means the psychological comfort of an online customer, which is directly related to the personal feeling of successful web activity, favorable conditions for its performance. Thus, it is the state of psychological comfort that is empirical evidence of the user-friendly interface. It should be noted that user-friendly interface is a critical usability parameter for an online store, but for interfaces of other interactive systems used in the company’s business processes and communications information security, human error safety and etc., but not user satisfaction can be the key parameters. Nowadays, there are various lists of requirements for an ergonomic web user interface drawn up mainly by practitioners. All these developments are anyhow associated with the best-known list of interface parameters that have already become conventional in the theory of usability. This list which includes learning ability, efficiency, retention, error safety, and user satisfaction is suggested by Nielsen (2012). Using Nielsen’s indicators, one can surely evaluate the ergonomic level of any interface (provided that they are further differentiated and empirically interpreted). However, the universal nature of the selected parameters has significant disadvantages, since it doesn’t make it possible to regard the specific features of the user-interface interaction common to one or another type of users, interactive system, and communication. In this situation, the principle of human-oriented design as the development of a system through the precise definition of users, tasks and the medium, as well as information on peculiar requirements for the interface imposed by a target group of users (GOST R ISO 2016). As mentioned above, a requirement such as a user-friendly interface is of critical importance for the communication between online customers and the interface of the online store. Thus, if the user interface is not perceived by customers as friendly, the communication of the online store cannot be high-quality. Let’s note that in the worst scenario, the hostile interface can cause technophobia among users (Zhuravlev and Nestik 2018), that is the state of psychological discomfort and the desire to reduce online marketing communications to a minimum. After analysis and classification of various data, including the findings of our empirical research (Aleksandrova 2019), we developed a model of the user-friendly interface of the online store, which is presented in Table 1.

Table 1. User-friendly model of an online store Interface parameter Features

Peculiarities of interface customer’s perception by parameter The interface meets the needs, goals, and objectives of the customer; keep up with modern technology; reliability, including reliable human error-free protection (continued)

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Table 1. (continued) Interface parameter Usability

Consistency

Operative usability Dialogue principle Adaptability

Peculiarities of interface customer’s perception by parameter Clear customer’s understanding of information elements of the interface, first of all, the navigation system; the intuitive pattern of information placement Justified availability and functions of user interface elements; consistency and coherence of the navigation system; predictable customer performed operations; logical, reasonable and justified customer journey map The convenient performance of various operations for the customer; solving customer problems in the fastest, easiest, and convenient way Intensive information exchange between the system and the buyer, consequently constant feedback, including available customer assistance system The adaptability of the interface to a specific situational context (various types of devices, customers with disabilities (for example, weak-sighted), etc.)

If the parameters of the user-friendly interface are up-to-date, then the Internet user feels psychological comfort in making an online purchase. According to the opinion of the well-known ergonomics specialist S. Krug, the user does not think about the technical capabilities of the web system, all operations are performed easily and naturally, as a matter of course (Krug 2017). So, we have explored the phenomenon of the user-friendly interface as a factor determining the communicative efficiency of the online store. However, this surely important factor of marketing web communication is not the only one issue of customer psychology in the above field since here we are talking about adjustment of the Internet user’s activity in the “man-machine” system, which is only a subsystem of the social system “company-seller – target consumer group” in marketing web communications. Hence, one should understand that the usability of an interactive web system and the efficiency of web communication are interconnected, but not synonymous. A userfriendly interface is an essential but insufficient condition for the psychological efficiency of web marketing communications. Usability is only responsible for efficient communication between a man and a machine, but not between a consumer and a company/brand. Thus, usability provides efficient communication between consumers and the carrier of the marketing message but doesn’t care for the content of the latter. Communicatively Efficient Marketing Content Consumer satisfaction with the user interface is not able to determine a purchase in the event of a communicative failure in the perception of the marketing message. Thus, if marketing communication regarded as the interaction between the company and the consumer is poorly arranged due to the low communicative competence of the content developer, the overall communicative efficiency of the online store will be unsatisfactory.

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Today, there are various psychological models of marketing communication explaining the local latent effects of cognitive processing of a marketing message by a potential consumer. In an entirety, these psychological effects provided that they are updated and integrated for synergy action, contribute to the high efficiency of the marketing communication. On the back of our multi-purpose model of marketing communication (Aleksandrova 2017a), analysis of empirical data (Aleksandrova 2019) and various proceedings addressing some issues of the communicative psychology (Rubinstein 2019; Solso 2011; Isard 2011; Martin 2015; Cheung and Lee 2006; Zimbardo and Leippe 2011; Norton et al. 2018; Hovland et al. 1953; Martin et al. 2019), we developed a model of communicatively efficient marketing content of the online store. The model takes into account the local psychological effects of the cognitive customer’s processing of the marketing message and the essential conditions for their updating (Table 2).

Table 2. A model of communicatively efficient marketing content in an online store The psychological effect of web The features of the information content required for effect update communication Involuntary attention

Understanding

Interest

Trust

Persuasiona

• • • • • • •

the novelty of an object object dynamics object isolation large object color and sound intensity, the sharpness of an object association of the object with the living creature the cognitive simplicity of information, including its monosemantic nature • logical sequences of information elements in the message • information sufficiency of the message from the consumer’s standpoint • semantic consistency of information elements in the message • the accordance of the message with the background knowledge of the customer • concordance of verbal and visual brand identifiers with the brand image • the novelty of a product/service, uniqueness of a trade offer • addressing customer’s needs, values, reasons • using the reference person in the message • reliability, accuracy, completeness, consistency of verbal and visual information about the product/service • sound reasoning • high-quality content development • use of credit communicator in the message • social adequacy of the online store: demonstration of respect for the consumer, fulfillment of obligations, no hard sell, psychological abuse, aggression • sound reasoning • semantic consistency of information elements of a message

(continued)

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Table 2. (continued) The psychological effect of web The features of the information content required for effect update communication Retention

• • • • • •

addressing the background knowledge of the target audience use of associative fields, recognizable signs, symbols meeting the general-to-specific principle the rhythmic structure of the text humor repetition

Willingness Action Assessment a

An analysis of persuasion and suggestion tools, as well as the peculiarities of their execution in marketing communications, see in: (Aleksandrova 2017b).

Each local psychological effect presented in the model can cause a communicative failure if the marketing content of the site is developed without regard to respective psychological regularities, which decreases the overall communicative efficiency of the online store. Communicatively Efficient Graphic Representation The problem of the communicative efficiency won’t be solved in full without an analysis of the customer’s perception of the visual form of the site, i.e. its graphic representation. We will use the term “graphic representation of an online store” in a broad sense and interpret it as all non-verbal content of the site, including both the essential graphic rendering of interface elements and other illustrative series that perform the marketing function, (photos, figures, symbols, signs, color fills, etc.) except for images of the goods for sale. This decorative (or anti-decorative) design of the site creates a particular image of the seller among customers, which can have a considerable impact on his behavior. Actually, the graphical representation of the site is perceived by the consumer as a visual attribute of the seller’s brand and, therefore, is engaged in the development of the semantic field of the brand and attitude to it. Thence, the issue of the online customer’s perception of the graphic representation of the online store is no less important than usability and a well-developed marketing message. Our studies on the perception of a complex visual pattern in marketing and brand communications (Aleksandrova 2017b, 2018) made it possible to develop a model of communicatively efficient graphic representation of an online store (see Table 3). The model presents 1) the main psychological regularities of a complex visual pattern perception in the form of updated psychological effects, 2) the principles of graphic design corresponding to each perception effect, and 3) the requirements for their implementation.

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Table 3. A communicatively efficient graphic representation model of an online store The psychological effect of the perception of the visual pattern (graphic representation of the site) Integrated perception of pattern elements

The corresponding principle of graphic design Integrity

Sensory satisfaction from the visual balance of the pattern

Balance

Perception of quantitative characteristics of pattern elements as proportionate Perception of pattern elements as ordered

Proportionality

Focusing on the most significant visual element of the pattern

Hierarchy

Emphasis

Requirements to the implementation of graphic design principle Observance with the compositional integrity development algorithm Compliance with the algorithms for the development of a formally balanced/informally balanced composition Observance of algorithms for determination of composition elements aspect ratio Compliance with composition element hierarchical arrangement algorithms Compliance with the emphasis algorithm; Compliance with the requirement for visual subordination in the multi-emphasis cases

Indeed, addressing the issue of efficient graphic representation of an online store, we focus on the least requirement for a developer such as a professional graphic product design, which implies psychological comfort when it perceived by the customer. However, the highest professionalism of a graphic designer is an expressive visualization of the site in aesthetic terms. We believe that the tougher the competition between sellers in the virtual space, the stronger the impact of these fancies for site decoration that seems unnecessary at the first sight on the competitiveness of the online store. Next, let’s summarize and integrate the findings of the study. Diagram 1 presents the findings of our theoretical and analytical study, namely, a model of a communicatively efficient online store. The model includes the identified basic determinants of its communicative efficiency, specificated as relevant parameters to be monitored by the online store developers.

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The basic determining factors of the communicative efficiency of an online store

User-friendly interface

Communicatively efficient

Communicatively efficient

marketing information content

graphic representation

Controlled parameters of basic determinants

•

•

features

•

involuntary attention

•

usability

•

understanding

•

consistency

•

interest

•

operative usability

•

trust

•

dialogue principle

•

persuasion

•

adaptability

•

retention

•

perception of pattern

pattern elements as

elements as ordered

proportionate

integrated perception of pattern elements

•

sensor satisfaction from the visual balance of the pattern

•

perception of quantitative characteristics of

•

focusing on the most significant visual element of the pattern

Diagram 1. A model of a communicatively efficient online store

4 Conclusions As the research findings showed, the communicative efficiency of the online store is contingent on the factors such as a user-friendly interface, communicatively useful marketing information content, communicatively efficient graphic representation of the site. Regular update of these factors ensures the high level of communicative efficiency between the company, seller, and online customer. The identified system of basic factors determining the communicative efficiency of an online store can be used both in designing an online store and as a theoretical foundation for integrated studies aimed at raising the psychological comfort of an online buyer in a marketing web-communication process.

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References GOST R ISO: 9241-210-2016 “Ergonomics of human-system interaction. Part 210. Humanoriented design of interactive systems” (ISO 9241-210: 2010, IDT). Standartinform (2016) Aleksandrova, I.Yu.: Analysis of socio-psychological models of advertising communication. In: Proceedings of the 22nd International Research and Practice Conference: Current Management Problems–2017, vol. 1, pp. 142–146. Publishing House of State University of Management, Moscow (2017a) Aleksandrova, I.Yu.: Socio-Psychological Impact in the Brand-Communications System. Publishing House of State University of Management, Moscow (2017b) Aleksandrova, I.Yu.: Peculiar perception of a complex visual pattern in marketing webcommunications. In: Znakov, V.V., Zhuravlev, A.L. (eds.) Psychology of the Man as Knower, Communicator and Activist, pp. 2078–2084. Institute of Psychology of Russian Academy of Sciences, Moscow (2018) Aleksandrova, I.Yu.: Peculiarities of Moscow students’ perception of online shopping marketing communication. Univ. Bull. 11(1), 184–192 (2019) Zhuravlev, A.L., Nestik, T.A.: Socio-psychological determination of a person’s readiness to new technologies. Psychol. J. 39(5), 5–14 (2018) Zimbardo, F., Leippe, M.: Social Influence. Peter, Saint Petersburg (2011) Isard, K.E.: Psychology of Emotions. Peter, Saint Petersburg (2011) Krug, S.: Do Not Make Me Think! Web Usability and Common Sense. Eksmo-Press, Moscow (2017) Cooper, A.: Interface. Basics of Interaction Design. Peter, Saint Petersburg (2019) Martin, R.: The Psychology of Humor. Peter, Saint Petersburg (2015) Rubinstein, S.L.: Basics of General Psychology. Peter, Saint Petersburg (2019) Solso, R.L.: Cognitive Psychology. Peter, St. Petersburg (2011) Cheung, C., Lee, M.: Understanding consumer trust in internet shopping: a multidisciplinary approach. J. Am. Soc. Inf. Sci. 57, 479–492 (2006) Norton, M.I., Rucker, D.D., Lamberton, C. (eds.): The Cambridge Handbook of Consumer Psychology. Cambridge University Press, Cambridge (2018) Hovland, C., Janis, I., Kelley, J.: Communication and Persuasion. Yale University Press, New Haven (1953) Nielsen, J.: Web design. Symbol-Plus, Moscow (2018)

Virtual Teams in Russian Organizations Olga L. Belova(&)

and Alexander D. Mezhevov

State University of Management, Moscow, Russian Federation [email protected], [email protected]

Abstract. The purpose of this article a comparative analysis of the features and patterns of development of virtual teams and competencies required to work in real and virtual teams. To achieve this goal, the author of the article conducted a study aimed at studying the activities of virtual teams in Russia. To achieve this goal, the author of the article conducted a study aimed at studying virtual teams in Russia. Several questions were posed in the study: 1. What are the fundamental differences between virtual teams from real ones? 2. How to distinguish virtual (remote) work from the work of virtual teams? 3. How do the features of team interaction and functioning in the virtual space affect team building processes and staff competencies? The hypothesis of the study represents that virtual teams correspond to modern trends focused on the needs of a person, the growth of his satisfaction with work, the creation of harmonious relations between life and work. At the same time, the conditions for the functioning of virtual teams significantly change the nature of the stages of the formation of teams, the content and pace of development of role dynamics processes and the requirements for the competencies of employees. The result of the study was the understanding that virtual teams changed not only the form of interaction between team members, as it seemed at the beginning. The transition of team work from a real (offline) environment to a virtual (online) led:

– to change the content of the stages of the formation of teams, slowed down and complicated the course of the stages of the storm and rationing; – complicated the process of role identification and the pace of role dynamics, led to an increase in the role of a leader and a change in the content of role behavior; – to change the requirements for the competencies of employees. Thus, it’s safe to say that changing the form of interaction between team members entailed the creation of a special form of labor organization - a «virtual team», the development patterns and management technologies of which are peculiar and need further serious study. Keywords: Virtual work
Real teams
Virtual teams
Digital economy Synergy
Stages of team building
Team competencies JEL Code: J 24


M 54
M59

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1553–1562, 2021. https://doi.org/10.1007/978-3-030-59126-7_170




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1 Introduction Information and communication technologies globally reorganize the basic processes in economics and management. Researchers focus on the changes associated with the changing role of information and communication. However, serious changes have appeared in the sphere of labor organization. First of all, it concerns such phenomena as virtual work and virtual team. Unfortunately, the confusion of these concepts in practice leads to error decisions and loss of effectiveness, because management of these forms of labor organization has fundamental differences. A virtual team is essentially a private form of virtual or remote work on the one hand, and on the other hand, it’s a form of team work organization (Gilson 2015). In recent decades, team forms of work have been actively used in the practice of many companies, and competencies related to team collaboration are becoming more and more popular. Researchers’ attention to team work has increased. Managers consider them as a source of increasing the efficiency of organizations (Belbin et al. 2007). Teamwork is transforming into a new virtual format under the influence of digital technology. This trend, on the one hand, is a natural continuation of the humanization of public consciousness, which is increasingly oriented toward the needs of a person in greater independence and responsibility on the background of the digital economy (both an external client and an employee, as an internal client). Studies show that teambased forms of labor organization increase job satisfaction, increase employee commitment and engagement, and create synergies that are a source of competitive advantage for organizations (Avdeev 2003). Additional sources of growth of satisfaction appear, work time and effort are saved on moving, increasing the speed of exchange of thoughts, time and space restrictions are overcome in the case of the transfer of teamwork to the online mode (virtual teams). At the same time, the new format of team interaction creates additional difficulties in implementing the principles of teamwork and obtaining synergies. Difficulties often arise that impede the development of synergy in team work and in the usual real format; digitalization in this case leads to additional problems (World Economic Forum 2020). Thus, the digitalization of team forms of work requires the study and deep understanding of the features of the team in the new conditions and the development of technology for their effective application in the activities of modern organizations. It is necessary to identify the essence and features of the functioning of teams in the virtual space for this.

2 Background and Methodology The purpose of this study is to identify the characteristic features and main differences of virtual teams, firstly, from virtual (remote) work, and secondly, from real teams. We will mean “groups representing a special form of labor organization, created to achieve a common goal, which work on the basis of the principles of mutual responsibility and equality, in an atmosphere of mutual assistance and friendliness” by real teams in conditions of real interaction. A distinguishing feature of such groups is the lack of a formal hierarchy and the presence of synergy (Belova and Kozhevnikova 2019).

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To achieve this goal, the author of this article conducted a study aimed at studying the activities of virtual teams as an innovative form of labor organization in the digital economy. The study raised several questions: Firstly, due to the existence of many transitional and mixed forms of organization of teams, to identify what are the essential distinguishing features of virtual teams from real teams on the one hand, and also how virtual teams differ from virtual work, on the other hand; Secondly, how the differences between virtual teams from real teams affect the stages and the process of team formation and what are the competencies of employees of successful virtual teams; and thirdly, what are the essential features of virtual teams, which team can be considered virtual. The patterns of the formation and functioning of virtual teams have recently come into the view of scientists and the creation of a special theory of team building in virtual conditions is still ahead. Therefore, we proceeded from the general principles and methods of the theory of groups and group work developed by the most prominent Russian and foreign scientists V.V. Avdeev, V.Ya. Yadov, A.A. Bodalev, Y.L. Kolominsky, E.M. Dubovskoy, Yu.M. Zhukov, R.M. Belbin, K. Arji-rice, Shermerorn J., Hunt J., Osborne R. Blanchard K., Carlos D. P., Randolph A et al. while conducting the study. Modern approaches to understanding the organization of work and the essence of virtual (remote) work were analyzed for the purposes of this study (Katzenbach 2013). As a hypothesis of the study, it was suggested that under the influence of digital technologies various flexible forms of group work develop, the basic laws of team formation remain, but its principles and methods are modified, the team’s role structure and role behavior models are changed. In order to verify this hypothesis, a questionnaire was conducted among managers of Russian organizations on the essence, principles, and features of the formation and functioning of virtual teams, role structure and role models of behavior. The questionnaire consisted of 19 questions, three of which were of a socio-demographic nature. The study was attended by representatives of various organizations that differ in the type and scale of activity (Table 1). Most of the respondents had experience in participating in virtual teams (77%) and only 15% didn’t want to repeat it or they have never participated in such projects. Table 1. The scale of the company’s managers who participated in the survey Large company (from 1000 people) 23,08% Medium (from 1000 to 100 people) 23,08% Less than 100 people 30,77% Other (specify) 23,08%

As for the sphere of activity, in our study we focused on those areas where virtual teams are most likely to be actively used: these are primarily information and communication technologies (16%), the consumer sector (services and trade) (15%) and education and science (39%), among the remaining 30% - manufacturing, services and healthcare.

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3 Discussion and Results This study confirmed the assumption that virtual teams have become an integral part of modern organizational practice. (Management study guide. Different types of virtual teams, 2016). With this statement, 93% of interviewees fully and basically agree, and only 7% of interviewees didn’t agree with this statement. The answer to this question confirms the relevance of our study. • This research allowed us to compare the definitions of virtual (remote work) and a virtual team. The results of the analysis are presented in Table 2 Table 2. Comparative analysis of the concepts of «virtual work» and «virtual team» Classification sign Kind of activity Number Setting a goal Hiring form Labour organization Subordination Planning/Decisions Communications Responsibility The control Ethics, norms of relations

Virtual (remote) work Virtual work Anyone No restrictions Organizational goal Unlimited Digital-based individual Hierarchical Manager, one-person management Vertical-horizontal Supervisor Supervisor Standards established by the organization

Virtual team Design, creative 5–7 Matching personal and organizational goals Unlimited Digital based teamwork Lack of hierarchy. Self-management groups Joint decision-making Horizontal (inside the team) Collective Collective control. Self-control Team norms developed in a joint venture based on trust and understanding

• A comparative analysis of the concepts of «virtual work» and «virtual team», it was concluded based on the results of the analysis that virtual teams are a special form of virtual work, which implies that the members of such a team have a high level of interest in achieving the goal, each person’s personal responsibility for achieving the result, job satisfaction with the team and an atmosphere of trust and friendliness, as a result of which a special effect is born – synergy (Keshelava et al. 2017). The fundamental difference between virtual teams and other types of virtual work is the involvement of team members in achieving team goals, self-management, i.e. joint decision-making on all organizational and production issues, work on the basis of team norms of interaction worked out jointly and involving relations of trust, mutual

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understanding and support. If it’s possible to create a team of professionals satisfied with joint activities, then as a rule a synergy effect is achieved, which is the goal of the team form of labor organization (Maynard et al. 2008). At the same time, special attention is paid to the regulations for working with various forms of information and communication technologies. Next, a comparative analysis of the essence of virtual and real teams used in modern organizations was made. Table 3. Comparative analysis of real and virtual teams Comparison lines Goals Number of staff Subordination system Team structure (roles)

Teams Real teams Virtual teams Set by the organization, shared by team members Recommended: 5 ± 2 or more, but efficiency decreases with growth of staff’s number Lack of hierarchy, distribution of social and functional roles Formation of a role structure (leader, coordinator, idea generator, company soul, expert, detailist …)

Features of communication Advantages

Verbal and non-verbal channels are involved Efficient communication channels

Possible problems

Loss of time to discuss issues Group pressure Conformism Social laziness Ringelman effect

Formation of the role structure (leader, generator of ideas, expert, detail, difficulties with role identification of the generator of ideas, the souls of the company) Communication channels are limited, ICT Organization High information availability, cost savings Difficulties of understanding associated with the reduction of communication channels, disunity Loss of energy due to the lack of timely discussion of ideas The difficulties of role identification, the formation of new role models Slowing down the pace of role dynamics, and the development of teamwork standards The complication of the role of a leader as a facilitator, a change in the role structure and role models

Based on the analysis of the described practice (Pryakhina 2019; Schmit et al. 2014) and the results of the questionnaire, it was concluded that according to the formal features, i.e. the goals of formation, strength, subordination system, decision-making practice and role structure, virtual and real teams are identical (Look the Table 3). A significant difference between them is concentrated in the area of the specifics of the

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development stages of team processes, role structure and dynamics, behavioral models, team management, and interaction technology. It’s important to note that the effectiveness of the team and determine the level of synergy influence these features. Therefore, we can conclude that the virtual and real teams are fundamentally different in a number of ways, primarily of a substantial, managerial and communication nature. On the one hand, communication is becoming more accessible and on the other hand, a significant reduction in non-verbal communication channels complicates the process of forming the team, role-based identification, complicates the process of team management, understanding and building trust between team members, changes the requirements for the competencies of employees, which affects the quality of the main stages of team building and the results of the team as a whole. Next, we analyzed the features of the stages of team building in virtual space. • The stage of team building. At the stage of team formation, as you know, the input resources are determined, i.e. goals, objectives, technologies, terms of employment and competencies of team members. The virtual format makes more stringent requirements for the technologies and competencies of team members and less structured for the conditions of employment from the point of view of the majority of our respondents Here is a list of the core competencies of virtual team members that we have been able to identify: Cognitive competencies - knowledge and skills in the professional field at the level of professional expertise and personal interest in solving the professional task assigned to the team. It was especially noted that the level of professionalism and motivation of members of virtual teams should be as high as it possible. Functional competencies - knowledge of digital technologies at the level of a professional user, formed stable interaction skills with the help of basic electronic devices, e-mail, a personal computer, smartphones, social networks and etc. Here also welcome the ability to present the results of their activities in programs appropriate to professional activities. Social competencies - an understanding of others, which includes a desire to understand and accept another person, an understanding of emotions and hidden problems, as well as cross-cultural receptivity and flexibility; the ability to clearly and concisely express their thoughts verbally and in writing, readiness for open communication, the skills of providing feedback and self-confidence, at a level that allows you to avoid conformal patterns of behavior. Personal of organization should use their experiences of communication in the virtual space. A meta competency - initiative - as the ability to take independent active actions to solve problems that arise, readiness for critical statements and a positive perception of criticism, responsibility and a high level of self-control and self-organization. In addition to general requirements for team members, it’s also necessary to appreciate the role range of future team members so that there is the possibility of forming an effective role structure further (Spasenkov 2016). • The second stage of team building is associated with differentiation’s role; it is called the stage of a storm or tempest in theory. This stage of team building causes

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the greatest difficulties in virtual teams. Its goal is to occupy each member of the group a role position that corresponds to group and individual expectations. However, the formation of group expectations and role-based identification in virtual communication are difficult. Experts advise, at the slightest opportunity, to introduce the team members in real format. In the absence of such an opportunity, video conferences, skype and other forms of communication are used. Information and communication technologies complicate the process of role identification and role dynamics; the greatest difficulties arise for the manifestation of the roles of a leader, the soul of a company, idea generator and critic. The lack of manifestation of these roles can be compensated by the strengthening of the role of administrator and expert and also the strict functional role distribution that occurs at the stage of formation. The downside of this process will be the strengthening of administrative tendencies that block the creative process and synergy. That is why it’s so important to select a team of people professional, motivated and self-confident. • Not small difficulties arise at stage 3, when the norms of interaction in a virtual team are developed. In order for norms of interaction to begin to effectively regulate interaction in a group, they must be discussed and formatted as a code of rules for team behavior. If in real teams the development of norms often occurs informally and is not fixed in the written rules, then in this case a written fixing of the norms is mandatory. As for the content of the norms, we can already name some of them according to the results of the study: first of all, it’s permanent access to project information for all team members, regularity and regulation of communication and also feedback, a clear distribution of responsibilities and functions, high level of responsibility for its functional area, including the provision of truthful and timely information about emerging problems and difficulties. However, fixing the norms of behavior is possible only after acceptance by all members of the team and therefore the leader needs to provide for this special session. • The last, fourth stage of team formation is the stage of the direct execution of the team task, or the stage of functioning. It becomes clear how effectively the three previous stages are implemented, all the hidden problems become apparent exactly at this stage. Additional problems may arise. The study participants identified a number of problems arising at this stage (Table 4). Table 4. Problems which can make virtual teams difficult What problems make the work of virtual teams difficult? Mark with a number in the priority (1 - always appear, 2 - often appear, 3 - rarely, 4 - do not appear at all) 1 2 3 Difficulties in understanding team members 30,77% 38,46% 30,77% Difficulties in organizing discussions 23,08% 53,85% 15,38% Difficulties in maintaining the necessary level 0,00% 30,77% 46,15% of trust of team members to each other Reduced responsibility of team members 15,38% 38,46% 38,46% Challenges to overcoming conflicts 0,00% 15,38% 69,23%

order of 4 0,00% 7,69% 23,08% 7,69% 7,69%

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It is important to remember that the processes left without attention of the leader are characterized by stagnation and degradation to successfully overcome problems at this and previous stages. Therefore, it is necessary to observe the principle of distributed management while managing virtual teams, when the attention of both the leader and all team members is focused not only on functional tasks, but also on communication issues. It is also desirable that all participants in the team process be aware of the features of the formation and functioning of virtual teams. It is important to regularly discuss team processes, give each other interested feedback, and openly discuss emerging issues. (Virtual Teams: Development of the Theory of Team Working Practice– 2018) Thus, the study showed that information and communication technologies bring orderliness and structural to all team processes, making it harder to show human warmth and trust, because they are one of the conditions for the emergence of synergy. To compensate for these problems can be targeted management actions. The last question posed in the study is aimed at identifying the essential characteristics and the formation of the definition of «virtual team». (Zhukov et al. 2008, Zotova 2018). Here is how our respondents answered this question: Choose the most accurate definition of a «virtual team» from your point of view Answer choices A virtual team is a group of people who work together to achieve one (unique) goal, taking into account the limitations and within a certain life cycle, the project team members are geographically distributed and the method of communication between them is virtual communication tools (email, skype, chat, etc.) A virtual team is a team, where members are geographically and organizationally dispersed, have a common goal and communicate with each other using modern information and telecommunication technologies A virtual team is a group of people who have united to carry out strategically important initiatives, use electronic technologies for communication more often than personal ones, live and work in different countries The virtuality of a team is determined by how team members work and how they interact with each other, and not by where they are physically located

Responses 30,77%

30,77%

7,69%

30,77%

As you can see, the opinions of the respondents were distributed approximately equally between the three definitions. This means, from our point of view, that on the one hand, these three definitions indicate the essential characteristics of virtual teams and at the same time there are certain inaccuracies and contradictions. So the thought of the team’s virtuality is determined by how the team members work and how they interact with each other, and here is no difference where they are physically located. It allows us to ignore the definition such characteristics as «geographically and organizationally dispersed» and «live and work in different countries».

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At the same time, it is necessary to emphasize that the synergistic effect is present only in teams interacting on the basis of trust and mutual assistance; therefore we emit three main signs of virtual teams: – Motivating goal – Collective responsibility – Confidential communication based on information and communication technologies Based on these characteristics, we propose the following author’s definition of a virtual team. Virtual teams are groups of people united by one motivating goal, bearing collective responsibility for its implementation in an atmosphere of confidential business communication and interaction based on information and communication technologies.

4 Conclusion Information and communications technologies lead to a global transformation of the economy, which causes a chain reaction of changes in management, labor organization and other areas of life. The enormous potential in these changes can only be revealed as a result of a thorough study and analysis of the changes that take place and a creative understanding of the problems that can arise. Virtual teams as an innovative form of labor organization are able to effectively solve many organizational tasks, based on an understanding of the features of their education and functioning. The most significant features, according to the results of our research, are changes regarding the content of the main stages in the formation of teams operating in a virtual space and the competencies of members of virtual teams. Therefore, managers and leaders need to be especially responsible for the tasks that they face at the stages of team formation, storms and rationing while forming virtual teams. It’s necessary to be able to analyze the processes of group dynamics, to be able to assess the level of development of competencies, and if it’s necessary, develop training and development programs for employees. Assessment of competencies should be aimed at assessing the ability of employees to implement functional and social roles. Particular attention should be paid to social role models of behavior of team members and especially the leader. Leaders of virtual teams are able to achieve efficiency with a harmonious combination of the ability to clearly administer functional processes with an adhocratic style of behavior in situations of social interaction. Since the virtual nature of the interaction complicates role-based identification and team building processes at the stages of the storm and rationing, the leader needs to conduct group and individual virtual sessions that contribute to the development of group dynamics in the right direction. This complication of the leadership role in virtual teams involves the implementation of several complementary roles: manager, leader, facilitator and coach.

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References Avdeev, V.V.: Human Resource Management: Team Building Technology: A Training Manual. Science, Moscow (2003) Belbin, R.M., et al.: Management Teams: How to Explain Their Success or Failure London, Kiwits (2007) Belova, O.L., Kozhevnikova, L.V.: Leadership and Team Building. Science, Moscow (2019) Gilson, L.L.: Virtual teams research: 10 years, 10 themes, and 10 opportuni- (2015). https:// www.mendeley.com/catalogue/virtual-teams-research-10-years-10-themes-10-opportunities. Accessed 02 Sept 2020 World Economic Forum: Global Information Technology Report 2016 (2020). http://reports. weforum.org/global-information-technol. Accessed 02 Sept 2020 Katzenbach, D.: Team Approach: Creating a Highly Effective Organization: John Katzenbach, Douglas Smith; trans. from English. Alpina Publisher, Moscow (2013) Keshelava, A.V.: Introduction to the Digital Economy (2017). https://docplayer.ru/58847440Vvedenie-v-cifrovuyu-ekonomiku.html. Accessed 08 Feb 2020 Pryakhina, G.A.: Virtual teams: features of creation and management (2019). overment.esrae.ru/ pdf/2019/2/637.pdf. Accessed 02 Sept 2020 Raven, D.: Competence in Modern Society: Identification, Development and Implementation. Kogito-Center, Moscow (2002) Schmit, D., et al.: Virtual development teams (2014). https://www.osp.ru/os/2014/10/13044386/. Accessed 08 Feb 2020 Spasenkov, V.V.: Theory and practice of the formation of virtual teams in the digital economy, Economic psychology: past, present, future (2016). https://www.elibrary.ru/contents.asp?id= 34329259. Accessed 09 Feb 2020 Virtual Teams: Development of the Theory of Team Working Practice– (2018). https://www. boundless.com/management/textbooks Zhukov, Yu.M., Zhuravlev, A.V., Pavlova, E.N.: Team Building Technologies, Textbook. Manual for University Students. Aspect Press, Moscow (2008) Zotova, I.: The impact of the digital transformation of the economy on entrepreneurial competencies (2018). https://www.elibrary.ru/contents.asp?id=35104605. Accessed 09 Feb 2020

Stakeholder Engagement in the Management of Innovative Territorial Development: A Platform Approach Viktoriya V. Degtyareva1(&) , Svetlana S. Bakhtina2 and Galina I. Tatenko2

,

1

2

State University of Management, Moscow, Russian Federation [email protected] Orel State University named after I.S. Turgenev, Orel, Russian Federation [email protected], [email protected]

Abstract. The article explores the potential for using a platform approach in solving strategic planning issues at the regional level, substantiates the need for involving stakeholders in the process of choosing priority areas for the innovative development of the territory. Based on the study of foreign experience, problems and effective tools and mechanisms for stimulating stakeholder participation in entrepreneurial search processes in some EU countries are identified. The scientific novelty of this study lies in the development of theoretical and methodological approaches to managing the interaction of stakeholders in the processes of innovative development of territories, taking into account the potential of digital platforms and using the principles of the SMART approach. The scientific novelty is confirmed by the following results: 1. The difficulty of effectively involving stakeholders in the processes of strategic innovation planning and forecasting is substantiated. 2. The levels of stakeholder involvement in the management of innovative development of the region are determined taking into account the degree of ICT use: information, integration and digital levels. 3. A qualitative characteristic of the competencies of regional stakeholders for their effective involvement in the process of choosing priorities for the innovative development of the territory is proposed. A distinctive feature of the author’s recommendations is the use of SMART principles, which allow assessing potential stakeholders not only from the standpoint of the availability of relevant characteristics and level of development, but also the degree of their interest and level of willingness to interact in the interests of the region, as well as taking into account “digital competencies”. 4. The features of the creation and operation of a digital platform for the interaction of strategic planning participants at the regional level in achieving innovative priorities are examined. The basic tasks of the proposed platform are highlighted, allowing not only to increase awareness, but also to involve participants in the innovation process in their effective interaction. Keywords: Digital platform
“Smart specialization”
Innovative development priorities JEL Code: O10


O20
O30

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1 Introduction Digital technologies are currently used in almost all areas, opening up new opportunities for the development of socio-economic systems at any level. Modern information and communication technologies are an important engine of growth, both as an independent sector of the economy and as a driver of other industries, as well as an incentive for the modernization of the public sector. The introduction of digital technologies and platform solutions in the areas of public administration and the provision of public services is a priority for the federal project “Digital Public Administration” of the National Program “Digital Economy of the Russian Federation” (Program 2019).

2 Background and Research Methodology In the framework of this article, the platform approach in matters of strategic planning at the regional level to ensure the interaction of stakeholders in achieving innovative priorities is of scientific interest. The study used general scientific (description, generalization, systematization, formalization), special (analysis of open data sources, comparative analysis) and other methods of scientific research. In the new conditions, the modern concept of strategic management of the territory should be based on scientific potential as the base, orient innovation activities to consumer requests, quickly respond to external challenges and help to gain competitive advantages in the long term (Tronina et al. 2019). It is the identification of the comparative competitive advantages of a particular region, taking into account its resources and potential capabilities, that forms the basis of the concept of “smart specialization”, the use of which is becoming popular not only in the EU countries, but also in Russian regions. Thus, the idea and principles of “smart specialization” are partially laid down in the Spatial Development Strategy of Russia and involve the development of a combination of existing in the region and new relevant competencies in the production and scientific-technical sphere, taking into account regional specifics. In European practice, the concept of “smart specialization” serves as a kind of set of methodological rules for choosing priorities within the framework of the strategy of innovative development of the territory, collected in a single document “Guide to the development of research and innovative strategies for smart specialization” (RIS 3 Guide 2012). To reinforce the strategic process with information and communication, legal, methodological and managerial mechanisms, a specialized “Smart Specialization Platform” (www.s3platform.jrc.ec.europa.eu) has been created. Of particular importance in determining the priorities of the innovative development of territories based on the principles of the European concept of “smart specialization” is given to the interaction of stakeholders, which is called the process of entrepreneurial search (EDP 2018). The entrepreneurial search process is a complex concept for implementation, it depends on the specific conditions of the territory, institutional capabilities and behavioral characteristics of the participants and requires the commitment of all parties in the long run. The entrepreneurial search is based on the interests of four stakeholder groups, according to the four-link spiral of innovation: government bodies, the business community, science and education, and the civil society. This

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combination and the resulting combination of four institutional components are aimed at “conceptualization, contextualization, design, implementation and evolution of smart, sustainable and inclusive entrepreneurship - the engine of economic growth - and innovative ecosystems at the regional level” (Carayannis and Grigoroudis 2016).

3 Discussion and Results An analysis of European practice (Cohen 2019) shows that the involvement of stakeholders in solving the problems of innovative development of territories remains a difficult issue. The results of European studies (Trippl et al. 2019) confirm the presence of a number of problems in the interaction of four groups of stakeholders, especially when choosing priority areas for the development of territories that use the principles of the concept of “smart specialization”. Among the most common problems of involving stakeholders in the process of developing regional strategies are the following: – “organizational weakness”, limiting the number of competent stakeholders that must be mobilized for joint development of strategies; – the presence of firms with weak innovative potential and, usually, externally controlled by transnational corporations that pay little attention to regional development issues; – Strong universities and research institutes that focus mainly on teaching and basic research (Sergeeva et al. 2019), and collaboration with industry and government bodies often goes beyond their scope (Gibadullin 2019); – unfavorable informal institutions, such as mutual distrust and a weak culture of cooperation that impede the interaction of interested parties; – transfer of management practices and the initial stages of developing a strategy for a consulting company; – the use of the “triple helix”, without involving more stakeholders, including civil society; – limited willingness and lack of motivation of stakeholders to participate in new processes; – Large companies that already work well often do not see the need to participate in activities related to the development of strategies (Trippl et al. 2019). It should be noted that the problems of interaction between stakeholders vary quite depending on the level of development of the studied regions. Thus, the positive practice of involving stakeholders in the management of innovative development of territories in European countries indicates that advanced regions have successfully included a large number of participants at the stage of developing the “smart specialization” strategy. In each of these regions there are competent stakeholders who can be attracted to exchange knowledge on developing a strategy. In addition, advanced regions benefit from past stakeholder engagement experiences. One of the key values of this process is the provision of voice to entities (such as SMEs), which in the past were ignored by politicians. An analysis of European regions (Trippl et al. 2019) distinguished a number of key success factors that contribute to the successful cooperation of stakeholders in entrepreneurial search processes (Table 1).

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Table 1. Tools and mechanisms to stimulate stakeholder participation in entrepreneurial search processes in some EU countries

So, successful European experience indicates that a great deal of attention in the process of developing strategies is given not only to mutual consultation of stakeholders, but rather to the coordination of priorities on the basis of a regular exchange of knowledge, ideas and experience. In order to motivate stakeholders to work together, the selection of priorities is focused on the specific needs of business and society. And as an information and communication tool to support the constant interaction of stakeholders in most European regions, the following forums are used: forums for dialogue and sustainable feedback, structured networks with formal and/or informal communication channels, thematic working groups with wide territorial coverage, functioning on the basis of specially created platforms. Thus, according to the results of studying European experience, it has been empirically established that there are three levels of stakeholder involvement in the process of selecting priorities for innovative development of a region (from simple to complex) taking into account the degree of IST use:

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– low - informational (the interested party is involved only for consultation on issues of innovative development of the territory, while regional authorities use information technology in the decision-making process of innovative development of the region); – medium - integration (the interested party is a member of an integrated structure or a temporary association to address certain issues of the innovative development of the territory, while the networking of the participants in the innovation process is based on modern IST); – high - digital (involving an interested party on an ongoing (regular) basis in the processes of managing the region’s innovative development, and the interaction of stakeholders to solve the problems of the digital economy is based on a platformbased process construction). The problem of stakeholder involvement in the management of innovative development of the Russian regions is also relevant and requires the search for new effective solutions. The relevance of this issue is due to the weak level of innovative development of Russia as a whole and its regions separately (Abdrakhmanova et al. 2020), strong territorial differentiation, and the problems of groundlessness and formality of the developed regional innovative strategies identified in previous studies (Bakhtina 2017; Kutsenko et al. 2018). In particular, a study by E. Kutsenko, E. Islankin, A. Kindras found that, in general, for all the studied regional strategies for innovative development in Russia, a low level of involvement of representatives of different groups of participants was revealed: government, business, science, civil society, experts (including from other countries/regions). At the same time, there are no examples of successfully functioning digital platforms as effective tools for stakeholder interaction, both at the federal and regional levels in Russia. Such a circumstance, in our opinion, will not only lead to effective inter-regional interaction, as suggested by the concept of “smart specialization,” but also within the framework of one region, the openness and effectiveness of the interaction of internal stakeholders is in doubt. Returning to the model of the “four-link spiral of innovation”, it is necessary to emphasize the importance of the openness of the innovation process in order to formulate a strategy for the innovative development of the region and select priorities for its specialization. The partnership model of government bodies, the business community, civil society, science and education should be created in the format of “open innovation” with the rejection of the closed model of cooperation inherent in the regions of the Russian Federation (Raunio et al. 2018). Therefore, we consider it justifiably necessary new formats for stakeholder engagement that stimulate a culture of open innovation, communication and partnership. In this regard, for research purposes, we will consider the mechanism for organizing cooperation between regional stakeholders in the framework of digital

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platforms. From the perspective of a platform approach, we will consider the digital platform a key tool for involving stakeholders in the “entrepreneurial search” process, which is necessary for forming the priorities of the region’s innovative development, based on modern digital tools that create a qualitatively new space for the development of innovative ecosystems. In this case, the platform approach will expand the knowledge base for participants in the innovation process, integrating data from various sources, accumulating and analyzing experience, thereby creating an environment for creating values. As a result, a platform ecosystem is formed and a network effect is created. The platform itself should become a mechanism for coordinating open innovation. The following functions of the digital platform can be distinguished: – attracting a large number of participants in innovation activity by stakeholder groups of the four-link spiral innovation model; – involvement of participants in the interaction; – ensuring effective communication of participants through the exchange of information; – supplying participants with innovative tools; – quality control of the participants; – popularization of open innovation; – the formation of an innovative culture of cooperation; – analysis of large data arrays; – creating and maintaining opportunities for individuals and communities in selfrealization; – the use of the Internet environment as an infrastructure for creating value; – ensuring the coincidence of the interests of participants as a factor in the success of the platform. The main subjects of the platform are users - stakeholders as participants in the innovation process. Obviously, the most important condition for effective interaction of regional stakeholders in the processes of strategic planning and forecasting is the correct selection of stakeholders (Tinyakova et al. 2018). In this regard, in the framework of this study, an attempt was made to give a qualitative description of the competencies of regional stakeholders for their effective involvement in the process of selecting priorities for the innovative development of the territory. For this, the authors use the SMART approach, which allows a “smart” look at the problem being studied, describing the property of the object under study through the characteristics of components (previously incompatible), based on the mnemonic abbreviation SMART, which is shown in Fig. 1.

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Fig. 1. The essence of SMART - principles for describing the competencies of regional stakeholders for their effective involvement in the process of selecting priorities for the innovative development of the territory

Since one of the conditions for joining stakeholders is their participation and joint work on the platform, the “digital competencies” of potential stakeholders are of particular importance. The characteristics for each group of stakeholders according to SMART principles taking into account the “digital competencies” are presented in greater detail in Fig. 2.

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Fig. 2. Characteristics to describe the competencies of regional stakeholders on SMARTprinciples

4 Conclusions The main condition for creating a digital platform is to develop a mechanism for effective key interaction between stakeholders, which is based on the exchange of information (knowledge, experience, problems). The result of this exchange is the creation of value (Geliskhanov 2018). At the same time, the key interaction of stakeholders creates an internal structure consisting of participants, values and filter. These elements of the interaction structure correspond to three basic tasks of the platform: – attracting participants to the innovation process (on the one hand, participants will not come to the platform if it does not create value for them; on the other hand, the platform has no value until there are users on it);

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– ensuring the interaction of participants (the platform should form the involvement of participants, improving their characteristics, connecting new functions, using technical capabilities to simplify the process of creating value and sharing information); – search for the coincidence of the interests of participants (the platform should collect large amounts of information; improve algorithms for collecting, analyzing and interpreting data; choose high-quality filters that ensure the value of information for developing the ability to combine the interests of the users most suitable for interaction). Therefore, the main purpose of the proposed digital platform is not just to raise awareness, but also to involve participants in the innovation process in their effective interaction. This, in turn, will contribute to the formation at the regional level of the competencies necessary for an effective “entrepreneurial search” and the selection of priorities for innovative development. Acknowledgments. This article was prepared as part of the project 19-010-00144 on the topic “Management of innovative development of territories: the concept of” smart specialization “in Russian conditions” with the support of the Russian Foundation for Basic Research.

References Abdrakhmanova, G.I., Artemov S.V., Bakhtin P.D., et al.: Rating of innovative development of the constituent entities of the Russian Federation. Issue 6. Nat researched University “Higher School of Economics” (2020) Bakhtina, S.S.: Possibilities of using European experience in the formation of regional innovation strategies. Manag. Account. (12), 78–87 (2017) Carayannis, E., Grigoroudis, E.: Quadruple innovation helix and smart specialization: knowledge production and national competitiveness. Foresight STI Gov. 10(1), 31–42 (2016) Cohen, C.: Implementing Smart Specialization: An analysis of practices across Europe, EUR 29976 EN, Publications Office of the European Union (2019) Geliskhanov, I.Z., Yudina, T.N., Babkin, A.V.: Digital platforms in the economy: essence, models, development trends. Scientific and Technical Sheets of SPbSPU. Economic Sciences, no. 6., pp. 22–36 (2018) Gibadullin, A.A., et al.: IOP Conf. Ser. Mater. Sci. Eng. 537, 042031 (2019) Klaus Detterbeck Based on existing EDP Analyses and Regions’ Experiences. Framework Document (2018). www.s3platform.jrc.ec.europa.eu Kutsenko, E., Islankina, E., Kindras, A.: Smart by oneself? An analysis of Russian regional innovation strategies within the RIS3 framework. Foresight STI Gov. 12(1), 25–45 (2018) Trippl, M., Zukauskaite, E., Healy, A.: Shaping smart specialization: the role of place-specific factors in advanced, intermediate and less-developed European regions, Regional Studies (2019) Program: Digital Economy of the Russian Federation (2019). https://digital.gov.ru/ru/activity/ directions/858/. Accessed 28 Jan 2020 Raunio, M., Nordling, N., Kautonen, M., Rasanen, P.: Open innovation platforms as a knowledge triangle policy tool - evidence from Finland. Foresight STI Gov. 12(2), 62–76 (2018)

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RIS 3 Guide (2012). www.s3platform.jrc.ec.europa.eu. Accessed 31 Jan 2020 Sergeeva, M., Shilova, V., Evdokimova, A., Arseneva, N., Degtyareva, V., Zuykov, A.: Future specialists’socialization in the context of competence approach. PráXis Educ. 15(34), 571– 583 (2019). https://doi.org/10.22481/praxisedu.v15i34.5796 Spatial Development Strategy of the Russian Federation (2019). http://static.government.ru/ media/files/UVAlqUtT08o60RktoOXl22JjAe7irNxc.pdf. Accessed 31 Jan 2020 Tinyakova, V., Morozova, N., Sivtsova, N., Rastopchina, J.: Territorial subjects development planning system modification for improving life quality of the population. Herald NAMSCA 3, 377–381 (2018) Tronina, I.A., Tatenko, G.I., Bakhtin, S.S.: The methodology of managing the innovative development of territories on the principles of the European concept of “smart specialization”: monograph (2019). 206 p.

Smart Technologies in Agriculture Mikhail M. Guzev1(&) , Marina V. Ledeneva2 , Anna A. Trukhlyaeva3 , and Natalya A. Mishura1 1

2

Volzhskiy Branch of Volgograd State University, Volzhskiy, Russia [email protected], [email protected] Volgograd Branch of Plekhanov Russian University of Economics, Volgograd, Russia [email protected] 3 Volgograd State University, Volgograd, Russia [email protected]

Abstract. Purpose: The purpose of the article is to identify stimulation areas at the introduction of smart technologies in agriculture using Volgograd region as the example. Design/Methodology/Approach: The article uses systemic and cluster approaches, production factors theory, methods of abstract, historical and logical analysis, subject and object, comparative, level, statistical analysis, geographic and graphical modeling, as well as expert assessment method. A qualitative and quantitative analysis of the cluster potential of agriculture in Volgograd region was carried out. The method of analysis of significant cluster groups was used. Findings: The authors analyzed the world and Russian experience of smart technologies’ use in agriculture, reviewed the basic smart technologies and assessed their effectiveness. The authors observed a trend towards an increase in the concentration of production in agriculture, the industry that does not benefit from economies of scale. One of the reasons for the appearance of advantages from the economies of scale is the use of smart technologies, which make it possible to offset the advantages of family farms. Originality/Value: By means of the identification of the features of smart technologies’ use in agricultural holdings and private farms, the authors conclude that a deeper integration is necessary to make use of the advantages of large and small agricultural production. The formation and development of a large agricultural and food processing cluster in Volgograd region creates a synergistic effect of technological, organizational and economic “smart technologies”, which will strengthen the food security of the region and positively affect the standard of living of the population. Keywords: Smart technologies holdings
Peasant farms JEL Code:: Q16


Agriculture
Clusters
Agricultural


O31

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1 Introduction According to the World Health Organization, about 821 million people suffer from hunger and malnutrition worldwide (Global hunger continues to grow, according to a new UN report). At the same time, about 1.6 billion tons of food worth $ 1.2 trillion is lost annually, which is one third of world production. According to Boston Consulting Group, at the production stage, 500 million tons of food are lost or spoiled annually, and 340 million tons disappear due to the fault of consumers (Morozov 2019). The main problem of production losses consists in outdated production technologies. In addition, the increasing climate changes negatively affect the production of major crops, which, in turn, can significantly reduce people’s access to food (Global hunger continues to grow, says a new UN report 2018). According to forecasts of Food and Agriculture Organization of the United Nations (FAO), in order to provide food to a growing world population, farmers will need to harvest steadily almost one and a half times more crops by 2050 than they do now (FAO, 2018. The future of food and agriculture 2018). And without the widespread introduction of “smart” technologies that allow automating the agriculture to the maximum extent, this problem cannot be solved. In particular, livestock farming which is based on traditional methods is ineffective today, since one third of the planet’s land is grazed with livestock, while animals eat most of the grown grain. Thus, the global business processes in agriculture, as in other sectors of the world economy, are developing under the influence of universal digitalization, they require modern solutions that can reduce costs and expenditures, increase the productivity. The “analogous” period of economic development ends, the extensive path of resource consumption is no longer able to meet the growing needs of the planet’s population and the number of environmental problems is constantly increasing. According to Goldman Sachs analysts, in the future, the use of new generation technologies will be able to increase the productivity of world agriculture by 70% (Chepollina 2019).

2 Materials and Method The article uses systemic and cluster approaches, production factors theory, methods of abstract, historical and logical analysis, subject and object, comparative, level, statistical analysis, geographical graphic modeling, as well as the method of expert assessments. A qualitative and quantitative analysis of the cluster potential of the region was carried out. The method of analysis of significant cluster groups was used. The authors analyzed the world and Russian experience of smart technologies’ use in agriculture. The empirical basis of the study was the statistical data of Federal Government Statistical Service, Volgograd Branch of the Federal Government Statistical Service, Committee of Agriculture of Volgograd region, relevant regulatory legal acts of the Russian Federation and Volgograd region. Using the statistics from Federal Statistics Service, the authors identified trends and problems in the use of smart technologies by

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agricultural enterprises of various types in the aspect of cluster development of rural territories.

3 Results By “smart technologies” we mean modern cutting edge technologies characterized by a high degree of internal self-organization, a large number of feedbacks (Selina and Semiokhina 2017). Smart technologies include smart systems, smart appliances, smart materials, permaculture biotechnologies (based on relationships from natural ecosystems), smart technologies of people management. Currently, smart technologies have been actively introduced in all sectors of the economy. And the agriculture was no exception. These are, in particular, geoinformation systems focused on the precision farming issues that allow you to analyze the condition of crops, to plan differential application of fertilizers and reclamation measures based on a multispectral survey data and accurate landscape information. These are also in-car navigation systems for precision farming, allowing you to process fields along the predetermined paths. In the agriculture the GPS/GLONASS trackers are used which are fixed on cars and special equipment, tankers with universal event counters (CSS), RFID-card readers of drivers that allow you to calculate accurately the amount of fuel issued to each vehicle and to exclude an inappropriate use of fuel and lubricants, as well as to strengthen the operational control weight of products coming from the fields and significantly reduce the time for weighing and acceptance of final products. In each of these areas, in addition to foreign companies, there exist also epy national ones. And they must compete for the Russian market of “smart technologies” due to the high cost of foreign developments, lack of a sufficient number of specialists training to work with them, especially since the introduction of “artificial intelligence” in the world the agricultural sector is increasing by 22% per year today, and according to Markets and Markets, and in 2025 this industry will amount to $ 2.6 billion (AI in Agriculture Market by Technology 2019). The main smart technologies used in agriculture, methods of their application and effectiveness are presented in Table 1. Smart technologies are introduced unevenly by small and large agricultural enterprises. In recent decades, large-scale agricultural enterprises (mega-farms or agricultural holdings) have been developing all over the world. They are horizontally or vertically integrated companies with farmlands beginning from 500 thousand ha or more, operating both in crop production and in animal husbandry. Their features are huge sizes, integration of several stages of production and processing of agricultural products, as well as a wide attraction of funds from external investors. The emergence and constant growth of agricultural holdings in the modern world raises the question of the optimal scale of an agricultural enterprise. In contrast to other sectors of the economy, the agricultural production does not benefit from economies of scale. The negative relationship between the farm size and output per unit area in non-mechanized agriculture is widely shown in the scientific literature (Eastwood et al. 2010).

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Technology

Application of technology in agriculture

Precision farming

Use of “smart” devices in the management of crop productivity, taking into account changes in the habitat of plants, as well as more efficient use of land; parallel driving of agricultural machinery using GPS navigation, which excludes the double processing or squeezing plants on the field, as well as the differentiated sowing and chemical use Use of automated systems for feeding, milking and monitoring animal health; constant and reliable veterinary control by means of individual veterinary registration, single database of animals, registration of animal owners, animals’ electronic chipped passport Management of the entire process of irrigation and climate control; monitoring the productivity and quality of work of all systems; day-to-day delivery of fresh and natural plantbased foods to urban population; replacement of manual labor by robotics; possible hydroponic land replacement

«Smart » farms

«Smart » greenhouses

Agricultural productivity improvement by means of smart technologies Optimization of operating expenses and increase in productivity by an average of 15– 20% due to a reduction in the number of seeds, fertilizers, agrochemicals and used water, which are applied strictly “on demand”

Smart farms can increase the productivity of domestic animals, in particular, increase milk yield by 30–40%, improve product quality, as well as to reduce costs and make more rational use of the available forage reserve

Smart greenhouses can increase yield by 20–40%, improve of the quality of the product and reduce costs due to more efficient consumption of fertilizers, chemicals, water, as well as by means of the optimization of the number of personnel needed to grow crops and reduce losses from the human factor In a year from the “smart” greenhouse with an area of 0.4 hectares, you can have the same amount of yield as from 12 hectares of a classic farm in the open air Monitoring the use of agricultural Monitoring the agricultural It allows you to reduce fuel machinery machinery use by means of consumption, as well as to satellite navigation systems (e.g. optimize routes and the load on GPS) and sensors personnel «Smart » storage facilities Smart storage facilities for They allow reducing personnel vegetables and fruits allow costs, as well as improving monitoring the state of products storage conditions of the crop and during the storage using specially increase its safety defined algorithms in real time (temperature, humidity, carbon dioxide). If the conditions are violated, the system corrects the situation and notifies the owner about the changes in the storage

(continued)

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Table 1. (continued) Technology

Irrigation automation

Electronic trading platforms for farmers

Application of technology in agriculture

Agricultural productivity improvement by means of smart technologies Modern automated irrigation Irrigation automation helps systems allow analyzing each site minimize irrigation water costs and determine the amount of and at the same time increase crop moisture needed, avoiding water yields overruns For example, there are systems that work on the basis of wireless sensors that transmit a signal to the controller and to the irrigation control unit, which allows you to automate the irrigation process and control its implementation at all stages: from monitoring the operation of the irrigation system to the analysis of soil moisture Electronic trading platforms for This technology allows reducing farmers are used for operational the time of delivery of the product communications of agricultural from the field to the retailer and producers (farmers) with reducing its losses associated with purchasing and trading the intermediate storage. organizations According to experts, at present As grain is harvested from each about 30% of grain and other field, all information about the crop goods supplied in bulk are lost is collected and displayed in real due to intermediaries and poor time in the program, and then it is logistics sent to suppliers’ warehouses, distributed between them depending on the required quality and price, which excludes intermediate storage of grain in bulk With the help of special programs working with the use of “blockchain” technologies, it is also possible to computerize the process of tracking the information along the entire grain supply chain. If a farmer produces an organic product or wants to emphasize a special type of certification, he can use the “blockchain” technology to track the delivery of products Consumers can scan the product barcode at the supermarket and see the entire supply chain from the farmer to the supermarket

(continued)

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Technology

Application of technology in agriculture

Drones (ground drones, unmanned aerial vehicles (UAVs), multicopter (quad-, hex-, octocopter), winged drones)

Drones are used for mapping, aerial photography, video shooting, thermal imaging, and laser scanning. They allow you to create electronic 3D-maps of fields, calculate indicators for fertilizing, inspect fields and monitor the state of the crop, monitor the operation of vehicles and agricultural machinery, protect land, apply plant protection products and fertilizers etc. Monitoring by means of drones can provide data not only on cultivated plants, but also on weeds, for example, their density, species composition Sensors (sensors), which are installed in the ground at control points, are the basis of the system for the determination of soil characteristics and they are able to detect, for example, landscape heterogeneities, soil types, lighting, weather, number of weeds, parasites and promptly inform the user about this for decision making. The measuring probes and sensors located in the field at a considerable distance, which are connected in a network, allow you to get the information about the status of fields and crops, in particular, humidity, temperature, weed infestation, plant growth phases, etc. Robots (robotic machines) perform a wide range of tasks starting from harvesting to cleaning the area from weeds. Key areas of robots’ application in agriculture are unmanned tractors and aircraft; automated systems of vegetation of agricultural crops; automated control systems for dairy farms, etc. At the same time, “smart” tractors and combines can work autonomously and they do not require human presence, which makes it possible to use them at any time of the day. In addition, they can be equipped with many additional functions, for example, built-in systems against pests

Sensors

Robots (robotic cars)

Agricultural productivity improvement by means of smart technologies Increase of crop yields

Improvement of the management of agricultural production by providing the farmer, agronomist and modern “smart” machines with a complete set of data necessary for making the right decisions

Robots allow reducing personnel costs, as well as carrying out tasks at any time of the day

(continued)

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Table 1. (continued) Technology

Application of technology in agriculture

Agricultural productivity improvement by means of smart technologies LEDs The brightness of the light coming The low cost of LEDs allows from the LEDs can be easily achieving the production adjusted; They allow you to grow efficiency in rooms that do not crops in rooms that do not have have sufficient natural light enough natural light, such as basements. For example, the British technology “Growing Underground” allows you to grow 20 types of lettuce underground in the territory of bomb shelters remaning from wars Genetic Engineering This technology allows you to Improvement of crop yields, their cultivate farm animals and plants resistance to pests that are resistant to viruses and insects and are beneficial to humans 5G Smart technologies cannot do This technology allows using without fast mobile sensors, unmanned vehicles and communications remotely controlled equipment The vast majority of farms are outside the LTE coverage, where located outside large populated proprietary short-range systems areas, far beyond LTE coverage, so are currently used the countrywide location of 5G base stations will correct the situation. Artificial Intelligence It is used to analyze the Improvement of agricultural appearance of plants. This production management technology allows to identify timely the problems with a future crop, to determine the spread of the disease or pests; to transport management, to schedule the automatic soil irrigation and fertilizer spraying, animal health monitoring Source: compiled by the authors based on Kutbitdinov 2019; Morozov 2019; Information technologies in the agricultural complex of the world 2018; Eldieva 2018

The reasons for this are as follows: 1) owners of family farms are more motivated, in contrast to employees of larger agricultural enterprises, whose work requires control; 2) the uncontrolled and unpredictable natural influence on production makes it difficult to consolidate and centralize management processes (Rylko 2009) and the implementation of actions. The owners of family farms have a deeper knowledge of local soil and climatic conditions, which are often spreaded from generation to generation; 3) family farms have greater flexibility regarding the use of excess labor outside the farm (Allen and Lueck 1998); 4) The opportunities for the division of labor in agriculture are limited, the necessity to perform a small number of strictly serial operations remains (Rylko 2009).

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However, the benefits of scaling up an enterprise can hang over the negative factors mentioned above which arise from economies of scale and cause further growth. The use of smart technologies can offset the advantages of family farms. In relation to agricultural holdings, the economies of scale are associated with such factors as: • the introduction of new technologies in crop production, minimization of soil cultivation, emergence of pest resistant and herbicide tolerant plant species what reduces the number of production processes and allows replacing labor with capital; • the use of new information technologies, in particular GPS-control, allows more efficient control of employees, while satellite data and remote sensing can reduce the competitive advantage of family farms connected with a better knowledge of local soil and climatic conditions; • a clear distribution of decision-making rights, a more efficient incentive system for managers, and performance evaluation systems help reduce some of the internal transaction (agent) costs in agricultural holdings; • the increase in wages in the non-agricultural sector made farmers search for incomes comparable to those that they can get in other sectors of the economy, and this situation led to the replacement of labor with capital and enlargement of production (1930–1970); • for economies with weaker financial and credit systems (countries with economies in transition, NIS), the advantages of agricultural holdings are the ability to attract investment from other industries, foreign investment and access to foreign financial markets; • high fixed costs for certification of products due to the need to comply with food safety and environmental standards, the need to maintain product identity in the supply give the agricultural holdings a competitive advantage over private farms (Hermans et al. 2017); • in some countries the integration in agriculture allows overcoming market failures and weaknesses of state institutions. For example, the predominance of agricultural holdings in post-Soviet countries is associated not so much with the economies of scale but with the preference of large farms by government authorities that can ensure the food security (Wandel 2009). On the other hand, government support programs for small farmers can lead to a decrease in the average size of an agricultural enterprise. The structure of the Russian agricultural model is fundamentally different from the one that is used in the West. In Russia, agricultural holdings predominate, while in Europe and the United States mainly small and medium-sized farms prevail. The data of the past Russian agricultural census showed 135 thousand farms, what is 40% less in comparison with the number which was a decade ago, and what is less than in the United States about 15 times. Their share in the volume of agricultural production is about 12%, the remaining volume belongs to agricultural holdings. Naturally, agricultural holdings have more opportunities to use smart technologies and complete re-equipment, but on the other hand, this situation makes farmers maximize the return on each invested ruble. For example, in the EU countries, 80% of agricultural machinery is sold with the navigation equipment, but only 30% is actually connected to the network, since small family farms with small cultivated areas prevail

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in agriculture, and therefore they have a lower economic feasibility of switching to “smart”, more expensive equipment. At the same time according to experts UAVs repay only if they serve at least 10 thousand hectares of land. The identification of smart technologies’ features used in agricultural holdings and peasant farms allows us drawing the conclusion about the need for a deeper integration, which allow to realize the advantages of large and small agricultural production.

4 Conclusion The development and implementation of technical and technological smart technologies involves the creation of organizational and economic “smart technologies”, which in modern conditions are presented by clusters. A flexible organizational cluster structure allows us using any organizational form of production, with any form of ownership, leaving the independence for economic entities, which has significant importance for the agricultural industry (Fig. 1). Coordination Council of representatives of state and municipal authorities

Leader of Agricultural and Food Processing Cluster

Advisory board (intellectual background) direct impact

Cluster enterprises

Nucleus of a cluster

indirect impact

Fig. 1. Approximate structure of the agricultural and food processing cluster.

The created agricultural and food processing clusters will be able to stabilize the reproduction processes of their cluster members by means of mutual support of partners and assistance in marketing products, obtaining loans, using tools, repairing equipment, personnel training, but most importantly, by leveling the possibilities of smart technologies’ use and obtaining a synergistic effect for all participants in the agricultural cluster. Moreover, the effectiveness of modern technology policy consists in the rapid spread of commercially successful technologies. The use of cluster approach allows getting the explosive effect of the joint transformation on the basis of smart technologies of marketing, supply and marketing, transportation, design, technological, production and other resources into factors of production of a cluster. Particular importance for peasant farms for the implementation of the cluster approach has the support at the state level. One of the examples of foreign government support for individual farmers is the state-owned Smart Farming Program in Ireland, which has been working since 2014 (Lewis 2018). Participation in this program of

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1900 farms gave them the opportunity of using the automated tools and applications in order to reduce costs and emissions, which led in 2017 to an average savings of up to 5,000 Euros and a 10% reduction in fuel consumption. In Russia, the difficult social and economic situation, fear of bankruptcy, and the lack of an effective agricultural cooperative system add to the problems in the development of small business forms. In this regard, it is necessary to initiate and support the integration processes of personal subsidiary plots of the population and peasant farms into structures serving large financial and agro-industrial associations (groups) (Gumerov 2009) (Fig. 2).

Agricultural enterprises

Cooperatives

Clusters

Agricultural holdings

Fig. 2. Prospects for the development of small business

“Smart farming” of course is possible only with the use of a scientific approach. And this will require additional efforts from the owner to collect data, analyze them and make decisions based on the obtained economic parameters. At the same time, in each region there should be a reliable provider of IT communication, which will help optimally select their combinations, based on the experience and knowledge of the customer and it should be able to provide high-quality equipment maintenance. The presence in the region of a group of clusters with developed technological, marketing, and information services strengthens its investment attractiveness as a Table 2. Agricultural products in actual prices, millions of rubles (in farms of all categories) in Volgograd region Agricultural production

2017

2018

2019

2017–2019 Absolute deviation −3 318.9

Agricultural 54 866.8 52 801.8 51 547.9 organizations Crop growing 42 930.4 40030.9 11 524.3 −31406,1 Animal breeding 11 936.5 12 770.8 40 023.6 28087.1 Subsistence farms 51 397.2 49 600.1 49 404.4 −1 992.8 Crop growing 25 765.5 21 935 20 671.1 −5094.4 Animal breeding 25 631.7 27 665.1 28 733.3 3101.6 Farmers 27 500.2 25 872.4 33 741.7 6 241.5 Crop growing 25 199.0 23 308.8 30 973.5 5774.5 Animal breeding 3 301.2 2 536.7 2 768.3 −532.9 Source: (Agricultural products according to category of farms 2019)

Growth rate, % 93.95 26.84 335.30 96.12 80.23 112.10 122.70 122.92 83.86

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whole and provides it with an additional channel for revitalizing business in the territory. In Volgograd region, there are all the necessary prerequisites for the formation of a large agricultural and food processing cluster. This is, first of all, developed crop production and, in recent years, animal husbandry, drip irrigation and gardening that received a new impulse for development (Table 2). In the region today the production of grain, vegetables, and feedstuff are currently produced in close cooperation with livestock producers. There are leading enterprises in all industries, there are agricultural machine-building enterprises, processing enterprises and necessary infrastructure, as well as complementary, related, financial and service companies, educational and research firms, a capacious domestic market. The following arguments speak in favor of such an agricultural cluster (crop and livestock in terms of content): 1) relatively low competitiveness of grain farming, due to climatic conditions, if one focuses only on crop production; 2) production of the bulk of the grain, again due to the specifics of the region, for forage purposes; 3) excess grain in the harvest years due to the use of smart technologies; 4) active development in the past few years of livestock based on smart technologies; 5) staff and economic traditions of the rural population of the region; 6) technical and technological smart technologies involve the creation of organizational and economic “smart technologies”, which are the clusters of modern conditions. The formation and development of a large regional agricultural and food processing cluster creates a synergistic effect of technological, organizational and economic “smart technologies”, which creates food security in the region as a component of economic security and guarantee of economic stability, directly affects the standard of living of the population and the level of social tension in the society.

References Global hunger continues to rise, says UN new report, World Health Organization (2018). https:// www.who.int/ru/news-room/detail/11-09-2018-global-hunger-continues-to-rise—new-unreport-says Gumerov, R.R.: On the implementation of national interests in the agro-industrial complex during the crisis. Russ. Econ. J. 3–4, 17–24 (2009) IT in the agro-industrial complex in the world (2018). http://www.tadviser.ru/ Kutbitdinov, Yu.: “Smart” agricultural tools. Economic Review (2019). https://review.uz/ru Morozov, E.: How smart technologies feed the planet (2019). https://www.iguides.ru/main/other/ kak_umnye_tekhnologii_nakormyat_planetu/ Agricultural products by category of farms (2019). https://volgastat.gks.ru/storage/mediabank/ agriculture_production_07022020.htm Rylko, D.: Agricultural holdings predominate in our country, and family farms prevail in the West (2009). http://lenagro.org/stati/1394-u-nas-preobladayut-agroxoldingi-a-na-zapade– semejnye-fermy.html Selina, O.A., Semiokhina, E.A.: Smart technologies in the social sphere. Young Sci. 1(135), 260–262 (2017) Chepollina, F.: The computer in beds: how “precision farming” will revive the Russian agricultural sector (2019). https://www.forbes.ru/tehnologii/378755-kompyuter-na-gryadkahkak-tochnoe-zemledelie-vozrodit-rossiyskiy-agrosektor

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Eldieva, T.M.: Directions for the use of smart innovations in agriculture. Agrarian Reform Forms Manage. 6(366), 46–49 (2018) AI in Agriculture Market by Technology (Machine Learning, Computer Vision, Predictive Analytics), Offering, Application (Precision Farming, Drone Analytics, Agriculture Robots, Livestock Monitoring), Offering, and Geography - Global Forecast to 2025 (2019). https:// www.marketsandmarkets.com/Market-Reports/ai-in-agriculture-market-159957009.html Allen, D., Lueck, D.: The nature of the farm. J. Law Econ. 41, 343–386 (1998) Deininger, K., Byerlee, D.: Rising global interest in farmland. Can it yield sustainable and equitable benefits? World Bank. Washington DC. (2011). https://siteresources.worldbank.org/ INTARD/Resources/ESW_Sept7_final_final.pdf Eastwood, R., Lipton M., Newell, A.: Farm size. In: Pingali, P.L., Evenson, R.E. (eds.) Handbook of Agricultural Economics. Elsevier, Amsterdam FAO. 2018. The future of food and agriculture. Alternative pathways to 2050, FAO, Rome, 224 pp. (2018). http://www.fao.org/3/I8429EN/i8429en.pdf Hermans, F., Chaddad, F., Gagalyuk, T., Senesi, S., Balmann, A.: The emergence and proliferation of agroholdings and mega farms in a global context. Int. Food Agribusiness Manage. Rev. 20(2), 175–185 (2017) Lewis, A.: Smart Farming boosts income and helps the planet at the same time (2018). https:// www.irishexaminer.com/breakingnews/farming/smart-farming-boosts-income-and-helps-theplanet-at-the-same-time-840692.html Wandel, J.: Agroholdings and clusters in Kazakhstan’s agro-food sector. Leibniz Institute of Agricultural Development in Central and Eastern Europe. Halle (Saale) (2009). https://www. econstor.eu/bitstream/10419/32793/1/613840038.pdf

Study of Machine Learning Techniques for Transport Viktoriya V. Degtyareva1(&) , Mikhail G. Gorodnichev2 and Marina S. Moseva2

,

1

2

State University of Management, Moscow, Russian Federation [email protected] Moscow Technical University of Communication and Informatics, Moscow, Russian Federation [email protected], [email protected]

Abstract. This work deals with one of the important topics - the organization of safe and optimal movement of land transport vehicles. Organizing the right logistics leads to economic gain as well as a reduction of greenhouse gas emissions into the environment. The main difficulty in solving this problem is that the problem is multiparametric, and dynamically variable in time. Another problem is that because of the above features it is not possible to write an algorithm that will choose the optimal route at each moment of time due to the complexity and variability of the input parameters. An interesting task is the development of software allowing automatic collection of traffic information, and transmission to the input of an adaptive decision-making system for choosing the most correct route. It is therefore proposed to develop an adaptive system based on modern machine learning techniques and genetic algorithms. To meet these challenges, the authors developed machine learning and simulation approaches. The work includes an analysis of machine learning methods, especially the use of neural networks in reinforcement training, as well as an analysis of machine learning methods for the task of finding the optimum route of transport. As a result, software has been developed for the crucial automated transport task through machine learning methods, analysis of sustainability of transport solutions based on machine learning methods and analysis of machine learning supported by digital control systems. Keywords: Machine learning
Mathematical modeling
Transport problem Stability analysis
Transport cost model JEL Code: L52





M21
R40

1 Introduction Improving the functional efficiency of transport management is intrinsically linked to the development and introduction of intelligent information technologies based on the ideas and methods of machine learning, which is an important part of the theory of pattern recognition. Application in transport of learning (self-learning) automated management systems, allows for the transition from outdated subjective manual control © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1585–1595, 2021. https://doi.org/10.1007/978-3-030-59126-7_173

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methods to intelligent information technologies for controlling the space- and timedistributed processes that are poorly formalized. From a theoretical point of view, however, there is a need to shift from strict traditional mathematical models to cybernetic (heuristic) methods of simulating controlled processes under conditions of a priori uncertainty, unclear data and resource constraints (Watkins and Dayan 1992). The methods of research in work are based on the principles and methods of systems analysis, IEC-technology and fuzzy set theory; Probability and mathematical methods for estimating random variables and testing statistical hypotheses; Methods and characteristics of information theory and object-oriented methodology of complex systems and software design.

2 Neural Networks in Supervised Learning Tasks 1. In classical Q-learning, the function of Q-values is represented in the form of a table, on the input of which the values of type «state-action» are received (Florian 2005; Terent’ev 2011). The necessity of convergence of the algorithm when using such representation of the function of Q-values is considered to be a multiple testing of all possible pairs of “state-action”. Practical problems typically address the space of such large-scale pairs or a continuous medium, making it difficult to use a tablebased Q-learning method to solve them. The main approach to solving this problem is to approximate the Q-values table. In training objectives, approximation functions must meet the following requirements: – Ensure good generalization, effective updating rules that allow learning online and step by step; – Be noise resistant; – Be easy to use, allowing flexibility in the choice of approximator for the task; – To have acceptable memory requirements. Typical approximation functions used in reinforcement learning applications are MLP networks, RBF networks, CMAC method, discretization, etc. Discretization is one of the commonly used approaches with continuous state space. The continuous state space is approximated by the lattice of the regions within the space, and each of the regions represents the input in the Q-table. The main problem with the discretization of continuous space is the «curse of dimension» and the lack of a priori information about those areas of space that require more careful processing. In this case, the efficiency of sampling depends directly on how a well-accepted partition produces an objective function. On the one hand, reducing the partition step is necessary to improve accuracy, but this leads to a table of larger values, resulting in the need for more learning updates. If you increase the partition step, you may not achieve the optimal control strategy. Thus, the size of the sampling intervals must be carefully chosen after several trials and errors. The Hamming distance-based method provides the opportunity to speed up the learning process when using high-volume Q tables. If this method is used, all states are

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represented in binary form, after which the proximity threshold (the number of bits that may differ from one state) is set (Brodeckij and Terent’ev 2005). During the value correction process, an update is performed simultaneously for the selected state and for all states where the Hamming distance from the selected state is less than the specified threshold.

3 Analysis of Machine Learning Techniques for Optimizing Transport Paths Consider the mathematical description of the algorithm for choosing a scheme for solving the organization problem (Fig. 1) on the basis of a multi-index transport problem. If the number of consumers is large, then the natural desire to reduce transport costs and delivery times leads to the need to solve the problem of placing additional (intermediate) warehouses besides the main ones (Lukinsky 2003). The formal definition of the problem is as follows. There are mpoints of delivery and a set ða1 ; a2 ; . . .an Þ, determining the distribution of the goods by suppliers; n- the points of consumption of this commodity and the set ðb1 ; b2 ; . . .bn Þ , of their requirements; K points used as intermediate centers (warehouses). In addition, the value matrix is given where C = (cikj) cikj is the cost of transporting the goods from the i- the supplier to the j- the consumer through k- the intermediate point The matrix is then entered where X = (xikj) xikj is the quantity of goods assigned for the carriage of the goods from the i supplier to the j consumer via the k intermediate point The aim is to find the X = (xikj) matrix that minimizes the total cost of transport LðXÞ ¼

m X n X K X

cikj xikj

i¼1 j¼1 k¼1

and satisfying the system of limitations n X K X

xikj ¼ ai ; i ¼ 1; 2; . . .m

j¼1 k¼1 K X m X

xikj ¼ bj ; j ¼ 1; 2; . . .n

k¼1 i¼1

xikj  0; i ¼ 1; 2; . . .m; j ¼ 1; 2; . . .n; k ¼ 1; 2; . . .K

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1

Database

2

Definition of transport management scheme

3

Checking the use of the scheme «many to many»

Yes Transport solution

No Coordination of delivery scheme

4

Yes

Checking the use of the scheme «one to one»

No 5

Solving the routing problem

6

Simulation of vehicle travel time on route

7

Verification of delivery times

No Route correction

Yes Route of the vehicle

Fig. 1. Scheduling algorithm for the transport organization problem

If capacity of warehouses is limited and the set ðd1 ; d2 ; . . .dk Þ is set, an additional group of constraints appears m X n X i¼1 j¼1

xikj  dj; k ¼ 1; 2; . . .K

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1. Thus, in this case, the usual two-index transport problem is converted into a threeindex problem (Leonov and Demidov 2003). Similarly, an increase in indexing is taking into account the fact that in many practical cases the cost of delivery depends on the type of goods and the type of vehicles (for example, refrigerated equipment, tanks, etc.) should be used for the carriage of certain products. In order to obtain a formal model of this task, enter a value matrix C = (cikj), where cikj- the value of the transport unit from the i- the supplier to jthe consumer using the l- the vehicle type, the set ðQ1 ; Q2 ; . . .; Ql Þ where Ql - the sum of the goods, l- the type of vehicles to be carried matrix X = (xikj) where xikj - quantity of goods transported from i-the supplier to j-the consumer using l- the transport type Then the problem is formulated as follows: finding the matrix X = (xikj) that minimizes the total cost of transport LðXÞ ¼

m X n X L X

cikj xikj

i¼1 j¼1 l¼1

and satisfying the limitations n X L X

¼ ai ; i ¼ 1; 2; . . .m

j¼1 l¼1 m X L X

¼ bj ; j ¼ 1; 2; . . .m

i¼1 l¼1 m X n X

xikj  Ql ; i ¼ 1; 2; . . .L

i¼1 j¼1

xikj  0; i ¼ 1; 2; . . .m ; j ¼ 1; 2; . . .n; l ¼ 1; 2; . . .L: The resulting problem is again three-index. Note that if this last task takes into account the possibility of using intermediate centers, the task becomes four-index. The inventive method consists in introducing the following: cikj - value of the transport unit from the i - supplier to the j - consumer via the kintermediate center using the l - type of vehicles xikj - quantity of goods assigned for carriage from the i - supplier to j -consumer via k- intermediate center using l - type of vehicles

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The aim is to find the matrix X = (xikj) that minimizes the total cost of transport LðXÞ ¼

m X n X K X L X

cikj xikj

i¼1 j¼1 k¼1 l¼1

and satisfying the system of limitations n X K X L X

¼ ai ; i ¼ 1; 2; . . .m

j¼1 k¼1 l¼1 m X K X L X

¼ bj ; j ¼ 1; 2; . . .m

i¼1 k¼1 l¼1 m X n X K X

xikj  Ql ; i ¼ 1; 2; . . .L

i¼1 j¼1 k¼1

xikj  0; i ¼ 1; 2; . . .m ; j ¼ 1; 2; . . .n; k ¼ 1; 2; . . .K; l ¼ 1; 2; . . .L: Uncertainty about the parameters of transport tasks is a natural and already familiar attribute of modern productions of these tasks. This uncertainty arises from a large number of random factors: changes in the value of raw materials and other consumables (electricity, fuel, etc.), market fluctuations in the value of the products produced, fluctuations in demand, etc. In many cases, by processing real statistical material, it is possible to restore the distribution densities of the participating random variables in the description of the problem. This creates a specific stochastic problem, which requires the development of a special mathematical apparatus (Zamyatin and Malyshev 2013). The purpose of the stochastic problem-solving technologies proposed in these works is to construct a deterministic analogue. The nature of the tasks involved is determined by the type of target functionality used in one of the following variants. Firstly, optimization on average; A plan satisfying the limitations is found, which minimizes the average; total transport cost. The second is to minimize the variance of the random transport costs. Third, minimizing the probability that the random total cost of transports will exceed some acceptable cost. In all cases, the original problem is converted to some complex mathematical programming problem, for which it is recommended to apply one of the numerical methods (sectional planes, possible directions method, etc.). Mathematical models of the corresponding problems have the following form. Let, for certainty, random values, cij, i = 1,2,…m, j = 1,2,…n unit transport from suppliers to consumers, and density distributions фij(cij) of these random values be given. Then,

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the optimization of traffic on average is formulated as follows: find a plan X = (xikj), which minimizes the average total cost of transport M½X ¼

m X n X

M½cij xikj ;

i¼1 j¼1

M½cij  ¼

Z

1 c 0 ij

  / cij dcij ; i ¼ 1; 2; . . .m; j ¼ 1; 2; . . .n

The resulting problem is a common linear programming problem. The same approach is used when the demand for a product is random. The obvious disadvantage of the solution is that it does not take into account the possible losses from the shortage of the good and the costs of storing the unsold part. The second type minimizes the variance of the random total cost of transport D½X ¼

m X n X

D½cij x2ij ;

i¼1 j¼1

The optimization problem here is quadratic programming. Finally, in type three problems, the distribution density f(C, X) of the random total cost L of transportation is first found. Now the problem of finding a plan X that minimizes the probability of exceeding the random total value of the allowable value is formulated PðL [ CdopÞ ¼ Pð

m X n X

cij xikj  Cdop ¼

i¼1 j¼1

Z

1 ðC; XÞdL; 0

The level of complexity of the problem and the manner in which the solution is to be achieved depends substantially on the density of the distribution. In all of these cases, the possible urgency the problem is unfortunately not taken into account when discussing possible solutions.

4 Calculation of the Cost of Transportation Under Conditions of Uncertainty Transport planning needs to take into account the cost of cargo transport depending on different physical parameters. A large number of methods are known for calculating transport cost statistics, taking into account various factors. The system of ratios proposed in this work makes it possible to calculate the mathematical expectation and variance of the cost of carriage. Assuming that the route between points (i, j) is divided into sections with their characteristics, the following parameters are used for the calculation cij - Cost of transport from point i to point j;

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ckij - Cost of the transport of cargo per unit of length k, the section of the road between points (i,j); Lk - Length of k a plot. k ¼ 1; 2; . . .; n; ck(1) ij - Actual costs per unit of length directly related to fuel consumption (rub/km); ck(2) ij - Costs related to the remuneration of drivers (ruble/km); Qфkij - Actual fuel consumption per unit of length k section of the road between points (i,j) (l/km); Цt - Cost per liter of fuel (rub/l); Qhkif - Average standard fuel consumption per track for a brand-name vehicle when driving on a level terrain at a standard speed; KT - Fuel consumption adjustment factor based on the ratio between the actual vehicle speed V/ and the standard speed ; Gф - Actual vehicle weight (H); R n- Rolling resistance coefficient in the standard conditions; R ф- Rolling resistance coefficient for the specific conditions of the k section of road (i,j) ; kb - Air resistance factor; lkij = {0.005 In case of going uphill; -−.05 In case of going dounhill. R 20- Rolling resistance value at a speed of 20 km/h; k - Coefficient of the change in rolling resistance with an increase in speed. k = 0.0002; rfkj Traffic density on the (i, j) section of the road between points (i, j) (unit/min.) qfkj Number of lanes on the k section of the road between points (i, j); lfkj Road category on the road k section between points (i, j) l = 1, 2, 3, 4, 5. R R

Qfkj is the square average deviation of the random cost from the mean k road section from I to j. An important advantage of the described methodology is the practical possibility of performing calculations taking into account a large number of factors and conditions of transportation (Borodinova 2010). However, a major drawback is the difficulty of direct computation due to the need to input tabular and graphically displayed data. The following alternative methodology is therefore proposed for the calculation of transport cost statistics. We now introduce a regression equation linking the average value of a unit of cargo per unit of length: C ¼ a0 þ a1 F1 þ . . . ak F2k þ . . . a22 F22 þ . . . akk F1 F2 þ . . .ak1;k Fk1 Fk ^ vector of the estimates of the coefficients of the regression In this case, the A equation is found using the method of least squares  1 A ¼ HT H HT C: In order to evaluate each of the coefficients of the equation independently, the transport conditions, that is, the elements of the H matrix, select that they together form

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an orthogonal plan. However, since the equation includes not only factors and their interactions, but also factor squares, the central compositional plan (CCP) (Yudin 2010; Muhachev 2007) is needed to evaluate the components of the A vector. It is clear that the practical solution to the problem of optimization of transports requires information in the form of a database containing specific data and characteristics of road sections between suppliers and consumers.

5 Assessing the Sustainability of Machine-Based Solutions to Transport Challenges Let some homogeneous product be transported from m suppliers with quantities of product supplied A1,A2,…Am to a group of consumers whose needs are equal to B1,B2, …Bn. Shipping costs from specific suppliers to specific customers are random, with known distribution densities (Sivilevičius and Vislavičius 2019; Buldin et al. 2019). The assessment of the sustainability of the transport solution allows for a simple analytical solution. Consider that the optimal solution of the transport problem is to be found using the method of the minimum element of the matrix. This method is designed in such a way that it can uniquely derive a sequence of designations, structured according to the increasing consistency of transport costs. This sequence begins in the first step with the procedure for finding the minimum element of the value matrix and continues in each subsequent step with the same procedure for the matrix adjusted after the next step. The result is a fixed incremental sequence of values that determines the order in which the values are found. Renumber this sequence as follows: C1 < C2… < Cm+n+1. 2. Now we calculate the probability of implementing the correct assignment order for a random pair (k, K + 1) of adjacent members of sequence C1,C2,…Cm+n+1.. Let the number Ck+1 take a random value X. Calculate the probability that a random number Ck will adopt a value less than X, and then interpolate this probability with the probability distribution density of the random value Ck+1(Gorodnichev et al. 2019; Gorodnichev et al. 2019). Density of the distribution фCk and ф(Ck+1) random variables Ck and Ck+1 are naturally assumed to be independent. Therefore, the desired probability is calculated by the formula Pk;k þ 1 ¼

Z

Z 1 /ðCk þ 1 ÞdCk þ 1 X /ðCk ÞdCk : 0 0

Furthermore, the probability of implementing the correct assignment order in the algorithm of the minimum element of the matrix equals the following P¼

Y

m + n  2 pCkCk þ 1 ¼ 1=2m þ n2   m + n  2 2ak þ 1 ak + 2bk þ 1 bk  2bk þ 1 ak  a2k þ 1 b2k =ðbk ak Þ ðbk þ 1 ak þ 1 Þ: k¼1

Y k¼1

The calculated value P describes the level of sustainability of the transport problem. The chosen solution will be absolutely stable if inequality (k, k + 1) is not achieved for

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all couples, i.e. bk < ak+1. In this case, x > bk and the internal integral are equals to 1 (Wang et al. 2019). And, of course, we get the following Pk,k+1=1 and pk,k+1=1. In another extreme case, if a1 = a2 = …=am+n-1 and b1 = b2 = …=bm+n-1, we get pk,k m+n−1 . +1=1/2 and P = 1/2

6 Conclusion As a result of the work, a study was carried out on machine learning methods for solving transport problems. For this purpose, machine learning methods have been analyzed for the task of finding the optimum route of transport. The main purpose of the developed software is to route transport with limited capacity and stochastic demand. The following programming languages were used for development: C#, JS, ASP.NET, jQuery, Signalr, Mapbox, Mapbox Directions API, and Algolia Places. The application lays out the optimal route, indicates its cost, and allows keeping step-by-step routing instructions for each vehicle. Acknowledgments. The study was carried out with the financial support of RFFI within the framework of the scientific project No.19-29-06036.

References Watkins, C., Dayan, P.: Machine Learning 8, 279–292 (1992) Florian, R.: A reinforcement learning algorithm for spiking neural network. In: Florian, R. (ed.) Proceedings of the 7th International Symposium on Symbolic and Numeric Algorithms for Scientific Computing. (SYNASC 2005). - Timisoara, 2005, pp. 299–306 (2005) Terent’ev, P.A.: Metod opredeleniya optimal’nogo mestoraspolozheniya sklada s uchetom kachestvennyh i kolichestvennyh faktorov. Logistics Supply Chain Manage. 45, 47–56 (2011) Brodeckij, G.L., Terent’ev, G.L.: Primenenie metoda analiticheskoj ierarhii dlya optimizacii mesta raspolozheniya regional’nogo raspredelitel’nogo centra. Logistics Supply Chain Manage. 1, 26–34 (2005) Lukinsky, V.S.: Models and Methods of Logistics Theory, 175 p. PETER, SPb (2003) Leonov A.A., Demidov M.M.: Paket dlya resheniya mnogoproduktovoj transportnoj zadachi s promezhutochnymi punktami perevozok. Actual problems of the Humanities. Problems of University education. Economy and management, Scientific session MIFI, vol. 6, pp. 266– 267 (2003). (in Russian) Zamyatin, A.A., Malyshev, V.A.: Vvedenie v matematicheskoe modelirovanie transportnyh potokov. 2-e izd. MXNMO Moskva, pp. 271–303 (2013) Borodinova, I.A., Saraev, L.A.: Stohasticheskaya transportnaya zadacha, Vestnik Samarskogo gosudarstvennogo universiteta, Samara, pp. 16–23 (2010) Yudin, D.B.: Matematicheskie metody upravleniya v usloviyah nepolnoj informacii. Zadachi i metody stohasticheskogo programmirovaniya, Krasand, 400 p. (2010) Muhachev, V.A.: Planirovanie i obrabotka eksperimenta: Uchebnoe posobie, 18 p. Tomskij gosudarstvennyj universitet sistem upravleniya i radioelektroniki, 1Tomsk (2007) Sivilevičius, H., Vislavičius, K.: Constr. Build. Mater. 214, 17–27 (2019). https://doi.org/10. 1016/j.conbuildmat.2019.03.330

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Buldin, I.D., Gorodnichev, M.G., Makhrov, S.S., Denisova, E.N.: Wave electronics and its application in information and telecommunication systems, WECONF 2018, 8604408 (2018). https://doi.org/10.1109/weconf.2018.8604408 Gorodnichev, M., Dzhabrailov, Kh., Gematudinov, R.: Conference of open innovations association, FRUCT, vol. 24, pp. 619–623 (2019) Gorodnichev, M.G., Gematudinov, R.A., Dzhabrailov, K.A., Potapchenko, T.D.: The concept of an automated weight and size control system for measuring the mass of freight vehicles in a traffic flow. In: 2019 Systems of Signal Synchronization, Generating and Processing in Telecommunications (SYNCHROINFO), Russia, pp. 1–5 2019. https://doi.org/10.1109/ SYNCHROINFO.2019.8814120 Wang, H., Liu, X., Apostolidis, P., Scarpas, T.: J. Clean. Prod. 177, 302–314 (2019). https://doi. org/10.1016/j.jclepro.2017.12.245

Mathematical Methods for the Analysis and Optimization of the Geometry of Transport Networks Based on Generalized Delaunay Triangulations Vladimir A. Klyachin1,2(&) and Ekaterina V. Yakovleva1,2 1

Sobolev Institute of Mathematics, Novosibirsk, Russia {klyachin.va,yakovleva.e.v}@volsu.ru 2 Volgograd State University, Volgograd, Russia

Abstract. Purpose: Construction of a mathematical model in a transport problem, taking into account non-straightness of shortest paths and the limited traffic capacity of sections of the transport network. Design/Methodology/Approach: Mathematical models are proposed in which the problems can be solved using linear programming and optimization on graphs methods. Originality/Value: In this paper, we consider the problem of transportation planning at which transportation costs are minimal, taking into account a traffic capacity and non-straightness of shortest paths of the transport network. An algorithm has been developed that minimizes costs for transportation on a finished transport network, taking into account the limited capacity of road sections. The algorithm is based on solving a linear programming problem. To represent the transport network in the form of a plane triangulation, a class of affine Delaunay triangulations of a finite set P of points in the plane is introduced. Such triangulations are constructed as images of non-degenerate affine triangulations of the classical Delaunay triangulation. To solve a number of variational problems of finding a triangulation with optimal values of certain parameters in the class of affine triangulations, it is very important to know what the discrete structure of the entire set of such triangulations. For this purpose, a convex set of X parameters of non-degenerate linear maps of the plane is introduced in such a way that each point of this set corresponds to a certain affine Delaunay triangulation. It is proved that there is a polygonal partition of the set X such that each open connectivity component of this partition corresponds to a certain one-valued affine Delaunay triangulation. Based on the description of the structure of the set of affine Delaunay triangulations, algorithms for calculating triangulations satisfying conditions of optimality for the values of functionals arising in the construction of transport networks are developed. Keywords: Delaunay triangulation
Transport networks
Transport problem
Simplex method
Stretch factor JEL Code: R41

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1596–1604, 2021. https://doi.org/10.1007/978-3-030-59126-7_174

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1 Introduction When the problem of minimizing the capital costs of building a network is solved, a geometric model consisting of points connected by a system of rectilinear segments appears. In this case, the solution of the problem is reduced to the search for a geometric network for which the total length of the segments is minimally possible. This and similar problems are called the Steiner problem. The results of solving Steiner’s problems are called minimal networks. The geometry and topology of minimal networks are actively studied by both domestic and foreign mathematicians. However, the classical statement of the Steiner problem on the construction of a minimal network does not take into account the many different factors that arise when solving real economic problems. Therefore, a number of analogues of Steiner’s problems arose and algorithms for finding their approximate solutions were developed. Steiner’s problem with constraints in the form of the maximum total length of communication sections from any terminal vertex to the collection point-the tree root-is considered. Despite the high interest in problems such as Steiner’s problem, it is nevertheless easy to see that real transport networks, for example cities, are not constructed at all like geometric trees. As possible geometric characteristics of the networks, the following are indicated there: a) b) c) d) e)

network density; the degree of non-directness of messages; the degree of loading of the central transport hub by transit correspondents; network capacity (availability of duplicate directions); configuration of intersections of trunk lines.

Unfortunately, the author ignored the consideration of the magnitude of point b) the degree of non-straightness of the messages: the paper does not show how this degree can be determined and calculated. In this paper, we propose some variants for determining the degree of non-rectilinearity of the transport network and present some results of the investigation of this quantity. The main goal of our research is to obtain such geometric configurations of transport networks for which the value of nonrectilinearity introduced below would be as small as possible, according to Ananiev et al. (2017), Boseet et al. (2008), Bose et al. (2018), Bose and Verdonschot (2017), Bose et al. (2016), Chew (1989), Drozd (2006), Gonska and Padrol (2016), Ivanov and Tuzhilin (2001), Kuspekov (2013), Lubiw et al. (2019). The classical transport problem about the optimal transport plan is formulated without taking into account the structure of the transport network, through which is supposed to carry out the required goods transportation. However, in real conditions, this can have a significant impact on transportation costs. There are two factors that need to be additionally taken into account when planning transportation. First, the value of non-straightness of routes connecting two points of the transport network. Mathematically, this value can be calculated as the ratio of the length of the shortest path between these points to the distance between them in a straight line. This value is always greater than 1 and on real urban transport networks can exceed 2. The difference between this value and unit multiplied by 100% gives the percentage of natural losses

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(for example, in the form of fuel consumption, time costs, etc.) during transportation via this transport network. The second factor that should be taken into account is the limited traffic capacity of road sections of the transport network. Even if solving the classical problem gives an optimal transportation plan, a situation may turn out when transportation at the right time cannot be carried out due to congestion in network sections. In this article, we make an attempt to formulate a mathematical model for solving the formulated problem and consider how both of the above factors can be taken into account. First, consider the problem, taking into account the factor of the throughput of the transport network. Suppose that from point Pi ði ¼ 1; 2; . . .; nÞ to point Pj ðj ¼ 1; 2; . . .; nÞ it is necessary to deliver mij units of goods. The cost of transporting a unit of goods per unit of distance is known and is c monetary units. The task is to draw up a transportation plan, in which all transportation needs will be fully satisfied and at the same time, the total transport costs will reach minimum. It should be noted that in the absence of restrictions on the maximum load on roads, this task is trivially solved: all mij units of goods must be transported along the shortest path from i to j. Now we give a rigorous statement of the problem. Let G ¼ ðP; EÞ – be a plate graph representing a transport network. Note that the values mij can always be considered non-negative numbers for any i, j. For each pair i; j 2 P, we define the set cij of all simple paths from i to j. For clarity,







let the elements of this set be numbered and obey the rule
ckij

ckij þ 1
. Thus, c0ij is the shortest path from i to j. These routes form the routes on which transportation is possible. If mij goods units are distributed over all the paths from cij , then the value   mkij k ¼ 1; 2; . . .; nij is equal to the number of goods units allocated for transportation along the route cij . Among these values, zero values are allowed. Then the total cost of transportation is calculated by the formula F ðmÞ ¼ c


nij

XX
k
k
cij
mij

ð1Þ

i6¼j k¼1

Next, for each edge e 2 E we define its maximum capacity hðeÞ. This value is the number of goods that can be transported through it per unit of time: N ð eÞ ¼

X

mkij

ð2Þ

ckij 3e

  It is required to define a set v of values mkij i; j ¼ 1; 2; . . .; n; k ¼ 1; 2; . . .; nij , satisfying the conditions:

Mathematical Methods for the Analysis and Optimization nij X

mkij ¼ mij

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ð3Þ

k¼1

N ðeÞ  hðeÞ8e 2 E

ð4Þ

  mkij  0 i; j ¼ 1; 2; . . .; n; k ¼ 1; 2; . . .; nij

ð5Þ

and such that the linear form (1) reaches its minimum. Equality (3) guarantees the satisfaction of all transportation needs; inequality (4) ensures that roads are not overloaded. Since functional (1) is linear, constraints (3)–(4) are also linear, we obtain a linear programming problem. Now let’s consider the formulation of the problem taking into account the factor of non-straightness of the shortest paths of the transport network graph. In this case, we will represent the transport network as a plane graph G, whose vertices form a finite set of points P on the plane. The edges of the graph correspond to roads of the transport network. Consider two points p, q from P. Let L(p, q) denotes the length of the shortest path from the edges of triangles of triangulation T. Enter the relation kðp; qÞ ¼ Lðp; qÞ=jp  qj: This value characterizes the curvature of the shortest path between points p and q in the graph G. Now we can formulate the problem of finding a triangulation T0 of a given set of points P, for which the value is reached kðT0 Þ ¼ min maxkðp; qÞ; where the maximum is taken for all points p 6¼ q, a minimum for all triangulations of T. That is, in this formulation, the desired one is the structure of the transport network, expressed as a plane graph, having the smallest value of non- straightness k(T0). The solution of this variational problem is very difficult, since the considered functional k(T) is neither convex nor differentiable. Moreover, the number of different triangulations of points in general position increases exponentially depending on the number of vertices of G. That is, a simple enumeration does not provide a polynomial search algorithm. First of all, we tried to find the optimal solution in a certain subclass of triangulations. This subclass will be described below.

2 Materials and Method In brief, we present algorithms for solving the above problems. To solve the first problem, the following algorithm is proposed. 1. Find c0ij 8i 6¼ j. If 9i; j : mij [ 0 and 6 9c0ij , then the end of the algorithm. The problem is unsolvable.

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2. Define a set of overloaded edges Eover . An edge e is overloaded if condition (4) is not satisfied for it. If Eover ¼ ;, then we get a trivial case, that is, the transportation of all mij units of goods is carried out along the shortest route c0ij 8i; j. The problem is solved. 3. W = ∅. 4. If Eover 6¼ ∅, then it is necessary to unload all edges e 2 Eover in the following way: (a) W ¼ W þ Eover . (b) 8ckij : ckij 3e find ckij þ 1 . If ckij þ 1 was not found for each pair (i, j) for each overloaded ribs, the problem is unsolvable, it is impossible to unload the overloaded ribs. Therefore, the network will not be able to cope with the specified volume of traffic. The end of the algorithm. (c) Solve the linear programming problem described above by slightly changing condition (4) as follows: N ðeÞ  hðeÞ8e 2 W:

ð6Þ

As a result of solving the formulated problem, we obtain the optimal distribution of flows over all the found paths. If the solution to the linear programming problem is found, go to step 5, otherwise go to step 4(b). 5. As a result of the redistribution of the load in step 4, some edges may be overloaded. If there are any, update Eover and go to step 4. If Eover ¼ ;, then the solution to the problem is obtained. As indicated above, the solution to the second problem was performed in a subclass of triangulations. This subclass is defined as follows. We will call the triangulation of points in the plane an affine Delaunay triangulation if there is an affine transformation of the plane that will translate this triangulation into the classical Delaunay triangulation. And, although the number of affine transformations is infinite, the number of affine Delaunay triangulations of a finite set of points is finite. The algorithm for finding the optimal solution is based on a description of the structure of the set of affine triangulations. To describe such a structure, a convex set X of parameters of nondegenerate linear mappings of the plane R2 is introduced in such a way that each point of this set corresponds to a specific Delaunay affine triangulation. It is proved that there is a polygonal partition of the set X such that each open connectivity component of this partition corresponds to a certain one-valued affine Delaunay triangulation. Moreover, the differences between affine triangulations that correspond to the boundary points of the open connected components of this partition and the one-valued Affine Delaunay triangulations for these components are described. It is also established that the connected components of the partition of the set X are convex, and the one-to-one correspondence of the set of connected components of the partition and the set of onevalued affine Delaunay triangulations is proved. It is also shown that the key points of the partition are points that are calculated by ellipses, on the boundary of which there are exactly five points from the set P, and there are no points from P inside such an ellipse. In the neighborhood of each such point, the partition is arranged in the form of five segments emerging from this point. The described structure of the set of affine

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Delaunay triangulations allows us to prove an asymptotic estimate O(N8) of the number of such triangulations with an increase in the power N = |P| of the set P. It should also be noted that the study of the structure of a set of triangulations can be given in terms of a method or algorithm for enumerating them. This approach is developed in a number of studies on the structure of the triangulation set of a plane finite set of points.

3 Results Based on the above description of the structure of the set of affine results, an algorithm for finding the optimal solution is compiled. We briefly outline its main steps. 1. At the first step, five points (p1, p2, p3, p4, p5) located at the vertices of a convex pentagon are constructed. An appropriate list is being built. 2. At the second step, a check is performed: if the interior of a given convex pentagon has a nonempty intersection with P, then the corresponding five points are removed from the list. 3. At the third step, a check is performed: if the inside of the ellipse passing through the points (p1, p2, p3, p4, p5) contains points from P, then in this case the five points are also removed from the list. 4. If the ellipse is «empty» (see Fig. 1), then its parameters b,c are calculated from its equation of the form

Fig. 1. The « empty » ellipse.

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ðx  x0 Þ2 þ 2bðx  x0 Þðy  y0 Þ þ cðy  y0 Þ2 ¼ r: 5. If two such points (b, c) correspond to ellipses passing through fives of points that have any four points in common, then we connect these points by a segment. 6. For the resulting linear partition of the set of parameters (b, c) (see Fig. 2), a graph G* is constructed in which the vertices correspond to the faces of the constructed partition and the edges are the neighborhood relations of the faces (i.e., if the faces have a common boundary segment, they are connected by an edge in the graph G*).

Fig. 2. Graphical representation of the set of Delaunay affine triangulations.

Each connected component corresponds to an affine Delaunay triangulation. Now the problem of finding a triangulation minimizing the quantity k(T0) is reduced to the optimization problem on the graph G*.

4 Conclusion In this article, the classical transport problem of the optimal transport plan is considered taking into account the structure and traffic capacity of the transport network. To solve this problem, a mathematical model of the transport network is formulated. An algorithm has also been developed that minimizes transport costs when

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transporting on a finished transport network, taking into account the limited capacity of road sections. The algorithm is based on solving a linear programming problem. To represent the transport network in the form of a plane triangulation, a class of affine Delaunay triangulations of a finite set P of points in the plane is introduced. Such triangulations are constructed as images of non-degenerate affine triangulations of the classical Delaunay triangulation. To solve a number of variational problems of finding a triangulation with optimal values of certain parameters in the class of affine triangulations, it is very important to know what the discrete structure of the entire set of such triangulations. For this purpose, a convex set of X parameters of nondegenerate linear maps of the plane is introduced in such a way that each point of this set corresponds to a certain affine Delaunay triangulation. It is proved that there is a polygonal partition of the set X such that each open connectivity component of this partition corresponds to a certain one-valued affine Delaunay triangulation. Based on the description of the structure of the set of affine Delaunay triangulations, algorithms for calculating triangulations satisfying conditions of optimality for the values of the functionals arising in the construction of transport networks are developed. Acknowledgments. The work is supported by Mathematical Center in Akademgorodok under agreement No. 075-15-2019-1613 with the Ministry of Science and Higher Education of the Russian Federation.

References Ananiev, A.A., Lomovitskii, P.V., Il’gov, D.V., Khlyupin, A.N.: A new algorithm for optimizing the design of transport networks with allowance for constraints [Novyi algoritm optimizatsii dizaina transportnykh setei s uchetom ogranichenii], Comp. Meth. Program. [Vych. Met. programmirovanie] 18(2), 158–168 (2017) Bose, P., Carmi, P., Collette, S., Smid, M.: On the stretch factor of convex delaunay graphs. In: Hong, S.H., Nagamochi, H., Fukunaga, T. (eds.) Algorithms and Computation, ISAAC 2008. LNCS, vol. 5369. Springer, Berlin (2008) Bose, P., Lubiw, A., Pathak, V., Verdonschot, S.: Flipping edge-labelled triangulations. Comput. Geom. Theory Appl. 68(1), 309–326 (2018) Bose, P., Verdonschot, V.: Flips in edge-labelled pseudo-triangulations. Comput. Geometry 60(1), 45–54 (2017) Bose, P., Carmi, C., Damian, M., De Caroufel, J.-L., Hill, D., Maheshwari, A., Liu, Y., Smid, M.: On the stretch factor of convex polyhedra whose vertices are (almost) on a sphere. J. Comput. Geom. 7(1), 444–472 (2016) Chew, L.P.: There are planar graphs almost as good as the complete graph. J. Comput. Syst. Sci. 39(2), 205–219 (1989) Drozd, G.Ya.: Planning of cities and transport, Lecture notes. Educational edition. [Planirovka gorodov i transport, Konspekt lektsii. Uchebnoe izdanie.]. Lugansk, Lugansk National Agrarian University (2006) Gonska, B., Padrol, A.: Neighborly inscribed polytopes and Delaunay triangulations. Adv. Geom. 16(3), 349–360 (2016) Ivanov, A.O., Tuzhilin, A.A.: Extreme networks. Acta Applicandae Mathematicae: An International Survey Journal on Applying Mathematics and Mathematical Applications. 66(3), 251–318 (2001)

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Kuspekov, K.A.: Development of geometric models of transport networks for loading-unloading and transport-warehouse works [Razrabotka geometricheskikh modelei transportnykh setei dlya pogruzochno-razgruzochnykh i transportno-skladskikh rabot]. Modern problems of science and education [Sovremennye problemy nauki i obrazovaniya] 4(1), 23–34 (2013) Lubiw, A., Masárová, Z., Wagner, U.A.: Proof of the orbit conjecture for flipping edge-labelled triangulations. Discrete Comput. Geom. 61(1), 880–898 (2019)

Transformation of Consumer Behavior on the Market of Educational Services Under the Influence of Smart Technologies Tatiana I. Melnik(&) , Nataliya S. Mushketova and Oksana A. Maletina

,

Volgograd State University, Volgograd, Russia [email protected], [email protected], [email protected]

Abstract. Purpose. The purpose of the article is to identify the characteristics, priorities and values of the modern generation of youth for their subsequent consideration in the process of transformation of the educational process of vocational educational institutions. Methodology. In their study the authors rely upon the conceptual and categorical terminology, global laws of the development of society and other basic statements of the theory of generations of N. Howe and W. Strauss, as well as studies of their supporters and followers. The information and empirical basis for the analysis was the research data presented on the official website of the Federal State Statistics Service of the Russian Federation, Russian public opinion research center and such commercial organizations as Sberbank and Validata. Moreover, the authors’ study is based on the analysis of e-content of social networks of youth from different countries. The methodological basis of the recommendations proposed by the authors of the study was valid developments, concepts and hypotheses presented in the publications of domestic and foreign scientists, reflecting the practice of functioning of educational institutions under the development of smart technologies. The development and justification of practical recommendations were carried out on the basis of the implementation of general scientific approaches: dialectical and historicallogical; under system approach methods of comparative and logical analyses were used to write this article. Results. As a result, the authors have identified the portrait and its features, values and priorities of a typical representative of Generation Z. Post-material values significantly transform the labor market, the market for educational services and the economy as a whole. The authors focus on the properties of the generation that influences the entry into the labor market and their competitiveness on it. Conclusions/recommendations. In the conclusion the authors of the article highlighted generation behavior, peculiarities and values of Generation Z due to modern digital environment, development and the widespread introduction of smart technologies. The recommendations of the educational process with representatives of Generation Z are given. Keywords: Generation Z
Theory of generations
Post-industrial society Society of knowledge
Educational process
Educational modules © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1605–1613, 2021. https://doi.org/10.1007/978-3-030-59126-7_175




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D83 J61
M53
M54


E24
E71
I2
J11
J13
J24
J28
J62
J15


1 Introduction Fantastic digital breakthrough with rapid development of the Internet led to the transition of civilization development of modern society from industrial to a postindustrial one (post-materializm) characterized by the change of ideology and values, and hence the change in patterns of social, economic and social behavior. Meanwhile, the main feature of occurring cultural and historical change is the accelerating exponential pace of innovation into the daily life of the society: the processes that previously took centuries, now take months. Thus, it results in a rapid change in socio-economic processes (the authors focus primarily on such processes as education and employment) and the life of society as a whole. Generally, supporters of a new system of values are young people born between 1995 and 2010. It should be noted that these time limits are not standardized, they are rather relative and depend on the level of the development of smart technologies in each country of the youth. Tapskott (2008; Tapscott 2014; Tapscott and Tapscott 2016) called this generation ‘net’. The printed page also contains terms ‘i-Generation‘, ‘digital generation’, ‘digital natives’, ‘centennials’, ‘Generation Z’, ‘Zoomers’, ‘Zs’ and others. Hence we should understand that this is the first generation fully formed under the influence of high technologies, the Internet, gadgets and social networks, the main feature and major competitive advantage of it are the technological effectiveness. Representatives of Generation Z grew among smart technologies which have become a natural part of the living space of a modern person, and, thus, they intuitively understand and learn how to use these technological devices (including software, interfaces, navigation and etc.), when they face a problem, they use modern technologies to solve it. Unlike previous generations, smart technologies for them are an ordinary reality which blurs the line between the real and virtual world. The Internet and social networks are their natural living environment: communication, games, friendship, education, work and creativity. Today the major part of the representatives of this generation is school students who are becoming active participants of market relations (they are currently consumers of goods and services). However, in the near future it is they who will also become the most significant largest group of participants in the educational process in higher educational institutions and colleges, and then on the labor market. Thus, according to the data of the Federal State Statistics Service of the Russian Federation for 2018 in Russia there are approximately 25 million people aged 15 to 29 years who will contribute to the breakdown of the traditional economy and the transition to postindustrialism (Bashina et al. 2018). Meanwhile, experts claim that Generation Z with its specific features of social and economic behavior will radically change the familiar economy. This raises the problem of defining specific features of Generation Z (we are talking about the features which are the result and peculiarity of the epoch, and not the consequence of definite age stages, natural dynamics of personality development, cognitive functions and maturation of the nervous system of adolescents), transforming

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traditional and habitual model of social and economic behavior, economic processes, motives and incentives of economic activity. The knowledge of the specific features of Generation Z allows to define long-term trends in the development of the society as a whole and individual economic processes, to evaluate the role of the ‘human factor’ in the economy, to elaborate the most suitable perspectives in the economic policy, and to predict the consequences of certain economic decisions with a fairly high degree of probability. In this article the emphasis is shifted to the features of the formation of the economic model of consumer behavior of Generation Z that create problems for the market of educational services, and subsequently for the labor market in their modern form. In conclusion, it is necessary to reconsider the classical approach to the educational process under the new model of social and economic behavior of Generation Z, the authors defined peculiarities of consumer behavior of Generation Z, changes that will be on the labor market.

2 Methodology The methodological basis of the authors’ study is developments, concepts and hypotheses in the researches of Russian and foreign scientists in the field of generation theory (Howe and Strauss 1991), post-material society (Booth 2018; Voscresensky et al. 2018), and value orientations of its representatives, as well as modern periodicals, reflecting the practice of functioning of educational institutions under the rapid development and the widespread introduction of smart technologies. The development and justification of practical recommendations were carried out on the basis of the implementation of general scientific approaches: dialectical and historical-logical; under system approach methods of comparative and logical analyses were used to write this article The empirical basis for the analysis conducted by the authors of the article was the published results of studies from the field of psychology, sociology, economics (including marketing) and some related sciences: ‘Formation of post-material values of youth in the educational space and youth subcultures: sociocultural analysis of the state of the development and prognostics of social risks’ (Bogdanov et al. 2018); the results of large-scale sociological studies of the youth of Russia, including the focus group method and in-depth interviews with representatives of Generation Z, their parents and teachers (Russian public opinion research center 2016; Young space 2017); statistics presented on the official website of the Federal State Statistics Service of the Russian Federation, as well as the content analysis of social networks of youth from different countries.

3 Results In the expert community the opinion about Generation Z is currently only being formed. Summarizing the most common points of view among researchers and supporters of generation theory (Kirschner and De Bruyckere 2017; Redick et al. 2016; Shatto and Erwin 2017; Uncapher and Wagner 2018; Utz and Breuer 2017; Yau and

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Reich 2018) the authors distinguish the following specific features of representatives of Generation Z which affect both the labor market and the educational services market: – Developed abilities to multi-tasking: Generation Z is familiar and comfortable to work simultaneously on several tasks, for example, on multiple screens (chatting, watching news, typing a text on the computer and uploading the content on a smartphone). On the one hand, this is an absolute plus for employers: the opportunity to carry out several business projects simultaneously. On the other hand, this feature has another side: representatives of Generation Z have to make considerable efforts to concentrate on one task and perform it up to the end. Thus, studies (Bogacheva and Sivak 2019) show that on average modern young people can focus on one issue for only eight seconds, that is, most of them, in principle, are not able to concentrate on something for a long time. – Clip, visual, to some extent even fragmented, thinking. As it has already been noted, the pace of life of today’s youth has significantly accelerated having converted into a series of flashing clips in social networks. Hence, there is no desire to comprehend the long text and there is preference to get information in a clear and concentrated form: emoji, memes, icons, smiles, video, pictures and etc. The skill to choose the most important and essential information in an endless and rapid information flow is, of course, one of the key necessary competencies in the information society and in a knowledge-based society. At the same time, this type of thinking can create difficulties in the process of learning in the traditional educational system, taking into consideration, for example, traditional multi-page summaries. Thus, there is a necessity to bring syllabus, educational methods and techniques in accordance with the needs of the time. Moreover, in schools Generation Z is taught to learn standardized responses in order to pass certificate tests successfully, and thus limiting the development of creativity and lateral thinking. – Demonstrativeness: a typical representative of Generation Z is continuously shooting videos of himself, taking pictures and posting, he is constantly replenishing its own news, photos, comments, and so on, waiting for a positive reaction of others. This feature transforms consumer behavior shifting the emphasis from possession of goods to the desire to gain impressions, emotions, and experience. The predominance of intangible values and orientation to the hedonism lead to the fact that the sign of a success of Generation Z is personal happiness which is measured by variety of lifestyle and the pleasure of existence, rather than by the size of salaries or the social status as that of previous generations. As a result, there is the lack of motivation for the long-term accumulation and conservation of material resources applied to all activities, including labor. The concept ‘economic value’ for young people is transferred to the intangible sphere, because intangible one can be a source of income. Thus, there are no long-term trends for this generation: they are aimed at the realization of short projects with minimal level of planning, investing money and effort (similar to the quick change of the content of social networks – their natural habitat). The transformation of consumer behavior also manifests in the need for customization, individualization, targeting of goods and services offered by

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manufacturers, and ensuring ethical consumption. Representatives of Generation Z believe that it is extremely important to have the right of independence, privacy and freedom of speech. It is caused by the transition to a fundamentally new type of information consumption in the network, where the principal difference of communication is the variety. Generation Z got the opportunity to participate in various socio-economic processes and phenomena, to customize its information environment, to shape its information feed, as well as to express its opinions and receive feedback (that is, not only to consume content, but also to produce it). – Desire for self-development, because one of the main values of the representatives of Generation Z is self-realization (professional, creative, personal and etc.). Development becomes a peculiarity of the young generation. Instead of accumulating material values they are more likely to invest in themselves as in ‘human capital’. Hence, there is the willingness to learn continuously. However, the experience of older generations shows that a diploma of a prestigious university does not guarantee employment due to the lack of practical skills and skills demanded by employers, and, consequently, decent payment. Thus, there is a critical attitude to schools, colleges and universities, which is expressed in the reluctance to acquire fundamental knowledge. Therefore, representatives of Generation Z prefer self-education to formal education, and they study practical knowledge and competencies. They can independently learn the topic, the language and acquire a profession with the help of the educational resources of the Internet: video tutorials on YouTube, online courses and webinars. However, there is the opportunity to get skills on the principle ‘I’ve seen how it’s done’, but not the fundamental knowledge. As a result, representatives of Generation Z have knowledge, but their knowledge on interesting issues is not deep enough. The lack of classical education deprive them of a chance to gain professionalism: without academic base it is possible just to become a practician who cannot create anything fundamental. – Lack of attachment to a specific region, country or continent, place of work and etc.: they are people of the world who do not know the problems of borders, change easily their place of study, work and residence. The concepts ‘border’ and ‘territory’ do not make sense in a virtual environment, the differences between the youth of other countries and continents are neglected due to a standard content and standard role models promoted on the Internet. On the one hand, the Generation Z is oriented towards a frequent change of life conditions (for example, students began to change frequently their university and specialty), it is characterized by difficulties in forming the concept of the rules and norms of cohabitation (as well as study, work) in a particular place and in being responsible for it. On the other hand, this feature of the youth solves the problem of migration of labor force. – Poorly developed communication skills as a result of the habit of communicating through various devices. It should be noted that this feature is far from being identified by all researchers. Its supporters claim that technologies are the main source of communication of Generation Z and it is mainly in a written form. The lack of communication skills creates certain difficulties in the educational process,

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and it also reduces the competitiveness of representatives of Generation Z on the labor market. Moreover, Generation Z does not accept authorities and hierarchies, and hence it leads to communication problems in the educational process: young people do not understand the traditional status of the teacher as absolute authority, necessity of the Russian National Exam, final exams and diploma work. There is a problem of subordination in youth employment. – Low level of responsibility: one of the characteristics of Generation Z is the avoidance of responsibility in the professional sphere, in the sphere of ownership of material assets, in the field of relationships and etc. They also have a low aptitude for entrepreneurial risk. – Low motivation to the activities, sometimes even infantilism. Generation Z refuses from a gradual movement to success. Interests in real physical life, in the world are reduced and supplemented, but sometimes replaced by an interest in virtual life. The concept of value loses its tangible form and becomes intangible. Values become abstract and they are in a virtual environment. Rapid development of smart technologies and their widespread introduction into everyday life contribute to the formation of the social order of society for training professionals who are able to respond promptly and flexibly to the new spirit of the times, to create innovative products and to introduce them into production. The employer is interested in an employee who is able to adapt flexibly to dynamically changing living conditions, to acquire independently and put into practice the necessary knowledge and skills, to solve various problems of the enterprise, to act actively and make decisions, since there are high rates of knowledge growth in all sectors and spheres of professional activity, and, as a result, there are highly differentiated and dynamically changing conditions of this activity. Under such conditions any knowledge becomes obsolete very quickly, thus the person’s ability to self-study and selfrealization is essential. Hence, the task of the current stage of the development of the domestic education system is to switch from training a graduate with relevant knowledge, skills and abilities to training a specialist who is able to think independently and creatively, to act, to develop intellectually, morally and physically. Meanwhile, the graduate should study the whole system of theoretical and practical knowledge, skills; but there is a necessity to form a set of personal qualities that will allow him to be successful on the labor market and in life. In fact, the educational system should contribute to the realization of the main tasks of the socio-economic and cultural development of society: it is the university that trains a person for active work in various areas of the economic, cultural and political life of society. The power of educational institutions and the system as a whole to respond flexibly to the needs of society, while maintaining the accumulated positive experience, is of great importance. One should take into account that post-materialism values are vital for modern youth, and if we don’t know about this specific feature of Generation Z, it is impossible to organize the educational process. The change of the goals and objectives of teaching leads to a change in teaching methods, in the content of the taught disciplines and in the form of classes.

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4 Conclusions/Recommendations As there are new fields of activity and, consequently, jobs, Generation Z has to learn how to adapt to endless changes, to screen out unnecessary information and to assimilate the required new information quickly, to combine knowledge from different branches and to think systematically. To achieve this goal, it is necessary to reform the educational process itself. The authors suggest the following areas of transformation: 1. To supplement the rigid structure of the syllabus developed in accordance with the Federal State Educational Standard of the chosen speciality with modules which enable students to choose suitable disciplines (with the support of competent mentors and tutors). Thanks to module training the student is able to combine training modules to learn interesting subjects. The proposed scenario is more flexible and actual for those students, who are motivated, but they did not take decisions about their profession, and they are eager to adapt their syllabus to their interests and peculiarities maximally. They have the opportunity to form a training program based on their individual needs and preferences, not only for deepening in the chosen professional profile, but also for studying disciplines from related or even independent professional fields. 2. The institution of vocational education should become a place where one can acquire the following skills: communication, cooperation, troubleshooting and sharing ideas. In the educational process it is necessary to apply the technology of learning in the social environment, using social tools and collaborations. Traditional methods should be supplemented by heuristic innovative teaching methods. The classic form of training in the form of lectures and seminars with the focus on providing with ready knowledge should shift to interactive complex lessons that involve bilateral interaction between teachers and students, work on group projects with an active discussion and sharing opinions, including mini and micro games in the class structure. Under modern educational conditions more attention should be paid to independent extracurricular work of students. It will allow to develop skills of independent work and teamwork, critical thinking, creativity. Special attention in the learning process should be given to a constructive discussion between the teacher and students, motivating to formulate questions, arguments in support of opinion, taking the initiative, expressing opinion with reasons. 3. Use of the new approach and teaching methods as multitasking instead of traditional lectures and summaries. Moreover, it is necessary to encourage students to combine knowledge from different branches of science (for example, by solving global problems getting information from podcasts, video and analytical articles), to develop soft skills, to communicate with each other, to manage their emotions, to work in a team. 4. To pay attention to the development of students’ social adaptation, namely: to feel the emotions of other people, to understand their point of view and to be actively interested in their concerns, to navigate in public life, to develop self-awareness as the ability to understand their own feelings and limits. For example, the role-playing method can be used to develop students’ abilities for independent creative thinking, making decisions on various problems and situations, reasoned expression of their

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ideas, quick adaptation and modeling of teamwork, collaboration in teams, and relationship management (communication skill (the ability to listen to others and express their thoughts constructively, convincingly and logically) forms students’ troubleshooting skills (the ability to relieve, to harmonize the differences and to reconcile the warring parties)). Hence, students learn to take into account the interests of all participants in the relationship, to express their own opinion clearly and convincingly, and also to discuss it and support it. Moreover, the increase of the students’ involvement requires active mental activity of students, creativity, analysis of their own experience, sufficient broad horizons, and it develops critical thinking and skills to discuss (to reason, to make proposals, thoughts quickly), and contributes to the development of adaptation skills to work in a team and to make organizational and managerial decisions in non-standard situations, the willingness to bear responsibility for them, the ability to express reasonable ideas. Thus, industrial society provided a rather limited choice of both forms of employment in terms of duration and mode of working time and the nature of employment (full and part-time employment) and specialties. The diploma of a prestigious university gave guarantees of employment and decent pay. The vocational educational system trained specialists in accordance with the state standards of knowledge and skills. In a modern post-industrial society the skill of a graduate to think independently, relying on the knowledge gained at the university, is more valuable than just erudition, possession of a wide range of knowledge without the ability to apply this knowledge to solve specific problems. Meanwhile, the post-industrial society provides a much wider option of areas of training, specializations, qualifications and etc.: representatives of Generation Z will have professions which are unknown now. The dissimilarity to others, originality in the modern world often turns into a competitive advantage, becomes the guarantee of an interesting, perspective and highly paid job: different points of view, views, perspectives help to find other solutions. On the labor market of the postindustrial economy representatives of Generation Z will have to find a suitable occupation where they cannot be replaced by smart technologies.

References Aoun, J.E.: Robot-Proof: Higher Education in the Age of Artificial Intelligence, 216 p. The MIT Press, New York (2017) Bashina, O.E. Vasyutina, E.S., Matrayeva, L.V.: Transformation of the economic and labour model of modern young people’s behaviour under the conditions of the formation of a digital society. J. State Civil Soc. Politics Econ. Law 3, 133–145 (2018) Bogdanov, S., Sultanov, K., Voscresensky, A.: Postmaterial values and orientations of generation Z: digital natives and the education system of modern Russia. J. Izv. Herzen State Pedagogical Univ. 187, 24–30 (2018) Booth, D.: Postmaterial experience economics. J. Hum. Values 24(2), 83–100 (2018) Voskresensky, A.A., Rabosh, V.A., Sunyagina, A.G.: Post-material values of generation Z on the way to the knowledge society – to pose the problem. J. Soc. Environ. Dev. 1, 84–87 (2018) Howe, N., Strauss, W.: Generations: The History of America’s Future, 1584 to 2069, p. 554. William Morrow & Company, NewYork (1991)

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Kirschner, P., De Bruyckere, P.: The myths of the digital native and the multitasker. Teach. Teach. Educ. 67, 135–142 (2017) Bogacheva, N.V., Sivak, E.V.: Myths about Generation Z, National Research University Higher School of Economics, 64 p. (2019) Russian public opinion research center: Generation Selfie: five myths about modern youth: study of the Russian public opinion research center (2016). http://www.old2.wciom.ru/index.php? Id=459&uid=115996. Accessed 12 Feb 2020 Redick, T.S., et al.: Cognitive predictors of a common multitasking ability: contributions from working memory, attention control, and fluid intelligence. J. Exp. Psychol. Gen. 145(11), 1473–1492 (2016) Sapa, A.V.: Generation Z – generation of the epoch of the federal state educational standard. J. Innov. Proj. Programs Educ. 2, 24–30 (2014) Shatto, B., Erwin, K.: Teaching millennials and generation Z: bridging the generational divide. Creative Nurs. 23(1), 24–28 (2017) Tapscott, D.: Grown Up Digital: How the Net Generation is Changing Your World, 385 p. McGraw-Hill (2008г) Tapscott, D., Tapscott, A.: The Blockchain Revolution: How the Technology Behind Bitcoin is Changing Money, Business, and the World, Penguin Books, 368 p. (2016) Tapscott, D.: The Digital Economy Anniversary Edition: Rethinking Promise and Peril in the Age of Networked Intelligence, 448 p. McGraw-Hill, New York (2014) Uncapher, M.R., Wagner, A.D.: Media multitasking, mind, and brain. Proc. Natl. Acad. Sci. 115 (40), 9889–9896 (2018). https://doi.org/10.1073/pnas.1611612115 Utz, S., Breuer, J.: the relationship between use of social network sites, online social support, and well-being. J. Media Psychol. 29(3), 115–125 (2017) Yau, J.C., Reich, S.M.: Are the qualities of adolescents’ offline friendships present in digital interactions? Adolesc. Res. Rev. 3(3), 339–355 (2018) Youn gspace: 30 facts about contemporary youth: a study by Sberbank and Validata (2017). http://www.youngspace.ru/faq/sberbank-issledovanie-molodezhi/. Accessed 12 Feb 2020

Smart Transformation of the Project Management System and Processes as a Factor in Increasing the Efficiency and Competitiveness of the Project Irina S. Brikoshina(&) , Alexandr P. Birukov and Artem G. Geokchakyan

,

State University of Management, Moscow, Russian Federation {kaf_up,geokchakyan}@guu.ru, [email protected]

Abstract. One of the leading trends in modern world economic and economic relations is the formation of smart production. In such conditions, the successful implementation of almost all national and international projects and programs can’t be imagined without the using of smart capabilities, since many processes have already been transferred to the digital sphere. In this article, the authors address the main aspects and directions of smart transformation of the system and processes of project management, affecting the success of development and implementation, increasing efficiency and ensuring the competitiveness of projects and programs. The paper identifies and describes possible essential changes in individual processes and project management subsystems, which is based on the using of tools and means of the digital economy; formulated new processes and aspects of management that arise during the smart transformation of the classical model of project management. The main scientific result is the smart transformed model of project management processes developed by smart authors and also the impact that this transformation has on the main criteria (indicators) of project or program effectiveness is determined. In addition, the authors determined the relationship between these processes and carried out their assignment to the stages of the project life cycle, at which it’s most advisable to use the capabilities described in the article smart. In conclusion, based on the study, the expected effect that can be achieved through the digital transformation of management processes is described, and author’s recommendations are developed on use of smart technologies and their capabilities for transforming the management system in order to increase the efficiency of projects and programs. Keywords: Smart transformation
Project management
Intelligent systems
Process automation
Smart technologies
Software
Efficiency JEL Code: M15


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1 Introduction Smart industry involves the massive introduction of information technology, the development of industrial complexes, the intellectualization of production, total digitalization, globalization of world economic processes. Smart industry means not only a new stage in the development of industry, it involves the integration of modern industry assets and digital technologies, leading to the creation of advanced industries, “smart” factories, smart devices, robots. In such a technological reality, machines, mechanisms, production, people communicate with each other through digital technologies without intermediaries (Kogotkova and Soroko 2017). Now smart transformation has affected all aspects of the economic life of society and the state. Digitalization and intellectualization permeate all management processes, most of them have already been transferred to the digital sphere. This transformation and project management were not spared. Recently, smart technologies have increasingly been applied in project management: big data, IoT, electronic commerce, electronic money and cryptocurrencies, blockchain technologies, analytical intelligent information systems, artificial intelligence tools, wireless communications, etc.

2 Background and Methodology Every updating and improvement of project management processes, first of all, is aimed at reducing the cost and duration of projects and programs, improving the quality of the project product, increasing customer satisfaction with project results, ensuring the flexibility of the project management system. In addition, smart management allows project development with higher accuracy and reliability, which reduces the overall risk level. In general, smart transformation should provide increased efficiency and competitiveness of the project management system and processes, and as a result, the project result and product. The methodology of the study is based on the understanding that a complete transition to smart control systems is impossible, at least at the current level of development, because the available technologies make it possible to automate deterministic, final management processes, such as resource allocation, deviation control, making optimal choices, mobilizing information, presenting the necessary summaries, forecasting, etc. But when human participation is required, the process ceases to be deterministic and the whole essence of smart transformation comes down to automation and digitalization of individual procedures that simplify and improve the quality of decision-making (Antonov and Samosudov 2018). Smart transformation of project management change the structure, principles, responsibilities of team members, management culture; In such circumstances, project managers lose a number of obsolete tasks, the implementation of which can be transferred to smart technologies, but a number of new tasks appear. The main methodological problem is the definition of the boundaries of smart transformation of the classical forms of project management (Gadasina and Piven 2018). The boundaries, degree and breadth of the process of integrating project

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management and smart technologies are determined by the head of the organization and/or project manager. In most cases, this process is carried out under the responsibility of the head. Obviously, neither the customer, nor the investor, intends to violate their project interests. The scientific novelty of this article is the identification and definition of the main groups of project management processes (directions) to which smart transformation is applicable and the study of the possibilities of using smart technologies in various project management processes. The main scientific tasks (results), which are solved by the authors during the study, were the development of a smart transformed system of project management processes and the development of copyright recommendations for the integrated using of the capabilities of smart technologies at various stages of the life cycle of projects and programs to increase the efficiency of their implementation.

3 Discussion and Results Smart transformation affects almost all production, business and management processes of project management: from team building and scheduling to control deviations and change management. This influence can be manifested in a reduction in the number and elimination of certain stages of the processes, a change in the sequence of execution and parallelization of the work of the process, reduction of “coordination points”, elimination of “bottlenecks”, reduction of excessive bureaucratization, etc. (Lisovsky 2018). The influence of smart technologies allows to reduce production costs by 1030%, logistics - by 10–30%, expenses for ensuring the quality of the project product by 10–20%, reduce the time to market new products, increase the effectiveness of interaction with customers, contribute to the effect “Economies of scale” and use the resources more efficiently (Rojko 2017). The use of modern technologies and smart tools, the processes of digitalization and intellectualization determine the formation of the concept of smart project management, the use of which allows increasing the efficiency and maintaining the competitiveness of the ongoing project. The main processes that lend themselves to smart transformation include: analysis and justification of the project; determination of key indicators of project success; project implementation planning; coordination and approval of decisions; project implementation control; project documentation; supply and provision of resources; project risk management; interaction with stakeholders and the external environment of the project; teamwork and communication within the team. Smart-transformed system and the main processes of project management and their impact on project performance and competitiveness indicators are shown in Fig. 1. At the initial stages of the project, it is necessary to analyze the economic effects and benefits of the project, the financial condition of the organization, the willingness of the organization to implement the project, the possibilities of commercializing the project product, the need to implement this project, the attitude and willingness of the target audience to use the project product, the impact of the project on public sectors, activities of the organization, on the environment. For these purposes, various preproject studies are carried out, which involve the collection and processing of a large amount of information (Guseva et al. 2010). In the emerging digital world, most of the

Fig. 1. The influence of smart transformation of project management processes on the criteria of project efficiency and competitiveness

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information is distributed via the Internet. In addition, every year there is an increase in the total amount of information. According to a report published at the end of 2018 by the IDC analytical firm “Data Age 2025” in 2006, the total volume was measured at 0.16 zettabytes (ST), in 2014 - 10 ST, in 2018 - 33 ST, the forecasted volume in 2019 41 ST, and in 2025 - 175 ST (Reinsel 2018). People with classical methods can no longer cope with such a volume of information. Big data technologies, which analyze the information necessary for a specific project according to predefined criteria, are an effective analytics tool in the digital environment. The using of these technologies and the analysis of a large amount of information are justified by the importance of making a decision to open a project, comparing customer requirements with technological implementation capabilities, developing a project concept, determining prospects for using the project result. An important decision of the customer is the definition, selection and conclusion of an agreement with the project executor (general contractor). In the digitalization era, there are electronic trading platforms (ETPs) where the project customer places an application for the project. Using ETP allows you to protect the customer and investor from unscrupulous contractors, choose the most optimal version of the project, ensure openness and transparency of the procedure, significantly save money on the development and implementation of the project (Loseva 2016). In addition, all competitive procedures take place in real time, which minimizes the processes of manipulation and falsification. ETP is also advisable to use in the process of project implementation during procurement. ETPs reduce the time for procurement and the costs of the resources themselves, provide a wider range of assortment and the possibility of forming their technical characteristics, offer delivery, unloading and installation services, if necessary (Geokchakyan 2018). The key indicators of any project are the duration, cost and quality, so the team’s primary task is to develop measures to achieve these indicators. The basis of project planning is to determine the requirements for the product of the project and the scope of work for the project. The customer, while putting forward requirements for the project product and the project product, sets the required level of quality. The key factors of the smart industry that positively affect the quality of the project include technological innovations, innovations in human resource management and innovations in the field of economic security (Levchenko 2018). These tools and means determine the direction of designing the quality of the project and measures to comply with it. The most popular area of application of smart technologies is project duration management. Software products have already been traditionally used for the automated construction of network and calendar schedules for the execution of work, the formation of the project work schedule, the automated allocation of resources, monitoring the progress of the project, reallocating resources and changing the sequence of work, calculating the planned duration of the project, permissible temporary reserves for work. The resource allocation functions allow you to determine the degree of resource overload and the bottlenecks of the project (Smorchkova 2017). Based on the results of

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resource allocation, the software allows you to determine the projected cost of the project, which will be adjusted during its implementation. The main advantage and the need to use software products is the ability to automate the planning and project management processes in time and cost. Such planning, without the personal involvement of the decision maker, is optimal. Thus, the use of smart techniques and technologies in project management provides opportunities to reduce the time and cost of projects and programs. The logical continuation is the smart transformation of control processes and monitoring the implementation of projects and programs that are now carried out remotely based on the functioning of the IoT system. In addition to remote monitoring, the Internet of Things allows you to monitor the health and uniformity of equipment loading, optimize logistics and transport processes, control the technical characteristics and suitability of resources, automate the control of deviations and the process of detecting changes, determine the necessary volumes of resources, carry out their order, calculate the time and actual cost project. In general, the essence of smart control systems is that the person sets the ultimate goal that must be achieved, and the order of its achievement is determined by the system independently. An important aspect of project activities is the identification and prevention of risk events. The processes of smart transformation of project management have a double effect on project risks. On the one hand, they minimize production risks: big data and the Internet of things technologies, new methods for quantitative and qualitative data analysis optimize project planning processes, therefore, initially the probability of occurrence of risk events such as lack of resources, low qualification of personnel, violation of project technology, etc. However, new information risks arise (confidentiality and security risks) and the risks of using the digital technologies themselves. In such conditions, it becomes necessary to include an information security specialist in the team. The risks of using digital technologies are associated with an insufficient level of qualification of team members, with a lack of experience in their use (Grigoryev et al. 2018). Such competencies as the use of smart tools in managing projects and programs come to the fore; remote control of the project team; building a smart project and program management system. According to PwC’s 2019 Risk in Review Study, almost 50% of projects use digital economy technology to manage risk (Pett et al. 2019). In addition to the individual functional and substantive aspects of project management, throughout the life cycle of the project, processes are coordinated, approved and documented decisions. It is in these areas that smart technologies are most often used. Electronic document management systems (EDS) are becoming more and more popular, which make it possible to transfer document and task management processes to the digital sphere. Within the framework of project activities, it is advisable to use the EDS at the level of the project team and key stakeholders to formulate instructions to team members, submit reports, coordinate key documents with all interested parties, and coordinate agreements with contractors. Most EDS allow you to interact with external contractors (suppliers, contractors).

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Also, Internet communication tools such as emails, instant messengers, and video conferencing have long been used. They are an integral part of modern communication in projects: contractual agreements, supply contracts are sent by e-mail, teams conduct videoconferences with the customer and contractors, at meetings partners are exchanged via messengers to determine and coordinate their positions. The completion of the project is associated with the formation of its archive, which includes all the key documents for the project, the results of the delivery of the project to the customer, contracts with contractors, acts of acceptance and transmission of the main results of the project. The need to get rid of a large number of documents, as well as the smart capabilities available at the same time, determine the need to create and develop electronic archives of the project. The formation of the electronic archive of the project involves not so much the processes of digitizing paper documents as the creation of a special electronic database of documents for the project, which should be filled during the project.

4 Conclusions The above-described capabilities of smart transformation of project management processes can improve the efficiency and strengthen the competitiveness of the project by reducing the time and cost of the project, ensuring the required level of quality and customer satisfaction. All this provides an opportunity to offer the market a sought-after product of the project and get the desired profit by meeting the needs of not only one customer, but also potential customers. Based on the analysis, the following recommendations can be formulated to improve project management processes, which are based on smart technologies and the formation of a smart project management system in order to increase the efficiency of project implementation: – conducting pre-design studies and substantiating the feasibility of the project with the help of big data analytical tools and a large amount of data analysis; – the implementation of the necessary purchases during the implementation of the project using electronic trading platforms and electronic money; – designing the quality of the project product based on “digital” technological innovations; – the using of software products for project management in terms of time and cost, optimizing the process of resource allocation; – implementation of remote control and monitoring of the progress of the project with using the technology of the Internet of things; – Organization of advanced training for project team members on the specifics and possibilities of using digital technologies in the management process using distance education tools; – involving all members of the project project team in the digital transformation process; – the using of electronic document management system for the organization of project communications;

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– the using of modern means of communication when communicating both within the project team and with project stakeholders; – maintaining an electronic archive of the project. Speaking about the prospects for smart transformation of project activities, it should be noted that the formed smart project management system is not just digitization of management processes, it is a qualitatively new processes and results obtained through the use of smart technologies, tools and techniques (digitization). Obviously, this process is just beginning, but now more than 90% of medium and large organizations understand that without smart transformation processes they have rather limited opportunities for growth and development, and as a result, to increase their efficiency, competitiveness and profitability. According to a 2016 study by Forbes, “Where are you on the path to transformation?” 7% of the respondents “didn’t even think,” 6% “assess the need”, 27% “plan the initiative”, 29% “started the transformation”, 17% “completed at least one initiative”, 14% - “completed several initiatives” (Hasty et al. 2016). According to the forecasts of the analytical center McKinsey, the share of digital business by the end of 2020 will amount to 34% of global GDP. The study confirms that smart transformation of project activities is a complex, multi-stage process (Marie-Cecile 2018), so a certain amount of time must pass in order to evaluate the effectiveness of such a transformation. At the moment, the smartconcept has only formed its outlines and determined its capabilities and development directions.

References Antonov, V.G., Samosudov, M.V.: Problemy i perspektivy razvitiya tsifrovogo menedzhmenta. E-management. 1(2), 38–48 (2018) Gadasina, L.V., Piven, G.I.: Tsifrovizatsiya – ugroza ili vozmozhnost razvitiya dlya menedzhmenta? Voprosy innovatsionnoy ekonomiki. 8(4), 565–574 (2018) Geokchakyan, A.G.: “Sovremennyye tekhnologii «tsifrovoy» ekonomiki i vozmozhnosti ikh primeneniya na protyazhenii zhiznennogo tsikla proyektov i programm” v Shag v budushcheye: iskusstvennyy intellekt i tsifrovaya ekonomika. Revolyutsiya v upravlenii: novaya tsifrovaya ekonomika ili novyy mir mashin/Materialy II Mezhdunarodnogo nauchnogo foruma. Moskva. 2018, 427–434 (2018) Grigoryev, S.G.: Razvitiye chelovecheskogo kapitala v usloviyakh tsifrovizatsii. E-Management. 1(2), 13–19 (2018) Guseva M.N.: Strategicheskiy i operativnyy marketing. Moscow, Science (2010) Kogotkova, I.Z., Soroko, G.Ya.: Iskusstvennyy intellekt i kompyuternoye modelirovaniye organizatsionnykh protsessov. v Shag v budushcheye: iskusstvennyy intellekt i tsifrovaya ekonomika. Materialy I Mezhdunarodnoy nauchno-prakticheskoy konferentsii, pp. 38–43. Moscow, Science (2017) Levchenko, E.V.: Vliyaniye tsifrovizatsii na razvitiye sistemy menedzhmenta kachestva. Vestnik Saratovskogo gosudarstvennogo sotsialno-ekonomicheskogo universiteta 4(73), 9–14 (2018) Lisovskiy, A.L.: Optimizatsiya biznes-protsessov dlya perekhoda k ustoychivomu razvitiyu v usloviyakh chetvertoy promyshlennoy revolyutsii. Strategicheskiye resheniya i risk menedzhment 4(107). 10–19 (2018)

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Loseva, M.V.: Preimushchestva provedeniya konkurentnykh protsedur na elektronnykh torgovykh ploshchadkakh. Otechestvennaya yurisprudentsiya 8(10), 17–19 (2016) Smorchkova, O.V.: Primeneniye mezhdistsiplinarnykh resheniy v upravlenii. ili kak ispolzovat opyt ekspluatatsii tekhnicheskikh sistem pri raspredelenii zagruzki personala. Upravleniye 1 (15), 29–34 (2017) Hasty, S.: Business Transformation and the Corporate Agenda. KPMG Transformation Survey. Forbes Insights, USA (2016) Marie-Cecile, C.: How to Go Digital. Practical Wisdom to Help Drive Your Organization’s Digital Transformation. MIT Sloan Management Review, New York (2018) Pett, J.: Being a smarter risk taker through digital transformation: 2019 Risk in Review Study. PricewaterhouseCoopers (PwC), London (2019) Rojko, A.: Industry 4.0 concept: background and overview. Int. J. Interact. Mob. Technol. 11(5), 77–90 (2017)

Differentiation of Clients Based on Behavioral Data Using Domestic Software Lyubov A. Konstantinova1(&) , Inna V. Kramarenko1 Anna I. Denisova1 , and Gevorg I. Margarov2

,

1 State University of Management, Moscow, Russia [email protected], [email protected], [email protected] 2 National Polytechnic University of Armenia, Yerevan, Armenia [email protected]

Abstract. Digital transformation of the client service and, first of all, the formation of the client’s digital profile is one of the modern trends in the company’s marketing policy. At the same time, not all companies can create this profile using digital tools developed on the basis of A.I. (Artificial Intelligence) and Deep Learning technology. The solution is to use the most reliable and upto-date tools for developing differentiated strategies for interaction with customers, in particular, customer segmentation based on various unique characteristics of customers that the company has without the involvement of A.I. The goal of the work is to implement RFM analysis based on existing approaches to customer segmentation (RF, RFM, LRFM, etc.) with automatic and expert determination of segment boundaries and the ability to interpret segmentation results using the Russian Loginom software. The research methodology consists of mathematical methods of classification, segmentation using behavioral data based on RFM values of customer purchases (classic RFM analysis, analysis based on alternative models (LRFM, RFMT, RFMT)), interval quantization method, archetypal analysis, and expert methods for interpreting segmentation results. The result is a set of components developed and placed in the Loginom open access library that can be used by companies when developing strategies for interacting with customers to differentiate them based on behavioral data. The developed components can be configured (when determining the number of groups, setting expert boundaries, and interpreting segments) and do not immerse the user in the specifics of developing mathematical models. As a result of work on the interpretation of the segments was developed approach based on the combination of archetypes and the interpretations of the segments. This can serve as a guideline for developing a company’s sales and marketing strategy. In the future, existing developments are expected to be compared with alternative calculations based on cluster analysis models, assessing the accuracy and complexity of customer differentiation. Keywords: Digital consumer profile
Loyalty
Analytical software Classification
Customer segmentation
RFM analysis
Archetypes JEL code:: M310





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1 Introduction Digitalization has led to a radical transformation of the retail business. Both retailer and consumer behavior today is a more interactive process that generates and uses large amounts of data in real time. With the introduction of new technologies such as Big Data, Machine Learning, more and more companies are actively using various ways to segment their customer base in order to attract new customers, increase loyalty and market share. One of the ways to make marketing effective is to try to understand the “value” of an individual client. A new term, “customer lifetime value” (CLV), has emerged, giving rise to many models that help measure this value (Shih and Liu 2003; EsmaeiliGookeh and Tarokh 2017). But before developing a comprehensive and effective customer profitability model, it is necessary to determine who the most profitable customers are. The starting point for developing a loyalty policy is to define groups of clients with similar interests, i.e. to segment clients. The ultimate goal of segmentation is to develop a relationship strategy that provides maximum value for each client. Thus, the use of each client’s value is the ultimate goal of the marketer. One of the models used to segment clients to calculate their CLV is the statistical RFM model (Recency, Frequency, Monetary) (Yeh et al. 2009; Srivastava 2017). Its application to client segmentation provides an insight into the past, shows what clients have been like and is a good indicator of what the following marketing policy objectives should be like. Therefore, marketing actions aimed at long-term impact on customers require, above all, their differentiation, as it is important to understand how a particular marketing action may affect the customer. Among the advantages of customer segmentation are the following: – identifying the least and most profitable customers in order to help businesses focus their marketing efforts on those who are most likely to buy products or services; – help build loyal customer relationships by guiding companies to develop and offer products and services that their customers are interested in; – improving customer service; – optimizing the use of company resources; – increasing profits by reducing costs. Modern analytical software offers a wide range of models in customer segmentation. The most famous players in this area SAS, SAP, Oracle, SPSS IBM offer readymade tools for solving business tasks of different complexity levels. However, lack of possibility to set up the software, or necessity of programming skills for adjustment of a range of attribute values under changing conditions, interpretation of results of segmentation, and also requirement of the Russian legislation1 concerning software import substitution have generated necessity to search for the solutions of these problems by means of domestic developments. Thus, the purpose of research can be formulated, as expansion of possibilities of RFM customer segmentation models with use of the Russian software.

1

Federal Law No. 1236 “On the establishment of a ban on the admission of software originating from foreign states for the purposes of procurement to meet state and municipal needs”.

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To accomplish this, the following objectives were set out in the study: 1) based on existing approaches to client segmentation (RF, RFM, LRFM, RFMT, RFMTC), develop algorithms that allow for automatic calculation of segment boundaries, or use for splitting the values defined by experts; 2) design library of components for basic segmentation methods (RF, RFM, LRFM, RFMT, RFMTC) using Loginom analytical platform2; 3) develop a library of components that implement the interpretation of segmentation results using various methods by using the Loginom analytical platform; 4) to test the developed components on data of children’s goods chain stores.

2 Background and Methodology The tasks addressed in this work are at the intersection of several areas: management (marketing), modeling, technology. A large number of authors have written on approaches to customer loyalty management (Shih and Liu, 2003), (Reicheld and Marky, 2018), (EsmaeiliGookeh and Tarokh 2017; Camilleri 2017); on the application of different methods of customer segmentation and segment interpretation (Christy 2018; Srivastava 2017; Shih and Liu 2003; Al-Shayea, Al-Shayea 2014; Yeh et al. 2009; Zoeram and Mazidi 2018; Huan et al. 2017; Culter 1993; Pankratov 2015; Roussel 2016); in the field of modeling (Kalinina and Solovyev 2020; Pisareva 2007); in the use of tools to achieve the objectives of segmentation (Paklin and Oreshkov 2009). The basis of research methodology was represented by mathematical methods of classification, segmentation of clients on the basis of RFM-analysis, architepic analysis, expert methods of interpretation of segmentation results, quantization algorithms.

3 Discussion and Results Many different methods of differentiation of clients can be divided into several groups: – methods of multidimensional data analysis (cluster analysis, component analysis, etc.); – segmentation methods based on descriptive statistics (RF, RFM, LRFM, etc.); – database processing using the query language; – various marketing approaches based on customer behavioral characteristics (target audience identification, BIG 5, 6 W, VALS, etc.) (Reicheld and Marky 2018; Camilleri 2017). The methods of the first two groups are characterized by high accuracy and predictive ability, but require specialized software and special competences in their application. Segmentation methods based on descriptive statistics are the most optimal in terms of combining accuracy and ease of implementation.

2

Official website of Loginom Software, URL: http://loginom.ru (accessed: 09.04.2019).

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The paper presents the results of the study using the second class of models, implemented using the analytical software Loginom, which has the ability to replicate models with any data of a given structure. To use the models, it is necessary to upload the data table, set the data inputs to the developed components and connect the outputs (if necessary) between the components. The structure of initial data should contain the following information: date of purchase (numeric variable format “Date”), customer ID (symbolic variable) and the amount of purchase or other financial indicator (numeric variable). Testing of the developed components was carried out on the basis of commercial data of the children’s goods store chain. The total number of records was over 2 million. The last 38,000 database records (about two months) were used as a sample for analysis. The developed components can be realized on any data of the specified structure. A general list of developed components is presented in Table 1. Table 1. Typology of the component library developed using Loginom Model catgory Assigning codes to clients with automatic border definition Assigning codes to clients with expert border definition

Model list RF (basic); RFM (based on RF); RFMT (based on RFM); LRFM; RFMTC RF; RFM; RFMT Interpretation of codes Classic; Score (ranking of clients by the sum of codes); Expert; Based on archetypes; Combination of several interpretations Compiled by the authors on the basis of the research

In models “by assignment of codes to clients”, universal parameters for such models are taken: R – purchase date; F – purchase frequency; M – money; L – duration, defined as the difference in time between the first and the last purchase; T – time from the moment of the first purchase. There are also more complex modifications of models, for example, RFMTC model, according to which the probability of expected customer visits is estimated (Yeh et al. 2009). It is generally accepted that for each of the parameters clients are divided into 5 classes. The best value of the indicator corresponds to a higher score. Each client is assigned a tag (code) by model indicators: for example, “55” by RF model, “324” by RFM model, etc. There are traditionally two classes in the LRFM model: more and less than the average index value. The implementation of the segmentation components in Loginom features three parameters that can be configured manually. In this way, practitioners can set these values expertly, feeling the specifics of the subject area.

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1. The possibility to set any number of classes. This is useful, for example, for RFM model when the number of combinations of values at 5 classes reaches 125. In this case it is rational to focus, for example, on three classes: the average value, below average and above average. 2. The possibility to set up boundaries for transition from one class to another. The variant uses different quantization methods by default. The basic Loginom segmentation component uses the interval quantization method. 3. The possibility of data pre-processing. The calculation of class boundaries is closely related to the peculiarities of data representation, in particular, the presence of abnormal values in the sample under study. Therefore, an important feature of the developed components is the ability to identify and correct abnormal values. At the output of any model “by assigning client codes” there will be a list of marked clients. Each label must be interpreted, i.e. it must describe each category of clients with a capacitive name. There are many interpretations of the obtained segments. For example, in classical interpretation of RF model codes (Pankrat 2015) there are the following categories: “lost client” (code 12), “leaving client” (code 22), “best client” (code 44) and others. For a number of models, such as RFMT, due to the great complexity and number of combinations, the classical interpretation is not appropriate, so there is a need to find alternative methods of interpretation. The paper proposes an original interpretation of segmentation results based on archetypes and the possibility of combining different interpretations. Table 2 summarizes presented in the literature (Pankratov 2015; Roussel 2016), used by experts and proposed by the authors (archetypes, combination) interpretations of segments. The “+” sign at the intersection of row and column means that this interpretation can be applied to the corresponding model. Table 2. Interpretation possibilities of segments in client segmentation models Model/Interpretation RF RFM RFMT LRFM Classic (basic) + + + Score + + + + Expert + + + + Based on archetypes + + Combined + + + Compiled by the authors on the basis of the research

Let us consider in more details an example of client differentiation based on archetypal analysis (Cutler 1993) which is one of the ways to cluster objects. In this paper “archetype” is understood as some generalized category of clients of the analyzed market. Archetypes should be highlighted during the marketing research for each subject area and described with the help of the purchase date, frequency, cost and time (for RFMT variant). An expert practitioner independently generates a table of archetypes and their corresponding codes, which is submitted to the component input. For

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each client code, the distance between all archetypes is estimated using different metrics (e.g. Euclidean distance (Paklin and Oreshkov 2009), Spearman’s rank correlation coefficient (Pisarev 2007), etc.). After that, the “nearest” archetype is selected by the lowest value. The case when a client is equally close to more than one archetype means that it is necessary to form new segments for deeper analysis of such clients. Table 3 shows an example of ten identified archetypes (using the RFMT model) for a control example of a children’s goods store chain. Table 3. Example of customer archetype list for a chain of children’s goods stores (RFMT model) No. 1 2 3 4 5 6

Archetype

Random client New client Lost client Leaving client/“Kids have grown up” “Children”-customers (often buy small stuff) Large family parents (often visit the shop, buy a lot, use things for a long time) 7 Guests/“Those who give presents” 8 Corporate clients (rare, large volume centralized purchases) 9 Spenders/“Rich parents” 10 Young parents (recent clients, visit the shop often, buy a lot) Compiled by the authors on the basis of the research

Code (cluster center) 3132 5231 1111 4114 4522 5555 3245 2155 3554 5552

Figure 1 shows a screenshot of the scenario implementation, and Fig. 2 shows a fragment of the scenario output on assigning codes to clients based on the RFM model and the classic segment interpretation performed at Loginom. Table 4 shows an example of combining “classic” and “score” interpretations on the example of a component that implements RFM segmentation. By combining interpretations, more flexible recommendations and strategies can be applied to clients. Within the limited scope of the article it is not possible to fully describe all the functionality of the developed components. The full library of components is available to users of the Loginom analytical platform.

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Fig. 1. Scenario fragment in Loginom

# Identificator 1 2S287A8AE39031CD50A977677B16E861 2 28F3SABB3E82F97B207S410093070$6F 3 1D5C1A4C1273EC9A3CAB0031C479B09A 4 77EE8A82BOA17FO9OA27D5500B2D7EAE 5 415C5B765C650BA0E17151353635E64D 6 4A83D08A8703C22968A5062A89780088 7 07AE06AFB1077D5B64BBCB01855535B6 8 02E66DB1B4703747349441C718FCCEBC 9 199FA420ED56420F45173257197F167D 10 C44E30E1D1A406157BF8EE3164C4204F 11 4632602A577857BCCC259DCB9A4BCO2F

Code 535 535 121 535 122 535 334 535 134 435 435

Basic interpretation Best client Best client Loyal client Best client Client at risk Best client Loyal client Best client Potential loss of client Best client Best client

Fig. 2. Scenario implementation output data fragment in Loginom

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Code

Interpretation Classic Score 535 Best Loyal client client Compiled by the authors on the

Example of a recommendation for working with a client These are clients who promote the brand. They are to be thanked as often as possible. basis of the research

4 Conclusions Understanding the needs of clients using information-analytical systems is one of the ways to improve the efficiency of the company’s marketing policy. The developed software tools allow to use flexible configuration of parameters, alternative variants of clients segmentation models, the information-analytical approach to interpretation of groups of clients. The scientific novelty of the results obtained in differentiating the client base on the basis of behavioral data (RFM values of customer purchases) using the Russian Loginom software consists in the following: – a method is proposed for adjusting the range of values of differentiating features under changing conditions, for interpreting the results of customer segmentation; – Algorithms have been developed by authors and they automatically calculate the boundaries of segments, or use the values determined by experts to partition; – the author’s approach to the interpretation of segments, which is based on the analysis of archetypes, is proposed and the possibility of combining segment interpretations is presented; – A unique library of components has been developed that implements the interpretation of segmentation results using various methods of RFM analysis using the Loginom analytical platform. An approach to the conceptual definition of a segment based on archetypes analysis is proposed. The software implementation of behavioral segmentation was carried out using the Loginom platform on the example of the client base of the children’s goods store chain, but it can be recommended to the market practices of any goods for effective segmentation of clients. In the future, the authors of the article are planning to carry out comparative differentiation of clients, using cluster analysis, and assessment of accuracy and labor intensity of the two approaches (segmentation and clustering of clients). Acknowledgments. The authors express their gratitude and deep appreciation to Alexey Arustamov, CEO of “Analytical Technologies” CJSC, for providing software in the framework of cooperation with universities, to Nikolay Paklin for advice and guidance while working on components development, to reviewers for advice and valuable comments while working on the article.

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References Al-Shayea, Q.K., Al-Shayea, T.: Customer behavior on RFMT model using neural networks. In: Proceedings of the World Congress on Engineering in London, U.K., vol. I, 2014, 2–4 July, pp. 49-52 (2014) Esmaeili Gookeh, M., Tarokh, M.J.: A new model to speculate CLV based on Markov Chain model. J. Ind. Eng. Manage. Stud. Summer Autumn 24(2), 85–102 (2017). Working paper Camilleri, M.: Market segmentation, targeting and positioning. In: Travel Marketing, Tourism Economics and the Airline Product: An Introduction to Theory and Practice, Edition: 1, Chap. 4, pp. 69–83. Springer, Cham (2017) Kalinina, V.N., Solovyov, V.I.: Data analysis. Computer workshop. (Bachelor’s Degree). Textbook, Moscow, KnoRus (2020) Cutler, A., Breiman, L.: Archetypal Analysis. Technical report No. 379 revised October 1993, Department of Statistics University of California Berkeley, CA 94720 (1993) Pankratov, A.: Data analysis in electronic marketing. Article 2 - RFM segmentation (2015). https://esputnik.com/blog/analiz-dannyh-v-elektronnom-marketinge-statya-2-rfmsegmentaciya. Accessed 25 Mar 2019 Paklin, N.B., Oreshkov, V.I.: Business analytics: from data to knowledge. SPb, Piter (2009) Pisareva, O.M.: Methods of Forecasting the Development of Socio-Economic Systems, 591 p. “High school” Publishing, Moscow (2007) Reichheld, F., Marky, R.: True loyalty. The key to winning customers for life/Fred Reichheld, Rob Marky; transl. from Eng. by Filin, S., Borymova, I., 2nd edn. MIF, Moscow (2018) Roussel, N.: One size doesn’t fit all. Realize your first RFM analysis. 2/2 (2016). https://blog. iandyoo.com/one-size-doesnt-fit-all-realize-your-first-rfm-analysis. Accessed 12 Apr 2019 Srivastava, R.: Identification of customer clusters using rfm model: a case of diverse purchaser classification. Bus. Manage. 9(4), 201–209 (2017). Working paper Shih, YY., Liu, C.Y.: A method for customer lifetime value ranking — combining the analytic hierarchy process and clustering analysis. J. Database Mark Cust. Strategy Manage. 11(2), 159–172 (2003) Yeh, I.-C., Yang, K.-J., et al.: Knowledge discovery on RFM model using Bernoulli sequence (2009). https://www.semanticscholar.org/paper/Knowledge-discovery-on-RFM-model-usingBernoulli-Yeh-Yang/5af0435276ba51a3d6391dc6ef1cbe18a0da2180. Accessed 3 Apr 2019 Huan, W., et al.: Application of RFMT model of supplier evaluation based on Automation, pp. 38–40, April 2017. Working paper Christy, A.J., et al.: RFM ranking - an effective approach to customer segmentation. J. King Saud Univ. Comput. Inf. Sci. September 2018. Working paper. https://www.sciencedirect.com/ science/article/pii/S1319157818304178?via%3Dihub. Accessed 10 Sep 2020 Zoeram, A.A., Mazidi, A.R.K.: A new approach for customer clustering by integrating the LRFM model and fuzzy inference system. Iranian J. Manage. Stud. (IJMS) 11(2), 351–378 (2018). Working paper

Producer Competition and Cooperation Within the Infrastructure Sector of the Economy Mikhail I. Kuternin(&)

and Vladislav L. Suponitskiy

State University of Management, Moscow, Russia [email protected], [email protected]

Abstract. The present work is devoted to mathematical modeling of infrastructural branch of economy built on the scheme of vertical integration with competition. The paper develops a mathematical model, which is a normal-form game that is suitable for determining the optimal values of the most important parameters of the industry, such as the degree of its vertical integration, the output volume and price level of the natural monopoly core of the industry, which is a network enterprise. To study various options for building the infrastructure industry, the article develops a methodology for the integrated application of game-theoretic capabilities of mathematical modeling and optimization capabilities of structural modeling of the industry based on the optimization of the integrated characteristics of the manufacturing and network sectors of the industry. The paper shows that the main structural feature of the industries under consideration are fundamentally different characteristics of production costs of the producing and network sector. Therefore, the proposed game model of the industry is based on the use of the functions of production costs of both components of the industry. The game nature of the model makes it possible to investigate different variants of interaction between public and third-party private producers, to identify possible options for building stable agreements between them, which makes it possible to find the best option for meeting the requirements of the European Union’s Third Energy Package in the study of export opportunities for Russian infrastructure industries. The construction of the joint characteristics of the manufacturing and network sectors of the industry as payoff functions in the proposed game model allowed us to explore various options for integrating sectors. As a result, an economically sound level of industry integration was found. As a result of researches carried out according to the model proposed in the work, it was established that in the market of infrastructure industry there is a necessity of joint development of strategies of public and private producers, limits of possible variants of their cooperation are established. Keywords: Infrastructural branch of economy
Efficiency
Vertical integration
Natural monopoly
State regulation
Mathematical modeling Normal-form game JEL code:: L22


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1 Introduction Infrastructure industries play a vital, often backbone, role in any country’s economy. A distinctive feature of the main infrastructure industries, which determines their role in the state, is the existence of a network structure, which is the central link of the industry. The network structure plays the role of a link between producers and consumers of products that can be located over vast distances. Thus, this structure connects a large number of independent enterprises of different nature into a single national economic complex of the country. The central position of the network company within the infrastructure industry is reinforced by the unique technical and economic characteristics of the company, the most important of which is economies of scale. This property consists in decrease in average production costs in all range of possible volumes of output. As a result, the lowest average costs of a network structure are achieved when all market demand is satisfied by a single network enterprise, which gives it the features of a natural monopoly (Taranuha 2011, p. 334). The determining role played by the network structure in the industry is the unique role of the owner of this structure, who can exercise control not only over the use of product transportation networks, but also has significant levers to manage the manufacturing and consumer sector of the industry (Kuternin 2010). In all countries, therefore, the state is striving to maintain a degree of control over the network enterprise, which is the natural monopoly core of the infrastructure industry. In this way, it is possible for the state to regulate such industries. Within a single enterprise, a network structure can be combined with some of the enterprises in the manufacturing and consumer sectors. Such integration, on the one hand, allows to improve the efficiency of management of the industry and is often a cornerstone in creating a single economic space. But, on the other hand, the integration of a part of producers with networks into one structure reduces the possibility of using competition of producing enterprises and allows the network structure to use protectionist measures in favor of that part of the producing sector, which is included in a single production association with this structure. In this connection, the issue of determining the optimal degree of integration of the infrastructure sector is very important. In a varying degree, the question of the need to identify ways of restructuring an industry containing a network component was raised at the turn of the century and caused considerable disagreement in all countries with developed infrastructure. Two opposite directions have emerged in the construction of infrastructure industries, as a result of a theoretical and practical solution to this issue in the world economy. One of the first papers, which shows the various trends in building the infrastructure industry, is (Teece 1990). These trends are clearly manifested in the Russian economy in the first decade of this century. As a result of theoretical and practical solution of this issue, two opposite trends in the construction of infrastructure industries have emerged in the Russian economy in recent years. As a result, infrastructure industries in modern Russia exist in the form of industrial associations with varying degrees of integration (Deryabina

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2006). The electric power industry of the Russian economy is built according to the scheme with full vertical separation. Federal Grid Company, which is the natural monopoly core of the industry, owns main power lines and is under state control. In its turn, the gas industry, which plays a crucial role in the Russian national economy, is an example of a single highly integrated vertical structure. PJSC Gazprom covers a considerable part of all gas production enterprises as well as almost the entire system of natural gas delivery to the final consumer. Gazprom’s gas transmission network is a natural monopoly by its technical and economic characteristics. At present, PJSC Gazprom is a monopolist in Russian gas exports to many countries on the Eurasian continent. The issue of expediency of dividing the production and network components of the infrastructure industry is raised again in connection with the construction of the Nord Stream 2 gas pipeline. The Third Energy Package, which is one of the components of the EU legislation on liberalization of the gas and electricity markets, involves limiting the monopoly of gas and electricity suppliers. The stated purpose of this package is to exclude the possibility for the main exporter to block the deliveries of competing companies by owning the delivery networks to consumers. According to the requirements of the Third Energy Package, the owner of a network company must reserve at least half of its capacity for delivery of third-party products. This paper explores the different ways public and third-party private producers can interact within the infrastructure industry in order to meet these requirements.

2 Materials and Method The analysis of possible variants of construction of vertically integrated production associations was carried out in many works of foreign economists at the beginning of this century (Beard et al. 2001). One of the most complete studies of the gas industry was carried out in the work by R. Pittman (Pittman 2003). Comparison of various schemes of building the infrastructure industry in a number of works is carried out at a high level in a qualitative way in the domestic (Sokolova 2014) and foreign (Suppington 2006) literature. Various aspects of the interaction between the public and private sectors are considered in (Kessides 2005). A critical analysis of the consequences of private sector expansion among manufacturing enterprises in the industry is given in (Trebling 2008). However, all these works do not raise the issue of quantitative comparison of indicators of various schemes of building the industry. For quantitative analysis of efficiency of such schemes it is necessary to build a mathematical model of the industry. Since competition and cooperation between stateowned companies and third-party private producers plays a leading role in this version of the industry, which meets the requirements of the Third Energy Package, it was decided to build a game model of the infrastructure industry, which includes both stateowned and private producers. The proposed model is designed to study the economic component of the issue of reserving the network enterprise capacity for use by thirdparty producers. Let us start building a game model of infrastructure industry. The structural scheme of the infrastructure industry is shown in Fig. 1.

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Fig. 1. Structural diagram of the infrastructure industry [compiled by the author based on research results]

3 Results In case of construction of the industry according to the scheme with the full vertical integration, all extracting industries constituting block I or production sector of the industry are united organizationally into a single enterprise with a network structure (block II). For the purposes of a model study of the industry, we will assume that all enterprises in the first block have the same technical and economic characteristics. In this paper (Kuternin 2019) we compare the efficiency of such a scheme to a scheme with a full vertical separation, in which all producing enterprises are independent and constitute a competitive sector of the infrastructure industry. The mathematical model proposed in this paper is designed to study the effectiveness of building the industry on the scheme of vertical integration with competition. We will assume, as it is required by the Third Energy Package, that the network enterprise is a production association with half of the producing enterprises, and the other half of the enterprises is a third party producer, and 50 percent of the capacity of the network structure is reserved for transportation of products of such producers. This

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paper explores the economic component of the required redundancy in the network structure, whether it is a gas pipeline or a power line. Therefore, we will assume that third-party producers make up 50 percent of the producing sector. The most difficult for the analysis is the case when such enterprises are also united into several structures or belong to the same owner, because in this case the competing owner may try to implement its own strategy on the market of the produced goods. At the first stage of the research we will consider that the only goal of third-party producers is to maximize profits. Now let us build a mathematical model of the industry shown in Fig. 1, where half of the 2 N producing enterprises are part of a single production association together with a network structure. The other half of the producers is a competitor production association. The infrastructure industry is fundamentally different from other economic sectors. The most important point that defines the specifics of the industry is the integration of the network enterprise with part of the producing enterprises. Moreover, the specific economic characteristics of an integrated enterprise, including the natural monopoly core of the industry, is determined by the presence in its structure of two components that have fundamentally different characteristics of production costs. In this regard, it was decided to use a mathematical model based on the use of production costs functions as an initial model (Kuternin 2019). In the model under consideration, it is assumed that 2 N producing (or extractive) enterprises, half of which are part of the association with the grid structure, have the same characteristics. Average costs of the enterprise included in block I of the scheme presented in Fig. 1 have U – a different dependence on the volume of output (Taranuha 2011). Such dependence is expressed by a square function: AC1i ¼ aQ2i  bQi þ c

ði ¼ 1; 2; . . .; 2NÞ;

ð1Þ

where AC1i is an average cost per unit of output of the i-th producing enterprise; Qi is the quantity of output. The network structure of the presented scheme (block II) is a natural monopoly core of the industry and has a distinct property of economies of scale (Taranuha 2011). Average costs of such an enterprise decrease with increase in volume of production and reach a minimum with full satisfaction of requirements of the market. This dependence has the form of a hyperbola branch and is described by a rational function: AC2 ¼

k þ l; Q

ð2Þ

where AC2 is the average expenses of network enterprise per unit of production; Q is the volume of production of networks, which is equal to output of all enterprises: Q¼

2N X j¼1

Qj :

ð3Þ

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The enterprises of the first block which are external manufacturers and are not included in association with a network structure, pay for transportation of the production to the network enterprise the established price p1 . In this paper, this price is considered the same for all third-party manufacturers. In the presence of state control of the network structure, this price is determined by state authorities considering the amount of costs of the second block and based on the development strategy of the industry. Price regulation of the natural-monopoly market is the most important element of state regulation of the economy (Saakyan et al. 2007). The consumer sector (block III of the scheme presented in Fig. 1) is characterized by a decreasing function of demand. We will use linear dependence to describe this function: p ¼ m  dQ;

ð4Þ

where p is the product price (consumer price per unit). In the given work we will consider the most difficult case of regulation of branch – a duopoly in the market of the produced goods. We will consider that third-party enterprises of the first block form a single production association, the sole purpose of which is to maximize profits. Let’s build a mathematical model of the industry, shown in Fig. 1, in which half of the 2 N producing enterprises are part of a single production association along with the network structure. This association will be called the First PA. The other half, as mentioned above, is another production association, which we will call the Second PA. In this case, the relationship of the two PAs on the market in question can be described using the game model. For two competing production associations the construction of this model consists in defining possible strategies of both PAs and their winning functions depending on the behavior of both players (Moulin 1981). So, let’s look at the normal-form game of two players. G ¼ ðX1 ; X2 ; u1 ; u2 Þ

ð5Þ

Here X1 ; X2 is a set of strategies of two players; u1 ; u2 are the functions of players’ winnings, defined on the set X1  X2 . The set of players consists of two persons who are called First and Second Production Associations. The First PA consists of half of the production enterprises and a network structure that delivers products to consumers and is a natural monopoly by its technical and economic characteristics. The Second PA includes the other half of the producing enterprises. Let’s look at the multitude of strategies the players have. The First PA defines total output volume of the enterprises, and also the price for services of networks which are paid by foreign manufacturers for transportation of the production to consumers. In this paper, for simplification, we believe that all producing enterprises have the same characteristics, and inside each PA the total output is evenly distributed among all producing enterprises. Then each strategy of the multitude X1 is a pair ðQ1 ; p1 Þ, where Q1 is the production of each manufacturing enterprise of the First PA, and p1 is the price of transporting a unit of production on networks. As mentioned above, this price is considered to be the same for all enterprises of the Second PA. The maximum values

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of the output of the enterprise and the price for transporting the products are determined by the technical characteristics of the enterprises and possible market conditions of the products under consideration. Then the set of strategies of the First PA looks the following way: X1 ¼ ½0; Q0   ½0; p0 ;

ð6Þ

where Q0 and p0 are the maximum output values of one enterprise and prices for network services. Similarly, each strategy of the multitude represents the output of each producing enterprise of the Second PA. Then X2 ¼ ½0; Q0 :

ð7Þ

Now let’s define the winning functions of both players. The purpose of the First PA under state control is determined by the state industrial policy in the market of the goods in question. The main option of this policy is to increase the total output (which, according to equality (4), corresponds to a reduction in the final price), provided that the conditions for the development of all the First PA enterprises are met. Such conditions may be expressed in the establishment of a minimum value of the profit margin sufficient for stable development of the sector of economy. The production costs of the First Software are composed of the costs of the producing enterprises, determined by equality (1), and the costs of the network structure, determined by equality (2). The total cost of the producing sector of the First PA is: C1 ¼

N X i¼1

Qi
AC1i ¼

N X

Qi
ðaQ2i  bQi þ cÞ ¼ Q1
ðaQ21  bQ1 þ cÞ
N;

ð8Þ

i¼1

where Q1 is the output of every enterprise of the First PA. The costs of a network enterprise depend on the total volume of products transferred to consumers and are determined by equality (2). Then C2 ¼ AC2
Q ¼ ðk þ lQÞ ¼ ðk þ lNðQ1 þ Q2 ÞÞ;

ð9Þ

where Q1 and Q2 are the output of each enterprise of the First and Second PAs accordingly. The income of the First PA is composed of the consumers’ payment for the products manufactured by the First PA enterprises, as well as the payment of the Second PA for the products transportation. Taking into account equality (4) these incomes have the form: R1 ¼ p
NQ1 þ p1
NQ2 ¼ ðm  dQÞ
NQ1 þ p1
NQ2 ¼ Nðm  dNQ21  dNQ1 Q2 þ p1 Q2 Þ

ð10Þ

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The state authorities set the minimum allowed profit margin for the First PA. Let this norm have the value m. Then the condition of compliance with the requirement to achieve the profit norm is as follows: R1  ð1 þ mÞ
ðC1 þ C2 Þ:

ð11Þ

Public authorities choose the strategy of the First PA in such a way that inequality is achieved (11). Inequality (11) determines the acceptable area for a set of strategies of the first player, depending on the Second PA’s strategy, which is expressed by the output volume Q2 . Let us denote the set of tolerable strategies of the First PA through D ðQ2 Þ. The goal of the First PA is to maximize the total output. Then the winning function of the first player has the form: ⎧ N (Q1 + Q2 ), если (Q1 , p1 ) ∈ D∗ (Q2 ) u1 (Q1 , p1 , Q2 ) = ⎨ 0, если (Q1 , p1 ) ∉ D∗ (Q2 ) ⎩

ð12Þ

The purpose of the Second PA is to maximize profits. Its costs are made up of the costs of manufacturing enterprises and transportation fees, and the income is made up of consumers’ fees for the products: C2 ¼ Q2
ðaQ22  bQ2 þ cÞ
N þ p1 Q2 N ¼ Q2 N
ðaQ22  bQ2 þ c þ p1 Þ R2 ¼ p
NQ2 ¼ ðm  dQÞ
NQ2 ¼ Nðm  dNQ22  dNQ1 Q2 Þ

ð13Þ ð14Þ

The function of winning of the second player has the form: u2 ðQ1 ; p1 ; Q2 Þ ¼ R2  C2

ð15Þ

Thus, a mathematical model of the branch under consideration is constructed, which is a normal-form game (5), expressed by Eqs. (6), (7), (12) and (15). Numerical coefficients included in the model can be determined by econometric methods based on the results of the industry for the previous years. In the paper (Kuternin 2019), the parameters typical for the Russian gas industry in 2013 were obtained. The model, which is a normal-form game, can be used to build stable agreements between economic entities. The method of such construction is described in the paper (Moulin and Peleg Moulin and Peleg 1982). With the help of the game model built, various options were tested for possible interaction between state production enterprises, which are part of PJSC Gazprom, and private gas producers, which should have access to Gazprom’s gas transportation system as required by EU legislation. The values of numerical coefficients given in the paper (Kuternin 2019) were used in model studies. A profit rate of 13 percent was used as a reference, which corresponds to the profit rate of PJSC Gazprom in 2015 (Gazprom v cifrah 2017). As a result of the research it was found, that in the theoretical and game plan, interaction between public and private manufacturers is a game in which there is a struggle for leadership, i.e. each software seeks to be the first to declare their production plans, trying to get the maximum market share. This situation forces producers to plan

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their gas production volumes jointly. The subject of the contract may be any agreements that in the game are both balanced on Nash and optimal on Pareto outcomes. Researches on the constructed model have shown, that there is a considerable area of possible contractual outcomes. State-owned companies have a wide range of possible production volumes. The minimum gas production volume is 3–5% higher than the minimum average cost. By increasing this volume to the maximum allowable (50% of the gas transportation system capacity), the public sector can provide the required profit rate by increasing the gas transportation price. Private producers set their gas production volumes at minimum average production costs. Their final profit depends on the level of gas production of the First PA. The most profitable for them is the minimum allowable level of this production. A stable agreement between the two production units is possible over the entire range of permissible production values. The stabilizing factor for such an agreement is the threat of a sharp increase in output from one PA, which will lead to a significant price reduction. The proposed game model was used to determine the optimal degree of industry integration. By means of model studies it was established that, if the manufacturing enterprises comprise several independent production associations, the production volume of each of which doesn’t exceed the output of the public sector, then the degree of integration that is optimal for maximizing output is 20–22%. However, if private producers form a single corporation, then the public sector should include at least 50% of all manufacturing enterprises. Thus, the research has shown the need and the possibility of concluding a stable agreement between manufacturers and building an optimal industry structure based on it. The specific parameters of the agreement can be established using the proposed model after a detailed description of the gas industry.

4 Conclusion In this paper a mathematical model of competition and cooperation between public and private producers in the infrastructure sector of the economy is developed. The given game model is intended for definition of possible variants of the coordinated behavior of such producers on the oil, gas or electric power market in case the market of the considered goods represents an oligopoly of the state and private companies having identical possibilities of transit of their production on networks belonging to the state enterprise. Such an oligopoly takes place if the requirements of the European Union’s Third Energy Package are fulfilled. Model studies based on the initial data close to the Russian gas industry parameters showed that there is a need and possibility to conclude a stable agreement between the state and private producers with regard to gas production volumes and gas transportation price. The possible parameters of such an agreement may vary significantly depending on the selected rate of return and specific industry indicators. The optimum degree of industry integration can be determined, based on this agreement. The constructed mathematical model after a detailed description of the gas industry can be used for gas market research in accordance with the requirements of European Union legislation.

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References Deryabina, M.: Reformirovanie estestvennykh monopolij: teorii i praktika [Reforming of natural monopolies: theories and practice]. Voprosy ekonomiki 1, 102–121 (2006) Kuternin, M.: Koncepciya kosvennogo gosudarstvennogo regulirovaniya nacional’noj ekonomiki na osnove upravleniya ee estestvennymi monopoliyami [The concept of indirect state regulation of national economy on the basis of management of its natural monopolies], p. 108. SUM, Moscow (2010) Kuternin M.I.: Sravnenie effektivnosti razlichnyh skhem gazovoj otrasli na osnove matematicheskogo modelirovaniya [Comparison of the efficiency of gas industry various schemes on athematical modeling. Vestnik universiteta 10. 124–131 (2019) Saakyan Y.Z. i dr. Estestvennye monopolii Rossii [Natural monopolies of Russia]. M.: Institut problem estestvennykh monopolij [Institute of problems of natural monopolies], p. 408 (2007) Sokolova, E.: Ekonomicheskie faktory razvitiya konkurencii v gazovoj promyshlennosti Rossii [Economic factors of Competition development in russian Gas industry]. Voprosy Ekonomiki 9, 82–95 (2014) Taranuha, Y.: Mikroekonomika: uchebnik dlya studentov vuzov, obuchayushchikhsya po ekonomicheskim special’nostyam [Microeconomics: the textbook for students of higher education institutions, studing on economic specialties]. Pod obshch. red. prof. A.V. Sidorovicha [under the general edition of professor Sidorovich]. M.: Delo i Servis/ [Business and service], 608 p. (2011) Gazprom v cifrah. 2012 – 2016. Spravochnik OAO « Gazprom » [Gazprom in figures. 2012 – 2016. Reference book of JSC Gazprom] (2017). http://www.gazprom.ru/f/posts/26/208817/ gazprom-in-figures-2012-2016-ru.pdf. Accessed 08 May 2019 Beard, T., Kaserman, D., Mayo, J.: Regulation, vertical integration and sabotage. J. Ind. Econ. 49, 319–333 (2001) Kessides, I.N.: Infrastructure privatization and regulation: promises and perils. World Bank Res. Observer. 20(1), 81–108 (2005) Moulin, H.: Theorie des jeux pour l’economi e et la politique, p. 200. Herrman, Paris (1981) Moulin, H., Peleg, B.: Stability and implementation of effectivity functions. J. Math. Econ. 10(1), 115–145 (1982) Pittman, R.: Vertical restructuring (or not) of the infrastructure sectors of transition economies. J. Ind. Compet. Trade 3, 5–26 (2003) Suppington, D.: Regulation in vertically related industries: myths, facts and policy. Rev. Ind. Organ. 28, 3–16 (2006) Teece, D.J.: Structure and organization of the natural gas industry: differences between the United States and the Federal Republic of Germany and implications for the carrier status of pipelines. Energy J. 11(3), 1–35 (1990) Trebling, H.M.: A critical assessment of electricity and natural gas deregulation. J. Econ. Issues 42(2), 469–477 (2008)

Foreign Practice of Application of Smart Technologies to Support Technological Entrepreneurship: Prospects for Application in Russia Sergei A. Korobov(&) , Viktor O. Moseyko , Elena Y. Marusinina , and Darya S. Devyatkina Volgograd State University, Volgograd, Russia [email protected]

Abstract. Purpose: The article is dedicated to a study of the most significant smart foreign technologies of state support for technological small and mediumsized enterprises with the aim of their potential integration into the Russian economic sector. Methodology: The analysis and structuring of measures of the state support of small and medium-sized business was defined on the basis of theoretical provisions of the famous Russian scientist Inshakov (2018). This approach is based on the analysis of the influence of a number of production factors on the manifestation of signs of entrepreneurial activity in a particular socio-economic system. Both factors are directly involved in the process of production of the finished product of the small and medium-sized enterprises. Such factors are human (A), technical (T), material (M), institutional (Ins), informational (Inf) and organizational (O). Results: The scientific work revealed key global trends in the formation and development of small and medium-sized enterprises in the field of digital technologies. The authors outlined common approaches to providing state support for technological small and medium-sized enterprises in various foreign countries. The experience of implementation of state policy in Great Britain and Italy has been studied in detail. Conclusions/Recommendations: The proposed study revealed that in Russian economic conditions special attention should be paid to the informational, technical and human factors of the development of state support measures for high-tech SMEs. Keywords: Small and medium-sized entrepreneurship regulation
Foreign experience
Smart technologies JEL Code: C10


State support
State


P51
R10

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1642–1648, 2021. https://doi.org/10.1007/978-3-030-59126-7_179

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1 Introduction Small and medium-sized enterprises (SMEs) play an important role in most countries of the world, especially in developing countries. On average, SMEs provide up to 60% of total employment and up to 40% of GDP in emerging economies (Kuzmisin and Kusmisinova Kuzmisin and Kuzmisinova 2017). Over the past few years, the world economic space has changed significantly: production and markets have become global, the pace of modernization and technological conversion of production, and the share of innovative products in markets have increased, products have become more diversified. Due to the high level of SME’s development in many countries of the world, and to the fact that active growth of the economy, including SMEs is possible mainly through the development and introduction of new innovative solutions, the policy of supporting SMEs in developed foreign countries has changed from focusing on all SMEs to focusing mainly on SMEs in strategic areas for the country. The main support measures are aimed at supporting the implementation and effective use of new technologies, stimulating innovation activity, and as well as promoting domestic products in other regions and countries (Korobov 2017a, b). In general, the period from 2014–2019 years is characterized by a decline in demand for products and services from the Russian SME sector. Such situation has negatively affected the development of most Russian SMEs. The share of SMEs in macroeconomic indicators and the number of employees in the SME sector are almost unchanged. Competition is increasing, including unfair competition, as in certain markets of goods and services there are high shares of counterfeit products. According to surveys conducted among entrepreneurs administrative barriers and corruption continue to hinder business development. However, the digital transformation of small business in Russia in the near and medium term should become one of the leading drivers of the country’s economy– by 2025 year the digital economy can reach 8-10% of the country’s GDP. Furthermore, the digital transformation of small business should also become the most important tool for social development and growth of well-being of the population, as well as formation of trust interaction between SMEs and the state (Kuzmisin and Kusmisinova 2017). Enterprises in the SME sector in Russia understand the importance of digital transformation, but cannot afford the same amount of investment in the development and use of digital technologies as Western business. This is confirmed by the results of surveys and statistics (Russian Public Opinion Research Center 2019). This circumstance may lead to the loss of the domestic SMEs’ positions in competition with foreign companies. Russian SME enterprises are even more aware of the importance of digital transformation than European SMEs in average. They are ready to develop in this direction. So a larger percentage of Russian companies named three main directions necessary for digital business transformation: – Automation of business processes (34% in Russia, 23% in Europe), – usage of predicative analytics for business development (29% in Russia, 20% in Europe),

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– new approaches to customers interaction (28% in Russia, 24% in Europe) (Russian medium and small businesses are ready for digital transformation, 2017). Therefore, it is necessary to study carefully smart technologies of state support and regulation of SMEs used in foreign countries in order to ensure their successful integration into the Russian economy. Methodology In this work will be used popular scientific methods of research: analysis and synthesis, derivation and induction, methods of scientific abstraction and expert assessment, historical and logical analysis, as well as techniques of structural-functional and comparative analysis.

2 Results Current key global trends in SMEs sector are presented below (Činčalová 2016): – SMEs’ contribution to economy of the developed countries is rather stable, both in the employment and in GRP. Values of these indicators change on average at the level of less than 0.5% per year in the absence of obvious dynamics. The countries with the high level of development of SMEs do not try to raise SMEs’ contribution to economy, and hold it at the current level; – earlier the main innovations were carried out by the large enterprises which were taking advantage of economies of scale. Now the role of leaders gradually passes to SMEs; – significant amount of SMEs’ investments into innovations is carried out by relatively small group of SMEs. First of all these are fast-growing enterprises, so-called “gazelles”, whose sphere of activity is high-tech sectors of the economy. For example, in EU countries, on average, “young” SMEs (up to 5 years old) account for up to 25% patents granted; – the share of SMEs participating in partnership or consortium with the aim of application R&D and innovation activity. The following factors influence the use of digital solutions by SMEs: – – – – –

development of digital technologies and increasing of their availability; the growth of the online trading market; expanding technical opportunities for cooperation with foreign companies; the growth of things market in the Internet; the growth of digital infrastructure market.

The development of digital technologies leads to an increase in the supply of affordable for business products and services. In turn, the use of digital solutions gives companies the opportunity to increase efficiency and to be in a better position than competitors. Thus, companies that do not use digital solutions when all other things being equal can lose out on competition.

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In many countries of the world there is an increase in demand for the following digital solutions, including: – decisions for increase in efficiency of customers interaction (including the Customer Relationship Management Systems): digital communication channels, omnicanality, artificial intelligence, robotics allow to organize the most personalized interaction that most of the clients prefer; – cloud computing, that enables multiple teams to work on a single project at the same time and efficient usage of the company’s resources; – application of ready decisions: various applications, extensions and connectors, voice assistants optimize the company’s operations and require minimal time to implement and adapt them; – technologies of big data. Information is a key resource in nowadays world. For its accumulation, structuring and analysis companies use BigData and AI. These digital technologies allow to process large flows of information, on the basis of which companies receive data for specific tasks. – development of artificial intelligence and robotics (Andreeva et al. 2016; Victorova et al. 2019). The legislation of EU countries does not identify SMEs as a separate business category, so there are no special laws for SMEs in EU countries legislation. However, a number of general laws provide for mitigation of established standards for enterprises that are not large (simplified financial reporting, exemption from income tax from funds allocated to information and telecommunication technologies, as well as part of funds allocated for R&D, benefits on payment VAT and local property tax, etc.). (Arzayeva et al. 2019). The UK Manufacturing Advisory Service (MAS) provides SMEs in the manufacturing sector with the all necessary information, human resources and technology support. It has nine regional centers (Scotland and Wales have a similar but independent service). The goal of MAS is to help English SMEs increase their competitiveness by increasing productivity through implementing best production experience. About 85% of interaction between MAS and SMEs is based on “lean principles” at the level of production, enterprise and chain of supplies (Andreeva et al. 2016). MAS supports SMEs at 5 levels: – level 1. Free consulting support service for SMEs, where technical and enterprise management specialists respond to requests from SMEs; – level 2. Free consultation of specialists directly in the enterprise, where they assess organizational mechanisms and applied technologies for one day, as well as highlight opportunities for improvement of productivity. Such an audit often results in SMEs accessing higher-level services – level 3. Conducting trainings among representatives of SMEs, thematic meetings and excursions to “exemplary” enterprises. Promotion of exchange of experience and establishment of business contacts; – level 4. A key level of assistance to SMEs, involving subsidized “restructuring” of SMEs, in which an expert from MAS works directly in the enterprise for up to two weeks, optimizing processes and technologies at all levels of its activities;

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– level 5. Programmes with the aim of supporting SMEs in areas, which are not directly related to production, such as entering new markets, exporting products, product design, seeking financial guarantees for R&D and innovations. In these cases MAS acts as an intermediary, linking SMEs with relevant specialized services across the UK. Most continental European countries practice direct support for R&D and innovation activity of SMEs in manufacturing sector (implementation of new or technological improvements to existing products). The main method is to include SMEs in the consortium for the development of a specific technology or production sector (Vertakova et al. 2016). Consider an example of the organization of industrial districts (hereinafter– ID) in Italy, where manufacturing SMEs are provided with the following opportunities for their development (Andreeva et al. 2016): – formation of workforce. SMEs’ workers, being members of the same local community, contact each other both at work and at home, constantly exchanging secrets of skill, discussing the subtleties of technology and know-how; – exchange of information and focus on innovation. It is noted, that innovations are more easily generated in a small enterprise, where the employees feel the return on their creative labor contribution and where the salary is closely related to the level of productivity. The acceleration of progress in science and technology gives SMEs’ innovations a qualitatively new dimension. That producing a kind of synthesis of craft skills and state-of-the-art technologies based on robotics and information technologies; – flexible specialization. The problems of reducing production costs and improving quality in ID are mainly solved by creating new companies that take over one or more elements of the technological cycle. This is possible thanks to the presence in the ID of a sufficient number of professionals focused on hard work and ready to risk starting their business; – savings on transactions. SMEs interact in the local community, united not only by corporate, but also by friendly ties. Hence the lack of need for paper-based arrangements. Moral sanctions against violators are more severe than court decisions, and informal relations accelerate the implementation of all agreements.

3 Conclusions The application of digital solutions by SMEs in leading Western countries in the near term will be characterized by the following trends: – – – – –

automation of jobs with the application of robotic systems; extension of tele-commuting and work at home; implementation of digital transformation and search for external partners; the growth of costs for ensuring cyber security; the growth of the cloud services market for SMEs.

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Based on the analysis of foreign experience we suppose that the following smart foreign technologies of state support for SMEs can be used in the Russian economy. We will identify them by factors of production function of the SME (Inshakov 2018): 1. Creation of a new format of infrastructure to support technological entrepreneurship – digital (technical factor T) – with the help of state funds: The Digital Support Center for Technological Entrepreneurship is focused on several tasks (skills training, development of prototypes, design, access to technical competences) and types of consumers (not only start-ups, but also large corporations and universities). This is important for income and environment providing interaction of students, young specialists, start-up teams, experts, engineers. At the same time, the focus is not on the equipment, but on the modern digital environment, that allows to solve many routine tasks. Such as equipment management, selection of experts, chains of supplies, providing passes to the facility, etc. 2. Creation of a single federal Internet platform of technological ideas and technological products for business (information factor Inf). The Internet platform of technological ideas and technological products for business is a place where developments, products, technologies will be combined with the aim of searching for a consumer or investor. The Internet platform will allow to unite customers (consumers) for technological products, which will be able to form requests for innovative products, identify problems, set tasks, form ideas and developers of technological products, which can offer innovative solutions to the tasks. Such a platform will allow to form a single list of innovative requests and technological solutions, to build a single information space of customers, inventors, investors. 3. Government support for human capital development of technological SMEs (human factor A). Together with the companies it is necessary to organize short but subject-oriented trainings aimed at strengthen of business competences both for specialists and for the heads of companies. The program of state co-financing of companies’ invitations is necessary for implementation of innovative projects by leading scientists, technologists, specialists. Opening of corporate departments and laboratories in universities will also provide a good effect. Thus, in the Russian economic environment, special attention should be paid to the development of information, technical and human factors in the development of measures of state support for SMEs.

References Andreeva, G., Calabrese, R., Osmetti, S.A.: A comparative analysis of the UK and Italian small businesses using generalised extreme value models. Eur. J. Oper. Res. 249(2), 506–516 (2016). https://doi.org/10.1016/j.ejor.2015.07.062

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Arzayeva, M., Mustafina, A., Sadykhanova, G.: The prospects of small and medium-sized business development in the conditions of the European economic union. In: Proceedings of the 33rd International Business Information Management Association Conference, IBIMA 2019: Education Excellence and Innovation Management through Vision 2020, pp. 4984– 4991 (2019) Beynon, M.J., Jones, P., Pickernell, D.: SME development strategy and product/service innovation intention: a NCaRBS analysis of the role of uncertainty. Int. J. Entrepreneurship Innov. 21(1), 3–16 (2020). https://doi.org/10.1177/1465750318807401 Cancino, C.A., Bonilla, C.A., Vergara, M.: The impact of government support programs for the development of businesses in Chile. Manage. Decis. 53(8), 1736–1754 (2015). https://doi.org/ 10.1108/md-06-2014-0428 Cihelková, E., Platonova, I.N., Frolova, E.D.: Comparative analysis of supporting small and medium enterprises for enhancing created added value in the EU and China. Econ. Region 15(1), 256–269 (2019). https://doi.org/10.17059/2019-1-20 Činčalová, S.: Innovation from a macroeconomic perspective, its support, evaluation and application. In: Proceedings of the 28th International Business Information Management Association Conference - Vision 2020: Innovation Management, Development Sustainability, and Competitive Economic Growth, pp. 2315–2327 (2016) Hasan, S., Klaiber, H.A., Sheldon, I.: The impact of science parks on small- and medium-sized enterprises’ productivity distributions: the case of Taiwan and South Korea. Small Bus. Econ. 54(1), 135–153 (2020) Inshakov, O.V.: Strategic planning of the social and economic development of a region: scientific substantiation and updating of a model. Reg. Econ. South Russia 1, 23–43 (2018). https://doi. org/10.15688/re.volsu.2018.1.3 Korobov, S.A.: Development of the export potential of small and medium-sized enterprises of the Volgograd region: problems and solutions. J. Volgograd State Univ. Econ. 3, 127–134 (2017a) Korobov, S.A., Moseiko, V.O., Marusinina, E.Y., Novoseltseva, E.G., Epinina, V.S.: The substance of a rational approach to entrepreneurship socio-economic development. Integr. Cluster. Sustainable Economic Growth. Contributions to Economics, pp. 207–223 (2017b). https://doi.org/10.1007/978-3-319-45462-7_24 Kuzmisin, P., Kuzmisinova, V.: Small and medium-sized enterprises in global value chains. Econ. Annal -XXI, 162(11–12), 22–27 (2017). https://doi.org/10.21003/ea.v162-05 Russian Public Opinion Research Center (2019), available at: https://wciom.ru/index.php?id= 236&uid=9801. Accessed 10 Feb 2020 Russian medium and small businesses are ready for digital transformation (2017). https://news. microsoft.com/ru-ru/rossijskij-srednij-i-malyj-biznes-gotov-k-tsifrovoj-transformatsii/. Accessed 28 Feb 2020 Victorova, N., Vylkova, E., Pokrovskaia, N., Shukhov, F.: Tax regulation of small and mediumsized science-based business: scales and productivity. In: IOP Conference Series: Materials Science and Engineering, vol. 497(1), paper No. 012053 (2019). https://doi.org/10.1088/ 1757-899x/497/1/012053 Vertakova, Y., Plotnikov, V., Fedotova, G.: The system of indicators for indicative management of a region and its clusters. Procedia Econ. Financ. 39, 184–191 (2016) Zabolotskaya, V.V.: Governmental programs of small business support in the USA. World Econ. Int. Relat. 63(12), 15–22 (2019). https://doi.org/10.20542/0131-2227-2019-63-12-15-22

Smart Cyber Resilience Technologies of Credit Organizations Gilyan V. Fedotova1,2(&), Yuri V. Kuznetsov3, Larisa A. Kargina4, Sophia L. Lebedeva4, and Diana A. Kurazova5 1

Volga Region Research Institute of Production and Processing of Meat and Dairy Products, Volgograd, Russian Federation [email protected] 2 Volgograd State Technical University, Volgograd, Russian Federation 3 Saint-Petersburg State University, Saint-Petersburg, Russian Federation [email protected] 4 Russian University of Transport, Moscow, Russian Federation [email protected], [email protected] 5 Chechen State University, Grozny, Russian Federation [email protected]

Abstract. Purpose/Objectives: the purpose of this article is to rethink the ongoing transformation of information platforms of credit companies. The service digitalization and virtually complete automation of the entire transaction cycle have led to new threats that are a reason to strengthen the protection of bank information resources, including customer details and accounts, as well as access to them. The concept of cyber resilience appeared and received considerable attention in 2016, therefore, it is necessary to assess current threats and determine further ways of digitalization of credit. To achieve this purpose, several tasks were posed and successively solved in the article, i.e., the dynamics of information theft in the economy has been assessed, the RF Central Bank’s measures to reduce cyber threats have been outlined, and recommendations to secure internal data and customer accounts have been developed. Methodology: in the investigation, methods of regulatory analysis and assessment of the current situation in the field of public cyber security administration in the financial and credit sector of the economy were applied. To assess the current situation and summarize the industry’s work in recent years, a content analysis of the statistics of hacks and leaks of various kinds of information was performed. Digital data were obtained from open Internet sources, processed by methods of financial, graphical and trend analysis, then formalized and systematized. Results: all banking operating systems being digitized and procedures and work protocols being complicated require new powerful resources implemented into daily work monitoring technologies. The procedure proposed by the Central Bank of Russia to implement smart technologies into credit operations enables strengthening cyber security of banking systems, which is to become one of the key development trends of the financial sector in the near future.

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1649–1658, 2021. https://doi.org/10.1007/978-3-030-59126-7_180

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G. V. Fedotova et al. Conclusions/Relevance: this paper has identified new development trends in the financial sector with respect to ongoing changes and sophistication of information security improvement systems. Keywords: Credit organizations technologies
Digitalization JEL Code:: G21


Bank
Cyber resilience
Smart


G24
G28
O32

1 Introduction For the first time, the term “cyber resilience” was used in the document of Bank for International Settlements (BIS) “CPMI, Cyber resilience in financial market infrastructures, November 2014” that defined cyber resilience as “the ability to anticipate, withstand, recover from and adapt to adverse conditions, stresses, attacks or compromises on systems that include cyber resources”. The cyber resilience of a credit institution is not only the ability to withstand fraudsters and hackers’ attacks, but also the ability to calculate and predict possible system hacks and quickly restore performance of the system. High cyber resilience allows a bank to work with resources as efficiently as possible and without interruptions, provide its customers and counterparties with complete protection of personal information, and maintain high liquidity and mobility of responds to credit inquiries. Information leakage statistics over the past 10 years shows an increase in cases recorded by InfoWatch Analytical Center (Fig. 1).

1400

35%

1276

31.9%

30%

1200 1039

1000

840

800 9.1%

400

359

392

20%

723

18.1%

600

25% 22.8%

925

23% 654

7.1%

16.2%

15%

496 420

10.6%

291

10.1%

11.2%

5%

200 0

10%

0% 2009

0% 2010

2011

2012

2013

2014 units

2015

2016

2017

2018

1П 2019

growth

Fig. 1. Information leaks according to InfoWatch

The data leakage dynamics presented in Fig. 1 has a steady upward trend. For the first half of 2019, 1276 data leakage incidents were recorded, which is more by 22.8% than in 2018. These facts require reconsidering our approach to providing information

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system security and look for new tools and mechanisms to replace ineffective protection. Leaked information can be not only financial information, but also any personal information that could harm reputation. The presented statistics demonstrates the most problematic sectors of the economy where leaks occur Fig. 2.

Banks and Finance 58.10% Other 36%

Municipal Administration 51.40%

Education 37.50% Government and Security Agencies 49%

Health Care 56.10%

Trade and HoReCa 62.50%

High tech 65% Industry and Transport 50%

Fig. 2. Sector statistics of information leaks, %.

According to Fig. 2, the sector statistics shows that in 2019 the largest number of data breaches was 65% in High Technologies; Banks and Finances industry ranked 3rd with 58.1%. So, the first three sectors in the list, i.e., high technology, trade and HoReCa, banks and finance, attract main fraudsters’ attention. Repeating hacker attacks and hacks, as well as information leakages make credit organizations to strengthen measures to ensure the safety of internal information. The government also monitors the situation. To ensure the cyber security of economic systems, two approaches have been developed and long applied in the practice, i.e. 1) planned cyber resilience based on resources to response quickly and correct consequences of cyber attacks; and 2) adaptive cyber resilience, when a company invests in human resources that allow quick respond and solution at any hour of danger. Russia does not prefer any specific approach and uses both in practice. Companies invest in improving the information literacy of personnel and provide for reserves to finance the consequences of cyber attacks. Nevertheless, regulatory structures make efforts to prevent possible hackers’ attacks and regularly check the status of cyber security systems in credit organizations. The Central Bank of Russia conducted 109 inspections of credit organizations for their cyber resilience in 2019; 730 security incidents were revealed in banking systems. Based on the results of the inspections, sanctions were imposed to violators, and a

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report entitled “Guidelines for the Advancement of Information Security in the Financial Sector for 2019–2021” was compiled. The main goal of the report is to update “smart technologies” (AI, BigData, and IoT) in the financial sector.

2 Materials and Method Smart technology today is the basis of the information communication in developed countries. Its widespread use in all areas of economics and management allows intensifying and maximizing production and technological breakthrough. The digitalization entails a number of global threats that can imbalance the operation of digital platforms, as they violate their integrity and do not fully protect users. In this regard, there is a need to strengthen traditional database protection tools due to smart technologies. Today, certain experience of researching smart technologies has been accumulated in various sectors of the national economy, the horizons of their capabilities have been identified, and the enormous potential of their use in countering threats has been determined. Some researchers studied the issue of the artificial intelligence being developed and its regulation being ensured (Marsden and Sonnino 2008; Mizyun 2008; Kharitonenkov 2011; Gordin 2015; Dudin et al. 2018; Fedotova et al. 2018; Chugumbaev et al. 2020; Giannakis and Bruggeman 2015; Cheyns et al. 2017; Kuznetsov et al. 2018). The technologies of computer vision and machine learning have been extensively applied and were studied by the authors (Shapiro et al. 2006; Zimin et al. 2006; Korolev 2010; Vizilter et al. 2010; Kuznetsov et al. 2017; Fedotova et al. 2019). A review of scientific and practical publications of Russian and foreign economists has proved the relevance of this research area. The ongoing transformation of the financial sector requires strengthening protection measures and cyber stability, including due to smart technologies implemented into the practice of banks. The methodological base of the research includes the method of systemic, problem and graphical analysis, as well as the program-target method and formalization method.

3 Results The cyber resilience of a credit institution is a comprehensive capability of the entire information architecture to protect the financial sector and market regulators. Confronting cyber threats, successful forecasting attacks and prompt resuming operations within 1–2 h after hacking—all these characterize the credit institution as a stable and reliable link in the financial infrastructure. The financial sector is constantly under pressure from fraudulent malware emailshotting and SMS messages. Recently, cybercriminals have been trying to use “smart things” as criminal tools, which forces financial services and the RF Ministry of Communications to intensify interactions. The increasing number of cyber attacks, especially in the financial sector, has caused international concern. In the World Economic Forum report 2018, cyber attacks

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Table 1. Statistics of the most popular cyber attacks on financial sector for the period of 2H 2018 – 1H 2019. Fraud type

Trojans fraud from juridical entity Android Trojans fraud from individuals Targeted Bank Attacks Phishing Cashing stolen funds

Successful attacks

Average amount of theft, RUB 250000

2H 20181H 2019, RUB 62250000

1

Average amount of 1 theft, RUB 500000

5

40

11000

440000

109560000

3

0

31000000

0

93000000

11

435

800

348000 467100

86652000 158157900

Number of groups 2

are called global technological risk. Cyber attacks vary in composition. The most popular types and amounts of theft are presented in Table 1. According to Table 1, cyber fraud is aimed primarily at small amounts of theft from the accounts of individuals, using Android Trojans (RUB 109.56 million). In the world, there are some groups of fraudulent organizations that specialize in certain types of cyber fraud. These include the “Russian-speaking troika”—Cobalt, Silence and MoneyTaker, as well as North Korean Lazarus (North Korea) and SilentCards (Kenya). Moreover, there are emerging organizations, specializing in cyber fraud. In recent years, the number of crimes, involving social engineering and telephone fraud, has increased. The international community has noted that the growth in profit losses from cyber attacks, periodically repeated malfunctions in global financial markets, and massive data leakage from classified databases are becoming a global trend in the development of digital technologies. The emergence of new types of crime and new tools makes the financial regulator constantly monitor and flexibily prevent system hacks and proactively implement preventive technologies into protection systems. The Bank of Russia regularly monitors unauthorized transactions from legal accounts in credit institutions and unauthorized transactions using payment cards issued by Russian banks Fig. 3. The statistics provided by the Information Security Department of the Bank of Russia demonstrates a decrease in the number of unauthorized transactions in legal entities’ accounts, while the amount of illegal transactions with payment cards of Russian banks increased in 2018. It is necessary to pay attention to this trend and take appropriate measures.

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4 3.5 3 2.5

1.89

2

1.57

1.469

1.5 1.384

1 1.14

0.5 0 2014.5

2015

1.08

2015.5

2016

0.961

2016.5

Accounts of legal entities, billion RUB

2017

2017.5

2018

2018.5

Payment cards of Russian banks, billion RUB

Fig. 3. Unauthorized operations recorded by the RF Central Bank, RUB billion.

According to the report of the Bank of Russia on the development of the credit and financial environment until 2021, the ways to ensure the industry’s cyber stability were identified, i.e., – – – – – – – –

controlling and monitoring the rate of information threats and risks, controlling the level of unauthorized banking financial transactions, prompt response to computer attacks, maximum protection of consumer rights, standardization of information security and cyber resilience, Inter-agency cooperation on security issues, tracking the activities of illegal participants in the financial market, and development of information security culture in society.

Let us dwell on some measures in more detail. Today, much attention is paid to preventive measures, ensuring the cyber resilience. Such a tool for preventing unauthorized operations with customer accounts is the prototype AS “Feed-Antifraud” aimed at collecting and quick exchanging data on legality of operations without customer authorization Fig. 4.

8037

7797

2324 157 cards

Personal accounts

529 Electronic purse

86 TIN

2 Passport hashes

Phones

SNILS hashes

Fig. 4. Unauthorized operations reports transmitted, August 31, 2019

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Fig. 5. Scheme of Anti-Fraud work in credit institutions

Figure 4 provides information on the number of unauthorized operations reports transmitted to FinCERT by Anti-Fraud. The main data collected by a system of that kind is aimed at collecting hashed data of recipients’ passport numbers on operations without customer authorization; hashed recipients’ SNILS data on operations without customer authorization; lists of TINs of organizations that are recipients on operations without customer authorization; lists of recipients’ accounts and BIC on operations without customer authorization; lists of recipients’ cards numbers on operations without customer authorization; lists of recipients’ telephone numbers on operations without customer authorization; and lists of recipients’ electronic wallet numbers on transactions without customer authorization.

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The Anti-Fraud operation is based on the principle of machine learning, since there is no human factor in its algorithm. In this case, the AI elements support the interaction between the operation center and all customer accounts and allow instant informing. We can say that the Anti-Fraud work is based on the BigData methodology and, moreover, is implemented in its practice. The credit institutions’ Anti-Fraud operation scheme presented in Fig. 5 gives a partial insight of the complex interaction mechanism that starts and instantly triggers in any reasonable report on atypical banking operations. In fraud incident, Anti-Fraud not only protects banking operating and remote service systems, but also processes a huge amount of data and makes decisions based on them. Information security is associated with the data exchange between participants that develop the level of cyber resilience of financial organizations. FinCERT ASOI operates as part of the financial sector; all RF banks and other financial structures and governing bodies are currently connected to it. The membership is presented in Fig. 6.

Other organizations Antivirus companies Software developers Authorities Security software developers Telecoms operators Payment systems Non-state pension funds EAEU banks Insurance market entities Securities Market Participants Non-Bank Credit Organizations Credit organizations

32 2 19 3 4 3 8 47 4 167 81 41 415

Fig. 6. Membership of FinCERT ASOI

FinCERT ASOI data exchange system includes about 826 participants—various businesses companies. The membership at the end of 2019 is presented in Fig. 6. The biggest part of the participants is credit institutions (415) and insurance market entities (81). The membership also includes IT companies, telecom operators, government agencies, etc. In addition to domestic data exchange, it is necessary to establish international cooperation with credit organizations of foreign countries. Four national EAEU banks have already been connected to FinCERT ASIC. The agreements between countries will make it possible to develop a single cyber resilience information space in the financial sphere. The single financial cyber resilience space requires the search for mechanisms to predict and minimize the risks of the consequences of cyber attacks.

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4 Conclusion Obvious is the fact, that digitalization cannot stop, since huge databases require careful attention to their security. Current information platforms, services and programs should not only work, but constantly become more complicated, modernize and increase their cyber resilience. Constant and ever-increasing cyber attacks on the resources of the financial sector force us to look for new approaches and tools to strengthen the cyber resilience of credit organizations. The emerging trends of fraudsters to use “smart things” in the criminal business require smart technologies being implemented to strengthen the security of information systems and protect the data on customers of credit organizations. Acknowledgments. The reported study was funded by RFBR according to the research project No. 18-010-00103 A.

References Dudin, M.N., Lyasnikov, N.V., Reshetov, K.Y., Smirnova, O.O., Vysotskaya, N.V.: Economic profit as indicator of food retailing enterprises performance. Europ. Res. Stud. J. 21(1), 468– 479 (2018) Gordin, M.D.: Scientific Babel: The Language of Science from the Fall of Latin to the Rise of English. ProfileBooks, London (2015) Fedotova, G.V., Ilyasov, R.K. Kovalenko, O.A., Tkachenko, D.D., Malyutina, T.D.: Imperatives of forecasting of socio-economic development of Russian economy. In: Popkova, E.G. (ed.) The Future of the Global Financial System: Downfall or Harmony: [materials of conference (Limassol, Cyprus, 13–14 April, 2018)], pp. 908–921. Springer, Cham (2018) Chugumbaev, R.R., Fedotova, G.V., Nesterenko, Y.N., Chugumbaeva, N., Barilenko, V.I.: Strategic Control as a Tool of Effective Management of Region’s Economy. Lecture Notes in Networks and Systems. Springer, Cham (2020) Fedotova, G.V., Chugumbaev, R.R., Chugumbaeva, N.N., Sukhinin, A.V., Kuzmina, E.V.: Increase of Economic Security of Internet Systems of Credit Organizations. Lecture Notes in Networks and Systems. Springer, Cham (2019) Kharitonenkov, A.S.: The evolution of the administrative-legal mechanism of management of national projects and state programs. State Adm. 26(1), 39–44 (2016) Korolev, L.N.: Evolutional computations, neuronet, genetic algorithms – formal statements. J. Math. Sci. 168(1), 80–88 (2010) Mizyun, V.A.: Intellectual Enterprise Management. Publishing House of the St. Petersburg Academy of Management and Economics, Saint Petersburg (2008) Marsden, T., Sonnino, R.: Rural development and the regional state: denying multifunctional agriculture in the UK. J. Rural Stud. 24(4), 422–431 (2008) Cheyns, E., Daviron, B., Djama, M., Fouilleux, E., Guéneau, S.: The standardization of sustainable development through the insertion of agricultural global value chains into international markets. In: Biénabe, E., Rival, A., Loeillet, D. (eds.) Sustainable Development and Tropical Agri-chains, pp. 283–303. Springer, Dordrecht (2017) Giannakis, E., Bruggeman, A.: The highly variable economic performance of European agriculture. Land Use Policy 45, 26–35 (2015)

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VizilterYu, V., ZheltovS, Yu., Bondarenko, A.V., Osokov, M.V., Morzhin, A.V.: Image processing and analysis in machine vision problems: course of lectures and practical exercises. Fizmatkniga, Moscow (2010) Shapiro, L., Stockman, J.: Computer Vision. Per. from English Moscow: Laboratory knowledge, 752 p. (2006) Kuznetsov, Y.V., Anokhina, E.M., Zhigalov, V.M., Melyakova, E.V.: Formation of ivanov region textile industry sustatnability development on the basis of regulatods of large, medium and small business enterprises activity. Izvestiya Vysshikh Uchebnykh Zavedenii, Seriya Teknologiya Tekstil’noi Promyshlennosti 5(1), 66–70 (2018) Kuznetsov, Y.V., Goncharenko, L.P., Kochetova, Y.N.: Innovations as a factor of increasing the competitiveness of enterprises of textile industry. Izvestiya Vysshikh Uchebnykh Zavedenii, Seriya Teknologiya Tekstil’noi Promyshlennosti 370(4), 37–40 (2017) Zimin, A., Otto, V., Filimonova, N., Fedosova, R., Kuznetsov, Y.: New type of regions in the innovation economy. Adv. Sci. Lett. 22(8), 2002–2006 (2006)

Development of the Vocational Education Ecosystem of an Enterprise: The Role of Advanced Learning Technologies Mikhail B. Flek1(&) 1

and Ekaterina A. Ugnich2

Rostvertol, Don State Technical University, Rostov-on-Don, Russia [email protected] 2 Don State Technical University, Rostov-on-Don, Russia [email protected]

Abstract. Purpose: This paper is aimed at revealing the subject-matter and specifics of the vocational education ecosystem of an enterprise as well as analyzing the role of advanced learning technologies in its development. Design/methodology/approach: This research focuses on the ecosystems approach based on a systems paradigm. The versatility of the ecosystems approach also allows using it in the study of social and economic processes, in particular, for the educational and personnel training system. The foundations of the stakeholders theory, direct subjective methodology, and case study method were used in this work to assess the effectiveness of a vocational education ecosystem. The effectiveness of the vocational education ecosystem is assessed on the basis of assessment of importance of knowledge and skills and satisfaction with knowledge and skills gained in process of training in its organizations. Findings: The authors of the paper reveal the essence of the vocational education ecosystem based on the integration of educational establishments and an enterprise. The overriding priority of the vocational education ecosystem of an enterprise is to provide its personnel with the necessary skills. The structure of the vocational education ecosystem is revealed from the perspective of its subject matter. It has been shown that the interactions between different entities of the ecosystem, as well as between them and the environment, produce synergistic effects. They, in turn, are responsible for the development of the vocational education ecosystem. Particular emphasis is made on the importance of stability of the ecosystem. The results from the analysis of the functioning of the vocational education ecosystem confirmed that it is efficient for solving the problem of providing the enterprise with the necessary personnel. The prospects for the development of the vocational education ecosystem can be seen in the improvement of learning mechanisms and the active dissemination of smart learning technologies, including those aimed at enhancing the integration of education with the community of professionals. Originality/value: The presented concept of a vocational education ecosystem based on the integration of educational establishments and the enterprise open up new vistas for solving the problem of providing the enterprise with the necessary personnel. The presented methods for assessing the effectiveness of the vocational education ecosystem of an enterprise allows identifying the problems of its functioning and potential for further development. © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1659–1669, 2021. https://doi.org/10.1007/978-3-030-59126-7_181

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M. B. Flek and E. A. Ugnich Keywords: Vocational education ecosystem
Enterprise Personnel of an enterprise
Interaction
Smart learning JEL Classification: I23


University



I25
O15

1 Introduction In the context of development of post-industrial society and the increasing intellectualization of the economy, the gap between the required “quality” of human resources and the available educational system is a major problem for many domestic enterprises. According to the research conducted by the Boston Consulting Group, Russia ranks 89th in terms of availability of skilled personnel. In addition to the above, 35% of graduates of domestic colleges and 25% of graduates of higher education establishments (Graduate Employability Monitoring, 2017) are unable to obtain employment in the trade learned, usually due to the lack of vacancies. In addition, knowledge obsolescence is a major problem for enterprises, especially high-tech enterprises, since the “half-life” of the latter in knowledge-intensive industries is less than 2.5 years. Industrial enterprises are badly in need for young skilled professionals with a certain skillset. However, by no means all graduates of redbrick universities meet these requirements today. That said, about 65% of graduates themselves claimed that the main cause of this problem is the absence of demand for knowledge acquired at the university. These and several other problems cannot be solved without joint efforts of the enterprise and various educational establishments. Within the scope of this association, basic departments are often created, the principle of which is based on the dual practice-oriented training, which proved successful both in Russia and abroad (Remington, 2017; Flek and Ugnich, 2019). There is also a more complex version of this association – the formation of vocational education ecosystems which are based on continuous acquisition of necessary knowledge, skills and experience on the principle of “lifelong learning” (Ugnich, Flek, 2019).

2 Research Materials and Methods As the focus of economy researchers has shifted from actors to systems, this leads us to revise approaches to the analysis of economic phenomena and processes. It is the systems approach that allows creating a unified research space for the whole set of social and economic phenomena (Popkova and Tinyakova, 2013). The concept of ecosystems which is supported by the system paradigm (Kornai, 2002) is fairly often addressed in modern social and economic research and is motivated by the search for a new scientific foundation that would allow gaining insight into economic activity development patterns (Moore, 1993). This concept is increasingly used to explore study open systems with a considerable number of heterogeneous participants with diverse inter-relations (Jarvi, Almpanopoulou and Ritala, 2018). In this paper, the concept of ecosystems is applicable to the study of interaction of the enterprise with educational establishments with a view to providing the enterprise with the necessary

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personnel. The systemic nature of this interaction, as well as mutual relations of the enterprise and related educational establishments with the environment in which they operate, suggest the existence of a vocational educational ecosystem (hereinafter referred to as VEE) (Flek and Ugnich, 2018). In order to interpret the essence of the VEE, the authors of this research applied the basics of the theory of stakeholders (Freeman, 1984) which explains the development strategy from the viewpoint of stakeholders, direct subjective methodology (Maltseva, 2019) which is based on the assessment of results achieved in the ecosystem by its participants, as well as the case study method (Yin, 2003) which allows analyzing current phenomena in actual practice. The efficiency of the VEE was assessed using the example of a large helicopter building enterprise - Rostvertol, PJSC. The empirical basis for assessing the efficiency of the VEE is composed of results of the two surveys of its participants, conducted in 2017 and 2019, concerning the importance of knowledge and skills gained in process of training and satisfaction with them. A perceptual map was constructed based on the results of the survey. The Needs & Gaps method (Galport and Azzam, 2017) was used to clearly demonstrate the benefits and drawbacks of the VEE, as well as its potential for further development.

3 Results 3.1

The Essence of the Vocational Education Ecosystem

The term “ecosystem” in the context of social and economic sphere gained currency late at the 20th century after the paper by J. Moore was published. However, there is no single general notion of socioeconomic ecosystems at present. In our opinion, the most complete definition was presented by Kleiner, G.B., according to which a socioeconomic ecosystem is a “geographically localized socioeconomic formation with a set (population) of interacting independent economic, social or organizational actors and their groups, as well as the products (results) of their activity, capable of independent functioning and development for a significant period of time due to the circulation of physical, information, energy and other resources” (Kleiner, 2019). That said, it is emphasized that the processes of cooperation and competition are implemented simultaneously. For the purposes of this research, while somewhat simplifying and complementing the abovementioned notion, we shall define VEE as a special socioeconomic ecosystem, namely, a geographically localized, complex dynamic system, consisting of a set of interrelated independent actors, their operational environment, the interaction between themselves and this environment, and the products (results) of their activity. The product results from the coordinated interaction (cooperation) and/or uncoordinated interaction (competition) referred to above, which can lead to both positive and negative synergistic effects. The need for a certain collaborative environment for the actors, in which synergistic effects occur, is emphasized by the prefix “eco” to the word “system”. We shall present a brief description of the VEE. It is aimed at continuous provision of the enterprise with the necessary personnel. While biomass is the product (result) of

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a biological ecosystem, human capital is such product in the VEE. On the other hand, the main resource flow in the VEE is knowledge/skills, both formalized and nonformalized. It was the enterprise that initiated the establishment of the VEE. Apart from the enterprise, educational establishments included in the process of personnel training for the enterprise as part of the chain “general secondary education – vocational secondary education – higher education – further vocational education”, are included in the VEE as well. The presence of at least one basic department in the VEE is mandatory, since it is a single educational platform of the university and the enterprise, which forms the bulk of skilled personnel of the enterprise. The VEE is not just a complex of participants and their interrelationships, but also an environment (which is determined, for example, by the level of development of scientific-technological progress, the state of the sector in which the enterprise carries out its activities, the educational system, etc.), certain integration mechanisms developing the interactions of participants and the adjustment mechanism that serves as a basis for the stability and self-development of the ecosystem (Kleiner, 2019). The stability of the ecosystem is achieved both through the exchange of resources between the interacting participants and through the adjustment of the composition of participants as such, thus ensuring their diversity. Each participant has its own “niche” (a definite place in the ecosystem) and there is an important stability condition (Popov, Simonova, Tikhonova, 2019). The composition of participants (actors) from the perspective of identification of “niches” can also be presented as follows: – students who strive to gain knowledge and skills for the required qualifications; – teachers imparting knowledge/skills; – employees of the enterprise (graduates) who acquired the necessary knowledge/skills in the course of education in educational establishments of the ecosystem, – managers of the enterprise and its structural subdivisions, focused on increasing the efficiency of the enterprise. In general, successful performance of the VEE can mainly be judged by the ability to provide the enterprise with personnel having necessary knowledge/skills. 3.2

Assessment of the Performance of the Vocational Education Ecosystem

We can illustrate the performance of the VEE through the example of the ecosystem of Rostvertol, PJSC, a major helicopter manufacturer being part of the holding “Russian Helicopters”. This ecosystem includes, apart from the enterprise itself and its structural subdivisions (workshops, departments, training centers), two specialized colleges, schools, and the Don State Technical University (DSTU), in particular, the basic department of Aircraft Engineering established in 2002 in cooperation with the DSTU. In our opinion, the analysis of the performance of the VEE should be based on the availability of knowledge/skills of various participants and their satisfaction with them (Flek and Ugnich, 2019); the composition of these participants was previously identified from the perspective of the four “niches”.

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For the abovementioned four groups of participants of the VEE, Rostvertol, PJSC conducted surveys in 2017 and 2019 on the importance and satisfaction of the general cultural, general professional, special knowledge and practical skills developed in the VEE. The mean values of estimates of respondents based on the results of surveys are presented in Table 1.

Table 1. Results of the survey on importance of and satisfaction with knowledge/skills gained in the learning process, 2017 and 2019 Indicators/ “attributes”

Year Mean value of significance

General professional knowledge (1) Special professional knowledge (2)

2017 4.65 2019 4.48

4.26 4.31

4.02 4.40

4.01 4.38

4.58 4.07

3.99 3.92

3.39 3.87

3.63 4.11

2017 2019 2017 2019 2017 2019

4.48 4.93 4.40 4.40 4.55 5

4.27 4.50 3.71 4.24 4.34 5

4.49 4.79 3.67 3.90 4.53 4.81

4.31 3.82 4.19 4.33 4.63 4.33

4.24 4.56 4.00 3.25 4.11 4.67

3.56 4.00 4.04 4.06 3.74 4.5

4.42 4.49 4.01 4.02 4.03 4.86

Common cultural knowledge (3) Practical skills (4)

Mean value of satisfaction

Chief Teachers Graduates Students Chief Teachers Graduates Students executives executives

4.92 4.53 4.59 4.38 4.73 5

Note. Table 1 presents the mean values of assessment of importance of knowledge and skills and their satisfaction with them by respondents (“attributes”) on a scale of 1 to 5, where 5 is of importance/totally satisfied; 1 is of no importance/totally dissatisfied. At the same time, managers pointed out the importance of this knowledge for the employees of the enterprise and their satisfaction with it; teachers pointed out the importance of this knowledge for the students (future employees); graduates of the department (employees of the enterprise) and students pointed out the importance of their own knowledge.

Data in Table 1 are indicative of a certain change in assessment of the importance of knowledge/skills by respondents and their satisfaction with them. The second survey (in 2019) showed that the majority of respondents generally appreciated the importance of knowledge/skills provided by the VEE more highly. However, while graduates (employees of an enterprise) in 2019 pointed out an increase in their level of satisfaction with knowledge and skills, managers, on the other hand, pointed out a lower level of satisfaction with them (except for common cultural skills (3)). The increase in managerial demands is partly attributable to the rapid obsolescence and development of new professional knowledge under the influence of the fourth industrial revolution. In order to show more vivid characteristics of the key knowledge/skills developing in the VEE, we will construct a perceptual map using the Needs & Gaps method (Galport and Azzam, 2017). In order to depict the perceptual map, we shall construct a coordinate plane for each of the four groups of respondents (separately based on the results of the 2017 and the 2019 survey). The points of origin of coordinates (mean values in terms of importance and satisfaction for the entire set of “attributes”) are presented in Table 2.

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Table 2. Central points for 2017 and 2019 perceptual map of each group of participants of the VEE Indicator 2017 Significance Satisfaction 2019 Significance Satisfaction

Chief executives Teachers Graduates Students 4.72 4.43

4.23 4.09

4.09 3.68

4.18 4.02

4.60 4.14

4.66 4.1

4.53 4.11

4.47 4.37

The generation of perceptual maps allows ranking the “attributes” based on their importance and satisfaction with them. The “attributes” in the upper right quadrant (I) are characterized by high importance and high satisfaction. The lower right quadrant (II) is a quadrant of secondary advantages or possibilities. The upper left quadrant (III) describes a basic deficiency. The lower left quadrant (IV) includes “attributes” with low importance and low satisfaction. Data shown in Fig. 1(a–d) are indicative of a qualitative change in the results of functioning of the vocational education ecosystem. For example, in 2019, there was no basic deficiency in the assessment of all groups of respondents (in 2019, Quadrant III was empty for all four groups of respondents). That said, all groups of respondents still consider practical skills to be the key advantage of the ecosystem (4): according to the results of both the 2017 and 2019 surveys, this “attribute” is in the Quadrant I on perceptual maps of all groups of respondents. Therefore, the vocational education ecosystem retained its key advantage. As for the assessment of the vocational education ecosystem of specialized knowledge by managers and graduates (2), the attributes have shifted from Quadrant III to Quadrant IV, that is, despite the fact that they have ceased to be a basic deficiency in the assessment of these respondents, their importance has decreased. In 2019, all four groups of respondents assess that general professional knowledge (1) falls into Quadrant IV as well. The presence of the “attribute” in quadrant IV means that it is assessed by respondents as being hardly suitable for professional activity in a business environment. It appears that potential reasons for this include the rapid obsolescence of knowledge as well as shortage of time to study the subjects constituting “attributes” (1) and (2) in the curriculum. These reasons are also responsible for the presence of the general cultural knowledge (3) in Quadrant IV in 2019 according to the assessment of three groups of respondents except senior officers. Taken as a whole, it may be noted that there has been a consolidated interaction among the participants of the VEE for the recent two years thanks to involvement in various joint scientific and research events (conferences, competitions, projects, etc.). The revision and amendment of curricula, as well as the distribution of advanced learning technologies, can be a source of increased importance of professional and cultural knowledge and satisfaction with it.

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Fig. 1. (a) Perceptual maps for heads of the enterprise and its structural subdivisions (2017 and 2019). (b) Perceptual maps for teachers of the VEE (2017 and 2019). (c) Perceptual maps for graduates of the VEE (2017 and 2019). (d) Perceptual maps for students of the VEE (2017 and 2019)

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Fig. 1. (continued)

3.3

Advanced Learning Technologies as a Source of Improvement of Efficiency of the VEE

Today, the need for the introduction of digital technologies in the process of education leaves no doubt, since the digital environment gives greater freedom of choice in learning, reduced learning costs and increased information transmission rate (Geliskhanov and Yudina, 2018). The digital environment exerts influence on the

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development of e-learning, complementing it with new technologies and techniques (Meskhi, Ponomareva and Ugnich, 2019). E-learning shall be understood to mean learning with the use of information and telecommunication technologies, which may imply the interaction of the teacher with the audience both in real time (synchronous learning) and with a time lag (asynchronous learning or self-paced learning) (Hrastinski, 2008). In addition to the above, one should take into account the dual nature of e-learning, which, on the one hand, has a progressive beginning (Mcpherson and Nunes, 2008) associated with the use of new information technologies that increase accessibility and flexibility of learning, and on the other hand, represents “disruptive innovations” (Hardaker and Singh, 2011), driving out traditional educational methods and techniques (but not necessarily suggesting the improved quality of education). In our opinion, the most appropriate technology for the development of the VEE will be the introduction of smart learning, which is also based on the progress of information and communication technologies. The following basic principles of smart learning may be identified (Hurlebaus, Stocks and Ozbulut, 2012): 1. The use of up-to-date knowledge and the latest advances in science and technology for teaching objectives in the educational program. 2. Organization of independent research and project activities of students, stimulation of their creative activity. 3. Implementation of teaching and learning activities in a distributed learning environment, that is, not only within the university campus. The learning process should be continuous and involve learning in a professional environment using the means of professional activity. 4. Interaction of students with the community of professionals. The teaching of students by teaching practitioners is a key condition for the functioning of the VEE, whereas information technologies provide students with new opportunities to participate in activities of professional associations, to see how tasks are solved by professionals. 5. Flexible educational paths, individualization of learning that shall be understood to mean learning according to individual curricula, providing the students with the opportunity to learn the knowledge/skills that suit their capabilities, needs and interests to the fullest extent. The improvement of student training mechanisms consists in securing their interaction with advanced knowledge-intensive and computer technologies on a regular basis. In practice, students must apply the book knowledge gained since the first days of their job training, solving real world problems posed by the enterprise. A special feature of modern training of engineers consists in their ability to carry out digital design, mathematical simulation, 3D printing, and to implement projects related to improvement of performance characteristics of machines and structures, preparation of elements of optimized structure designs for manufacture using the additive technology method.

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4 Conclusion The integration of educational establishments and enterprises which is primarily aimed at providing the enterprise with personnel with the necessary skills, is at the heart of the VEE. The development process of the VEE itself is based on complication of its structure and improved adaptation to changing external conditions based on continuous updating. The efficiency of the VEE can be judged by the assessment of its performance. The assessment of dynamics of development of the VEE of a helicopter manufacturer is generally indicative of an improvement in its efficiency. Participants of the VEE noted that its basic advantage was the acquisition of practical skills by the holders of human capital of an enterprise. It is particularly remarkable that this advantage was pointed out by all groups of survey respondents both in 2019 and 2017. This suggests the stability of the ecosystem. The prospects for the development of the VEE can be seen in the improvement of learning mechanisms and the active dissemination of smart learning technologies aimed at enhancing the integration of education with the community of professionals.

References Flek, M.B., Ugnich, E.A.: Human capital formation of the enterprise: the role and experience of the specialized department of the pillar university. In: Advances in Economics, Business and Management Research, vol. 79, pp. 289–291 (2019). https://doi.org/10.2991/iscfec-19. 2019.81 Flek, M.B., Ugnich, E.A.: Professional and educational cluster as an ecosystem: development in the conditions of digital transformation. J. Econ. Regul. 9(4), 146–159 (2018). (in Russian) Freeman, R.E.: Strategic Management: A Stakeholder Approach. Cambridge University Press, Boston (1984) Galport, N., Azzam, T.: Evaluator training needs and competencies: a gap analysis. Am. J. Eval. 38(1), 80–100 (2017) Geliskhanov, I.Z., Yudina, T.N.: Digital platform: a new economic institution. Qual. Access Success 19(S2), 20–26 (2018) Hardaker, G., Singh, G.: The adoption and diffusion of e-learning in UK universities: a comparative case study using Giddens’ theory of structuration. Campus Wide Inf. Syst. 28(4), 221–233 (2011) Hrastinski, S.: Asynchronous & synchronous e-learning. Educause Q. 4, 51–55 (2008) Hurlebaus, S., Stocks, T., Ozbulut, O.E.: Smart structures in engineering education. J. Prof. Issues Eng. Educ. Pract. 138(1), 86–94 (2012) Jarvi, K., Almpanopoulou, A., Ritala, P.: Organization of knowledge ecosystem: prefigurative and partial forms. Res. Policy 47(8), 1523–1537 (2018) Kleiner, G.B.: The economics of ecosystems: a step into the future. Ekonomicheskoe Vosrozhdenie Rossii 1(59), 40–45 (2019). (in Russian) Kornai, J.: Sistemnaya paradigma [The system paradigm]. Probl. Econ. 4, 4–23 (2002). (in Russian) Maltseva, V.: The concept of skills mismatch and the problem of measuring cognitive skills mismatch in cross-national studies. Educ. Stud. Moscow (3), 43–76 (2019)

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Moore, J.F.: Predators and prey: a new ecology of competition. Harv. Bus. Rev. 71(3), 75–86 (1993) McPherson, M.A., Nunes, J.M.: Critical issues for e-learning delivery: what may seem obvious is not always put into practice. J. Comput. Assist. Learn. 24(5), 433–455 (2008) Meskhi, B., Ponomareva, S., Ugnich, E.: E-learning in higher inclusive education: needs, opportunities and limitations. Int. J. Educ. Manag. 33(3), 424–437 (2019) Monitoring of graduate employability. Ministry of Science and Higher Education of the Russian Federation, M. (2017) Popkova, E.G., Tinyakova, V.I.: Dialectical methodology of analysis of economic growth. World Appl. Sci. J. 24(4), 467–475 (2013) Popov, E.V., Simonova, V.L., Tikhonova, A.D.: Factor model of development of innovation ecosystems. Innovatsii 10(252), 88–100 (2019). (in Russian) Remington, T.F.: Public-Private Partnerships in VET: Translating the German Model of Dual Education/National Research University Higher School of Economics, Institute of Education. HSE Publishing House, Moscow (2017) Ugnich, E.A., Flek, M.B.: Vocational education ecosystem in a knowledge economy/state management: Russia in worldwide policy. In: Proceedings of the XVII International Conference – Moscow: Universitskaya Kniga (2019). (in Russian) Yin, R.K.: Case Study Research Design and Methods. Sage, Thousand Oaks (2003)

Infrastructure Maintenance of “Smart Technologies” for Entrepreneurship in the Agricultural Machinery Market: Needs vs. Opportunities Tatyana N. Litvinova(&) Volgograd State Agrarian University, Volgograd, Russia [email protected]

Abstract. Purpose: The purpose of the work is to substantiate the prospects of entrepreneurship development in the Russian market of agricultural machinery based on “smart technologies”, to determine the current level and develop recommendations to ensure the sufficiency of infrastructure maintenance for this process. Design/Methodology/Approach: In order to determine the current strategic development of agricultural engineering in Russia (according to the data as of the end of 2019 – beginning of 2020), the work is done to characterize and conduct a plan-fact analysis of the strategy implementation of the studied market. The scenario analysis of the strategic development of the Russian agricultural machine-building industry for the period from 2020 to 2030 is conducted. The statistics on the digitalization of entrepreneurship in the market of agricultural machinery in Russia as part of the manufacturing industry, % of enterprises that use appropriate technologies are also analyzed. Findings: The model of the digital enterprise in the market of agricultural machinery, managed on the basis of “smart technologies” has been developed. The needs and sufficiency of infrastructure maintenance of “smart technologies” for digital entrepreneurship in the market of agricultural machinery have been assessed. It has been substantiated that the prospective scenario of strategic development of entrepreneurship in the Russian market of agricultural machinery implies its digitalization. At present, the practical implementation of this scenario is complicated by the deficit of infrastructure maintenance of “smart technologies”, the sufficiency of which is estimated at 49%. Originality/Value: It has been proved that digital marketing should become the key area of application of “smart technologies” in entrepreneurship on the agricultural machinery market. The specifics of the digitalization of entrepreneurship in this market is that it should not become “smart” itself, but its products should – so production of “smart” agricultural machinery is recommended. The proposed approach will allow achieving a systemic effect of modernization of the agricultural machinery market and maximize its contribution to national food security. Keywords: Infrastructure maintenance
“smart technologies
Entrepreneurship
Agricultural machinery market
Food security Opportunities
Needs
Russia




© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1670–1677, 2021. https://doi.org/10.1007/978-3-030-59126-7_182

Infrastructure Maintenance of “Smart Technologies” for Entrepreneurship JEL Code: H54

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L26
O13
O14
O31
O32
O33
O38
Q13
Q16

1 Introduction Against the backdrop of increasing global challenges to economic security, the management of its food dimension at the level of national economies is becoming increasingly important. Improved national food security will stabilize economic systems and possibly reduce the amplitude of global economic fluctuations that is destabilized by the volatility of demand for key international trade products (including fuel and energy resources). In the interests of ensuring national food security, Russia is implementing a number of governmental and regional initiatives to establish import substitution for food products. Although agriculture is at the core of these initiatives, an important role is assigned to the production of domestic agricultural machinery, which determines the effectiveness of agricultural activities. In order to successfully fulfil this role, the Government of the Russian Federation (2020) approved the Strategy for the Development of Agricultural Machine Building of Russia for the Period until 2030 by Order No. 1455-r of July 7, 2017. The adopted strategy outlined the general boundaries and requirements of the state and society to the agricultural machinery market in the long term, and formed the basis for monitoring its development. Nevertheless, there is still uncertainty about the approach to practical implementation of this strategy. The working hypothesis of this research is that the digital economy opens up opportunities for practical implementation of the strategy of development of the Russian agricultural machinery market based on “smart technologies”, but the lack of infrastructure does not allow to use these opportunities. The purpose of this work is to substantiate the prospects for entrepreneurship in the Russian agricultural machinery market based on “smart technologies”, to determine the current level and develop recommendations to ensure the sufficiency of infrastructure maintenance for this process.

2 Materials and Method The general issues of infrastructure maintenance for the digital economy and “smart technologies” have been studied in sufficient detail and disclosed in the works of Andronova et al. (2019), Belik et al. (2020), Haabazoka et al. (2019), Ivanov et al. (2019), Pichkov (2016), Popkova (2019), Popkova and Gulzat (2020a), Popkova and Gulzat (2020b), Popkova and Sergi (2018), Popkova and Sergi (2019), Popkova and Sergi (2020), Popkova and Zmiyak (2019), Ragulina (2019), Ragulina et al. (2019), Sergi (2019), Sergi et al. (2019), Shulus et al. (2020), Cтpeлeц (2017), Zavyalova et al. (2018). Specifics of functioning and development of entrepreneurship in the market of agricultural machinery is reflected in the works of Litvinova (2020a), Litvinova (2020b), Litvinova (2020b), Litvinova (2020c), Litvinova (2020b), Litvinova (2020c),

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(2020d). Thus, the available sources of research literature do not sufficiently disclose the prospects for digitalization in the agricultural machinery market, nor do they adequately describe the required and existing infrastructure maintenance for “smart technologies”, which requires further research to fill the identified gaps. In order to determine the current strategic development of the agricultural machinebuilding industry in Russia (according to the data as of the end of 2019 – beginning of 2020), the work is done to characterize and conduct a plan-fact analysis of the strategy implementation of the studied market (Table 1). Table 1. Characteristics and plant-fact analysis of the strategic development of agricultural machine building in Russia in 2020 (as of the beginning of the year) Agricultural engineering strategic development indicator

Indicator value in 2020

–

34.74

Difference in actual value from the planned one Difference Ratio, % – –

–

−45.99

–

–

–

−0.3

–

–

–

Top-1: 31.6 – Top-3: 64.16 Top-10: 80.45 Top-50: 99.39 60 −16.00

Plan Fact Characteristics Production capacity utilization level, % Loss from sale of agricultural machinery, RUB billion Profitability (loss) of sold agricultural machinery, % Coefficient of production concentration, %

–

−21.05 Domestic agricultural machinery 76 products share in the domestic market, % −13.80 −69.00 Ratio of export and shipments of 20 6.2 agricultural machinery products to the domestic market, % Agricultural engineering 115 −113.6 −228.60 −198.78 production index, % Revenue from sales of – 151.65 – – agricultural machinery, RUB billion Investments in fixed assets, RUB – 5.2839 – – billion Share of R&D expenses in total 1.4 3.48 (author’s 2.08 148.57 revenue of agricultural machine evaluation) building enterprises Source: Compiled and calculated by the author on the basis of materials: National Research University “Higher School of Economics”, Development Center (2020), Government of the Russian Federation (2020). Plan-fact analysis

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As shown in Table 1, the relevant problem of the Russian agricultural machinery market is its monopolization (high production concentration ratio). This leads to unprofitability of entrepreneurship in the market under consideration (loss in 2020 amounted to RUB 45.99 billion, profitability of sales: −0.3%). Russia is characterized by dependence on import of agricultural machinery (share of domestic business: 60%), insignificant export (6.2%), decline in production (production index: −113.6%). Nevertheless, the high (exceeding the plan) innovative activity of entrepreneurship in the Russian agricultural machinery market opens up prospects for accelerating its development. Scenario analysis of the strategic development of the Russian agricultural machinery industry for the period from 2020 to 2030 is shown in Fig. 1.

Fig. 1. Scenario analysis of the strategic development of the Russian agricultural machinery industry in the period from 2020 to 2030 Source: Designed and built by the author.

As can be seen from Fig. 1, at present (2020) the goals of the strategy for the development of the Russian agricultural machinery market are scheduled to be met by approximately 60%, but in fact they are only met by 30%. “Provided other conditions are equal” the plan will not be fulfilled by 2024. Moderate innovative development will also prevent the plan from being implemented. The most promising scenario is the digitalization of entrepreneurship in the Russian agricultural machinery market based on “smart technologies”. Statistics on the digitalization of entrepreneurship in the Russian agricultural machinery market as part of the manufacturing industry in early 2020 is shown in Fig. 2.

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Fig. 2. Statistics on the digitalization of business in the Russian agricultural machinery market as part of the manufacturing industry, % of enterprises using appropriate technologies Source: Compiled by the author on the basis of the National Research University “Higher School of Economics” (2020).

As can be seen from Fig. 2, in general, digital technologies are available and actively used in the manufacturing industry of Russia and in the market of agricultural equipment, being a part of this industry. Internet access is available to 91.6% of enterprises, while 85.1% of enterprises use information protection tools (anti-virus programs). This opens wide prospects for successful implementation of the scenario of digitalization of entrepreneurship in the Russian market of agricultural machinery based on “smart technologies”.

3 Results It is recommended that the proposed scenario is based on the developed model of a digital enterprise in the market of agricultural machinery managed on the basis of “smart technologies” (Fig. 3). As shown in Fig. 3, the developed model assumes not total, but selective digitalization of entrepreneurship in the Russian agricultural machinery market. The model takes into account the lack of financial and human resources to robot production and focuses on digital marketing. This will help to achieve customer orientation of entrepreneurship in the Russian agricultural machinery market and import substitution. It is necessary to establish production of “smart” agricultural equipment, monitor its operation on a regular basis and modernize it. The assessment of the need and sufficiency of infrastructure maintenance of “smart technologies” for digital entrepreneurship in the market of agricultural machinery was made in Table 2.

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Fig. 3. Model of a digital enterprise in the market of agricultural machinery managed on the basis of “smart technologies” Source: Designed and compiled by the author. Table 2. Infrastructure maintenance of “smart technologies” for digital entrepreneurship in the agricultural machinery market Infrastructure maintenance opportunities not adapted to the specifics of the agricultural machinery market Technology for analytics need on exist but are not widely of Big Data preferential terms available Ubiquitous computing mass availability severe shortage, single is required supply is under development, Internet of Things Internet intellectualization the Internet is massively available is needed Cloud technologies public cloud cloud technology is marketing highly developed, widely databases available In total, “smart technologies” for the agricultural machinery market

Element of infrastructure maintenance: “smart technology” Artificial intelligence for digital marketing

Infrastructure maintenance needs specialised software is required

Source: Designed and compiled by the author.

Infrastructure sufficiency assessment 80%

10% 5% 50%

100%

(80 + 10 + 5 +50 + 100)/ 5 = 245/5 = 49%

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As can be seen from Fig. 2, the assessment showed that, on the whole, “smart technologies” (including the Internet, cloud technologies, and some capabilities of intellectual data analytics) are available in Russia. The sufficiency of infrastructure maintenance of “smart technologies” for digital entrepreneurship in the agricultural machinery market is generally estimated at 49%. Prospects for the development of infrastructure maintenance for “smart technologies” for digital entrepreneurship in the agricultural machinery market are associated with increased price and quantity availability, as well as with the adaptation of existing technologies to market specifics.

4 Conclusion So, the promising scenario of strategic development of entrepreneurship in the Russian agricultural machinery market suggests its digitalization. Currently, the practical implementation of this scenario is complicated by the deficit of infrastructure maintenance of “smart technologies”, the sufficiency of which is estimated at 49%. Digital marketing should become the key area of application of “smart technologies” in business on the agricultural machinery market. The specifics of the digitalization of entrepreneurship lies in the fact that it is not the market itself which should become “smart”, but its products – namely, production of “smart” agricultural equipment is recommended. The proposed approach will allow achieving a systemic effect of modernization of the agricultural machinery market and maximize its contribution to national food security.

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Litvinova, T.N.: Managing the development of digital infrastructural provision of entrepreneurial activities in the agricultural machinery market. Lect. Notes Netw. Syst. 87, 424–431 (2020c) Litvinova, T.N.: Managing the development of infrastructural provision of AIC 4.0 on the basis of artificial intelligence: case study in the agricultural machinery market. Lect. Notes Netw. Syst. 87, 317–323 (2020d) Pichkov, O.B.: Social Inequality in the US and Canada. Int. Trends 2(2(3)), 85–92 (2016) Popkova, E.G.: Preconditions of formation and development of industry 4.0 in the conditions of knowledge economy. Stud. Syst. Decis. Control 169, 65–72 (2019) Popkova, E.G., Sergi, B.S.: Human capital and AI in Industry 4.0. convergence and divergence in social entrepreneurship in Russia. J. Intell. Capit. 21(4), 565–581 (2020) Popkova, E.G., Gulzat, K.: Technological revolution in the 21st century: digital society vs. artificial intelligence. Lect. Notes Netw. Syst. 91, 339–345 (2020a) Popkova, E.G., Gulzat, K.: Contradiction of the digital economy: public well-being vs. cyber threats. Lect. Notes Netw. Syst. 87, 112–124 (2020b) Popkova, E.G., Zmiyak, K.V.: Priorities of training of digital personnel for industry 4.0: social competencies vs technical competencies. On the Horizon 27(3–4), 138-144 (2019) Popkova, E.G., Sergi, B.S.: Will Industry 4.0 and other innovations impact Russia’s development? In: Exploring the Future of Russia’s Economy and Markets: Towards Sustainable Economic Development, pp. 51–68. Emerald Publishing Limited, Bingley (2018) Popkova, E.G., Sergi, B.S.: Digital Economy: Complexity and Variety vs. Rationality. Springer, Heidelberg (2019) Ragulina, Y.V.: Priorities of development of industry 4.0 in modern economic systems with different progress in formation of knowledge economy. Stud. Syst. Decis. Control 169, 167– 174 (2019) Ragulina, Y.V.,Alekseev, A.N., Strizhkina, I.V., Tumanov, A.I.: Methodology of criterial evaluation of consequences of the industrial revolution of the 21st century. Stud. Syst. Decis. Control 169, 235–244 (2019) Sergi, B.S.: Tech, Smart Cities, and Regional Development in Contemporary Russia. Emerald Publishing Limited, Bingley (2019) Sergi, B.S., Popkova, E.G., Bogoviz, A.V., Litvinova, T.N.: Understanding industry 4.0: AI, the internet of things, and the future of work. Emerald Publishing Limited, Bingley (2019) Shulus, A.A., Akopova, E.S., Przhedetskaya, N.V., Borzenko, K.V.: Intellectual production and consumption: a new reality of the 21st century. Lect. Notes Netw. Syst. 92, 353–359 (2020) Zavyalova, E.B., Studenikin, N.V., Starikova, E.A.: Business participation in implementation of socially oriented Sustainable development goals in countries of Central Asia and the Caucasus region. Cent. Asia Caucasus 19(2), 56–63 (2018) National Research University “Higher School of Economics”, Development Centre. Agricultural machinery market (2019) (2020). https://dcenter.hse.ru/data/2019/12/18/1523096077/%D0% A0%D1%8B%D0%BD%D0%BE%D0%BA%20%D1%81%D0%B5%D0%BB%D1%8C% D1%81%D0%BA%D0%BE%D1%85%D0%BE%D0%B7%D1%8F%D0%B9%D1%81% D1%82%D0%B2%D0%B5%D0%BD%D0%BD%D1%8B%D1%85%20%D0%BC%D0% B0%D1%88%D0%B8%D0%BD-2019.pdf. Accessed 19 Feb 2020 National Research University “Higher School of Economics”. Digital Economy (2019) (2020). https://www.hse.ru/primarydata/ice2019kr/. Accessed 19 Feb 2020 Government of the Russian Federation. Strategy for the Development of Agricultural Machine Building in Russia until 2030, approved by Order No. 1455-r of 7 July 2017 (2020). http:// static.government.ru/media/files/Ba4B6YDTiuOitleLkDQ05MCbz4WrfZjA.pdf. Accessed 19 Feb 2020 Strelets, I.A.: Cartoon effects in networks. World Economy and International Relations 61(6), 77–83 (2017)

Tasks of Preparing Smart Managers for Smart Business Marina B. Zhernakova(&) , Tatiana Yu. Krotenko and Irina A. Rumyantseva

,

State University of Management, Moscow, Russia [email protected], [email protected], [email protected]

Abstract. Problem and Purpose of Work. The rapid changes taking place today in the world around us – politics, economy, society, information space – cannot but affect the business environment, business and production activities of people. Improvement of technologies and information systems, high speed of changes causing the necessity of quick decision making require from managers not only professionalism and certain personal qualities, but also constant development. This raises the problem of training specialists who are able to meet these requirements. It can be stated that today smart business requires smart managers for its successful development in the labor market. The goal is to analyze the main trends of changes in the world and society that affect business, and assess its provision with employees, including managers, appropriate for the new environment. Methodology. In the course of the research, the problems of providing business with the appropriate employees for the current situation were studied. The methods used in the study allowed conclusions to be drawn on the basis of statistical data, publications in the open press, on sites, as well as on the basis of results of the author’s survey of students. Results. The basic tendencies of changes in the conditions of business activity and problems in providing its professional staff corresponding to a modern situation are revealed. It is proposed to solve the problem of inconsistency of professional digital competences and lack of desire for professional and personal development of employees by building a system of continuing education. Conclusion. For successful business development it is necessary to ensure the ability and willingness of employees of organizations to change, their desire for professional development and digital literacy. In this regard, it is advisable to build a system of continuing education. Keywords: Knowledge society Change
Business
Managers JEL Code: A22


Digitalization
Continuing education



I21
O32
O38

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1678–1686, 2021. https://doi.org/10.1007/978-3-030-59126-7_183

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1 Introduction In the context of this article, we will put the following meaning into the terms “smart business” and “smart managers”. SMART in the professional environment of managers is often associated with the widely known method (technology) of defining goals and setting objectives. However, this is not the case in this context. First of all, we will understand the word “smart” in literal translation from English, which makes sense – clever. Dictionaries of the Russian language define a clever person as an “intelligent”, “conscious”, “reasonable” person. The dictionaries of synonyms add that a clever person is a person who is “intelligent”, “thinking”, “wise”, “comprehensive”, “prudent”, and this is not yet a complete list of synonyms. Is it possible to use this word for the area of managers’ professional activity in business? We believe such positive qualities as wisdom, prudence, etc. must necessarily be inherent in people involved in management and business. But something else must be added there – something more specific and more appropriate to the present moment. This “something” concerns not the qualities of an individual person, an employee, but the field of activity as a whole. The question of what makes a business “smart” today, what “smart managers” are needed for its success, where to take them and how to prepare them for professional activity is central to this study. The issue of successful business and good management has been the subject of numerous studies and a lot of literature was published on these topics (Davison et al. 2018). However, as the situation changes over time, the recipes for success also change. Currently, the following trends are observed that affect people’s business activities and the results they achieve. The growth of large and medium-sized companies today is ensured by high technology based on knowledge. Back in the second half of the twentieth century, American sociologist R. Lane introduced the concept of “knowledge-based society”. In theory, a person in such a society receives knowledge from various sources. In this case, on the way to life goals people improve their knowledge. They are most often guided by objective truth, using the basis of ideas about nature, society, and man. Another American sociologist D. Bell, developing the concept of “knowledge society”, argued that knowledge forms the potential for economic growth, provides a transition to a post-industrial society. At this, on the one hand, innovations emerge as a result of scientific developments, i.e. they originate in science, as it is the main source of everything new and advanced, but on the other hand, the “weight of society”, which is usually measured in GDP and the degree of employment, is steadily shifting into the field of knowledge. Today, “knowledge society” is defined as a society in which the main product is knowledge, not capital or labor. At the same time, it is recognized that knowledge is a resource that has the property to reproduce itself infinitely (Konstantinov et al. 2019). Thus, the economic dimension of knowledge was recognized as the basic dimension, and the term “knowledge-based economy” was used. Knowledge in such an economy is the basis for the development and high competitiveness of any social system. In addition, high-tech products and quality services contribute to the welfare of members of society. Thus, the availability of knowledge and its constant

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development are the main requirements for modern business, which put it in the category of “smart”. Another trend observed today in the practice of human activity, including in business, is the high rate of change of all kinds. As a result, professional knowledge becomes obsolete extremely quickly, some business methods and management methods become unusable, and serious changes take place in the external environment of companies. As a consequence, there is a need to react quickly, often quickly, to changes (Lokuge et al. 2019). Another area of change is digitalization. If we look at this process in its relation to business and management activities, it becomes obvious that for them, the introduction of new production technologies, technologies for collecting, processing information and, in part, decision-making are becoming manifestations of digitalization (“Digital Economy of the Russian Federation” Program 2017). This is another aspect of the formation of modern smart business and another factor that cannot be ignored in solving the task of training smart managers for it (Udaltsova 2019). Changes in the operating environment entail changes in the management of these organizations. It can be stated that today the demand for professionalism and personal qualities of managers is changing (Tsalikova and Pakhotina 2019). Development logic requires that the state task of digitalization supports the directions of business development towards smart business, and the need of business for smart professionals encourages applicants to seek higher education that would allow them to become competitive on the labor market (Rumyantseva 2018). Thus, smart businesses need smart competencies, and this creates a special demand for higher education. Specifically for a management university, it should be emphasized that it is not only and not so much about specific technological details, but also about the formation of the ability to think algorithmically, as well as the ability to quickly master any additional competences required at the moment (Krotenko and Zhernakova 2019). Today, managers are trained in specialized educational organizations – in universities and specialized secondary educational establishments. There are numerous, though not systematically structured, institutions for professional development (Khramtsova and Mayboroda 2019). In addition, managers continue to acquire a significant proportion of their professional knowledge through on-the-job experience. At the same time, modern changes in the nature and content of work require constant development of the employee, including professional development and training. The blistering nature of change leaves very little time for people to adapt. Very often, however, it is not just training that is needed, but also retraining. Continuing education becomes a requirement of time (Ellis and Bliuc 2019). Continuing education today is implemented in different variants, which differ from each other in type and content of education. Each of them claims to be systematic, competes with others in the educational and political field and emphasizes the relative independence of the object from the structures of formal education, moving away from the practice of long-term training within the walls of one educational institution. At present, continuing education is one of the main areas of research in education in general. The idea of continuity is being approached by foreign and domestic practitioners, psychologists, researchers and experimenters. Nevertheless, despite the renown

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of many theoretical statements, continuing education remains the largest, most complex and controversial research space in educational theory and practice. Continuing education is also a philosophical theory, in which learning lasts for an individual all his or her life. This is also a huge area of psychological and pedagogical practice, where a person is constantly and purposefully mastering the sociocultural experience of generations. This is also the principle of coordinating the work of educational institutions of the state and regions. Finally, it is a comprehensive world social and cultural trend with a certain way of thinking (Journal “Continuing Education: XXI Century” 2020). Continuing education is a far-reaching unifying idea; it reconciles “compulsory” and “optional” learning in its space. The process of personal, cultural, social and professional development throughout a person’s life is carried out to improve the quality of their life. Continuing education presupposes motivated learning – both in fragmented and continuous mode – to improve competencies in the conditions of globalization of world processes, exponential scientific and technological progress, digitalization (Romanov 2018). American specialist P.H. Coombs in his book “The Crisis of Education in the Modern World” analyses in detail the institutional problems and states the breakthrough in the value system concerning education. He studies the products of the educational system and the extent to which it meets the needs of society. French scientist T. Lovet is interested first of all in the issues of non-institutional and spontaneously organized education. Such education is more flexible in terms of timing, form and content. In addition, it meets the diverse cultural needs of different categories of education consumers, stimulates unconventional thinking and is more receptive to new technologies of education (Salehan et al. 2018). Clubs at museums and theatres, library-based courses, even television programs, etc., operate outside the institutional system, responding to people’s needs in a certain way, but at the same time they generously open up new educational horizons for man. In fact, for the first time “informal” education is brought up, which includes all kinds of educational activities not connected with purposeful processes of organization and coordination (Soboleva et al. 2018). This type of education, which can be delivered individually or in groups, is now recognized because it meets the attitudes and behavior patterns of contemporaries. At the State University of Management, research, seminars and conferences have been held for several years to study these problems. In particular, one of such studies allowed studying the needs for smart competence of students studying in management specialties of the University (Kuptsova and Rumyantseva 2019).

2 Methodology The main methods were desk research and survey of management students of the State University of Management in order to understand their readiness to study and apply specific information technologies. The methodological basis for theoretical analysis and conclusions was provided by the materials of official sites of research and educational institutions of the world, which have the terms “knowledge society”, “digitalization”, “continuing education” in their titles.

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We also turned to the works of foreign and domestic scientists and practitioners on the essence of digitalization in economics and education.

3 Results In the course of the research, an analysis was made of the compliance of the quality of managers with modern business conditions. Attention was focused on the analysis of human resources in terms of the readiness of employees to operate, taking into account modern trends in business management. The analysis shows that nowadays human resources used in business activity do not fully correspond to modern conditions. For example, the motivation of employees to improve their professionalism is quite low. This conclusion was made as a result of the analysis of data obtained in the surveys conducted by the “FOMnibus” center in 2014 and 2015 in 100 settlements of the Russian Federation and covering 1500 respondents (no detailed surveys were conducted later) (Ideal of Management in the Traditional Culture of Russia and China 2019). The survey results showed that 66% of employees in 2014 and 61% of employees in 2015 did not want to continue their education, get another specialty or additional knowledge and skills. Young people (under 30 years) with higher education and low income level are ready to continue their education. That is, a little over a quarter of people are ready to develop professionally and continue their education. At the same time, even among those people who have expressed their desire to continue their education (27% of those surveyed), only a fifth (21%) is really inclined to it. This is evidenced by the fact that when answering the question “when are you going to continue your education, to get another specialty or additional knowledge, skills?” they answered that they were going to do it within the following year. 38% of respondents were going to deal with it within 1–5 years, 29% have not yet decided and are not even sure that they will succeed. That is, out of all those who positively evaluated the prospect of their studies, almost a third of respondents perceive this prospect positively, but in isolation from reality. If we consider only those respondents who have a positive attitude to obtaining additional education, the survey results show that 49% would like to get additional higher (or second higher) education; 22% of respondents are ready to get additional education in computer, language, accounting courses (with a diploma or certificate); 19% – in advanced training courses. At this, secondary vocational education and various courses without proper documentation are of little interest to most respondents (8% and 7% respectively). Besides, answers to the question of what higher education is for show that among the most popular answers are: “to work in a high position” (49% of those surveyed in the group “population as a whole”), “to earn a lot” (47%), “to get the desired profession, interesting work” (40%), “to be engaged in mental rather than physical labor” (29%). The answers “to broaden knowledge and horizons” and “to reveal abilities and talents” are 24% and 18% respectively. The above data, in our opinion, shows that a significant part of people are interested in additional training primarily as an opportunity to subsequently improve or confirm their existing status, rather than for the purposes of their professional development.

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Employers cannot be satisfied with the low motivation of employees for professional development. For the purpose of ensuring efficient work of enterprises and organizations, it is extremely important to have qualified employees with the modern level of knowledge. The unwillingness to improve their work skills is an extremely undesirable behavior. In 2018–2019, the NAFI Research Center conducted a study on “Digital Literacy for the Future Economy”. According to these studies, 45% of Russians today have a high level of digital literacy. The analysis of employees’ attitude towards digitalization of processes in production and management shows that 65% of employees are afraid of losing their jobs due to the development of new technologies. 23% of employers also acknowledge the possibility of such reduction. Due to such concerns, Russian employees generally acknowledge the need to acquire knowledge in the field of digital technologies, but only 24% of employees believe that they may lose their jobs due to their absence (Official website of the NAFI Research Center 2020). Moreover, young people (up to 31 years old) are more aware of this threat. They make up 31% of those surveyed. This trend is also confirmed by the results of an author’s study at the State University of Management (Moscow). The survey conducted among management students of the State University of Management was aimed at assessing whether they have a conscious need to study and apply specific information technologies. The questionnaire asked students to assess the needs of future managers to study and apply specific information technologies to ensure the successful functioning of the organization. The questionnaire was structured in such a way that it included seven types of information technologies, specific tools within each type, and an additional line titled “Other” allowing the interviewee to identify those types and tools that were not included in the questionnaire. For all respondents, the following types of answers were the most popular. The first place was taken by programming languages, the second place was held by various means of data analysis, the third place – by corporate IT systems, the fourth – by databases, the fifth – by marketing tools for product promotion in social networks. In the case of study groups, only one choice for different data analysis tools exceeded the choice of programming languages. In all other groups, the five most popular types of IT coincide with the ones obtained in the final line. The analysis also showed that the respondents’ choice of the types of IT that are already in use is less than what students think is necessary in the future (see Fig. 1). This indicates that students are aware of the increasing trend of digitalization in the future. In general, the results of the study allowed us to conclude that future managers are quite definitely aware of the need to master IT competences (Baskakova and Soboleva 2019). At present, according to the NAFI study, the digital literacy rate of a quarter of the adult population of Russia remains low. In our opinion, the data on the desire/willingness of employees to acquire knowledge about technological innovations by age categories are of interest (Table 1).

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Fig. 1. The result of respondents’ choice of IT types necessary for future activities Table 1. Desire/willingness to acquire knowledge about technological innovation, % of respondents by age group I try to keep up with technological developments and follow trends I don’t keep up with new developments and trends in technology

All respondents 36

18–24 68

25–34 61

35–44 41

45–54 26

55+ 11

64

32

39

59

74

89

As can be seen from the above data, only 36% of respondents try to keep up with technological innovations. And most of these people (68%) are young people (18–24 years old). Practice shows that the majority of managers, including in business, are older people, so they have less desire to monitor new technologies (41, 26 or even 11%), which has a negative impact on business results in today’s conditions. Thus, based on the results of various surveys and studies, it can be concluded that currently employees, including managers, do not fully meet the requirements of modern business environment. They are not ready to be engaged in maintenance of their professional level, to adapt to constant and fast changes, to learn on a permanent basis to successfully perform work using new digital technologies.

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4 Conclusion and Recommendations To address the problem identified, it is necessary to improve the system of training managers in the formal education system and to ensure the functioning of a system of continuing professional development (if necessary – retraining) of employees (Bostic et al. 2019). It should be noted that today there is already a tradition to consider continuing education as a complex process aimed at ensuring the gradual comprehensive development of the personality. It includes elements of “formal”, i.e. specially organized education, and self-education. If we consider continuing education on the organizational level, it should be noted that it should be implemented as a whole complex of educational institutions based on different forms of ownership. This complex as a whole should constitute and ensure the substantive and organizational unity, interrelation and continuity of various links and levels of education. In particular, it should provide advanced training of employees or their necessary retraining. This most complex conglomerate should take into account real and prospective social and economic, technical and technological needs, geopolitical and national-regional peculiarities and, most importantly, personal educational goals, abilities and opportunities of a person. The abilities, desires and opportunities of a large number of people to learn throughout their lives are those significant characteristics of educational trends that should be taken into account by public authorities in any developed country as a great source of potential for human capital development at the national level. The idea that education is a leading factor in the economic development of any state, and not just a form of consumption provided by industrial growth, has in fact initiated the development of the idea of “human capital” and the need to invest in its development. The same factor is associated with the solution of the task of training smart business managers to meet its requirements.

References Baskakova, M.E., Soboleva, I.V.: New facets of functional illiteracy in the digital economy. Educ. Issues 1, 244–263 (2019) Bostic, J.D., Krupa, E.E., Carney, M.B., Shih, J.C.: Reflecting on the past and looking ahead at opportunities in quantitative measurement of k-12 students’ content knowledge. In: Bostic, J., Krupa, E., Shin, J. (eds.) Quantitative Measures of Mathematical Knowledge: Research Instruments and Perspectives, pp. 205–229. Routledge, New York (2019) Davison, R.M., Ou, C.X.J., Martinsons, M.G.: Interpersonal knowledge exchange in china: the impact of guanxi and social media. Inf. Manag. 55(2), 224–234 (2018) “Digital Economy of the Russian Federation” Program, approved by Decree of the Government of the Russian Federation, no. 1632-R of 28 July 2017 Ellis, R.A., Bliuc, A.-M.: Exploring new elements of the student approaches to learning framework: the role of online learning technologies in student learning. Act. Learn. High Educ. 20(1), 11–24 (2019) Khramtsova, N.G., Mayboroda, T.Y.: Approaches to the development of digital competencies of law students. Perspect. Sci. Educ. 37(1), 80–93 (2019)

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Konstantinov, V., Sakulyeva, T., Makeeva, V.: Development of economic tools for managing regional innovation clusters. J. Entrep. Educ. 22(1), 1–9 (2019) Krotenko, T.Y., Zhernakova, M.B.: Competencies of the manager of the digital revolution era. Bull. Univ. 5, 23–27 (2019) Kuptsova, E.V., Rumyantseva, I.A.: On the transdisciplinary approach to the formation of modern manager’s competencies. Educ. Sci. Russ. Abroad 63(15), 221–234 (2019) Lokuge, S., Sedera, D., Grover, V., Dongming, X.: Organizational readiness for digital innovation: development and empirical calibration of a construct. Inf. Manag. 56(3), 445–461 (2019) Official website of the analytical center NAFI. https://nafi.ru/about/profile/. Accessed 7 Feb 2020 Romanov, E.V.: Trends in the development of higher education in the context of creating a system of training and professional growth of scientific and scientific-pedagogical personnel. Perspect. Sci. Educ. 35(5), 33–43 (2018) Rumyantseva, I.A.: Organization’s readiness for digital transformation. Problems of interaction in the conditions of digitalization. Step into the future: artificial intelligence and the digital economy. In: Proceedings of the II International Scientific Forum, vol. 2, pp. 279–285 (2018) Salehan, M., Kim, D.J., Lee, J.N.: Are there any relationships between technology and cultural values? A country-level trend study of the association between information communication technology and cultural values. Inf. Manag. 55(6), 725–745 (2018) Soboleva, E.V., Sokolova, A.N., Votintseva, M.L.: Model of cognitive activity in the digital environment of the quandary text maze. Perspect. Sci. Educ. 35(5), 221–230 (2018) Zakharov, M.Y. (ed.): The ideal of governance in the traditional culture of Russia and China. State University of Management, Moscow (2019) Journal “Lifelong education: the XXI century”. http://lll21.petrsu.ru/. Accessed 7 Feb 2020 Tsalikova, I.K., Pakhotina, S.V.: Research on the formation of soft skills (review of data in international databases Scopus, Web of Science). Educ. Sci. 21(8), 187–207 (2019) Udaltsova, N.L.: Digitalization of economic processes in the context of the industrial revolution 4.0. Creat. Econ. 13(1), 49–62 (2019)

Concept of Marketing Models Combining at Stages of Innovative Startup Implementation Boris Tokarev(&)

, Sergey Shkarovskiy

, and Natalia Soldatova

State University of Management, Moscow, Russian Federation [email protected], {shkarov,pankratova_n_f}@mail.ru

Abstract. The article is devoted to the study of marketing concepts related to innovative products. Modern marketing theory concerning innovative startups is underdeveloped. There is no basic marketing framework without which startupers can hardly understand what can be and should be done for success. Now, the determining factor of startup development is practice, and theory states and explains principles based on developed cases. The proposed material examines approaches to the organization of innovative startup marketing. It is shown that marketing should be dramatically reordered at pre-startup and startup stages. At the PreSeed stage, marketing is focused on prediction to assess the market opportunities of the future product. At the Seed stage, the product is developed and adjusted to the demands of future consumers, therefore marketing is targeted at understanding their needs. At this stage, it is proposed to implement Agile techniques, which allow us to accelerate the development. MVP sales is launched among the first innovative customers and marketing events are developed and held. Further growth of innovative product sales requires modification of the marketing mix and its extension to strategic marketing. Finally, we get a combined marketing model of an innovative startup with all the above stages. Keywords: Startup


Marketing
Marketing mix
PreSeed
Seed

JEL Code: M31

1 Introduction This paper aims to assess the state of marketing theory concerning innovative startups to examine the possibility of designing a general concept of a startup marketing mix with an account of its development stages. The startup market is very diversified. Startups are launched with the hope that new product succeed on the market and the startuper will achieve an ambitious entrepreneurial goal. Successful innovative products offer consumers to satisfy their needs in an easier, faster, better, and cheaper way. These are their merits, but the drawback consists in the uncertainty of the result. The success or failure of a startup depends on a myriad of factors such as a really good idea, the startup team and the organization of its work, the technical and other capabilities of innovation, funds, available sales channels, sufficient number of © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1687–1695, 2021. https://doi.org/10.1007/978-3-030-59126-7_184

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consumers who are ready and able to accept a new product, the ability of entrepreneurs to attract and retain partners. This is the essential but not exhaustive list of factors for startup success. The way of marketing application is also of fundamental importance. The startup is developed according to a certain logic. Typical stages of a startup include PreSeed, Seed, the start of sales (launch), and further development along a particular path (Cooper 1990, 2014). Before the launch, tricky situations may occur that often hamper the implementation of a good idea in a market product. At the development stage, an innovative product is often to be deeply refined and brought step by step to a form that would be acceptable to future customers. The vision and the actual content of the product are changing during critical transitions: from an idea to a prototype, and then to MVP (Ries 2011) start sales, then to growth and further to a market niche, its development and further scaling by expanding the product range. With that, entrepreneurs take main efforts firstly to development of the technology, then to a product, and after that to the marketing and work activity management (Moore 1995). Each transition necessitates the readjustment to the subsequent stages of the project. Moreover, all the critical stages of innovative startup strongly correlate with the need for dramatic changes in marketing actions. Unavailable data on future startup consumers and statistics on the innovation product market, the uncertain thinking of innovation customers, deficiencies of econometric approaches—all the points require new marketing solutions for innovative startups. Before writing this article, we put forward the hypothesis that shifting from PreSeed to Seed stage and ultimately to Startup-Launch takes an adaption of marketing and reconfiguration of the toolbox. The author set the task to propose and theoretically substantiate the concept of marketing combination, which has proved to be effective in supporting innovative startup projects.

2 Background and Methodology For covering the stated topic of the research we have to rely on three methodological sources, namely startup cases, the theory of innovations, and the theory of marketing of innovations. F. Kotler wrapped the concept of the marketing mix into a convenient 4P model (Kotler 1986); (Kotler 2011). Later, the scientists adapted the model to different markets and expanded the range of the traditional marketing mix to 5P and 6P (Volkmann and Berg 2020), and even to 12P (Rapp and Collins 2019). For the sake of simplicity, let’s denote a variety of P marketing mix concepts with symbol nP understanding n as all possible variations. In 1990, Lauterborn published his work (Lauterborn 1990), which gave impetus to the development of consumer priority and declared the 4C model. It is focused on the consumer’s nature, his needs, and desires, functions performed by the product for the consumer, his evaluation of costs for its acquisition and use, ease, and acceptability of buying.

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F. Kotler mentions Lauterborn’s model in terms of the need for understanding the consumers (Kotler 2001). His model called The New-Product-Development Decision Process uses the stages of concept development and testing as well as marketing strategy development but boils down to it. Later he (Kotler et al. 2010), endeavored to lay emphasis on consumers but paid little attention to consumers of innovative products. The review revealed that any innovative marketing model wasn’t suggested for innovative startups. V. Davidow made an important conclusion that technological marketing and high-tech marketing (its subtype) are much different than other types of marketing (Davidow 1986). Unfortunately, the author did not offer a viable model for high-tech products. J. Moore advanced in this field and built a high-tech marketing model (Moore 1995). The author believes that high-tech marketing represents a set of specific actions intended for a particular group of consumers. It’s a landmark conclusion for this paper. Ettenson and co-authors adhere to the opinion that the conventional 4P concept is not suitable for B2B corporate businesses. Their model is SAVE that means solution, access, value, education (Ettenson and Conrado 2013). Thus, they shift the marketing focus from the product to a solution that can be put into practice and evaluated. We see something in common with this concept for the launch stage of the startup, when for developed product one search for the most winning solution to find the target audience and hold training during sales start. Entrepreneurs are trying to make up a deficiency of a scientific concept for startup marketing. Authors of writings on innovative startups pay attention to practical considerations (Kawasaki 2015; Merkoski 2013; Cagan 2014). The recommendations are based on cases. Regularities identified in analyzing the successes and failures of startups do not guarantee the viability of an innovative startup. An integrated approach to startups is presented in the works of famous startupers (Blank 2005; Blank and Dorf 2012; Alvarez 2014; Ries 2011) et al. Steve Blank has focused on marketing (Blank 2005). The practical model under his proposition proved to be viable, as evidenced by numerous citations. Blank and Dorf worked out the start-up guide (Blank and Dorf 2012), having attached special attention to the technology of marketing provision of the project from idea to product line. Such approaches don’t answer the question about how marketing helps to raise the chances of a particular startup for success. Could the common marketing principles expressed in nP models be applied in innovative startups? Judging by given recommendations, the answer is “yes, everyone does this”. Why are the results so unsatisfactory? (Wasserman 2016). In this paper, we propound a concept applicable to the marketing of innovative startups, including high-tech ones (Tokarev 2018). A key factor of the proposed work is the result of our study showing that in the course of the development a startup gradually moves from one market to another (Tokarev and Shkarovskiy 2019). We have established that each stage of a startup is correlating with a special market situation, which necessitates regard to the nature of market forces and different types of consumers and requires special marketing tools.

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The market shift should retarget the entrepreneur to new goals and marketing tools. The startup team has to change the principles of marketing activities during implementation. At the startup stages, entrepreneurs get in contact with unique consumers. This requires special competencies and an understanding of marketing possibilities in principle, a clear vision of what can be and cannot be attained with it, rigorous selection, and application of different marketing principles and communication with consumers. It’s hard and very painful for startup-team to shift to new forms of marketing planning. Often, an entrepreneur has to load himself with most tasks. Startupers should plan in advance subsequent marketing actions and be ready for them to lower risks and uncertainty. The search for applications of an innovative idea and its verification is carried out through marketing research tools of predictive and analytical nature. The PreSeed stage takes place in the context of the struggle of ideas for innovative applications, and the ideas themselves are sold and purchased thereby creating a specific international market for ideas. The Seed stage rises the need to arrange simultaneous product development and consumer analysis for acceptance and willingness to pay the established price. At this stage, the startup is acting in the market of technology, development, and investment. The main goal is the product for the future consumer. It is far from certain that it will be exactly such as entrepreneurs imagine. But to understand it and set its features is a hard problem of this stage. Consumer-oriented marketing (Best 2005) claims marketing of the future, a non-existing product that will be in demand by consumers. To develop the technology and the product based on it is only half the battle, but the main thing is to create a product for the market. Responsibility for this is assigned to marketing. The pre-sales stage is the time to decide on the price of the offer (Ramanujam and Tacke 2016), promotion techniques, sales channels, and practical arrangements with partners. This means for a team a transition to a new market 2013 – the market of startups. Startups that manage to overcome all the obstacles encounter other problems associated with growth. Therefore, marketing has to adapt to the requirements typical for this stage of innovative product development. The whole range of the modern marketing mix tools is involved in the process. Marketing does not become step-bystep like in the early stages of a startup but an integrated one. The proposed solution consists in that marketing approaches should be employed on a reasonable at the different stages of an innovative startup. You cannot boil down to the generally recognized concept of nP and act under common rules. Since a startup goes through several successive stages of development, then a specific marketing mix is required for each of them. Another key point should be also noted. The startup is short-lived. Other companies pick up the idea, investments begin to run short. The startup process can be fancied as playing blindfold lighting chess. Time is limited, moves should be quick, long speculations and analysis of results are excluded. Ries, Blank, Dorf, Alvarez, et al. use the Lean Startup model in practice (Ries 2011; Blank and Dorf 2012; Alvarez 2014). It suggests building marketing proceeding from the consumer, and the product – from the needs. Searching for a need that may not exist is a challenging task, like looking for a needle in a haystack.

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The above said is logically integrated into the 4C concept. The main character is the consumer. The task is to find and examine the consumer. It is required to know about his needs and values, paying capacity, means of communication, and to select a sales channel. If the consumer is found out and innovative product is capable of meeting customer value, there is indeed an opportunity for launching products at the market. After discovering the potential of an innovative product, market experts launch the start of sales, set and justify the product price, take various communication actions with customers, and support sales channels. These actions shouldn’t be taken before there will be firm confidence in the readiness of MVP and mean the start of sales of an innovative product (launch). To this end, a combination of marketing techniques for the product is being prepared. An nP marketing mix adapting the findings of the study on potential consumers to specific promoting activities of MVP with a selected price is being developed. This stage of a startup demonstrates the need for the implementation of a marketing mix for an MVP product. As practice shows, even a successful start of sales of an innovative product does not guarantee further stability. On the contrary, at this stage, the startup can face the need to retarget all marketing policy to opposite consumers. The most world-known cases of changing the product’s purpose are felt-tip pens, Viagra, and Listerine. Products were developed for one purpose, and after the start of sales, they showed such properties that the marketers were compelled to change the purpose and end consumers. Later, the marketing mix will change, improving, and aiming for actual consumers, contributing to the development of a full-fledged viable market product, adjusting to the real needs of consumers. By that time, market statistics, data on real customers and consumers, the findings of surveys on the assessment of the product quality, its advantages and disadvantages from the viewpoint of actual consumers will be accumulated. This means that the nP marketing mix will need to be changed or completely replaced for new consumers. But the marketing mix will be different. F. Kotler in his writing (Kotler and Keller 2002) pointed that at the stage of product development and sales uplift, individual elements of the marketing mix should be united in the whole aimed at marketing goals. To this end, the model is complemented with the marketing mix management elements including People, Processes, Programs, and Performance. For convenience, let’s entitle this model nP+. But this can be done if and only if the success of the startup is apparent, and sales show a steady growth trend. The nP+ model works out a plan of marketing activities to attain sound market goals of an innovative product that has consolidated its positions in the market, and if necessary, to rebuild the model with a focus on new consumers, who firstly constitute niche ones and later the majority. But the marketing mix for a niche product and market segments product will differ in the toolbox and purpose.

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3 Discussion and Findings The above analysis allows us to propose the concept of combined marketing models for different stages of an innovative startup. Each stage requires a specific marketing model. The first stage is prediction and analysis, identification of the prospects of the market where the startup is to be launched. The second stage is aimed at understanding the consumer using the 4C mix to identify and explore potential consumers of the future product and promote the development of value propositions. The third stage is focused on the development of practical solutions for the nP marketing mix elements and carried out in the preparation and launch of MVP products. In the future, this marketing mix will change, so far as a startup will learn during the sales stage. The marketing mix for the MVP product has limited capabilities, budget, and time of use. We could even say that it is unique to every single innovative startup. When developing an innovative product, startupers use well-proven principles in other fields. In the marketing of startups of goods and services, one can find a lot in common with approaches to the marketing of IT products. In particular, the SCRUM development technique is similar to Seed-stage marketing. It is based on close principles of changing marketed product and their quick testing in a limited term. Hardly anyone will call in question applications of the sprint technique (Knapp et al. 2016). It can be difficult to meet a deadline for an IT product, but the principle of such a technology is pretty viable. Kanban is considered to be the technique of both lean (Ries 2011) and agile management (Brinker 2016). S. Brinker argues that marketing can adopt many things from what Agile marketing uses. The terms “lean” and “flexible” are often used interchangeably but interpreted differently. The term Lean is used in the context of higher efficiency of the development, flexibility is related to fast development and testing, as well as the adaptability of product development on the back of iterative approach of multiple changes and customer feedback. The use of A/B testing in product development means the use of the natural principle of working out several forms of an innovative product to assess their impact on the target audience. The models united into a combined marketing mix of an innovative startup can be presented, as it is common to say in mathematics, as a superposition of its constituent elements (Fig. 1):

Assessment of market capacity and concept of the product Available market

Product development and testing

Available customers

Launch, start of salea

Sales uplift

Available product

Fig. 1. The sequence of the startup stages and their results Source: made by the authors.

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In Fig. 1 presents the main stages of a startup and its results. The PreSeed phase ends up with a general assessment of market availability for a future product. The Seed stage concludes the consumer’s willingness to pay for an innovative product. The start of sales of the MVP product shows that startuper’s product has demand among real customers. Along with the promotion of a startup, the marketing mix is changing, as stated above. Benchmarks of marketing performance are presented in Fig. 2: Marketing simultaneously changing with the start-up stages Predictive and analytical marketing

4С-Agile marketing aimed at customer

Demand, consumer problems

nР marketing focused on MVP

Consumer value

nР+ growth marketing

Product quality for the consumer

Product range expansion

Fig. 2. Aligning startup stages with marketing tools Source: made by the authors.

As follows from Fig. 2, the PreSeed predictive and analytical marketing benchmark states the need for a future product. The next stage 4C-Agile is responsible for the development of the product’s customer value. At the Seedstage of nP marketing, they develop the minimum essential properties of the product under the requirements of the MVP form. The successful start of sales over time makes a marketing to develop an nP+ full-fledged growth strategy and related things. Examining the proposed concept of a combined marketing mix of innovative startups, we emphasize that the 4C and 4P models, which have become common, complement each other in marketing startups of innovative products. Models have different designations and tools but certainly, pursue a common end. The principal feature of their combination is the consumer of the product being at the heart of it. The relationship between startup stages and applied marketing can be depicted as follows (Fig. 3): Thus, marketing activities accompanying a startup of an innovative product can be described by two pyramids with adjoining vertices. At the joining point (launch) there is a narrow neck, the most critical link of a startup. Conventionally, the width of the pyramid is the volume of marketing activities and the choice of possible specific actions to be implemented. The evolution of relationship marketing offers insight into the importance of engaging consumers in the development of concepts, new products, and communications. The theory has gone the way from transaction to interaction and engagement marketing. At each turn of the theory’s evolution, communication with consumers was getting stronger and deeper. These changes are the effect of modern demands.

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nP+ marketing Niche marketing SAVE marketing Launch

nP marketing 4С-Agile marketing Predictive and analytical marketing Fig. 3. A visual representation of rebuilding the marketing mix by the stages of innovative startup development Source: made by the authors.

4 Conclusion The task of a market expert is to turn needs into demand. Actions driven by the need to understand markets and consumers is like wandering in the dark. This fact reflects deep-rooted problems of grasping the opportunities for innovation that embodied in the development of innovative products. The entirety of the startup stages forms the general patterns of their relationship. Each stage has accurate performance indicators and upon reaching them moves from the previous stage to the next one. An analysis of timeline covering idea choice, development, implementation, and improvement of innovative products showed the objective need for strictly coordinated marketing actions fitting for the situation at each stage of a startup. Acknowledgments. The reported study was funded by RFBR, project number 20-010-00233.

References Alvarez, C.: Lean Customer Development: Building Products Your Customers Will Buy. O’Reilly, London (2014) Blank, S.: The Four Steps to the Epiphany. K & S Ranch, London (2005)

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Blank, S., Dorf, B.: The Startup Owner’s Manual. K&S Ranch Inc., London (2012) Brinker, S.: Hacking Marketing. Faster, and More Innovative. Wiley, London, Agile Practices to Make Marketing Smarter (2016) Cagan, M.: Inspired. Berrett-Koehler Publishers, London, SF (2014) Cooper, R.G.: Stage-gate systems: a new tool for managing new products. Bus. Horiz. 2(1), 44– 54 (1990) Cooper, R.G.: What’s Next After Stage-Gate? Res. Technol. Manag. 157(1), 20–31 (2014). http://www.bobcooper.ca/articles/agile-stage-gate. Accessed 5 Feb 2020 Davidow, W.H.: Marketing High Technology. An Insider’s View. The Free Press, London (1986) Ettenson, R., Conrado, E., Knowles, J.: Rethinking the 4Ps. Harvard Bus. Rev. 91(1), 26–33 (2013) Kawasaki, G.: The Art of the Start 2.0. Portfolio/Penguin, London (2015) Knapp, J., Zeratsky, J., Kowitz, B.: Sprint. How to Solve Big Problems and Test New Ideas in Just Five Days. Simon & Schuste, London (2016) Kotler, P.: Marketing Management, Millennium edn. Prentice-Hall, London (2001) Kotler, P.: Megamarketing. Harvard Bus. Rev. 4(1), 117–124 (1986) Kotler, P., Keller, K.L.: Marketing Management. Prentice-Hall, London (2002) Kotler, P., Kartajaya, H., Setiawan, I.: Marketing 3.0: From Products to Customers to the Human Spirit. Wiley, London (2010) Lauterborn, P.: New marketing litany: four Ps Passé: C-words take over. Adv. Age 61(1), 26 (1990) Merkoski, J.: Burning the Page. Sourcebooks, London (2013) Moore, G.: Crossing the Chasm. HarperCollins, London (1995) Ramanujam, M., Tacke, G.: Monetizing Innovations. Wiley, London (2016) Rapp, S., Collins, T.: Maxi-Marketing. McGrow-Hill, New York (2019) Ries, E.: The Lean Startup: How Today’s Entrepreneurship Use Continuous Innovation to Create Radically Successful Businesses. Crown Publishing Group, London (2011) Tokarev, B.E.: Marketing Innovacionno-Tehnologicheskih Startapov [Marketing of innovativetechnology startups]. Magistr, Moscow (2018) Tokarev, B.E., Shkarovskiy, S.I.: Marketing innovacionnogo startapa [Marketing of innovative startup]. Int. J. Bus. Econ. Affairs (IJBEA) 3(3), 28–39 (2019) Volkmann, C., Berg, H.: Entrepreneurial marketing (2020). www.ekf.tuke.sk/files/utorok.pdf. Accessed 06 Feb 2020 Wasserman, N.: The Founder’s Dilemmas: Anticipating and Avoiding the Pitfalls that Can Sink a Startup. Princeton, Princeton University Press (2016)

Financing of Public-Private Partnership Projects Based on “Smart Technologies” Svetlana S. Galazova(&) North Ossetian State University after K.L. Khetagurov, Vladikavkaz, Russia [email protected]

Abstract. Purpose: The purpose of this paper is to substantiate the perspectives and to develop a perspective model of financing of public-private partnership projects based on “smart technologies”. Design/Methodology/Approach: For comprehensive research, we perform a complex regression analysis of the dependence of financing of public-private partnership projects and dissemination of smart technologies by the example countries that show the largest volume of financing of public-private partnership projects based on the most recent data. Findings: The research shows that financing of public-private partnership projects based on smart technologies is not very popular in the modern global economic practice and has low effectiveness, due to a range of problems, which include uncertainty and instability of the volume of financing of a project, bureaucracy and corruption during selection of a private partner, complexity of selecting a project for investing, conventionality of projects, complexity of decision making on attraction of borrowed financial resources, and difficulty in distribution of finances, risks, and income. Originality/Value: The above problems could be solved by the developed model of financing of public-private partnership projects based on smart technologies. Its advantages include increased flexibility and use of various “smart technologies” by private and public partners. The model reflects a perspective (improved) algorithm of financing of public-private partnership projects based on smart technologies. Keywords: Financing
Financial model
Investments partnership
Smart technologies
Digital economy


Public-private

JEL Code: D91
E01
F42
F43
F64
Q01
Q15 O38
Q56
Q57
O13
O41
O43
O44
O47


O31
O32
O33


1 Introduction In the conditions of the digital economy, a contradictory situation has formed in the sphere of financing of public-private partnership projects, which requires scientific reconsideration and solution. On the one hand, being an object of the digital economy infrastructure, smart technologies are a perspective object of investing by the terms of public-private partnership. The inflow of private investments allows overcoming the deficit of financing of smart technologies and reducing the burden onto the state budget, © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1696–1703, 2021. https://doi.org/10.1007/978-3-030-59126-7_185

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as well as increasing effectiveness of using financial resources due to more flexible management, adapted to the specifics of the market environment. On the other hand, financing of public-private partnership projects – as a process connected to decision making – could be subject to authomatization based on smart technologies. Digitalization of the financial management of public-private partnership projects could be built based on the principle of smart companies. In this case, smart technologies are used for gathering information and managing assets. As an alternative, digitalization of financial management of public-private partnership could be built by the principle of smart state management (e-government). Intellectual support for decision making is provided here. The described contradiction causes an uncertainty as to direction in which the modernization of financing of public-private partnership projects based on smart technologies should develop. As the potential of growth of public-private partnership’s effectiveness is not fully implemented, its competitiveness, as compared to the alternative variants of investing and state financing of socio-economic development, reduces. This does not allow attracting sufficient private investments in the infrastructural projects, which are accessible for implementation only by the terms of publicprivate partnership. This problem is to be solved by this paper; its purpose is to substantiate the perspectives and to develop a perspective model of financing of public-private partnership projects based on smart technologies.

2 Materials and Method The experience and perspectives of applying smart technologies for improvement of economic practices, which include public-private partnership, are outlined in the works Andronova et al. (2019), Belik et al. (2020), Haabazoka et al. (2019), Ivanov et al. (2019), Pichkov (2016), Popkova (2019), Popkova and Gulzat (2020a), Popkova and Gulzat (2020b), Popkova and Sergi (2018), Popkova and Sergi (2019), Popkova and Sergi (2020), Popkova and Zmiyak (2019), Popkova et al. (2019), Ragulina (2019), Ragulina et al. (2019), Savelyeva et al. (2019), Sergi (2019), Sergi et al. (2019), Shulus et al. (2020), Sozinova (2019), Sozinova (2018a), Sozinova (2018b), Sozinova et al. (2019), Fokina et al. (2018), Strelets (2017), and Zavyalova et al. (2018). The financial aspect of dissemination of smart technologies is studied in the works Aisaiti et al. (2019), Burger-Helmchen et al. (2020), Preda and Muradoglu (2019), and Zhang et al. (2019). Thus, the problem of financing of public-private partnership projects based on smart technologies has been studied fragmentarily – there is a clear emphasis on financing of digital modernization based on the mechanism of publicprivate partnership, while digitalization of the process of public-private partnership and its financing remains poorly studied. For the purpose of comprehensive study, let us perform a complex regression analysis the dependence of financing of public-private partnership projects (Public private partnerships investment in ICT, current US$, World Bank) and dissemination of smart technologies (digital competitiveness index, IMD) by the example of countries

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with the largest volume of financing of public-private partnership projects, based on most recent data (2020) (Fig. 1). Dissemination of "smart technologies", points 1-100

Financing of public-private partnership projects, USD million

Russia South Africa Romania Peru Indonesia India Mexico Brazil

7 229.82 268 273.7 385.26 689.4 946.6 1512.9 2000

1500

1000

500

70.406 60.865 62.755 54.029 58.011 64.952 60.411 57.346 0

0

20

40

60

80

Fig. 1. Statistics of financing of public-private partnership projects and dissemination of smart technologies in 2020. Source: compiled by the authors based on IMD (2020), World Bank (2020).

1.6E+09 1.4E+09 1.2E+09 1E+09 800000000 600000000 400000000 200000000 0

y = -4E+07x + 3E+09 R² = 0.1336

Dissemination of smart technologies, points 1-100

Financing of public-private partnership projects, USD

As shown in Fig. 1, financing of public-private partnership projects is very differentiated among countries for which statistical data are accessible, and smart technologies are disseminated rather equally in these countries. For obtaining precise data, let us use the results of a regression analysis (Fig. 2).

0 20 40 60 80 Dissemination of smart technologies, points 1-100

80 70 60 50 40 30 20 10 0

y = -4E-09x + 63.125 R² = 0.1336

0 1E+09 2E+09 Financing of public-private partnership projects, USD

Fig. 2. Regression dependence of financing of public-private partnership projects and dissemination of smart technologies. Source: calculated and compiled by the authors.

As is shown in Fig. 2, regression dependence of the studied indicators is very small. This shows that financing of public-private partnership projects based on smart

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technologies has very low effectiveness of development or does not develop in any direction – thus it requires scientific substantiation and increased regulation.

3 Results The current problems of financing of public-private partnership projects and perspectives of solving them based on smart technologies are shown in Table 1. Table 1. The current problems of financing of public-private partnership projects and perspectives of solving them based on smart technologies. Problem of PPP projects financing* Uncertainty and instability of the volume of project financing Bureaucracy and corruption during selection of private partner Complexity of selecting a project for investing Conventionality of PPP projects (imperfection of organization) Complexity of decision making on the attraction of borrowed financial resources Complexity of distribution of finances, risks, and income

Perspective smart technology Internet of Things (IoT), ubiquitous computing (UC) Blockchain

Possibility to solve the problem based on smart technology Collection and intellectual analysis of data on digital assets within PPP project Objective online auction

Artificial intelligence (AI)

Intellectual decision support on investing in project Selection of an appropriate model of project organization Intellectual decision support on attraction of borrowed financial resources Analytics and forecasting of risks and profitability on PPP project

*PPP – public-private partnership. Source: developed and compiled by the authors.

As is shown in Table 1, one of the determined current problems of financing of public-private partnership projects is uncertainty and instability of the volume of project financing. This problem could be solved by collection and intellectual analysis of data on digital assets within a public-private partnership project based on such smart technologies as the Internet of Things (IoT) and ubiquitous computing (UC). Another problem is bureaucracy and corruption during selection of a private partner. It could be overcome with the help of an objective online auction based on the blockchain technology. For solving other problems AI is very important – as the main smart technology of our time. The current problems of financing of public-private partnership projects also include complexity of selecting a project for investing. This problem could be solved by intellectual decision support on placing investments in a project.

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Another problem is conventionality of the public-private partnership projects – i.e., imperfection of organization. This problem could be solved by selecting an appropriate model of organization for each separate project of public-private partnership. Among the studied problems, an important role belongs to complexity of decision making on attraction of borrowed financial resources. It could be solved by intellectual decision support regarding the attraction of borrowed financial resources. The last problem is complexity of distribution of finances, risks, and income. It could be solved with the help of analytics and forecasting of risks and profitability for a public-private partnership project. For systemic solution of all determine problems, the following model of financing of public-private partnership projects based on smart technologies is offered (Fig. 3).

(AI) 1. comparison by the set criteria and selection of an optimal project

4. concluding an agreement on publicprivate partnership (PPP) Public partner

Private partner 1 2 3 … n

organization based on blockchain

Alternative investment projects

2. intellectual support for selection of an investment project

3.selection

5. unique project of PPP organization; 6. intellectual decision support.

Artificial intelligence (AI) of PPP

7. IoT, UC

Digital assets

Fig. 3. The model of financing of public-private partnership projects based on smart technologies. Source: developed and compiled by the authors.

As is shown in Fig. 3, the model of financing of public-private partnership projects based on smart technologies envisages the following sequence of actions. At the first stage, private investor uses own corporate AI for comparing the available alternative investment projects by the set criteria and selecting the optimal one. At the second stage, intellectual support for selection of an investment project is provided. If this is public-private partnership, at the third stage private investor participates in a tender in the form of an online auction, with the help of the blockchain technology, which ensures independence and objectivity of evaluating the applicants. Public partner uses AI to choose the optimal private partner and concludes a publicprivate partnership agreement (the fourth stage). At the fifth stage, AI compiles a unique project of public-private partnership organization. At the sixth stage, it provides intellectual support for decision on project financing, the information on which digital assets is updated at the seventh stage, with the help of the Internet of Things (IoT) and ubiquitous computing (UC).

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4 Conclusion Thus, the performed research showed that financing of public-private partnership projects based on smart technologies is not very popular in the modern global economic practice and has low effectiveness due to a range of problems, which include uncertainty and changeability of the volume of project financing, bureaucracy and corruption during selection of a private partner, complexity of project selection for investing, conventionality of projects, complexity of decision making on attraction of borrowed financial resources, and difficulty with distribution of finances, risks, and incomes. All the above problems could be solved by the developed model of financing of public-private partnership projects based on smart technologies. Its advantages include increased flexibility and use of various smart technologies by private and public partners. This model reflects a perspective (improved) algorithm of financing of publicprivate partnership projects based on smart technologies.

References Aisaiti, G., Liu, L., Xie, J., Yang, J.: An empirical analysis of rural farmers’ financing intention of inclusive finance in China: the moderating role of digital finance and social enterprise embeddedness. Ind. Manag. Data Syst. 119(7), 1535–1563 (2019). https://doi.org/10.1108/ IMDS-08-2018-0374 Andronova, I.V, Belova, I.N., Yakimovich, E.A.: Digital technology in the fishing sector: international and Russian experience. In: 1st International Scientific Conference on Modern Management Trends and the Digital Economy - From Regional Development to Global Economic Growth (MTDE). Proceedings of the 1st International Scientific Conference Modern Management Trends and the Digital Economy: from Regional Development to Global Economic Growth (MTDE 2019). AEBMR-Advances in Economics Business and Management Research, Yekaterinburg, Russia, vol. 81, pp. 277–280 (2019) Belik, E.B., Petrenko, E.S., Pisarev, G.A., Karpova, A.A.: Influence of technological revolution in the sphere of digital technologies on the modern entrepreneurship. Lecture Notes in Networks and Systems, vol. 91, pp. 239–246 (2020) Burger-Helmchen, T., Laperche, B., Schiavone, F., Stefani, U.: Financing novelty: new tools and practices to induce and control innovation processes. Eur. J. Innov. Manag. 23(2), 197–199 (2020). https://doi.org/10.1108/EJIM-03-2020-333 Haabazoka, L., Popkova, E.G., Ragulina, Y.V.: Africa 4.0 as a perspective scenario for neoindustrialization in the 21st century. Afr. J. Econ. Sustain. Dev. 2(2), 20–38 (2019) IMD: World Digital Competitiveness Ranking 2019 (2020). https://www.imd.org/wcc/worldcompetitiveness-center-rankings/world-digital-competitiveness-rankings-2019/. Accessed 27 Apr 2020 Ivanov, O., Zavyalova, E., Ryazantsev, S.: Public-private partnership in the countries of the Eurasian Economic Union. Central Asia Caucasus Engl. Ed. 2(2), 33–47 (2019) Pichkov, O.B.: Social inequality in the US and Canada. Int. Trends (Mezhdunarodnye protsessy) 2(3), 85–92 (2016) Popkova, E.G.: Preconditions of formation and development of industry 4.0 in the conditions of knowledge economy. Stud. Syst. Decis. Control 169(1), 65–72 (2019)

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Popkova, E.G., Sergi, B.S.: Human capital and AI in industry 4.0. Convergence and divergence in social entrepreneurship in Russia. J. Intellect. Capital (2020, in press) Popkova, E.G., Gulzat, K.: Technological revolution in the 21st century: digital society vs. artificial intelligence. Lecture Notes in Networks and Systems, vol. 91, pp. 339–345 (2020a) Popkova, E.G., Gulzat, K.: Contradiction of the digital economy: public well-being vs. cyber threats. Lecture Notes in Networks and Systems, vol. 87, pp. 112–124 (2020b) Popkova, E.G., Zmiyak, K.V.: Priorities of training of digital personnel for industry 4.0: social competencies vs technical competencies. Horizon 27(3–4), 138–144 (2019) Popkova, E.G., Sergi, B.S.: Will industry 4.0 and other innovations impact Russia’s development? In: Sergi, B.S. (ed.) Exploring the Future of Russia’s Economy and Markets: Towards Sustainable Economic Development, pp. 51–68. Emerald Publishing Limited, Bingley (2018) Popkova, E.G., Sergi, B.S. (eds.): Digital Economy: Complexity and Variety vs. Rationality. Springer, Heidelberg (2019) Popkova, E.G., Sozinova, A.A., Menshchikova, V.I.: Managing the adaptation of modern society to the industry 4.0 based on information waves and impulses. Voprosy teorii i praktiki zhurnalistiki [Theoret. Pract. Issues J.] 8(2), 438–446 (2019). https://doi.org/10.17150/23086203.2019.8(2). (in Russian) Preda, A., Muradoglu, G.: Groups, social processes and decision making in finance. Qual. Res. Financ. Markets 11(4), 429–455 (2019). https://doi.org/10.1108/QRFM-08-2017-0073 Ragulina, Y.V.: Priorities of development of industry 4.0 in modern economic systems with different progress in formation of knowledge economy. Stud. Syst. Decis. Control 169, 167– 174 (2019) Ragulina, Y.V., Alekseev, A.N., Strizhkina, I.V., Tumanov, A.I.: Methodology of criterial evaluation of consequences of the industrial revolution of the 21st century. Stud. Syst. Decis. Control 169, 235–244 (2019) Savelyeva, N.K., Kuklin, A.V., Lapteva, I.P., Malysheva, N.V.: The investment attractiveness of a regional market of educational services as the basis of its global competitiveness in industry 4.0. Horizon 27(3–4), 239–244 (2019) Sergi, B.S. (ed.): Tech, Smart Cities, and Regional Development in Contemporary Russia. Emerald Publishing Limited, Bingley (2019) Sergi, B.S., Popkova, E.G., Bogoviz, A.V., Litvinova, T.N.: Understanding Industry 4.0: AI, the Internet of Things, and the Future of Work. Emerald Publishing Limited, Bingley (2019) Shulus, A.A., Akopova, E.S., Przhedetskaya, N.V., Borzenko, K.V.: Intellectual production and consumption: a new reality of the 21st century. Lecture Notes in Networks and Systems, vol. 92, pp. 353–359 (2020) Sozinova, A.A.: Causal connections of formation of industry 4.0 from the positions of the global economy. Stud. Syst. Decis. Control 169, 131–134 (2019) Sozinova, A.A.: Marketing concept of managing the reorganization of entrepreneurial structures using the latest information technologies. Qual. Access Success 19(S2), 118–122 (2018a) Sozinova, A.A.: Effectiveness or reorganization: application of information technologies in solving marketing problems of modern companies. Espacios 39(28) (2018b) Sozinova, A.A., Nabokikh, A.A., Ryattel, A.V., Sanovich, M.A.: Analysis of “underdevelopment whirlpools” as a tool of managing the regional market of education in the conditions of Industry 4.0, vol. 27, no. 3–4, pp. 173–179 (2019) Fokina, O.V., Fufacheva, L.A., Sozinova, A.A., Sysolyatin, A.V., Bulychev, L.L.: Information and communication technologies as a new vector of development. Espacios 39(28), 5 (2018) World Bank (2020). Indicators. https://data.worldbank.org/indicator. Accessed 27 Apr 2020

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Zavyalova, E.B., Studenikin, N.V., Starikova, E.A.: Business participation in implementation of socially oriented Sustainable Development Goals in countries of Central Asia and the Caucasus region. Central Asia Caucasus 19(2), 56–63 (2018) Zhang, L., Zhang, S., Guo, Y.: The effects of equity financing and debt financing on technological innovation: evidence from developed countries. Baltic J. Manag. 14(4), 698– 715 (2019). https://doi.org/10.1108/BJM-01-2019-0011 Strelets, I.A.: Mul’tiplikatsionnye effekty v setyakh [Multiplicative effects in networks]. Mirovaya ekonomika i mezhdunarodnye otnosheniya 61(6), 77–83 (2017)

Geoinformation Systems as a Means of Monitoring and Managing Floodplain Landscapes Denis A. Solodovnikov(&)

and Stanislav S. Shinkarenko

Volgograd State University, Volgograd, Russia {solodovnikov,shinkarenko}@volsu.ru

Abstract. Purpose: The authors describe the experience of the creation of a specialized geographic information system for floodplain landscapes of the Don River basin (southern part of the European Russia). Design/Methodology/Approach: The authors give consideration to the methods of creation of an electronic atlas of floodplains of the Don River basin. The Don River basin covers densely populated areas of Russia and has long been facing the water deficiency problem. Withdrawal of water from watercourses accounts for more than half of the annual flow. The data on the majority of the practically significant characteristics can be obtained remotely by processing satellite images in the ArcGIS software environment. Some data can be obtained from field studies at reference sites. Findings: At the first stage, the electronic atlas includes 12 most important elements (characteristics), such as river (tributary) basin area, slopes and exposures of the valley sides, slopes of the riverbed and the length of the watercourse, floodplain area, farming area in the floodplain territory, forest area, differentiation of floodplains by altitude levels, river sinuosity coefficient, floodplain maturity coefficient, groundwater depth and sloping water tables, river valley geology aspects, number, area and volume of small reservoirs. Originality/Value: There is currently no common database that would make it possible to analyze the most important characteristics of floodplain landscapes. The atlas will become widely used in the areas of water and land management as well as environmental protection. Keywords: Floodplain
Geoinformation systems resources management
Don River


River basin
Water

JEL Code: Q250

1 Introduction River floodplains play a major role in natural ecosystems and the economy. With their comparatively small areas, they make for the reproduction of hayfields and pastures, fish, aquatic and semi-aquatic birds. For example, floodplain meadows produce 50% of hay made in the country, although they cover only 20% of hay acreage (Faschevskiy 1986). River floodplains are particularly important in arid climates. It is in the arid zone © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1704–1713, 2021. https://doi.org/10.1007/978-3-030-59126-7_186

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that forest resources and wild animals are concentrated. River valleys serve as migration paths for birds. Floodplains accumulate huge amounts of plant nutrients, both those that were brought from the surface of the catchment basin and those that were generated locally. With land reclamation and extensive hydrotechnical construction, vast floodplain areas can be effectively used in agriculture, primarily as vegetablegrowing areas. The lower reaches of the major rivers of southern European Russia (Volga, Don, Kuban) have already been considerably reclaimed. The floodplains almost completely belong to territories with special conditions of natural resource use. Several protection regimes are often in effect within the same territory, such as “water conservation zone”, “spawning protection forest belt”, “Important Bird Area”, “Wetlands of International Importance, especially as Waterfowl Habitat”, “National park” etc. (Robert 2003). All of the above is indicative of the extreme value and vulnerability of landscapes of river floodplains and the need for careful and efficient management of their natural resources.

2 Methodology There is a crucial task of creating a modern database and an electronic atlas of floodplains in Russia. Publicly accessible archives with satellite images and modern processing means (geographic information systems) make it possible to obtain most of this information remotely. This work was started by the authors of the database of floodplains of the Don River basin. This database includes the following elements at the initial stage: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

River (tributary) basin area. Slopes and exposures of the valley sides. Slopes of the riverbed and the length of the watercourse. Floodplain area. Farming area on the slough. Forest area. Differentiation of floodplains by altitude levels. Groundwater depth and sloping water tables. Floodplain maturity coefficient. Groundwater depth and sloping water tables. River valley geology aspects. Number, area and volume of small reservoirs.

3 Results The database elements specified in the section above are implemented as follows. 1. River (tributary) basin area. The digital terrain model (DTM) derived from the Shuttle Radar Topography Mission (SRTM) conducted in February 2000 from the reusable space shuttle Endeavour (van Zyl 2001), served as the material basis for

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the geomorphological analysis of the exploration area. The National Aeronautics and Space Administration of the United States (NASA) and the National Geospatial-Intelligence Agency (NGA) (Martz and Garbrecht 1993) are the developers. Based on radar surveying data, DTM has found wide application in remote terrain inspection techniques. DTM SRTM 1 Arc-Second Global were used with a resolution of 1 arcsecond. During geoinformation modeling, it was processed in the Arcgis 10.3 software environment using the Spatial Analyst module. The erosional pattern was modeled in Arcgis 10.3 by means of the consecutive processing of the DTM using the functions of the Spatial Analyst module: Spatial Analyst > Hydrology (Hydrology) (Kashchavtseva and Shipulin 2011). The watercourses have been selected based on the value of the total runoff >100.1. With this processing algorithm, the boundaries of the catchment basins are formed automatically. Free QGIS software may be used as well. Slopes and exposures of the valley sides. This indicator is also formed according to the above algorithm. It is of importance in the calculations of the module and the discharge layer (Harvey 2012). Slopes of the riverbed and the length of the watercourse. They are an important indicator of the intensity of riverbed processes in the river valley. The data are generated automatically according to the above algorithm. Floodplain area. This atlas layer is formed on the basis of the morphometric analysis of digital terrain models as well as remote sensing data, both optical and radar. The actual area of inundation during a seasonal flood can be determined by the classification of the infrared channel (maximum water absorption). Sentinel 2 (Channel 8) satellite data with a resolution of 10 m and Landsat (Channel 5 Landsat 8, Channel 4 Landsat 5 and 7) with a resolution of 30 m (Shinkarenko and Solodovnikov 2018) can be used to these ends. For large water bodies such as the estuary of the Volga River at the peak of a seasonal flood, MODIS data with a resolution of 250 m can be used, which benefit from high temporal resolution: less than 24 h, while higher spatial resolution data can be obtained at intervals of 7–16 days (Shinkarenko et al. 2019). Radar information products provide advanced data to identify the water table. Their advantage is independence of ambient conditions and cloudiness, which is highly important during the spring flood, when shiny days are very rare. The elevation figures can be derived from the layer with a water table according to the digital terrain model; as a result, remote sensing data can be used for determining floodplain levels and inundated areas during seasonal floods of varying degrees of exceedance probability. When this layer is superimposed on the mask of boundaries of municipalities (https://data.nextgis.com/), the data on the administrative association of agriculturally used areas can be obtained, and the floodplain area for each municipality can be determined. Farming area in the floodplain territory. The outlines of the cultivated land can be identified during visual examination of satellite images and are digitized manually. It should be noted that in most cases floodplains are included in the water conservation zone and it is prohibited to plough lands there out of concern for the environment. The ploughing of floodplains inevitably results in significant soil

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losses that are run down during the next seasonal flood; therefore, the identification and elimination of such violations is an important environmental measure. 6. Forest area. The woodlands are distinguished using the satellite RGB composites Sentinel 2 with a resolution of 10 m combined with “natural colors” (channels 4-32) or “artificial colors” with the inclusion of the infrared channel (combination of 84-3). For local areas, one may be limited to expert visual interpretation with verification based on ultrahigh resolution data, e.g. Google Earth. For the areas with dimensions of a river basin, the algorithms of automated classifications should be used combined with learning. For this purpose, satellite images obtained during the period from August to September would be optimal. At this time, grassland vegetation tends to be at the end of growth, and the green crowns are quite discernible. 7. Differentiation of plain floods by altitude levels. Researchers of river valleys distinguish between three altitude levels (generations) in the floodplains of large and medium-sized rivers, associated with various hydrological and climatic conditions during the formation of floodplains as topographic forms (Sidorchuk et al. 2012). Each river is characterized by a high variability in altitude and the duration of seasonal floods in different years. For example, in rivers of the steppe zone, the difference in the flood height may exceed 5 meters in different years. High floodplains are flooded seldom and not for long; average floodplains are flooded more frequently during a seasonal flood, while low floodplains are flooded annually for up to 1–1.5 months (depending on the size and geographical location of the river). Earth remote sensing data alone is not sufficient for this task. Field verification of specific areas is needed. In this case, the operating procedure is as follows. a) The year-wise analysis of the maximum heights of seasonal floods on a particular river. The water-level observation data from hydrologic stations are used. b) Analysis of satellite images of location of the hydrologic station, determination of preliminary boundaries of the three high floodplain levels (Fig. 1). c) Field research in the vicinity of the hydrologic station, obtaining instrumental cross-section of the river floodplain. d) Comparison of the elevation figures of the floodplain surface with the height of seasonal floods, determination of the conditions and probability of inundation during seasonal floods of different levels (Fig. 2). e) Analysis of satellite images during the high-water season for specific years (low, medium and high level of a seasonal flood). This stage allows refining the floodplain inundation data and giving a spatial description of this process. The results are used to create the contour maps of inundation of floodplain levels depending on the altitude of a seasonal flood. Shape-files with the outlines of inundation areas are in point of fact the outcomes of this stage. Such data are highly valued in land-use planning, protection of human settlements and infrastructure facilities from catastrophic inundations, assessment of the driveability of the territory (Fig. 3).

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Fig. 1. The ratio between the three floodplain levels and original slopes in the floodplain of the Khopyor River 1 – indigenous slopes of the river valley; 2 – riverbed; 3 – average level; 4 – low level; 5 – high level.

Fig. 2. Cross-section of the floodplain of the Khopyor River in the vicinity of the town of Uryupinsk I – terrain, II – ground water level, III – maximum level during a seasonal flood, IV – minimum level during a seasonal flood, V – average maximum level during a seasonal flood, VI – monitor wells, VII – geobotanical platforms

Geoinformation Systems as a Means of Monitoring

Fig. 3. Altitude levels of the floodplain of the Khopyor River

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Fig. 4. The risk of inundation of the floodplain of the Khopyor River during seasonal floods of various probability a – Low level; b – Average level; c – High level; d – The entire area of the floodplain.

f) Calculation of the probability of inundation of separate high-altitude levels of floodplain and the entire floodplain in years with different altitudes of seasonal floods. The calculation is graphically expressed in the form of a diagram showing inundation risks (Fig. 4). 8. River sinuosity coefficient. This is one of the most important morphometric characteristics of the river. All sluggish rivers form the systems of bends and swashways in the course of their development. The physical significance of swashways is an increase in the stream flow length, hence a decrease in the slopes on each particular reach. Sinuosity coefficient is the ratio of the stream flow length on a certain reach (or river as a whole) to the length of the corresponding reach of the river valley. Several mathematical tools of calculating the sinuosity coefficient, mostly rather time-consuming, have been developed to date. When geoinformatics is used, obtaining results by any method (or all methods at once) becomes simple. 9. Floodplain maturity coefficient is the ratio of the floodplain width which is average for the specific reach to the width of the riverbed. It is one of the major proxy indicators characterizing the natural and economic significance of stream ecosystems. This indicator is directly related to the amount of reproduction of plankton and benthon, fish spawning and feeding areas, area of nesting sites of aquatic and semi-aquatic birds, grasslands and forests (Faschevskiy 1986). On the average, the higher is this ratio, the higher is the economic and environmental value of the floodplain, although there are exceptions. The fluctuations in the average width of the floodplain – spreadings and narrowings – are of particular significance. Such areas serve as markers of modern diastrophic movements. The spreadings of the floodplain and the areas of increased meandering correspond to the areas of neotectonic subsidences, and the narrowings and reaches of shortened beds correspond to the elevation areas. These indicators are of importance in structural geology, particularly in the search for oil and gas fields.

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10. Groundwater depth and sloping water tables. This is the most important characteristic of the floodplain ecosystem. It defines driveability, buffer functions of the floodplain as a natural filter, possibility of diffusive discharge of contaminants within floodplain. Data for this database element can be solely obtained in the field (Fig. 2). The authors have developed original methods for the monitoring and modeling of processes involving changes in the level of floodplain groundwaters (Solodovnikov et al. 2017; Solodovnikov 2019; Solodovnikov et al. 2019). 11. River valley geology aspects. This thematic layer of the electronic atlas can find its use for structural geology. River valleys are usually confined to crustal disturbances – splits, faults, downfolds, areas of tectonic cleavage. Technologies of the analysis of the structure of valleys have been long elaborated (Filosofov 1960), but modern geoinformatics brings their application to a whole new level. Traditional morphometric features of river valleys are as follows (Korytny 1986): – – – –

Tributaries location diagram relative to the trunk valley of the system; Number of valleys forming the system; Degree of asymmetry in the valley system; Length of valleys in the right order;

All of these indicators are generated automatically by modern geographic information systems. 12. Number, area and volume of small reservoirs. This is the most important indicator of utilization of water resources in the river basin. Experience has proven that, given the scarcity of water resources, a great number of such reservoirs are generated by rivers, most of which are de facto illegal. There are more than 12,000 reservoirs in the Don River basin, but only 1,738 reservoirs have been included in the Russian Register of Hydraulic Structures (http://water/ru/gts/). The majority of them (67% of the total number of artificial reservoirs) are small reservoirs and ponds with a live storage of less than 1 million m3, most of them being used for water supply of neighborhoods and irrigation of lands (Jamalov et al. 2013). As early as the first stages of creation of our database have shown that the number of 12,000 is greatly underestimated, since it does not include many small ponds that catch the surface discharge at the highest links of the erosional pattern. In the central portion of the Don River basin, there are often up to 20 ponds per 100 km2 of upper gulches. Without accurate data on the storage capacity of such reservoirs, it is unfeasible to correctly make up the basin’s water balance. The areas of small reservoirs can be calculated by automatic processing digital terrain models and satellite images. The storage capacity of the reservoir is closely related to the area and the backwater effect. If the main morphometric characteristics are known, it can be calculated to an accuracy of up to 10–15%, which is permissible in calculating the main hydrological characteristics of the river.

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4 Conclusions During the creation of a specialized geographic information system for floodplain landscapes of the Don River basin, specific tasks of data unification and interaction of different modules of the electronic atlas with each other and with external web-based cartographic services and databases are solved. GIS is supplemented with new thematic layers in proportion to its creation. Once finally-formed, such a database can be an effective means of monitoring, managing and protecting the natural resources of floodplains. Acknowledgments. The reported study was funded by RFBR and the government of the Volgograd Region according to the research project No. 19-45-340006.

References Faschevskiy, B.V.: Hydrological aspects of protection and rational use of floodplain landscapes. In: Bachurin, G., Korytny, L. (eds.) Hydrological Studies of Landscapes, pp. 57–64. Sciense, Novosibirsk (1986) Filosofov, V.P.: Brief Management to a Morphometrical Method of Search for Tectonic Structures. SGU Publication, Saratov (1960) Harvey, A.: Introducing Geomorphology: A Guide to Landforms and Processes. Dunedin Academic Press, Edinburgh (2012) Jamalov, R.G., Frolova, N.L., Kireeva, M.B.: Modern changes in the water regime of rivers in the Don basin. Water Resour. 40(6), 544–556 (2013) Kashchavtseva, A.Yu., Shipulin, V.D.: Modeling of river basins by means of ArcGIS 9.3, Uchenye zapiski Tavricheskogo natsionalnogo universiteta imeni V.I. Vernadskogo. Seriya “Geografiya” 24(63), 85–92 (2011) Korytny, L.M.: Indicative role of characteristics of the structure of river systems in Siberia. In: Bachurin, G., Korytny, L. (eds.) Hydrological Studies of Landscapes, pp. 136–143. Sciense, Novosibirsk (1986) Martz, L.W., Garbrecht, J.: Automated extraction of drainage network and watershed data from digital elevation models. Water Resour. Bull. Am. Water Resour. Assoc. 29(6), 901 (1993) Robert, A.: River Processes: An Introduction to Fluvial Dynamics. Arnold, London (2003) Shinkarenko, S.S., Solodovnikov, D.A.: Formation of a new delta of Syr Darya. Curr. Probl. Remote Sens. Earth Space 15(2), 267–271 (2018). https://doi.org/10.21046/2070-7401-201815-2-267-271 Shinkarenko, S.S., Kosheleva, O.Yu., Solodovnikov, D.A., Rulev, A.S.: Coastline dynamics of the Sarpinsky Island on the Lower Volga. Curr. Probl. Remote Sens. Earth Space 16(5), 120– 129 (2019). https://doi.org/10.21046/2070-7401-2019-16-5-120-129 Sidorchuk, A.Yu., Panin, A.V., Borisova, O.K.: Decrease in the flow of rivers of the plains of Northern Eurasia in the Holocene optimum. Water Resour. 39(1), 40–53 (2012) Solodovnikov, D.: Modeling of groundwater dynamics and landscapes of river floodplains of the Lower Volga region. In: 19th International Multidisciplinary Scientific GeoConference SGEM 2019, vol. 12, Hydrology and Water Resources, pp. 387–392 (2019). https://doi.org/10.5593/ sgem2019/3.1/s12.050

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Solodovnikov, D.A., Khavanskaya, N.M., Vishnyakov, N.V., Ivantsova, E.A.: Methodical basis of geophysical monitoring of ground water river floodland. South Russ.: Ecol. Dev. 12(3), 106–114 (2017). https://doi.org/10.18470/1992-1098-2017-3-106-114 Solodovnikov, D.A., Shinkarenko, S.S., Vishnyakov, N.V., Khavanskaya, N.M.: Groundwater of river floodplains – intra-annual dynamics and mathematical models. Nat. Syst. Resour. 9(2), 54–63 (2019). https://doi.org/10.15688/nsr.jvolsu.2019.2.7 van Zyl, J.: The shuttle radar topography mission (SRTM): a breakthrough in remote sensing of topography. Acta Astronaut. 48(5–12), 559–565 (2001)

Transnational Capital in Banking Market: Making Investment Decisions with the Help of AI in the Conditions of Competition Nadezhda K. Saveleva(&) Vyatka State University, Kirov, Russia [email protected]

Abstract. Purpose: The purpose of this paper is to substantiate the perspectives and to develop a concept of investment decision making in the conditions of transnational capital competition in banking market with the help of AI. Design/Methodology/Approach: For empirical purposes of the research, the author performs an overview of statistics and regression analysis of the influence of digitalization, which indicator is the index of “technology”, which is calculated within digital competitiveness index and reflects placement of funds in banking market, on transnationalization of banking market and its stability (soundness) as a manifestation of effectiveness of investing. The research objects are 10 countries which show the highest level of banking market’s transnationalization (their banks are in the ranking Standard & Poor “The world’s 100 largest banks”). For the representation purposes, the selection includes not only the leaders of the ranking (developed countries) but also developing countries. The research is performed based on the 2020 data. Findings: Regression dependence of transnationalization and stability of banks on digitalization is analyzed. It is substantiated that digitalization has a vivid potential of increase of effectiveness of investing in the conditions of transnational capital competition in banking market, but this potential is not fully realized. For specifying the causal connections of investment decision making in the conditions of transnational capital competition in banking market with the help of AI, a SWOT analysis is performed. Originality/Value: A concept of investment decision making in the conditions of transnational capital competition in banking market with the help of AI is developed; it provides advantages for investors: effective investing, and for receiving economies – supporting quality of life, provision of stability and competitiveness of banking market, and for the global economy: balance of the global banking system. Keywords: Smart investing
Smart technologies
Transnational capital Banking market
Investment decision making
Competition
AI JEL Code: D91
E01
F42
F43
F64
Q01
Q15 O38
Q56
Q57
O13
O41
O43
O44
O47





O31
O32
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© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1714–1721, 2021. https://doi.org/10.1007/978-3-030-59126-7_187

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1 Introduction Under the influence of the consequences of the 2008 global financial crisis and despite the active measures of state regulation, the global banking market still shows the signs of stagnation. This problem is caused by the fact that innovative potential of banking market was depleted during the previous technological mode, which led to the crisis, while the opportunities of a new – the Fourth technology mode – are used in a limited way. In the conditions of formation of the digital economy and transition to Industry 4.0, each sphere sees the formation of digital segments: in banking market this is FinTech, in which “smart” banking is provided as a service for consumers, and “smart” investing as a progressive business practice among capital owners. Though general outlines of the practices of “smart technologies” application in banking market are clear, their institutionalization is still at the initial stage. Foundation on obsolete technologies during making of investment decisions in the sphere of transnational capital in banking market in the conditions of competition leads to negative consequences for all concerned parties. Investors place capital with low effectiveness, receiving insufficient incomes and bearing risks that could be avoided. Non-optimal investment decisions negatively influence the character of bank competition, which requires improvement. National economies that are interested in attracting transnational capital to banking market face a deficit of investment and a limited effect from the measures on their attraction. Also, there could be destabilization of national banking markets due to the high level of investment risks. At the global scale, the disproportion between banking markets of developed countries, which are characterized by high investment attractiveness, and markets of developing countries, which are competing for transnational capital, grows. The hypothesis of this research is that the set problem could be solved by transition of bank investing to the digital technological mode and institutionalization of smart banking. The purpose of this paper is to substantiate the perspectives and to develop concept of investment decision making in the conditions of transnational capital competition in banking market with the help of AI.

2 Materials and Method The perspectives of improving the practice of investment decision making in the conditions of competition with the help of AI in smart economy are studied in the works Andronova et al. (2019), Belik et al. (2020), Haabazoka et al. (2019), Ivanov et al. (2019), Pichkov (2016), Popkova (2019), Popkova and Gulzat (2020a), Popkova and Gulzat (2020b), Popkova and Sergi (2018), Popkova and Sergi (2019), Popkova and Sergi (2020), Popkova and Zmiyak (2019), Popkova et al. (2019), Ragulina (2019), Ragulina et al. (2019), Savelyeva et al (2019), Sergi (2019), Sergi et al. (2019), Shulus et al. (2020), Sozinova (2019), Sozinova (2018a), Sozinova (2018b), Sozinova et al (2019), Fokina et al. (2018), and Zavyalova et al. (2018).

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Certain issues of transnational capital placement in banking market are considered in the works Buallay et al. (2019), Doni et al. (2019), Huang et al. (2019), Le (2019), and Ngo and Le (2019). However, the capabilities of AI in improvement of the practice of investment decision making in the conditions of transnational capital competition in banking market have not been sufficiently studied in the existing research literature and this require further elaboration. For empirical purposes of the research, the author performs an overview of statistics and regression analysis of the influence of digitalization, which indicator is the index of “technology”, which is calculated within digital competitiveness index and reflects placement of funds in banking market, on transnationalization of banking market and its stability (soundness) as a manifestation of effectiveness of investing. The research objects are 10 countries which show the highest level of banking market’s transnationalization (their banks are in the ranking Standard & Poor “The world’s 100 largest banks”). For the representation purposes, the selection includes not only the leaders of the ranking (developed countries) but also developing countries. The research is performed based on the 2020 data (Figs. 1, 2 and 3). 18

20 15

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Fig. 1. Number of trans-border banks. Source: compiled by the author based on Standard & Poor (2020).

As is shown in Fig. 1, the largest number of trans-border banks is observed in China (18) and the USA (12); the smallest number – in India and Russia (1). 120 100 80 60 40 20 0

94.077

75.08

80.265 79.658 80.511

100 72.856

54.978 49.166 58.451

Fig. 2. Technology index, points 1–100. Source: compiled by the author based on World Economic Forum (2020).

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As is shown in Fig. 2, the highest level of technological development of banking market and placement of funds in this market is observed in Singapore (100 points) and the USA (94.077 points), and the lowest level – in Brazil (49.166 points).

100 80 60 40 20 0

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81.6 58.1

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Fig. 3. Soundness of banks, points 0–100. Source: compiled by the author based on Standard & Poor (2020).

As is shown in Fig. 3, the highest stability of banks is observed in Singapore (91.2 points) and Australia (87.3 points), and the lowest – in Russia (48.5 points).

3 Results

20 18 16 14 12 10 8 6 4 2 0

y = 0.099x - 1.0757 R² = 0.0946

0

Stability of banks, points 0-100

Number of trans-border banks

The established – based on the data in Figs. 1, 2 and 3 - regression dependence of transnationalization and stability of banks on digitalization is shown in Fig. 4.

50 100 150 Technology index, points 1-100

100 90 80 70 60 50 40 30 20 10 0

y = 0.4776x + 37.725 R² = 0.3262

0

50 100 150 Technology index, points 1-100

Fig. 4. Regression dependence of transnationalization and stability of banks on digitalization. Source: calculated and compiled by the author.

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As is shown in Fig. 4, increase of the activity of digital technologies application during investment decision making in banking market (by 1 points) leads to increase of transnationalization of this market – the number of transnational banks grows by 0.099 (correlation – 9.46%) and stability of banking market grows by 0.4776 points (correlation – 32.62%). Therefore, digitalization has a vivid potential of increase of effectiveness of investing in the conditions of transnational capital competition in banking market, but this potential has not been fully realized. For determining the causal connections of investment decision making in the conditions of transnational capital competition in banking market with the help of AI, let us use the results of the performed SWOT analysis (Table 1). Table 1. SWOT analysis of investment decision making in the conditions of transnational capital competition in banking market with the help of AI. S: Strengths of AI – quickness of decision making; – rationality during decision making; – multitasking and completeness of analytics

W: Weaknesses of AI – manual input of data for analytics; – neglect of social criteria; – problems of cyber security; – differences in digital infrastructure O: Opportunities of improvement of AI T: Threats to development of AI – macro-economic instability; – expansion of the specter of statistics; – high cost of AI and infrastructure; – solving the problems of cyber security; – delayed development of statistics; – creation of Big data; – aggravation of the cyber security problems – unification of digital infrastructure Source: developed and compiled by the author.

As is shown in Table 1, strengths of AI (S) include quickness of decision making rationality during decision making, and multitasking and completeness of analytics. Weaknesses of AI include manual input of data for analytics, neglect of social criteria (e.g., risk of unemployment due to wrong investment decisions), problems of cyber security, and differences in digital infrastructure. Opportunities of improvement of AI include expansion of the specter of statistics, solving the problems of cyber security, creation of Big data, and unification of digital infrastructure. Threats to development of AI include macro-economic instability, high cost of AI and infrastructure, delayed development of statistics, and aggravation of the cyber security problems. The following concept has been developed for obtaining opportunities, implementation of perspectives, and overcoming of threats to investment decision making in the conditions of transnational capital competition in banking market with the help of AI (Fig. 5).

Transnational Capital in Banking Market: Making Investment Decisions Developed economy

Transnational investor

Developed economy

State

AI

State

Big data on banking market

investments in the conditions of competition

Analysis of profitability/risk ratio; Consideration of social consequences technical support, security

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Big data on banking market

investments in the conditions of competition

Unified and integrated progressive digital infrastructure

Advantages: For investors: optimal placement of funds (effective investing); Forreceiving economies: supporting quality of life, providing stability and competitiveness of banking market; For the global economy: balance of the global banking system.

Fig. 5. The concept of investment decision making in the conditions of transnational capital competition in banking market with the help of AI. Source: developed and compiled by the author.

As is shown in Fig. 5, the offered concept envisages the creation of a unified and integrated progressive digital infrastructure in developed and developing economies, which provides technical support and ensures cyber security of AI application. The role of the state consists in collection of Big data on banking market. A transnational investor uses AI for analyzing the profitability/risk ratio and consideration of social consequences of investment decision making. As a result, investments by the terms of competition are placed in the banking markets of developed and developing economies.

4 Conclusion It could be concluded that the developed concept of investment decision making in the conditions of transnational capital competition in banking market with the help of AI provides advantages for investors: effective investing, and for receiving economies – supporting quality of life, provision of stability and competitiveness of banking market, and for the global economy: balance of the global banking system.

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References Andronova, I.V., Belova, I.N., Yakimovich, E.A.: Digital technology in the fishing sector: international and Russian experience. In: 1st International Scientific Conference on Modern Management Trends and the Digital Economy - From Regional Development to Global Economic Growth (MTDE). Proceedings of the 1st International Scientific Conference Modern Management Trends and the Digital Economy: from Regional Development to Global Economic Growth (MTDE 2019). AEBMR-Advances in Economics Business and Management Research, Yekaterinburg, Russia, vol. 81, pp. 277–280 (2019) Belik, E.B., Petrenko, E.S., Pisarev, G.A., Karpova, A.A.: Influence of technological revolution in the sphere of digital technologies on the modern entrepreneurship. Lecture Notes in Networks and Systems, vol. 91, pp. 239–246 (2020) Buallay, A., Cummings, R., Hamdan, A.: Intellectual capital efficiency and bank’s performance: a comparative study after the global financial crisis. Pac. Account. Rev. 31(4), 672–694 (2019). https://doi.org/10.1108/PAR-04-2019-0039 Doni, F., Larsen, M., Bianchi Martini, S., Corvino, A.: Exploring integrated reporting in the banking industry: the multiple capitals approach. J. Intellect. Capital 20(1), 165–188 (2019). https://doi.org/10.1108/JIC-11-2017-0146 Haabazoka, L., Popkova, E.G., Ragulina, Y.V.: Africa 4.0 as a perspective scenario for neoindustrialization in the 21st century. Afr. J. Econ. Sustain. Dev. 2(2), 20–38 (2019) Huang, F., Chen, S., Tsai, J.: Optimal bank interest margin under capital regulation: bank as a liquidity provider. J. Financ. Econ. Policy 11(2), 158–173 (2019). https://doi.org/10.1108/ JFEP-12-2017-0124 IMD: World Digital Competitiveness Ranking 2019 (2020). https://www.imd.org/wcc/worldcompetitiveness-center-rankings/world-digital-competitiveness-rankings-2019/. Accessed 28 Apr 2020 Ivanov, O., Zavyalova, E., Ryazantsev, S.: Public-private partnership in the countries of the Eurasian Economic Union. Central Asia Caucasus Engl. Ed. 2(2), 33–47 (2019) Le, T.: The interrelationship between liquidity creation and bank capital in Vietnamese banking. Manag. Finance 45(2), 331–347 (2019). https://doi.org/10.1108/MF-09-2017-0337 Ngo, T., Le, T.: Capital market development and bank efficiency: a cross-country analysis. Int. J. Manag. Finance 15(4), 478–491 (2019). https://doi.org/10.1108/IJMF-02-2018-0048 Pichkov, O.B.: Social inequality in the US and Canada. Int. Trends (Mezhdunarodnye protsessy) 2(3), 85–92 (2016) Popkova, E.G.: Preconditions of formation and development of industry 4.0 in the conditions of knowledge economy. Stud. Syst. Decis. Control 169(1), 65–72 (2019) Popkova, E.G., Sergi, B.S.: Human capital and AI in industry 4.0. Convergence and divergence in social entrepreneurship in Russia. J. Intellect. Capital (2020, in press) Popkova, E.G., Gulzat, K.: Technological revolution in the 21st century: digital society vs. artificial intelligence. Lecture Notes in Networks and Systems, vol. 91, pp. 339–345 (2020a) Popkova, E.G., Gulzat, K.: Contradiction of the digital economy: public well-being vs. cyber threats. Lecture Notes in Networks and Systems, vol. 87, pp. 112–124 (2020b) Popkova, E.G., Zmiyak, K.V.: Priorities of training of digital personnel for industry 4.0: social competencies vs technical competencies. Horizon 27(3–4), 138–144 (2019) Popkova, E.G., Sergi, B.S.: Will industry 4.0 and other innovations impact Russia’s development? In: Sergi, B.S. (ed.) Exploring the Future of Russia’s Economy and Markets: Towards Sustainable Economic Development, pp. 51–68. Emerald Publishing Limited, Bingley (2018)

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Popkova, E.G., Sergi, B.S. (eds.): Digital Economy: Complexity and Variety vs. Rationality. Springer, Heidelberg (2019) Popkova, E.G., Sozinova, A.A., Menshchikova, V.I.: Managing the adaptation of modern society to the industry 4.0 based on information waves and impulses. Voprosy teorii i praktiki zhurnalistiki [Theoret. Pract. Issues J.] 8(2), 438–446 (2019). https://doi.org/10.17150/23086203.2019.8(2). (in Russian) Ragulina, Y.V.: Priorities of development of industry 4.0 in modern economic systems with different progress in formation of knowledge economy. Stud. Syst. Decis. Control 169, 167– 174 (2019) Ragulina, Y.V., Alekseev, A.N., Strizhkina, I.V., Tumanov, A.I.: Methodology of criterial evaluation of consequences of the industrial revolution of the 21st century. Stud. Syst. Decis. Control 169, 235–244 (2019) Savelyeva, N.K., Kuklin, A.V., Lapteva, I.P., Malysheva, N.V.: The investment attractiveness of a regional market of educational services as the basis of its global competitiveness in industry 4.0. Horizon 27(3–4), 239–244 (2019) Sergi, B.S. (ed.): Tech, Smart Cities, and Regional Development in Contemporary Russia. Emerald Publishing Limited, Bingley (2019) Sergi, B.S., Popkova, E.G., Bogoviz, A.V., Litvinova, T.N.: Understanding Industry 4.0: AI, the Internet of Things, and the Future of Work. Emerald Publishing Limited, Bingley (2019) Shulus, A.A., Akopova, E.S., Przhedetskaya, N.V., Borzenko, K.V.: Intellectual production and consumption: a new reality of the 21st century. Lecture Notes in Networks and Systems, vol. 92, pp. 353–359 (2020) Standard & Poor: The world’s 100 largest banks (2020). https://www.spglobal.com/ marketintelligence/en/news-insights/latest-news-headlines/50964984. Accessed 28 Apr 2020 Sozinova, A.A.: Causal connections of formation of industry 4.0 from the positions of the global economy. Stud. Syst. Decis. Control 169, 131–134 (2019) Sozinova A.A.: Marketing concept of managing the reorganization of entrepreneurial structures using the latest information technologies. Qual. Access Success 19(S2), 118–122 (2018a) Sozinova, A.A.: Effectiveness or reorganization: application of information technologies in solving marketing problems of modern companies. Espacios 39(28) (2018b) Sozinova, A.A., Nabokikh, A.A., Ryattel, A.V., Sanovich, M.A.: Analysis of “underdevelopment whirlpools” as a tool of managing the regional market of education in the conditions of Industry 4.0, vol. 27, no. 3–4, pp. 173–179 (2019) Fokina, O.V., Fufacheva, L.A., Sozinova, A.A., Sysolyatin, A.V., Bulychev, L.L.: Information and communication technologies as a new vector of development. Espacios. 39(28), 5 (2018) World Economic Forum: The global competitiveness report 2019 (2020). http://reports.weforum. org/global-competitiveness-report-2019/competitiveness-rankings/#series=EOSQ087. Accessed 28 Apr 2020 Zavyalova, E.B., Studenikin, N.V., Starikova, E.A.: Business participation in implementation of socially oriented Sustainable Development Goals in countries of Central Asia and the Caucasus region. Central Asia Caucasus 19(2), 56–63 (2018)

Smart Technologies in Entrepreneurship: Launching a New Business Cycle or a Countercyclical Instrument for Regulating the Economic Situation Elena G. Popkova1(&), Nadezhda K. Savelyeva2, and Anastasia A. Sozinova2 1

Moscow State Institute of International Relations, Moscow, Russia [email protected] 2 Vyatka State University, Kirov, Russia [email protected], [email protected]

Abstract. Purpose: The main goal of the work is modeling scenarios of economic growth under the influence of the spread of «smart technologies» in entrepreneurship. Design/Methodology/Approach: The study is based on a hypotheticaldeductive principle. The work uses methods of regression and correlation analysis. With their help, the influence of the spread of «smart technologies» in entrepreneurship on the economic growth rate (GDP at constant prices) in 2020 and its variation in 2016–2020, is determined. The study is conducted on the example of leaders (countries from the top 20) of the World Bank global rating by the value of the doing business index for 2020. Findings: Scenarios of economic growth simulated by the spread of «smart technologies» in entrepreneurship. The prepared scenarios showed that «smart technologies» in entrepreneurship probably can’t be used to launch a new business cycle. Originality/Value: It’s proved that «smart technologies» in entrepreneurship can be used as a countercyclical tool for regulating the economic situation. Compiled forecasts of the spread of these technologies indicate a decrease in the variation in the rate of economic growth (by 8.94% with a probability of 13% and 2.06% with a probability of 24%). It’s proved that developing countries have a much more pronounced potential for using «smart technologies» in entrepreneurship in the interests of counter-cyclical regulation of the economic situation. In contrast, developed countries may be deprived of the opportunity to take advantage of the spread of «smart technologies» in entrepreneurship for economic growth and managing the cyclical nature of the economy. Consequently, in both categories of countries, the spread of «smart technologies» in entrepreneurship needs to be toughened by state regulation and that’s why further research is recommended. Keywords: Smart technologies
Digital economy
Industry 4.0
Entrepreneurship
Launch of a new business cycle
Countercyclical

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1722–1730, 2021. https://doi.org/10.1007/978-3-030-59126-7_188

Smart Technologies in Entrepreneurship instrument
Regulation Upcoming countries

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Economic conditions
Developed countries


JEL Code: D91
E01
F42
F43
F64
Q01
Q15 O38
Q56
Q57
O13
O41
O43
O44
O47


O31
O32
O33


1 Introduction The formation of the digital economy under the influence of scientific and technological progress has contributed to active modernization in various directions, from the formation of the information society to the launch of the e-government system. The key of these areas was the introduction of «smart technologies» in entrepreneurship, because the implementation of this area has the most pronounced, systemic impact on modern economic systems, covering their social subsystem (from the standpoint of transforming the labor market, changing the conditions for the sale of goods and services), and their economic subsystem (prevailing forms of business activity, technological market barriers, the nature and rate of economic growth). The uniqueness of the fourth industrial revolution lies in the fact that, in contradistinction to all previous revolutions initiated by private entrepreneurship and taking place spontaneously, the transition to industry 4.0 is carried out under state control. The new - regulated format of industrial revolutions allows us to reduce the risks associated with them and derive maximum benefits from them. In this regard, the problem of managing the influence of «smart technologies» in entrepreneurship on the cyclical economy is becoming increasingly relevant. This process can occur in one of two scenarios. The first script involves launching a new business cycle that is, accelerating the pace of economic growth based on the spread and application of «smart technologies» in entrepreneurship. The second scenario is connected with the prospect of using «smart technologies» in entrepreneurship as a countercyclical instrument for regulating the economic situation that is, preventing crises and stabilizing economic systems. Although the described scenarios don’t contradict each other, in practice their simultaneous implementation in a modern market economy is difficult, and therefore it’s advisable to consider them as alternative. The goal of this work is to model scenarios of economic growth under the influence of the spread of «smart technologies» in entrepreneurship.

2 Materials and Methods The spread of smart technologies in entrepreneurship in the digital economy and industry 4.0 is described in Belik et al. (2020), Haabazoka et al. (2019), Ivanov et al. (2019), Pichkov (2016), Popkova (2019), Popkova and Gulzat (2020a), Popkova and Gulzat (2020b), Popkova and Sergi (2018), Popkova and Sergi (2019), Popkova and

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Sergi (2020), Popkova and Zmiyak (2019), Popkova et al. (2019), Ragulina (2019), Ragulina et al. (2019), Savelyeva et al. (2019), Sergi (2019), Sergi et al. (2019), Shulus et al. (2020), Sozinova (2019), Sozinova (2018a), Sozinova (2018b), Sozinova et al. (2019), Fokina et al. (2018), Strelets (2017), Zavyalova et al. (2018). The implications of introducing smart technologies in entrepreneurship for economic growth and cyclical business systems are reflected in publications by Andronova et al. (2019), Guru and Yadav (2019), Kurniawati (2020), Liu et al. (2018), Zheng and Shen (2019). Although some issues have been studied in the existing literature, in general, the scenarios of economic growth under the influence of the spread of «smart technologies» in entrepreneurship are poorly understood and need further study. For this reasons, methods of regression and correlation analysis are used in this work. With their help, the influence of the spread of «smart technologies» in entrepreneurship is determined, the index of which is the «future readiness» index, calculated by IMD as a component of the digital competitiveness index (x), on the economic growth rate (GDP at constant prices) in 2020 (y1) and its variation in 2016– 2020. (y2). The study is conducted on the example of leaders (countries from the top 20) of the World Bank global rating by the value of the doing business index for 2020. The study is built on the hypothetical-deductive principle and involves a sequential test of two alternative hypotheses: – Hypothesis H1: there is a positive relationship between the introduction of «smart technologies» in entrepreneurship and the rate of economic growth in 2020, that is, r (x, y1) > 0 (in the correlation analysis) and their correlation is quite high, that is, R2 (x, y1) > 50% (in regression analysis); – Hypothesis H2: there is a negative relationship between the introduction of «smart technologies» in entrepreneurship and the variation in the rate of economic growth in 2016–2020, that is, r (x, y2) < 0 (in the correlation analysis) and their correlation is quite high, i.e. R2 (x, y2) > 50% (in regression analysis). The statistical base for the study is given in Table 1.

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Table 1. Statistics of «smart technologies» in entrepreneurship and economic growth in countries from the top 20. Ranking position doing Country business 2020

Developed countries (top-10)

Upcoming countries (top-20)

The average Standard deviation

New Zealand Singapore Denmark The Republic of Korea The USA The UK Malaysia UAE Thailand Russia China Turkey – –

Future readiness, бaллы 1 − 100

The rate of economic growth (GDP at constant prices), % 2016

2017

2018

2019

2020

Variation

x

–

–

–

–

y1

y2

81,367 86,407 94,519 89,662

3,956 1,996 1,137 2,828

3,076 2,249 1,474 2,679

2,940 2,555 1,701 2,835

2,563 2,553 1,801 3,027

2,561 18,92 2,552 10,60 1,873 18,66 3,049 5,35

98,427 85,270 71,509 87,626 52,864 56,539 80,743 57,567 78,54 15,40

1,616 1,806 4,239 2,732 3,230 −0,248 6,700 2,876 – –

2,307 2,048 4,500 1,471 3,002 1,400 6,582 2,452 – –

2,519 1,457 4,700 4,392 3,264 1,444 6,168 3,307 – –

2,121 1,606 4,900 3,318 3,239 1,500 6,000 3,428 – –

1,825 1,909 4,880 3,451 3,110 1,500 5,900 3,794 3,03 1,32

17,46 13,37 5,99 35,00 3,49 68,39 5,65 16,36 18,27 18,03

Source: compiled by the authors based on materials from IMD (2020), Institute of scientific communications (2020), International Monetary Fund (2020).

3 Results Based on the data from Table 1, the following results of correlation (Fig. 1) and regression (Fig. 2) analysis are obtained. As shown in Fig. 1, in developed countries, the rate of economic growth under the influence of the spread of «smart technologies» in entrepreneurship decreases (correlation −47.69%), and in developing countries increases (correlation 55.75%). It was also found that in developed countries, the variation in the rate of economic growth under the influence of the spread of «smart technologies» in business is increasing (correlation 15.43%), and in developing countries it’s decreasing (correlation −11.08%). As can be seen from Fig. 2, the correlation of the spread of «smart technologies» in entrepreneurship with economic growth is very small: R2 (x, y1) = 3.53%, R2 (x, y2) = 5.52%. Using a random number generator based on the revealed average and standard deviation, a histogram of the normal distribution of the predicted values of the spread of «smart technologies» in business was obtained (Fig. 3).

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Fig. 1. Cross-correlation of the spread of «smart technologies» in entrepreneurship with economic growth in developed and upcoming countries, % Source: calculated and built by the authors.

Fig. 2. Regression curves of the influence of the spread of «smart technologies» in entrepreneurship on economic growth in developed and developing countries Source: calculated and built by the authors.

Based on the histogram, modeling of economic growth scenarios was carried out under the influence of the spread of «.smart technologies» in entrepreneurship, the results of which are given in Table 2. As can be seen from the Table 2, a script of accelerating economic growth, involving the launch of a new business cycle based on the spread of «smart technologies» in entrepreneurship, is unlikely. An alternative script for it to reduce the cyclical nature of the economy is quite probable, in connection with which one can

Frequency (probability of getting into your pocket), %

Smart Technologies in Entrepreneurship

30 25 20 15 10 5 0

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24

7

9

13

17

7

14 5

1

3

Pocket forecast range, points 1-100 Fig. 3. Histogram of the normal distribution of forecast values the spread of smart technology in entrepreneurship Source: calculated and built by the authors. Table 2. Scripts of economic growth under the influence of the spread of «smart technologies» in entrepreneurship Script feature

Consequences of the spread of smart technology in entrepreneurship Heзaвиcимaя пepeмeннaя The average value of the independent variable in 2020 Dependent variable

The average value of the dependent variable in 2020 Regression addiction Predicted recession of independent variable Consequences of recession for a dependent variable The predicted increase in the independent variable Consequences of growth for a dependent variable

Growth Acceleration Script Launch a new business cycle

The script of reducing the cyclical economy

Economic growth rate (y1) 3,03%

Variation in economic growth rate (y2)

Their use as a countercyclical instrument for regulating the economic situation Future readiness index 78,54 points

18,27%

y1 = −0,02 * y2 = −0,27 + 39,87 x + 4,30 5.84% to 73.9527 points with a probability of 13% 19.90 2.82 (8.94% decline) (6.89% decline) 3.64% to 81.3978 points with a probability of 24%

17,89 2,67 (2,06% decline) (11,81% decline) Script output The script is The probability of the script is high unlikely Source: developed, calculated and compiled by the authors.

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expect the use of «smart technologies» in entrepreneurship as a countercyclical instrument for regulating the economic situation.

4 Conclusion As a result of the study, the following conclusions were obtained. Firstly, the «smart technologies» in entrepreneurship probably can’t be used to launch a new business cycle, as the forecasts for the dissemination of these technologies indicate a decrease in the rate of economic growth (by 6.89% with a probability of 13% and 11, 81% with a probability of 24%). Secondly, «smart technologies» in entrepreneurship can be used as a countercyclical tool for regulating the economic situation. Compiled forecasts of the spread of these technologies indicate a decrease in the variation in the rate of economic growth (by 8.94% with a probability of 13% and 2.06% with a probability of 24%). Nevertheless, «smart technologies» in entrepreneurship shouldn’t be the only measure to reduce the cyclical nature of the economy, because their influence on the variation in the rate of economic growth is very small (the correlation is 5.52%). Thirdly, developing countries have a much more pronounced potential for using «smart technologies» in entrepreneurship in the interests of counter-cyclical regulation of the economic situation. In contrast, developed countries may be deprived of the opportunity to take advantage of the spread of «smart technologies» in entrepreneurship for economic growth and managing the cyclical nature of the economy. Consequently, in both categories of countries, the spread of «smart technologies» in entrepreneurship needs to be toughened by state regulation, which is why further research is recommended.

References Andronova, I.V., Belova, I.N., Yakimovich, E.A.: Digital technology in the fishing sector: international and Russian experience. In: 1st International Scientific Conference on Modern Management Trends and the Digital Economy - From Regional Development to Global Economic Growth (MTDE), Proceedings of the 1st International Scientific Conference Modern Management Trends and the Digital Economy: From Regional Development to Global Economic Growth (MTDE 2019), Yekaterinburg, Russia. AEBMR-Advances in Economics Business and Management Research, vol. 81, pp. 277–280 (2019) Belik, E.B., Petrenko, E.S., Pisarev, G.A., Karpova, A.A.: Influence of technological revolution in the sphere of digital technologies on the modern entrepreneurship. Lecture Notes in Networks and Systems, vol. 91, pp. 239–246 (2020) Guru, B.б., Yadav, I.: Financial development and economic growth: panel evidence from BRICS. J. Econ. Finance Adm. Sci. 24(47), 113–126 (2019). https://doi.org/10.1108/JEFAS12-2017-0125 Haabazoka, L., Popkova, E.G., Ragulina, Y.V.: Africa 4.0 as a perspective scenario for neoindustrialization in the 21st century. Afr. J. Econ. Sustain. Dev. 2(2), 20–38 (2019)

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IMD: World Digital Competitiveness Ranking 2019 (2020). https://www.imd.org/wcc/worldcompetitiveness-center-rankings/world-digital-competitiveness-rankings-2019/. Accessed 26 Apr 2020 Institute of Scientific Communications: Data set “Big data of the modern world economy: digital platform for intelligent analytics – 2020” (2020). https://www.archilab.online/en/data/ sounting-data-set. Accessed 26 Apr 2020 International Monetary Fund: World Economic Outlook Database (2020). https://www.imf.org/ external/pubs/ft/weo/2017/01/weodata/weoselgr.aspx. Accessed 26 Apr 2020 Ivanov, O., Zavyalova, E., Ryazantsev, S.: Public-private partnership in the countries of the Eurasian Economic Union. In: Central Asia and the Caucasus, English edn., vol. 2, no. 2, pp. 33–47 (2019) Kurniawati, M.: The role of ICT infrastructure, innovation and globalization on economic growth in OECD countries, 1996–2017. J. Sci. Technol. Policy Manag. 2(1), 114–127 (2020). https:// doi.org/10.1108/JSTPM-06-2019-0065 Liu, A., Song, H.б., Blake, A.: Modelling productivity shocks and economic growth using the Bayesian dynamic stochastic general equilibrium approach. Int. J. Contemp. Hosp. Manag. 30 (11), 3229–3249 (2018). https://doi.org/10.1108/IJCHM-10-2017-0686 Pichkov, O.B.: Social inequality in the US and Canada. Int. Trends (Mezhdunarodnye protsessy) 2(2(3)), 85–92 (2016) Popkova, E.G.: Preconditions of formation and development of industry 4.0 in the conditions of knowledge economy. Studies in Systems, Decision and Control, vol. 169, no. 1, pp. 65–72 (2019) Popkova, E.G., Sergi, B.S.: Human capital and AI in industry 4.0. Convergence and divergence in social entrepreneurship in Russia. J. Intellect. Cap. (2020, in press) Popkova, E.G., Gulzat, K.: Technological revolution in the 21st century: digital society vs. artificial intelligence. Lecture Notes in Networks and Systems, vol. 91, pp. 339–345 (2020a) Popkova, E.G., Gulzat, K.: Contradiction of the digital economy: public well-being vs. cyber threats. Lecture Notes in Networks and Systems, vol. 87, pp. 112–124 (2020b) Popkova, E.G., Zmiyak, K.V.: Priorities of training of digital personnel for industry 4.0: social competencies vs technical competencies. Horizon 27(3–4), 138–144 (2019) Popkova, E.G., Sergi, B.S.: Will Industry 4.0 and other innovations impact Russia’s development? In: Sergi, B.S. (ed.) Exploring the Future of Russia’s Economy and Markets: Towards Sustainable Economic Development, pp. 51–68. Emerald Publishing Limited, Bingley (2018) Popkova, E.G., Sergi, B.S. (eds.): Digital Economy: Complexity and Variety vs. Rationality. Springer, Cham (2019) Popkova, E.G., Sozinova, A.A., Menshchikova, V.I.: Managing the Adaptation of Modern Society to the Industry 4.0 Based on Information Waves and Impulses. Voprosy teorii i praktiki zhurnalistiki = Theor. Pract. Issues J. 8(2), 438–446 (2019). https://doi.org/10.17150/ 2308-6203.2019.8(2).438-446. (in Russian) Ragulina, Y.V.: Priorities of development of industry 4.0 in modern economic systems with different progress in formation of knowledge economy. Studies in Systems, Decision and Control, vol. 169, pp. 167–174 (2019) Ragulina, Y.V., Alekseev, A.N., Strizhkina, I.V., Tumanov, A.I.: Methodology of criterial evaluation of consequences of the industrial revolution of the 21st century. Studies in Systems, Decision and Control, vol. 169, pp. 235–244 (2019) Savelyeva, N.K., Kuklin, A.V., Lapteva, I.P., Malysheva, N.V.: The investment attractiveness of a regional market of educational services as the basis of its global competitiveness in industry 4.0. Horizon 27(3–4), 239–244 (2019)

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Sergi, B.S. (ed.): Tech, Smart Cities, and Regional Development in Contemporary Russia. Emerald Publishing Limited, Bingley (2019) Sergi, B.S., Popkova, E.G., Bogoviz, A.V., Litvinova, T.N.: Understanding Industry 4.0: AI, the Internet of Things, and the Future of Work. Emerald Publishing Limited, Bingley (2019) Shulus, A.A., Akopova, E.S., Przhedetskaya, N.V., Borzenko, K.V.: Intellectual production and consumption: a new reality of the 21st century. Lecture Notes in Networks and Systems, vol. 92, pp. 353–359 (2020) Sozinova, A.A.: Causal connections of formation of industry 4.0 from the positions of the global economy. Studies in Systems, Decision and Control, vol. 169, pp. 131–134 (2019) Sozinova, A.A.: Marketing concept of managing the reorganization of entrepreneurial structures using the latest information technologies. Qual. Access Success 19(S2), 118–122 (2018a) Sozinova, A.A.: Effectiveness or reorganization: application of information technologies in solving marketing problems of modern companies. Espacios 39(28) (2018b) Sozinova, A.A., Nabokikh, A.A., Ryattel, A.V., Sanovich, M.A.: Analysis of “underdevelopment whirlpools” as a tool of managing the regional market of education in the conditions of Industry 4.0. Horizon 27(3–4), 173–179 (2019) Fokina, O.V., Fufacheva, L.A., Sozinova, A.A., Sysolyatin, A.V., Bulychev, L.L.: Information and communication technologies as a new vector of development. Espacios 39(28), 5 (2018) Zavyalova, E.B., Studenikin, N.V., Starikova, E.A.: Business participation in implementation of socially oriented Sustainable Development Goals in countries of Central Asia and the Caucasus region. In: Central Asia and the Caucasus, vol. 19, no. 2, pp. 56–63 (2018) Zheng, J.б., Shen, C.: Domestic demand-based economic globalization and inclusive growth. China Polit. Econ. 2(1), 136–156 (2019). https://doi.org/10.1108/CPE-04-2019-0003 Strelets, I.A.: Cartoon effects on the networks. World Econ. Int. Relat. 61(6), 77–83 (2017)

Culture Perception Matrices as an Identity Management Tool Anna R. Akopyan(&), Artur M. Arakelyan(&), and Viktor V. Krysov(&) State University of Management, Moscow, Russian Federation [email protected], [email protected], [email protected]

Abstract. The article discusses the possibility of solving the problem of the identity crisis, which is characteristic of a person in a modern fast-changing society, by gently controlling the individual’s identities by creating cultural perception matrices that reflect the existence of identities in the individual’s mind, followed by ontologization of subject areas representing identities, and searching for common ones for different identities of concepts with a positive connotation. Keywords: Identity
Self-identification
Multiple identity Ontologization
Linguistic personality
Cognitive base


Subject area


JEL Code: Z130

1 Introduction In today’s increasingly complex society, everybody experiences certain difficulties in understanding and accepting in a timely manner the processes that they observe, in which they participate consciously or unconsciously. This reduces the success of human adaptation to continuous, often unpredictable changes in the social environment. Modern society is characterized by high instability, the weakening of common values and behaviors, and the simultaneous presence in society of several types of conflicting cultures and subcultures. This is mainly due to the spread of urban lifestyles, informatization, virtualization and digitalization of society. Continuous increase of information flows, involuntary interaction with new people from other cultures and subcultures, constant human participation in virtual communities, in network communication, as well as the increasing complexity and speed of each of the changes have a negative impact on a person’s ability to understand, accept and adapt to the changes. This leads to loss of psychological and social well-being, loss of satisfaction with life, self-esteem, quantity and quality of social skills acquired. The basis of psychological and social well-being of modern man can be considered as perception and evaluation of their self-realization in the course of creative activity, their perception of balance, happiness and normal life. The human being realizes their © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1731–1737, 2021. https://doi.org/10.1007/978-3-030-59126-7_189

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full potential in a constant process of identifying themselves, their deeds and achievements with their ideas of norm and wellbeing. In turn, individual’s perceptions of well-being are shaped through self-identification with various components of society, culture and environment. The complex of ideas of a person about their conformity with certain aspects of being important for them, about the identity to authorities, “significant others”, their ethical norms, values, and actions is commonly called self-identification. This complex is naturally formed in human consciousness from early childhood, first unconsciously, then more and more consciously. The adult person is characterized by a formed set of interrelated identities, collectively called cultural and/or social identities. If in a traditional society it was enough for a person to realize and manifest one or two identities to be satisfied with life, in today’s complex, diverse, multicultural society each person has several identities, or multiple identities (Razlogov 2008; Krasnopol’skaia 2015). Interaction, correlation and different degree of expression of several identities within one personality often lead to self-identification crisis, when a person cannot consciously choose and fix that ensemble of self-image, that set of personal constructions – in D. Kelly terminology – which ensures their psychological and social well-being (Kelly 2000). “This situation has the potential to create identity conflicts. At the same time, people’s painful experience of both their own structural marginality and their own identity discrepancies, such as that of ‘me’, which arose as a result of all previous socialization, and of another ‘me’, which is forced to adapt to new living conditions, is intensified.” (Klimov 2001) Different human notions of norm and well-being, expressed in their different identities, come into conflict. This conflict is exacerbated by changes in external orientations, authority and examples for self-identification. This problem was called the “identity crisis” of the modern man. This crisis is experienced by the majority of people at certain stages of socialization in interaction with a rapidly changing and increasingly complex society. The identity crisis is manifested in the fact that in a society that is becoming more complex and rapidly changing, a person loses the ability to successfully adapt, giving freedom of choice, a sense of security, predictability, belonging to “own” group. The person is disappointed in personal fulfilment, experiences a crisis of trust in people, reduces the desire for cooperation and, ultimately, to self-development. The person loses their self-respect and experiences psychological ill-being. The person begins to realize the necessity of correcting the ideas about themselves and about their place in society. And then the question arises: are there any methods or tools that can help a person during an identity crisis? How can we help a rebellious personality avoid mental anxiety and even mental damage, and not in the framework of psychotherapeutic (or even psychiatric) assistance, but in the framework of cognitive, thinking operations that can be formalized and standardized? The problem can be formulated as follows: there are mental tools that can reduce the risks of an identity crisis for any person. It is possible to manage identities gently, both from the person who has mastered the tools and from outside.

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The next logical step is to convert mental identity management tools into a standardized and then encoded form for use in order to prevent an alleged identity crisis, as well as to train “artificial identities” created by artificial neural networks.

2 Methodology The human consciousness is studied by many sciences, from psychological and neurobiological to cognitive and linguistic ones, forming complex and applied variants such as cognitive linguistics, neuropsychology, etc. The current level of understanding of the mechanisms of consciousness work is based on connectionist models: thinking in each unit of time functions as a stimulusactivated parallel ensemble-network interaction of neurons with a predominance of associative links of varying degrees of severity (Arutiunian 2013). This approach suggests that each identity as a mental object exists in the consciousness of the individual in the form of an inactive semantic network, where activation in the nodes forms the basic concepts that generate this type of identity, and associations linked with these concepts. Each semantic network representing this or that identity can be defined as a subject area and ontologized. Multiple identity is a property of any adult’s consciousness. The set of human identities is finite, it can be classified and represented in the form of interacting semantic networks and, accordingly, subject areas. Private ontologies that reflect these subject areas are combined into a common ontology that reflects the multiple identities of individuals. In the first stages of identity ontologization, the relevant subject areas can be presented as matrices of cultural perception. Such matrices unite the majority of attributes of those units of thought – mentifacts (Krasnykh 2003), which comprise a part of the cognitive base of a cultural-linguistic personality responsible for the perception of any “other culture” different for a given cultural-linguistic personality (Krysov 2011). These can be cultures both ethnic or national cultures, such as Kazakh and Pomor cultures, and any subculture which a person is in contact with and which may be part of or the basis for forming one of their identities.

3 Results The identity of each individual is multiple and has a complex structure (Krysov 2009). We can speak about natural identities formed in a person within the framework of their space-time life cycle and in the process of socialization in their native culture (gender, family, territorial, linguistic, cultural identity), and imputed identities imposed on an individual by external meaning-producing constructions-discourses (an individual often does not realize the artificiality of the identity formed in his or her consciousness by these or those ideas and notions and considers them natural): ethnic, national, religious identity.

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A distinctive feature that separates natural types of identity from imputed ones can be considered the correspondence of identity and individual space-time life cycles of everyday being. Natural identities are concrete, unambiguous and formed in the daily life of an individual, in his or her interaction with the environment and reference groups (day, week, seasonal life cycle of an individual starting from childhood: family, yard, school, neighborhood). Imputed identities are formed by influencing the individual’s consciousness through various discourses diverted from everyday life (religious cult, ideology, mythology). This impact is made through the attitudes of adults, through assignments in school, through the mass media. Imputed identities are vague, blurred and ambiguous, suggesting that consciousness can be manipulated (Table 1). Table 1. Identity typology (Krysov 2009) Hierarchy level MacroMacroMezo-

Mezo-

Identity type Imputed Imputed Natural turning into imputed Natural

Micro-

Natural

Micro-

Natural

Identity kind

Identification object

Civilizational National, state Ethnical, religious

Cultural world Nation, state Nationality, ethnicity, affiliation

Territorial, group, linguistic, civil, cultural Territorial, group

In adulthood – place of permanent residence and work, territorial community In childhood – a “small” motherland, a place of growing-up Individual themselves as a person (self-identification) and reference groups (family, friends, classmates)

Personal, gender, birth (family), cultural and domestic

Also identities can be variously realized and not realized, perceived from outside or formed during individual work of individual consciousness, i.e. universal for any person, group and individual with different variants of interlacing of individual, group and universal components. An individual can only use his or her own identity as a tool for socializing and balancing their psychological state, or can manifest his or her identity by declaring it and using it in various actions. As mentioned above, cultural perception matrices are a convenient tool for working with identities. A common scientific understanding of the perception of another culture can be formulated as follows. The cultural and linguistic personality is formed in a certain linguistic and cultural community, in the cognitive space of the native culture. This space absorbs the whole set of collective and individual cognitive spaces. Clouds of knowledge, ideas and images revolve around the cognitive base, a certain pillar of ethno-cultural worldview created by centuries of development of this culture and

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language. The cognitive base contains time-honored and constant use of forms of perception of certain elements of being, including knowledge and ideas about other cultures. These representations exist as part of an individual’s background knowledge (Krasnykh 2003). The composition of the cognitive base is quite complex and cannot be precisely defined, its identification and fixation in view of the constant development and change of the cognitive base is a separate objective. For this purpose, on the basis of representative surveys, associative dictionaries or so-called dictionaries of cultural literacy (The New Dictionary of Cultural Literacy 2002; Are you literate 1994; Russian associative dictionary 2002), corpuses of texts are created, and cultural studies are conducted. The cognitive base, absorbing and reflecting the public and all individual consciousnesses, consists of the so-called mentifacts – spiritual products in the form of collective and individual perceptions. This includes knowledge, concepts, notions, precedent phenomena, stereotypes, canons, templates, and others (Gudkov 2003). It is necessary to conduct a typology of mentifact representations that exist and are possible in the consciousness of an individual and are elements of identity building. The first basic level of typology is the division of mentifacts into universal ones, peculiar to human culture, and into so-called national-determined ones. Here, we also divide mentifacts into fundamental ones, that have developed over the centuries and have become part of myths or school knowledge, and into conjunctural ones, inspired by modern mass media (they usually prevail in the average individual consciousness). Next, we add a positive, neutral or negative connotation to each menttifact. Another criterion will be the type of mentifact: a precedent phenomenon, canon, stereotype, etc. Thus, it is possible to compile rather complete lists of attributes for each of the identified mentifacts reflecting the perception of culture, i.e. the presence of culture in human consciousness. These may be, for example, universal conjunctive notions with a neutral connotation, or national-determined fundamental stereotypes with a negative connotation that have survived for centuries (related, for example, to the study of a military conflict at school). The next step is to fix the sources of mentifacts formation (they can be textual or sensory perception-based – audio-visual, taste, smell and even tactile) and their basic topics: history, economy, household, geography, art, etc. Each mentifact will therefore get a related set of attributes. For example, a national fundamental mentifact with a negative connotation associated with the notion of a foreign cultural work of art, which has entered the cognitive base of this culture through a well-known text. Or a universal conjunctural mentifact with a neutral connotation formed on the basis of audio-visual perception and related to the geographical topic. And so on. The next logical step is to create an ontology of mentifacts collected in an associative dictionary or vocabulary of cultural literacy of this linguistic and cultural community. It is this step that should form the basis for further work on the ontologization of identities.

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4 Conclusion On the basis of the aforementioned, it can be assumed that the most obvious way to manage identities may be: first, to conduct identification and ontologization of existing (and presumed in an individual) identities through matrices of perception of cultures; second, to identify in the cognitive base of the individual the concepts of other identities as the notions of other cultures and subcultures, and search for common, universal and fundamental mentifacts with positive connotations in each culture; third, to bring elements of a different, new identity into the consciousness of an individual by means of learning with the help of the matrix of perception of culture and ontology created on its basis; fourth, to help individuals develop a new individual identity that is necessary for successful adaptation to changed conditions; fifth, to train artificial neural networks on the basis of ontologies of subject areas reflecting the created matrices of cultural perception and corresponding identities.

References Hirsch, E.D., Kett, J.F., Trefil, J. (eds.): The New Dictionary of Cultural Literacy. Houghton Mifflin Company, London (2002) Andreeva, G.M.: K voprosu o krizise identichnosti v usloviiakh sotsial’nykh transformatsii [On the identity crisis in the conditions of social transformation]. Psikhologicheskie issledovaniia, no. 6, iss. 20 (2011). http://psystudy.ru/index.php/num/2011n6-20/580. Accessed 14 Feb 2020 Arutiunian, V.G.: Struktura mental’nykh reprezentatsii: izvlechenie teksta iz pamiati, neironnaia set’ i iskusstvennyi intellekt [Mental representation structure: text retrieval from memory, neural network and artificial intelligence]. Perm (Russia), Perm University Herald. Russian and Foreign Philology, no. 4, iss. 24 (2013). https://cyberleninka.ru/article/n/strukturamentalnyh-reprezentatsiy-izvlechenie-teksta-iz-pamyati-neyronnaya-set-i-iskusstvennyyintellekt. Accessed 14 Feb 2020 Barysheva, Iu.S., Krasnopol’skaia, A.P.: Transformatsiia identichnosti v usloviiakh sotsiokul’turnogo prostranstva megapolisa [Transformation of identity in the social and cultural space of a megapolis]. The Bulletin of Moscow State University of Culture and Arts, no. 6, iss. 68 (2015). https://cyberleninka.ru/article/n/transformatsiya-identichnosti-v-usloviyahsotsiokulturnogo-prostranstva-megapolisa. Accessed 14 Feb 2020 Pushnykh, V.A., Shevchenko, N.N.: Gramotny li vy, ili 5000 slov, kotorye pomogut proverit’ eto [Are you literate, or 5000 words to help check it]. Tomsk (Russia), Izdatel’skii Dom Tomskogo Universiteta (1994) Gudkov, D.B.: Teoriia i praktika mezhkul’turnoi kommunikatsii [Theory and practice of intercultural communication]. ITDGK “Gnozis”, Moscow (2003) Kelly, G.A.: A Theory of Personality. The Psychology of Personal Constructs. Rech, Saint Petersburg (2000) Klimov, I.A.: Psikhosotsial’nye mekhanizmy vozniknoveniia krizisa identichnosti. Transformatsiia identifikatsionnykh struktur v sovremennoi Rossii. [Psycho-social mechanisms for identity crises. Transformation of identification structures in modern Russia]. Stefanenko, T. G. (ed.) Moskovskii obshchestvennyi nauchnyi fond (MONF), Moscow, pp. 54–53 (2001)

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Krasnopol’skaia, A.P.: Stanovlenie mnozhestvennoi identichnosti i printsipy kommunikativnoi ratsional’nosti [Formation of multiple identities and principles of communicative rationality]. The Bulletin of Moscow State University of Culture and Arts, no. 5, iss. 67 (2015). https:// cyberleninka.ru/article/n/stanovlenie-mnozhestvennoy-identichnosti-i-printsipykommunikativnoy-ratsionalnosti. Accessed 14 Feb 2020 Krasnykh, V.V.: “Svoi” sredi “chuzhikh”: mif ili real’nost’? [“Own” among “alien”: myth or reality]. ITDGK “Gnozis”, Moscow (2003) Krysov, V.V.: Matritsy vospriiatiia kul’tur [Cultural perception matrixes]. Istoriia i sovremennost’ glazami molodykh: Chastnyi chelovek v sovremennom mire, pp. 255–260. Russian State University for the Humanities, Moscow (2011) Krysov, V.V.: Rasshirenie estestvennoi identichnosti kak osnova razvitiia obshchestva [Expansion of natural identity as the basis for the development of society]. Istoriia i sovremennost’ glazami molodykh: Rossiia v sovremennom mire, pp. 233–236. Russian State University for the Humanities, Moscow (2009) Razlogov, K.E.: Problema mnozhestvennosti identichnostei [Problem of multiple identities]. Personality. Culture. Society, vol. 13, no. 2, iss. 63–64, pp. 115–119 (2011) Karaulov, Y.N., Cherkasova, G.A., Ufimtseva, N.V., Sorokin, Iu.A., Tarasov, E.F.: Russkii assotsiativnyi slovar’ [Russian associative dictionary]. Russian Academy of Sciences, Moscow, AST: Astrel’ (2002). http://tesaurus.ru/dict/. Accessed 14 Feb 2020 Riabichenko, T.A., Lebedeva, N.M., Plotka, I.D.: Mnozhestvennye identichnosti, akkul’turatsiia i adaptatsiia russkikh v Latvii i Gruzii [Multiple identities, acculturation and adaptation of Russians in Latvia and Georgia]. Kul’turno-istoricheskaia psikhologiia 15(2), 54–64 (2019)

Management in Higher Education Based on “Smart Technologies”: Digital Managerial Staff vs. Artificial Intelligence Olga V. Konina1(&), Sergey A. Tinkov2, and Elena V. Tinkova1 1

Moscow State Pedagogical University, Moscow, Russia [email protected] 2 REU Named After G.V. Plekhanov, Moscow, Russia

Abstract. Purpose: The research aims to solve the problem by developing the scientific and methodological foundations of management in higher education based on “smart technologies”. Design/Methodology/Approach: The author analyzes the digitalization statistics of science and higher education in Russia in 2019 and substantiates that significant prospects for further digitalization of higher education in Russia remain at present. Findings: A management model in higher education based on “smart technologies” has been developed. A polyparametric assessment of managerial functions in higher education on the basis of “smart technologies” was carried out. The requirements to the subjects of management in higher education on the basis of “smart technologies” in the context of the functions performed are determined. Originality/Value: Summing up the study, we note that management in higher education based on “smart technologies” requires the simultaneous use of digital managerial staff and artificial intelligence, the distribution of functions between them and the organization of their highly effective interaction. This testifies both to the limited possibilities of automation of management in higher education on the basis of “smart technologies”, and to the need for unique artificial intelligence, as well as to the need to train digital managerial personnel with strong social and technological competencies. Keywords: Management
Higher education
Digital education
Digital university
“Smart technologies”
Digital management personnel
Artificial intelligence
Russia JEL Code: G32
G34
G38
I523
I25
M11
M12
M15
O16
O31
O32
O33
O38

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1738–1745, 2021. https://doi.org/10.1007/978-3-030-59126-7_190

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1 Introduction Higher education is one of the most priority areas of the modern economy. Acting as an environment for the creation and development of human potential, the development of innovations and the growth of knowledge, this area contributes to the efficiency and competitiveness of the economy. System modernization of Russia, along with other developed and developing countries, extends to higher education, which creates new challenges for its management. The scenario for the modernization of higher education is specific. Unlike industry, in which fully automated “smart” enterprises are created, social interactions play an important role in higher education, and therefore only hotel business processes are subject to automation based on “smart technologies”. Attempts at full-scale automation of higher education, embodied in distance learning and eliminating interpersonal communications, do not guarantee the high quality of the provision of educational services and therefore cause reasonable criticism and are not popular. In this regard, the approach based on the experience of industry to automation of business processes under the control of artificial intelligence cannot be used templatewise in digital education and needs either adaptation to industry specifics or a fundamentally new alternative. This causes a confrontation between digital management personnel and artificial intelligence as promising subjects of management in higher education, based on “smart technologies”. Uncertainty as to which university management subjects in which “smart technologies” are being introduced are most preferable inhibits the digitalization of education, which is an urgent scientific and practical problem. This study aims to solve the problem by developing the scientific and methodological foundations of management in higher education based on “smart technologies”.

2 Materials and Methods Various issues of management of business systems and corporate business entities based on “smart technologies”, the use of artificial intelligence, the preparation and use of digital managerial staff are reviewed in numerous studies and publications, among which Andronova et al. (2019), Belik et al. (2020), Haabazoka et al. (2020), Ivanov et al. (2019), Pichkov (2016), Popkova (2019), Popkova and Gulzat (2020a), Popkova and Gulzat (2020b), Popkova and Sergi (2018), Popkova and Sergi (2019), Popkova and Sergi (2020), Popkova and Zmiyak (2019), Ragulina (2019), Ragulina et al. (2019), Sergi (2019), Sergi et al. (2019), Shulus et al. (2020), Strelets (2017), Zavyalova et al. (2018). As shown by the content analysis of the cited literature sources, they do not adequately reflect the specifics of management in digital education, which requires further research. To determine the general prospects for the modernization of higher education on the basis of “smart technologies” using the example of modern Russia, we turn to the data of official statistics (Fig. 1).

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Fig. 1. Statistics on digitalization of science and higher education in Russia in 2019, % of universities. Source: compiled by the authors based on materials from the Institute for Statistical Studies and Economics of Knowledge (2020), National Research University Higher School of Economics (2020).

As shown in Fig. 1, according to the estimates of the Institute for Statistical Studies and Economics of Knowledge, the share of digital personnel involved in education in Russia in 2019 amounted to 4.3% of the total number of specialists in ICT professions. Prerequisites for the development of digital higher education in Russia with the mass availability of broadband Internet access among Russian universities (85.1%), with the active implementation of electronic financial settlements (56.1% of universities), using software to solve managerial, organizational and the economic objectives of universities (52%) and using electronic signatures (78.2%). Along with this, there is a weak use of the Internet for marketing purposes: 4.6% of universities use it for sales, and 14.5% of universities use it for purchases. 22.1% of universities in Russia use cloud services, and 8.2 universities use SRM systems. Consequently, significant prospects remain for further digitalization of higher education in Russia.

3 Results To determine the place and functional load of management in higher education on the basis of “smart technologies”, its conceptual model has been developed (Fig. 2). From Fig. 2 shows that one management entity exercises control at the national level, and the other at the corporate level. At the national level, Big Data analytics is carried out, strategic development priorities for higher education are determined, trends are analyzed, unscrupulous market players are identified, universities are ranked, educational standards, norms, university requirements are made, decisions on licensing, financing and grants are made. At the corporate level, Big data on the university’s activities is analyzed, strategic management, decision making, personnel management, product management and marketing are carried out.

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Fig. 2. Management model in higher education based on “smart technologies” Source: designed and compiled by the author.

A polyparametric assessment of managerial functions in higher education based on “smart technologies” in points from 1 to 10 was carried out in Table 1. As can be seen from the Table 1, the need for artificial intelligence is very high in Big Data analytics, in strategic planning and decision making, in the selection of applicants, in documentary support of business operations, decision making, preparation and submission of corporate reporting to regulatory authorities. Digital management personnel are preferred when selecting personnel for a digital university. The joint use of artificial intelligence and digital management personnel is recommended when monitoring performance, making decisions on students, marketing, as well as evaluating individual results and stimulating employees. The requirements for management entities in higher education based on “smart technologies” in terms of the functions performed are given in Table 2.

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Table 1. Polyparametric assessment of managerial functions in higher education based on “smart technologies”. Managerial function

Big Data analytics Strategic planning and decision making Staff selection Selection of applicants Documentary support for decisions made Student performance monitoring, student decision making Assessment of individual results, employee incentives Marketing Corporate reporting Source: designed

Preferred The need for artificial intelligence, points 1– Social 10 component, management Average points 1–10 functionality Complexity Scope Speed entity requirement of tasks 10 10 10 10 1 Artificial intelligence 10 10 10 10 3 Artificial intelligence 5

3

3

3,3

10

7

7

7

7

1

2

10

10

7,3

1

10

10

10

10

10

10

10

10

10

10

5 10

7 10

3 10

5 10

7 1

Digital management Artificial intelligence Artificial intelligence Together: artificial intelligence and digital management

Artificial intelligence

and compiled by the author.

From the table. Figure 2 shows that for each of the management functions in higher education on the basis of “smart technologies”, special abilities are needed both for artificial intelligence and digital management personnel, in addition to the standard set of digital competencies, which boils down to the ability to apply “smart technologies”. This indicates the need to develop special software for artificial intelligence in higher education using machine learning technologies, as well as training qualified digital management personnel for higher education.

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Table 2. Requirements for management entities in higher education based on “smart technologies” in the context of the functions performed. Managerial function Big Data analytics Strategic planning and decision making

Staff selection Selection of applicants Documentary support for decisions made Student performance monitoring, student decision making

Artificial intelligence requirements high performance, logical analysis ability the presence of a methodological base for strategic planning, decisionmaking patterns –

availability of an algorithm and selection criteria for applicants availability of document templates and student data the availability of formalized information about the requirements for students and their performance, decisionmaking patterns the existence of an assessment Assessment of methodology and criteria, as individual results, well as a ranking technique and employee incentives classification criteria for employees Marketing the presence of patterns of marketing communications, algorithms and logic of communication, methods of processing marketing information Corporate reporting corporate reporting templates Source: designed and compiled by the author.

Digital management requirements – –

knowledge of psychology, selection criteria – – knowledge of psychology, the ability to develop and implement an individual approach to each student (flexibility) knowledge of psychology, the ability to develop and implement an individual approach to each employee (flexibility) the ability to draw up templates of marketing communications, the ability to develop and implement an individual approach to each client (flexibility) –

4 Conclusion Summing up the study, we note that management in higher education based on “smart technologies” requires the simultaneous use of digital managerial personnel and artificial intelligence, the distribution of functions between them and the organization of their highly effective interaction. This testifies both to the limited possibilities of automation of management in higher education on the basis of “smart technologies”, as well as to the need for unique artificial intelligence, as well as the need to train digital managerial personnel with strong social and technological competencies, which is difficult to achieve at the same time. Therefore, when conducting further research, it is

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recommended to pay increased attention to the issues of training digital management personnel for higher education.

References Andronova, I.V, Belova, I.N., Yakimovich, E.A.: Digital technology in the fishing sector: international and Russian experience. In: Proceedings of the 1st International Scientific Conference on Modern Management Trends and the Digital Economy - From Regional Development to Global Economic Growth (MTDE 2019), Yekaterinburg, Russia, AEBMRAdvances in Economics Business and Management Research, vol. 81, pp. 277–280 (2019) Belik, E.B., Petrenko, E.S., Pisarev, G.A., Karpova, A.A.: Influence of technological revolution in the sphere of digital technologies on the modern entrepreneurship. In: Lecture Notes in Networks and Systems, vol. 91, pp. 239–246 (2020) Haabazoka, L., Popkova, E.G., Ragulina, Y.V.: Africa 4.0 as a perspective scenario for neoindustrialization in the 21st century. Afr. J. Econ. Sustain. Dev. 2(2), 20–38 (2019) Ivanov, O., Zavyalova, E., Ryazantsev, S.: Public-private partnership in the countries of the eurasian economic union. Cent. Asia Cauc. 2(2), 33–47 (2019). English Edition Pichkov, O.B.: Social inequality in the US and Canada. Int. Trends (Mezhdunarodnye protsessy) 2(3), 85–92 (2016) Popkova, E.G.: Preconditions of formation and development of industry 4.0 in the conditions of knowledge economy. Stud. Syst. Decis. Control 169(1), 65–72 (2019) Popkova, E.G., Sergi, B.S.: Human capital and AI in industry 4.0. convergence and divergence in social entrepreneurship in Russia. J. Intellect. Cap. 21(4), 565–581 (2020) Popkova, E.G., Gulzat, K.: Technological revolution in the 21st century: digital society vs. artificial intelligence. In: Lecture Notes in Networks and Systems, vol. 91, pp. 339–345 (2020a) Popkova, E.G., Gulzat, K.: Contradiction of the digital economy: public well-being vs. cyber threats. In: Lecture Notes in Networks and Systems, vol. 87, pp. 112–124 (2020b) Popkova, E.G., Zmiyak, K.V.: Priorities of training of digital personnel for industry 4.0: social competencies vs technical competencies. Horizon 27(3–4), 138–144 (2019) Popkova, E.G., Sergi, B.S.: Will industry 4.0 and other innovations impact Russia’s development? In: Sergi, B.S. (ed.) Exploring the Future of Russia’s Economy and Markets: Towards Sustainable Economic Development, pp. 51–68. Emerald Publishing Limited, Bingley (2018) Popkova, E.G., Sergi, B.S. (eds.): Digital Economy: Complexity and Variety vs. Rationality. Springer, Heidelberg (2019) Ragulina, Y.V.: Priorities of development of industry 4.0 in modern economic systems with different progress in formation of knowledge economy. Stud. Syst. Decis. Control 169, 167– 174 (2019) Ragulina, Y.V., Alekseev, A.N., Strizhkina, I.V., Tumanov, A.I.: Methodology of criterial evaluation of consequences of the industrial revolution of the 21st century. Stud. Syst. Decis. Control 169, 235–244 (2019) Sergi, B.S. (ed.): Tech, Smart Cities, and Regional Development in Contemporary Russia. Emerald Publishing Limited, Bingley (2019) Sergi, B.S., Popkova, E.G., Bogoviz, A.V., Litvinova, T.N.: Understanding Industry 40: AI, the Internet of Things, and the Future of Work. Emerald Publishing Limited, Bingley (2019)

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Shulus, A.A., Akopova, E.S., Przhedetskaya, N.V., Borzenko, K.V.: Intellectual production and consumption: a new reality of the 21st century. In: Lecture Notes in Networks and Systems, vol. 92, pp. 353–359 (2020) Zavyalova, E.B., Studenikin, N.V., Starikova, E.A.: Business participation in implementation of socially oriented sustainable development goals in countries of central Asia and the Caucasus region. Cent. Asia Cauc. 19(2), 56–63 (2018) Strelets, I.A.: Cartoon effects in networks. World Econ. Int. Relat. 61(6), 77–83 (2017) Institute for Statistical Studies and Economics of Knowledge. Personnel for the digital economy (2020). https://issek.hse.ru/news/220069291.html. Accessed 01 July 2020 National Research University Higher School of Economics. Digital Economy: 2019 - A Brief Statistical Digest (2020). https://www.hse.ru/primarydata/ice2019kr/. Accessed 01 July 2020

A Smart Consumer Is a Challenge for Business Vera Aleshnikova1(&) , Tatyana Beregovskaya1, and Ekatetina van der Voort2 1

2

State University of Management, Moscow, Russia [email protected], [email protected] AB Sciex Netherlands B.V., Nieuwerkerk aan den IJssel, The Netherlands [email protected]

Abstract. The relevance of the research topic is explained by new trends of consumer behavior that affect the choice of products and purchase decisions. The article presents the outcomes of an analysis of the key features of modern consumers and their behavior. The features of the modern consumer as a responsible, digital, and smart one are associated with a changing structure of consumer value, the core of which is environmental friendliness, ethics, costeffectiveness, and a healthy lifestyle. Changing key consumer features opens up opportunities but at the same time poses challenges to manufacturers. The purpose of the study is to reveal the impact of key features and demands of smart consumers on the marketing mix of manufacturers of goods and services. The methodological background of the study is an entirety of scientific ideas and conceptual developments of domestic and foreign scientists on the factors and motives of consumer behavior and customer relations management. The information basis is the analytical reports of marketing and consulting firms, expert assessments, and the findings of sample surveys. Findings: we have clarified the meaning of terms “connected consumer”, “digital consumer”, “smart consumer”, “responsible consumer”; have given an idea of the involvement of the Z generation in the sharing economy, have suggested an approach to the development of the company’s adaptation mechanism to consumer’s behavior and preferences. Conclusions: the application of the suggested approach will allow manufacturers of goods and services to understand the customer’s needs and develop a marketing mix with regard to features of the “smart” consumer, as well as adjust the product, pricing, and communication strategies. Keywords: Connected consumer
Digital consumer Responsible consumer
Consumer values


Smart consumer


JEL Code: M 31

1 Introduction The requests of the business for the study of the behavioral issues of consumers at the end of the first half of the 20th century have been caused by the transition of companies to a new management paradigm treating the company as an open socio-economic system that should continuously adapt to external. During this period, the Association © Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1746–1753, 2021. https://doi.org/10.1007/978-3-030-59126-7_191

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of Consumer Research (ACR) has been founded in the USA, Consumer Research Journal and has been issued a little bit later. The manufacturing, product, and marketing concepts describing the peculiarities of the manufacturer-consumer communication were based on the out-of-date management paradigm (the company is a closed socio-economic system). After the transition to a new management paradigm, the above-mentioned concepts have gradually evolved into the concepts of traditional marketing, relations marketing, holistic marketing with a socio-ethical component. The main reason for evolution is the excessive supply as a consequence of basic needs satisfaction, the emergence of selective demand and new consumer demands. These changes have served a heavy incentive for a reinterpretation of the consumer’s role in the company’s marketing system. The sustainable interest in research of consumer behavior is primarily associated with new consumer values and preferences, and the development of digital marketing communications. This situation is evidenced, firstly, by the persisting trend when the consumers leave their habits in favor of a less negative impact on the environment. Secondly, the choice in favor of a healthy lifestyle and environmentally-friendly goods. Thirdly, responsible shopping, commitment to reasonable spending. Fourthly, the growing role of consumers in the creation of companies’ product offerings and the emergence of the C2B model. Changing the structure of consumer value poses challenges for manufacturers and makes them transform marketing strategies. Thus, despite the resolution of many methodological, theoretical and applied problems related to the factors and motives of consumer behavior and customer relations management, we can state the need to develop new consumer models, reveal the peculiarities of their behavior in the digital medium and work out recommendations for manufacturers concerning adaptation to new consumer behavior trends.

2 Background and Methodology A weighty contribution to the development of the consumer behavior theory was made by market experts, psychologists, and scientists. By the 21st century, scientists have suggested a great number of simulation models explaining consumer behavior differences. The simplest but nuanced models of customer behavior by Kotler (1984) have become the most wide-used. They explain different customer responses to the same motivations and stimuli by a combination of diverse cultural, social and personal factors. Assel in his cognitive model (Assael 1995) reasoned the differences in the speed of purchase decision-making. Assel classified four types of customer behavior depending on the extent of consumer involvement in the purchasing process and awareness of the differences between products. The model developed by Blackwell et al. (2005) model has suffered some changes since 1968. To date, it is integrated, as far as includes a description of purchase decision-making stages and a subsequent assessment of the consistency between the purchased product and consumer expectations. The problem under study is touched in the works by modern Russian and foreign authors. Among the main lines of research on the features of consumers and their behavior are:

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– A social-ethical, responsible approach to consumption (P&G 2019; Skolkovo 2017; Barboza et al. 2019) et al.; – A generational approach to the development of a consumer’s image (McCrindle 2009; Kautish and Sharma 2019) et al.; – Shared consumption (Lebedev 2019; Gazzola et al. 2018) et al.; – Behavior in the digital medium (Skorobogatykh and Musatova 2018; Fuentes 2019; Hunjet et al. 2019; McLean and Wilson 2019; Monteiro et al. 2019) et al. We should mention the contribution of consulting firms and marketing agencies to recurrent research of consumer behavior trends; integration of the best practices of companies in the development of new products, services, and activities aimed at changing demands; as well as the creation of ideas for adjustment of companies to new consumer behavior trends (BCG 2018; PWC 2019; P&G 2019; Euromonitor 2020).

3 Discussion and Findings Researchers more often describe a modern consumer using the terms “ethical consumer”, “responsible consumer”, “connected consumer”, “digital consumer”, “smart consumer”. Let’s explore the meaning of these terms and the relationship between them. The term “ethical behavior” introduced in the late 90s (in studies there are also used as synonyms “responsible behavior” and “green behavior”) means that an ethical consumer, making a purchasing decision, focuses not only on personal gain but also assesses the impact of his decision on society, environment, thinks about the efficient use of natural resources. Analysts around the world note the sustainable trend towards responsible consumption, the willingness to leave bad habits and support socially ethical manufacturers (Barboza et al. 2019; BCG 2018; Euromonitor 2018, 2019, 2020). Studies on manufacturers (e.g. P&G 2019) also proved that consumers around the world are committed to cost savings, healthy lifestyles, waste reduction, efficiency and non-pollution of water. These conclusions are justified by the growing rate of the sharing economy and higher number of consumers aimed at minimalism and a healthy lifestyle, shared use instead of sole ownership. The behavior of Russian consumers stays within global trends (Zaitseva and Feoktistova 2016; P&G 2019; Euromonitor 2018, 2019, 2020; TIAR Center, RAEC 2018). Responsible consumers are mainly represented by well-educated urban residents with above-average income. According to Nielsen’s findings (Nielsen 2018), 62% of Russian respondents were ready to change their preferences to reduce the negative impact on nature and environment in 2017. However, so far only 12% can afford to buy environmentally-friendly products. The proportion of people interested in sharing in Russia is 55.6% (Lebedev 2019). In the framework of the problem under study, the authors surveyed 136 representatives of generation Z in Russia (18–21 years old) to know their attitude toward shared consumption. A one-quarter of respondents heard about sharing for the first time. The three popular sharing services included apartment renting (35.3%), vehicle renting (25.7%) and carpooling (19.9%) (Fig. 1).

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Fig. 1. The popularity of sharing services among generation Z. Source: made by the authors based on P&G (2019)

As for the trust performance, sharing services were evaluated on a five-point scale (1 – minimum, 5 – maximum). The trust has been evaluated by 51.5% of respondents at 3 points, 27.9% − 4 points (Fig. 2).

Fig. 2. The trust of generation Z to sharing services. Source: made by the authors based on P&G (2019)

Figure 3 presents the willingness of respondents to lease or exchange something. First of all, the young generation is willing to share books, household items, and clothes. In the opinion of the respondents, four main factors affect their willingness to participate in the shared economy (to share and use sharing services) (Fig. 4).

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Fig. 3. The willingness of generation Z to lease and exchange goods and services. Source: made by the authors based on P&G (2019)

Fig. 4. Factors affecting the decision-making of the younger generation concerning participation in a shared economy. Source: made by the authors based on Skolkovo (2017)

It is important to note that although the respondents have not yet acquired the property and still depend on parents, they can already be regarded as active participants of the sharing economy. Sharing can be successfully developed only under digital geo-positioning platforms; online maps; escrow services; remote online identification, authentication of user documents and data; the exchange of information (feedback) and making up user online ratings. The development of information technology resulted in the emergence of additional features of the modern consumer, including the responsible one, as digital, connected: – High interest in digital marketing communications;

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– Omnichannelling (the customer gathers information on the product and at the same time uses online and offline channels, and also can start a purchase in one channel and complete in another one; – Deep involvement in the acquisition of tangible goods and services; – Big need for feedback from the seller, manufacturer, etc. We believe that a smart consumer is a socially responsible one playing a major role in the consumer value chain and imposing his demands on the product and company via digital marketing channels. Table 1 gives a general presentation of the impact of the smart consumer on the marketing mix and the possible business response.

Table 1. Recommendations on company’s adjustment to the demands of smart consumers The marketing mix items

Key demands of smart consumers

Changes in the company’s marketing mix

Product

• Environmental friendliness, safeguards of products and services quality • Customized, individual offer, with regard to consumer’s peculiarities • No clear association of the product with the consumer’s age • Available online information on the product • Augmented and virtual reality tools available for product research • The long-term lifecycle of the product

Place

• The option of choosing the place and time of purchase • Online purchase option • Products and services delivery option • Cost Optimization Option • Available digital technologies for the provision of personal discounts • Online settlement option • Payment security • Available mobile applications for price comparing • Flexible credit terms • Omni-channel personalized communications between the consumer and the manufacturer/seller (website, mobile applications, social networks, email, phone, etc.) • Feedback option • Online advice • Online rating of the manufacturer/seller • Business rating and social responsibility of the manufacturer/seller

• Development of a comprehensive customer value proposition • Quick replies to applications, order placement and processing • Establishment of a consumer experience monitoring system • Programs on consumers’ involvement in the adjustment and customization of products • Available exchange and purchase decline system • Availability of repair and maintenance services • Highly-developed logistics system of goods and services • Purchase tracking offer

Price

Promotion

Source: made by the authors

• The available system of alternative and safe payment options • Prompt refunding system on product decline or return cases

• An omnichannel platform for processing of all consumer communications • Regular updates of websites • Creation of an online image of the company and its products • Managing a business reputation and taking corporate social responsibility

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4 Conclusions The study allowed us to conclude that there is a need for further development of conceptual foundations of consumer behavior in a digital medium with regard to dramatically changed consumer values. An equally important task is to conduct recurrent studies on consumer trends and develop recommendations for manufacturers of goods and services. The discussion of the presented approach concerning the development of the company’s adaptation mechanism to changing consumer’s behavior should be continued. But it can be taken as an idea in developing a product, pricing, and communication policy.

References Assael, L.H.: Consumer Behavior and Marketing Action. South-Western College Pub, London (1995) Barboza, G., Pede, V., Madero, S.: Shared social responsibility. Dual role of consumers as stakeholders in firm strategy. Soc. Responsib. J. (2019). https://doi.org/10.1108/SRJ-07– 2019-0244. Accessed 3 February 2020 Blackwell, R.D., Miniard, P.W., Engel, J.F.: Consumer Behavior, 10th edn. South-Western College Pub, London (2005) Fuentes, Ch.: Smart consumer come undone: breakdowns in process of digital agencing. J. Mark. Manag. 35(15–16), 1542–1565 (2019) Gazzola, P., Vătămănescu, E.M., Andrei, A.G., Marrapodi, C.: User’s motivations to participating in the sharing economy: moving from profits toward sustainable development. Corp. Soc. Responsib. Environ. Manag., 1–11 (2018). 10.1002/ csr. 1715 PWS: Global Consumer Behavior Survey 2019 (2019). https://www.pwc.ru/ru/publications/ consumer-insights-survey.html. Accessed 4 February 2020 Hunjet, A., Kozina, G., Vukovic, D.: Consumer of the digital age. Economska Misao I Praksa (Econ. Thought Pract.) 28(2), 193–208 (2019) Kotler, F.: Marketing Essentials. Prentice-Hall, London (1984) Lebedev, A.: Sharing services in the responsible consumption concept. Environ. Law 76, 19–21 (2019) McCrindle, M.: The ABC of XYZ: Understanding the Global Generations, pp. 202–204. NSW Press, Sydney (2009) McLean, G., Wilson, A.: Shopping in the digital world: examining customer engagement through augmented reality mobile applications. Comput. Hum. Behav. 101, 210–224 (2019) Monteiro, T.A., Giuliani, F., Pizzinato, N.K.: Managing the digital consumer: insights from Brazil and Spain. J. Manufact. Technol. Manag. 30(8), 196–1215 (2019) Nielsen: Environmental friendliness as a selection criterion (2018). https://www.nielsen.com/en/ ru/insights/article/2018/ekologichnost-kak-kriteriy-vybora/. Accessed 3 February 2020 P&G research: Responsible consumption increasingly determines the consumer’s choices in Russia (2019). https://tass.ru/press-relizy/7401689. Accessed 3 February 2020 Kautish, P., Sharma, R.: Value orientation, green attitude, and green behavior intentions: an empirical investigation among young consumers. Young Consumers 20(4), 338–358 (2019)

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Skolkovo: Responsible consumption: the space of new business opportunities and the experience of Russian companies (2017). https://iems.skolkovo.ru/downloads/documents/SKOLKOVO_ IEMS/Research_Reports/SKOLKOVO_IEMS_Responsible%20Consumption_RUS.pdf. Accessed 3 February 2020 Skorobogatykh, I.I., Musatova, Z.B.: Behavior peculiarities of digital consumers. Issues Mod. Econ. 4(68), 127–130 (2019) TIAR Center: Russian Association of Electrotechnical Companies. Economics of Shared Consumption in Russia (2018). https://tiarcenter.com/wp-content/uploads/2018/11/RAEC_ Sharing-economy-in-Russia-2018_Nov-2018.pdf. Accessed 4 Feb 2020 Euromonitor: Top 10 Global Consumer Trends (2020). https://www.euromonitor.com/. Accessed 12 Feb 2020

The Development of Smart Entrepreneurship as a Driver of the Smart Economy Victor Antonov1(&) , Elena Petrenko2 and Ekaterina Kuptsova1,2 1

,

State University of Management, Moscow, Russian Federation [email protected], [email protected] 2 Chamber of Entrepreneurs, Karaganda, Kazakhstan [email protected]

Abstract. The study of new business forms requires an assessment of the factors that cause the entire modern economic system to change. New technological capabilities transform the nature of production interactions and knowledge turns into the main resource of economic development. The modern economy generates knowledge and databases that bring economic value and can enhance business performance. Newly-built knowledge is also a product that can be sold or bought. Smart technologies of modern times are developing towards smart goods, smart cities, and smart regions and give rise to breakthrough conditions in business development. Up-to-date entrepreneurship transfers business activity from the individual area into one of collective success. Now there are no local business tasks since local markets went away. Smart technologies build global markets, and the entrepreneur takes on global development challenges. Business is a risk, balanced combination of production factors, innovation, and management in the globalization of innovative processes, as truly as collective activities on the alignment of development in dealing with global challenges. The business initiative is aimed at conceiving new ideas, designing innovative products based on them, and incorporating new forms of business. Keywords: Smart economy JEL Code: O10


Entrepreneurship
Digitalization
Knowledge


O20
O30

1 Introduction The current importance of the study is explained by the global development of digital technologies and their prevailing impact on the development of the business activity. The modern business is changing towards qualitatively new use of knowledge as a development resource. Business activity of the industrial era employed knowledge as a resource for inner development. The transition to a post-industrial economy has changed the role of knowledge (including ones embodied and transmitted in digital form) and made them the main commodity. The knowledge-based economy has a

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1754–1760, 2021. https://doi.org/10.1007/978-3-030-59126-7_192

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character a “smart economy”, and the entrepreneurship emerging in its terms is getting smart as well as knowledge-oriented.

2 Background and Methodology The interpretation of entrepreneurial activity has evolved remarkably. The proponents of the classical theory of entrepreneurship have considered profit-taking by creating goods and services in demand of the society as the main motive (Chepurenko 2013). Later theories defined entrepreneurship as a process of creating a new product, whether the conceiving new idea or organizing the release of goods. The modern entrepreneurship is developing in a post-industrial society dominated by information technology and prioritizing knowledge as a factor of production. Presently, a new change has occurred in the content of the business activity, which shifted it into the field of generating knowledge and creativity. The main features of an up-to-date entrepreneur are the innovative content of his activity, creating new knowledge-based consumer values (Florida 2002). To the authors’ opinion, business activity in the new economy can be defined as smart entrepreneurship emerging and developing on a digital technology platform. In the post-industrial economy, tangible objects of labor are replaced by intangible ones. Knowledge and information become both the main object and the product of labor. The opportunity of remote connection of an employee with the means of production and the remote manufacturing of a product lift barriers to entry into the market and opens up new development prospects for business (Nilles 1998). The remote communication facilities give rise to new forms of business incorporation. Along with the common form of incorporation, electronic and virtual workplaces are developing. In their writings, T. Malone and R. Loibacher introduced the term “e-freelancer” (Malone 1998) to designate a new type of IT entrepreneurs. The globalization of production is carried out not so much in material form as in a virtual one. Remote economics as a form of economic ties brings together almost all countries. The largest Remote Exchange FreeLance.com is used by freelancers and customers from about three hundred countries. Modern technologies change the employee’s dependence on the employer, which allows specialists themselves to enter the market and pursue business activities. The prevailing motivation for e-freelancers is interesting work (82% of respondents) and financial independence (78%) (Strebkov and Shevchuk 2009). Smart entrepreneurship in the electronic services market is a sign of the post-industrial economy. Today, there is no common scientific interpretation of smart-entrepreneurship and smart economy. Researchers link the emergence of the smart economy with the theory of smart growth and intelligent city that consider the generation of innovations and the introduction of information and communication technologies (ICT) in urban life. Smart technologies in general terms denote technologies based on information and communication systems (ICS). Modern ICS have penetrated the product itself, making it a source of information and thereby creating smart technologies in their present

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sense. Smart technologies are changing the value creation chain and enabling the people to get new value in its various links. The smart business model was jointly developed by authors from Kazakhstan through the integration of elements for the development of databases and cyberphysical systems (Metzik et al. 2019) (Fig. 1).

Smart entrepreneurship based on knowledge

Knowledge generation (the main assets) New factors of production

Storage, processing and classification of data. Data exchange.Cyber-physical systems

Changes in business activity

Economic effects

Smart development strategy

Digital manufacturing and smart products

Stronger market leadership: for whom, what, how, where and when? Integration and alignment of development

Higher product qualities for the consumer and their rapid improvement, customer integration

Stronger market leadership: for whom, what, how, where and when? Integration and alignment of development

Fig. 1 Smart business model. Source: (Metzik et al. 2019)

Cyber-physical systems are networks of wide coverage, involving logistics systems and production facilities and providing autonomous information exchange and production control. The model of smart entrepreneurship implies the complementation of traditional factors of production (land, labor, capital, business initiative) with the fifth factor (knowledge). In our mind, the digital platform is the physical embodiment of this fifth element as a production factor. The intensified use of large databases and cyberphysical systems lays conditions for just as active development of smart entrepreneurship. Smart-entrepreneurship creates a new image of the business environment and gives competitive advantages of this business model over previous types. Smartentrepreneurship is evolving within a smart economy and found the most demanded in places of the highest localization (i.e., smart cities). The knowledge generated by smart entrepreneurship should be regarded as ones put on the market for purchase by another entrepreneur. The traditional business of industrial capitalism protected intellectual property, limited use, and hampered taking profit from it by other market actors. Emerging entrepreneurship seeks to profit from

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“using our intellectual property by others, and we should purchase others’ intellectual property when it promotes our own business model” (Petrenko 2018). Smart-entrepreneurship ensures benefit from the production and sale of the commodity, as well as from targeted collection and processing of data, knowledge generation through a sale in the market. Most social networks provide free services to their customers since they are primarily aimed at the collection of data for the subsequent sale of information on consumer preferences and market behavior.

3 Discussion and Findings The smart economy of Kazakhstan is firstly premised on the development of the IT sector. Annually, the volume of IT is increasing by about 15%, which is a decent indicator for the republic with the materials sector stagnating in recent years. IT development centers are the capitals of the country, the new capital Nur-Sultan (annual 25% growth), and the southern capital Almaty (15% per year). Up to half of ITservices accrue to software development and about 20% – consulting services. IT entrepreneurs can be called the drivers of a qualitatively new economy, smart and digital. The country has set the task to raise the share of small and medium-sized enterprises (SMEs) in GDP from the current 28.4%(in 2018) to 30% in 2021, 35% in 2025, and 50% in 2050. Accordingly, smart entrepreneurship is foremost developing in the IT sector of the republic (Fig. 2). Consulting is proactively developing business area, including both industry-specific and technology consulting, brand interaction, innovation as a service, development of solutions and platforms, Data Science. Design and engineering cover services on the development of virtual and augmented reality, data visualization, management of the customer experience, and artificial intelligence. The development of digital platforms, generation of corporate offers, the Internet of things, the cloud & DevOps is the forward-looking area for Kazakhstan business. Automation of IT services includes the business process outsourcing/knowledge process outsourcing, establishment of dedicated centers, and SaaS & PaaS services. Streamlining of business processes through new technologies involves services on the optimization of supplies, security testing, robotic automation of processes, etc. To date, Kazakhstan entrepreneurs are mainly interested in Big Data (75%), cloud technologies (45%), blockchain (40%), and the Internet of things (30%). In 2017, Kazakhstan government adopted the Digital Kazakhstan program intended to “speed up the economic development of the republic and raise the living standards of the population by using digital technologies in the medium term, as well as to establish conditions for taking the breakthrough development path of the economy to ensure the development of the digital economy of the future in the long-term” (State program 2017). The document provides for wide-scale advancement of digital competencies of specialists both by retraining of some working specialists and replenishing the economy with 30 thousand ICT specialists from graduates annually.

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Consulting and business transformation Streamlining

Design and engineering Management and automation

Development

Fig. 2 Transformation of Kazakhstan’s IT market Source: compiled by the author on the back of expert estimates

The program of transition to digital technologies should be firstly directed at the development of technical capabilities and the integration of new technical solutions in economic processes. However, as far as the state initiates the transition to a digital economy, there are high risks that technical and economic priorities can be substituted with political ones. The foundations of state regulation of the transition to the digital economy were laid in Germany, which adopted the Industry 4.0 concept in 2012 (German, 2012). The dominant role of the state inducing business and society towards a digital future has become a world practice. Dozens of countries are implementing state initiatives, for example, “Smart Nation” in Singapore (2015), Chinese “Internet plus” (2015), digital economy programs in Russia (2016), etc.

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The core of the digitalization program is the establishment of smart cities on the territory of the republic. Smart cities should become the drivers of regional growth, procure faster innovative entrepreneurship, and provide individuals with equal access to high-quality services. In particular, the Kazakhstan SmartCity concept is designed to improve the performance of public utilities and build a friendly urban environment. The main value of the SmartCity concept is the person and his needs. Smart City provides the residents with a friendly environment for safe and favorable living. Such an environment can be built due to the efficient use of resources, compliance with environmental requirements, and flexible changes in resource management systems depending on the tasks and population’s requests. The SmartCity concept is carried out in the five largest cities of Kazakhstan: SmartAstana, SmartKaraganda, SmartOntystuk, SmartAlmaty, SmartAktobe. Priority areas for the development of smart entrepreneurship are healthcare, education, the social field, housing and utilities sector, transport, security, business, construction, environmental protection, urban management. Best practices have been accumulated in the capital Nur Sultan. The introduction of Smart City elements lowers the rate of crimes committed by 30–40%, enhances the response to emergencies by 20–35%, reduces morbidity rate by 8–15%, saves travel time in transport (about 15–30 min per day), lessens water consumption (by 30–60 L/day per person). Technologies ensure more rational use of resources (municipal property, transportation systems, water and energy supply, etc.) and better life due to their reasonable distribution. Modern megacities use 60–80% of global energy demand. The transition to the smart city system allows for contraction of energy costs by one third as well as significant growth of energy efficiency. It is expected that the introduction of smart technologies in the energy sector will save half the municipal energy costs. Knowledge entrepreneurship is aimed not at domestic consumption, but external sale as a product or service. The Smart City concept has multiplying potential. Having provided the development of the urban environment, it builds a qualitatively new, digital ecosystem, at the same time generating demand and supply for digital products and services and encouraging the development of smart entrepreneurship.

4 Conclusions Smart technologies change both the conditions and content of labor as truly as the nature of modern business through the transformation of internal management based on automated technological systems. Smart technologies also lay down new rules of the competition and global integration on the back of open big data systems. Business development models also suffer changes, turning into more open and globally integrating. Workers become individual entrepreneurs and change the labor model to a creative man with his particular approach to work and behavior. The opportunity of remote work and independent location makes the entrepreneur a free agent of economic relations. A smart entrepreneur acts as a free, conscious, and proactive party creating new economic relations. He is able to design his future thanks

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to freelance, higher mobility, and the ability to create new value. Features of the modern entrepreneurship are: – the development of business activity around the knowledge production chain in their field about all stages of the reproduction, sale, and consumption of goods; – data generation based on smart goods and services with an option to collect customer information during consumption. Modern smart entrepreneurship does not touch the relations of ownership and capital accumulation but develops ones connected with storage, generation, and dissemination of knowledge. It’s not the property measuring the frames of an entrepreneur, but a place in the chain of knowledge creation and management of production what matters. Entrepreneurship is a risk and balanced combination of production factors as well as innovative and creative activity.

References Brynjolfsson, E., Kahin, B. (eds.): UndersTanding the Digital Economy. The MIT Press, Cambridge (2000) Florida, R.: The Rise of the Creative Class: And How it’s Transforming Work, Leisure, Community, and Everyday Life. Perseus Book Group, New York (2002) Metzik, O.I., Petrenko, Y.S., Vechkinzova, E.A.: Smart-predprinimatel’stvo kak sovremennyj jetap v razvitii predprinimatel’skoj dejatel’nosti (Smart-entrepreneurship as a modern stage in the development of entrepreneurial activity). Kreativnaya Ekonomika 13(12) (2019). https:// doi.org/10.18334/ce.13.12.41426 Nilles, J.: Managing Telework: Strategies for Managing the Virtual Workforce. Wiley, New York (1998) Nonaka, I., Takeuchi, H.: Company is the Creator of Knowledge. The origin and development of innovation in Japanese firms, Moscow (2003) Gershenfeld, N., Krikorian, R., Cohen, D.: The Internet of Things, Scientific American, October 2004 New Industry Agenda. German Industry Initiative 4.0 (2020). http://www.csr-nw.ru/files/files/ file_content_1351.pdf Petrenko, E., Pritvorova, T., Dzhazykbaeva, W.: Processy ustojchivogo razvitija: sfera uslug v postindustrial’noj jekonomike (Sustainable development processes: service sector in the postindustrial economy). J. Secur. Sustain. Issues 7(4), 781–791 (2018) Porter, M., Heppelman, D.: The Revolution of technology. Smart technologies are changing competition. Harvard Business Review Russia (2020). http://hbr-russia.ru/upload/iblock/000/ ptc-iot-1.pdf. Accessed 10 Jan 2020 Strebkov, D.O., Shevchuk, A.V.: Frilansery na jelektronnyh rynkah: rol’ social’nyh svjazej (Freelancers in E-markets: The role of social ties). J. Econ. Soc. 10(5), 11–32 (2009). https:// doi.org/http://ecsoc.hse.ru/issues/2009-10-5/index.html

Author Index

A Abaev, Alan, 873 Afanasev, Valentin, 1348 Afanasiev, Valentin Y., 269 Ageeva, Olga, 1526 Akhmaeva, Lyudmila G., 115 Akopyan, Anna R., 1731 Aleksandrina, Maria, 1204 Aleksandrov, Aleksandr S., 1195 Aleksandrova, Irina, 1544 Aleshko, Alexander S., 20 Aleshnikova, Vera, 873, 1746 Allakhverdiev, Bakhtiiar T., 360 Alpatova, Ekaterina A., 1381 Al-Qadi, D. G. Osama, 124 Anan’ina, Liubov’ G., 786 Andryashina, Natalia S., 344, 352, 609 Andryashina, Nataliya S., 238 Anikina, Irina D., 47 Antonenko, Veronika V., 522 Antonov, Victor, 1754 Antonov, Viktor G., 842 Arakelian, Artur M., 1440 Arakelyan, Artur M., 1731 Arevshatov, Vladislav E., 633 Arkhipova, Nadezhda I., 530 Arzhanovskaya, Anastasia V., 619 Astafieva, Olga E., 3 Astafurova, Tatiana N., 336 Avadaeva, Inna V., 1406 Averina, Irina S., 1516 Azhmukhamedov, Iskhandar M., 714 Azizova, Diana K., 683

Azmina, Julia M., 965 Azoev, Gennadiy L., 530 Azoev, Gennady, 1535 B Badina, Anna V., 1451 Baeva, Liudmila V., 714 Baidalinova, Ainur S., 107, 514 Baigireyeva, Zhanar, 107, 514 Bakhtina, Svetlana S., 1563 Barantsev, Sergei A., 804 Baziyan, Zhanna K., 1432 Belinsky, Alexander, 1348 Belokrylov, Kirill A., 1222 Belonenko, Mikhail M., 164 Belousova, Maria, 315 Belova, Olga L., 1553 Beregovskaya, Tatyana, 1746 Berstembayeva, Rysty, 99 Bezrukov, Aleksandr V., 599 Birukov, Alexandr P., 1614 Bobryshev, Artur D., 1397 Bodyako, Anna V., 1256 Bogachkova, Lyudmila Yu., 152 Bokov, Yuriy A., 1167 Boldyreva, Inna A., 1381 Bondarovich, Ekaterina P., 434 Borisova, Viktoria V., 1356 Boroznin, Sergei V., 277, 288 Boroznina, Natalia P., 288, 297 Brauweiler, Hans-Christian, 1232 Brikoshina, Irina S., 1614 Bukhantsev, Yuriy A., 47

© Springer Nature Switzerland AG 2021 E. G. Popkova and B. S. Sergi (Eds.): ISC 2020, LNNS 155, pp. 1761–1766, 2021. https://doi.org/10.1007/978-3-030-59126-7

1762

Author Index

Burlakov, Vyacheslav V., 1159 Butkenova, Aliya K., 514 Buyanova, Marina A., 1063 Buyanova, Marina E., 1516

Eremina, Tatyana N., 832 Eriashvili, Nodari D., 1389 Ermakov, Ivan A., 733 Ershov, Anatoliy T., 1498

C Chaynikova, Liliya N., 1185 Chelnokova, Elena A., 238 Cherepov, Viktor M., 786 Chernova, Maria, 548 Chicherin, Vadim, 548 Chicherin, Vadim P., 804 Chugrina, Maria A., 483

F Fadeeva, Marina Yu., 1092, 1266 Falaleeva, Irina N., 558 Fantrov, Pavel P., 507, 665 Fedotova, Gilyan V., 1159, 1649 Fetisova, Olga V., 965, 1232 Filimonova, Natalia Y., 567 Firsov, Evgeniy I., 1222 Flek, Mikhail B., 1659 Francifirov, Yuri V., 674

D Dashkov, Andrey A., 1451 Davletshina, Leysan A., 599 Davydova, Marina L., 1014, 1296 Degtyareva, Viktoriya V., 538, 1563, 1585 Demin, Alexander V., 1099 Denisova, Anna I., 918, 1623 Derbisher, Evgenia V., 1489 Derkacheva, Tatyana V., 1118 Devyatkina, Darya S., 1642 Dikarev, Ilia S., 625, 1306 Dolgikh, Ekaterina A., 724 Dolgopolov, Dmitry V., 115 Donskova, Olga A., 641 Drinova, Elena M., 976 Drobotenko, Oleg N., 903 Dryuchkov, Evgeny S., 277 Dubovik, Mayya V., 1021 Dubovskaya, Victoria, 1489 Dunenkova, Helena N., 1052 Dvuzhilov, Ilya S., 164 Dvuzhilova, Yulia V., 164 Dzhikiya, Anastasya A., 1081 Dzhikiya, Mikhail D., 1081 Dzhioev, Vladimir, 418 Dzyubenko, Yulia, 893 Dzyurdzya, Olesya A., 1159 E Efanova, Elena V., 683 Efimova, Marina R., 724 Egorov, Gennady G., 1118 Ekimova, Ksenia V., 1248 Ekimova, Kseniya V., 1288 Elkhina, Irina A., 633 Eltanskaya, Elena A., 619 Epinina, Veronica S., 1471 Eremeeva, Anastasia I., 115

G Galazova, Svetlana S., 1440, 1696 Galich, Sergey V., 190 Garbuzov, Dmitry V., 795 Gataullin, Sergey T., 1108 Gataullin, Timur M., 1108 Gavrilov, Sergey D., 499 Gavrilova, Julia A., 558 Gdanskiy, Nikolay, 315 Generalova, Larisa M., 619 Geokchakyan, Artem G., 1614 Gerasimova, Anastasia, 548 Gerbina, Tatyana V., 483 Germashev, Ilya V., 1489 Godin, Vladimir V., 1369 Goldenova, Viktoriya S., 1406 Golodova, Olga A., 965 Goltser, Yuri, 733 Golub, Oksana V., 92 Golubeva, Olga V., 352 Goncharenko, Liudmila P., 1481 Gordeev, Alexey Y., 172 Gorelova, Olga A., 3 Gorin, Viktor S., 327 Gorodnichev, Mikhail G., 1585 Gribkov, Vladislav Yu., 202 Grigorieva, Elena G., 589 Grimashevich, Olga N., 379 Gromova, Elena A., 795 Gubareva, Elena A., 1498 Gubin, Viktor, 1126 Gudkova, Oksana E., 1397 Gudkova, Oksana Ev., 1159 Gukasova, Angelina E., 910 Gureev, Pavel M., 1052 Gurieva, Madina T., 530

Author Index Guryanova, Lidiya S., 152 Gutzluk, Elena F., 1222 Guzev, Mikhail M., 1573 I Ignatova, Yana S., 327 Inshakova, Agnessa O., 987, 1033 Inshakova, Elena I., 987 Ionova, Svetlana V., 769 Isupov, Igor B., 202 Ivanov, Alexey S., 998 Ivanova, Ksenia V., 1108 Ivonina, Oksana G., 344 K Kabanova, Irina A., 819 Kakorin, Igor A., 277 Kakorina, Olesya A., 277 Kalashnikova, Nina A., 558 Kaldenova, Gulzhanat S., 99 Kalinina, Alla A., 1063 Kalinina, Alla E., 1516 Kalinina, Vera V., 1033 Kamchatova, Ekaterina Yu., 1397 Kanke, Alla A., 445 Karabanov, Anatoly D., 1471 Kargina, Larisa A., 1649 Karp, Marina, 1526 Karsanova, Elena S., 947 Karyagina, Tatyana V., 930 Kashina, Oksana I., 1045 Kashkina, Ekaterina V., 404 Katkova, Olga V., 352 Kayumov, Naimjon N., 724 Kazban, Elena P., 903 Ketko, Nataliya V., 641 Khalimon, Ekaterina A., 1340 Khandamova, Eva, 1126 Khrapov, Sergey A., 714 Kiseleva, Marina N., 77 Klenova, Tatiana V., 998 Klyachin, Vladimir A., 172, 1596 Kochetova, Larisa A., 987 Kolpakov, Alexey V., 947 Koltunova, Elena V., 395 Komissarova, Yaroslava V., 674 Konchenkova, Ekaterina I., 56 Koneva, Daria A., 998 Konina, Olga V., 1738 Konstantinova, Lyubov A., 1623 Korobov, Sergei A., 1642 Korobova, Svetlana I., 1471 Koroleva, Lyubov M., 395 Korolkova, Svetlana A., 228

1763 Korostin, Sergey A., 1313 Korotina, Natalya Yu., 1007 Kosarin, Sergey P., 11, 1099 Kosinova, Marina I., 825 Kostennikov, Mikhail V., 404 Kostikova, Anastasia V., 1413 Kotelnikov, Nikolay V., 1280 Kovaleva, Irina A., 445, 832 Kozhevnikova, Larisa V., 938 Kozlova, Elena P., 609 Kozlova, Marina Yu., 1204 Kozlova, Olga P., 336 Kramarenko, Inna V., 1623 Krasilnikova, Tatyana K., 1118 Krivolapchuk, Igor, 548 Krotenko, Tatiana Yu., 1678 Krutilin, Aleksandr A., 77 Krylova, Natalya F., 1424 Krysov, Viktor V., 1731 Kryukova, Ekaterina V., 580, 1070 Kucherova, Ekaterina P., 47 Kudryashova, Inna V., 370 Kukanova, Nadezda S., 1461 Kulichenko, Yulia, 893 Kuptsova, Ekaterina, 1754 Kuptsova, Elena V., 842 Kurazova, Diana A., 1649 Kurbanova, Gozel D., 819 Kurchenkov, Vladimir V., 965, 1232 Kurchenkova, Elena A., 132, 1232 Kuternin, Mikhail I., 1632 Kuzminykh, Svetlana S., 733 Kuznecov, Sergey Yu., 1413 Kuznetsov, Nikolay V., 1248 Kuznetsov, Victor P., 609, 1045 Kuznetsov, Yuri V., 1649 Kuznetsova, Svetlana N., 344 L Larina, Olga I., 1021, 1248, 1461 Latfullin, Gabdelakhat R., 1432 Lazareva, Valentina A., 1176 Lebedeva, Sophia L., 1649 Ledeneva, Marina V., 1573 Lenshin, S. I., 1274 Leontiev, Viktor V., 132 Leshutina, Irina A., 769 Levshinskii, V. V., 212 Liberovskaya, Anna N., 77 Lisina, Lyudmila M., 77 Litvinova, Alla V., 66 Litvinova, Tatyana N., 1670 Lizyaeva, Viktoria V., 1248 Loginova, Elena V., 1331

1764 Losev, Alexander G., 220 Loseva, Natalia V., 1331 Lyapina, Svetlana Y., 538 M Madiyarova, Elvira S., 744 Makarenko, Kirill M., 683 Makarov, Vladislav O., 1014, 1296 Maksimova, Elena A., 1213 Maletina, Oksana A., 589, 1605 Maltseva, Mariya V., 1440 Malushko, Elena Yu., 141 Manakhov, Boris M., 388 Mantaeva, Elza I., 1406 Margarov, Gevorg I., 1623 Markushevskaya, Elena A., 1489 Marusinina, Elena Y., 1642 Matikeeva, Nazgul K., 454 Matkovskaya, Yana S., 855 Matsui, Elena A., 580 Medevedev, Denis A., 220 Medvedeva, Lyudmila, 893 Medvedeva, Olga E., 40 Melnik, Tatiana I., 1605 Merenkov, Artem O., 20 Mezhevov, Alexander D., 1553 Milkina, Irina V., 1099 Milovanova, Marina V., 141 Mischeryakov, Sergey V., 269 Mishura, Natalya A., 1573 Mitrofanova, Inna V., 1021 Mityagina, Vera A., 228, 1092 Mizintseva, Maria F., 483, 653 Mohova, Galina V., 327 Moiseeva, Valentina U., 753 Moiseeva, Valentina Y., 85 Mokhova, Galina V., 475 Morozov, Sergey I., 499 Morozova, Galina A., 609 Moryzhenkova, Natalia V., 1021, 1461 Moseva, Marina S., 1585 Moseyko, Viktor O., 1642 Mucciardi, Massimo, 465 Mukhtarov, Seitkerei M., 804 Muraev, Peter P., 674 Muraev, Petr P., 1195 Musatova, Sima, 761 Mushketova, Nataliya S., 1605 Mushnikov, Dmitrii L., 786 Myrkanova, Assem, 107 Myshko, F. G., 1274 Myshyakov, Vladimir, 548

Author Index N Nasurdinov, Maxim S., 269 Naumova, Anna P., 228 Neginsky, Igor V., 307 Nezamaykin, Ivan V., 490 Nikolaev, Nikolay Yu., 795 Niyazbekova, Shakizada U., 99, 107, 514 Novikova, Elina Yu., 1092 Novozhilova, Anna A., 228 O Obradović, Vladimir, 1340 Oganesyan, Tigran, 1126 Olimpiev, Anatoly Yu., 28 Omelchenko, Nikolai A., 903 Onishchenko, Svetlana I., 1052 Opimpiev, Anatoly Yu., 1389 Oreshina, Marina N., 1451 Orlov, Evgeniy, 410 Orlova, Marina, 1544 Ostapenko, Vladislav A., 811 Ozerina, Anna A., 92 P Palashevskaya, Irina V., 132 Panfilova, Elena E., 1356 Pankratov, Sergey A., 499 Pankratova, Liliia S., 499 Parfenova, Mariya V., 66 Parubochaya, Elena F., 976 Pastukhov, Pavel S., 1266 Pasyuk, Alexey O., 190 Patsyuk, Elena V., 77 Perekrestov, Vadim N., 1266 Pershina, Tatiana A., 599 Pershina, Tatyana A., 724 Peters, Irina A., 641 Petrenko, Elena, 1754 Petrenko, Elena S., 842, 855 Petrova, Elena A., 1033 Pisareva, Olga M., 918 Piskunov, Nikita V., 976 Polkovnikov, Aleksander A., 1331 Polkovnikov, Alexander A., 360 Poltavskaya, Mariya B., 691 Poluboyarov, Valery V., 633 Poluboyarova, Natalia M., 633 Ponomarev, Aleksandr M., 567 Ponomareva, Larisa V., 777, 955 Ponomareva, Svetlana V., 1256 Popkova, Elena G., 426, 1722 Popov, Alexey P., 674

Author Index Potapova, Irina I., 258 Pronchatova-Rubtsova, Nataliya N., 1045 Protopopov, Alexander G., 307 Pshenichnikov, Ilya V., 1471 Q Qerimi, Qerim, 701 R Ramazanov, Sergei P., 795 Raza, Hendra, 1356 Rebrina, Larisa N., 141 Rogulenko, Tatyana M., 1256 Romanova, Olga N., 336 Romanovskaya, Elena V., 238, 344, 352, 609 Roos, Anna Brusina-de, 832 Rouiller, N., 28 Rozhkova, Dar’ya, 410 Rozhkova, Lyudmila K., 124 Ruchkin, Vitaly A., 1195 Rumyantseva, Irina A., 1678 Russkikh, Tatyana N., 930 Russkova, Elena G., 955 Ryazanova, Galina N., 881 Rybakov, Oleg Ju., 558 S Sadkov, Andrey N., 1280 Sadkov, Vitalii A., 1280 Saninsky, Sergey A., 379 Sardaryan, Anna R., 483 Savchenko, Irina A., 683 Saveleva, Nadezhda K., 426, 1714 Savelyeva, Nadezhda K., 1322, 1722 Savostitsky, Artem S., 40 Schekoldina, Anna V., 589 Semenov, Evgeny S., 124, 190 Serebryakova, Galina V., 490 Shamne, Nikolay L., 141 Sharkov, Feliks, 873 Sharova, Irina V., 1185 Shchepakin, Mikhail, 1126 Shelestova, Dildarakhon A., 1240 Shemyakina, Tatiana Yu., 3 Shevyakova, Anna L., 855 Shinkarenko, Stanislav S., 1704 Shinkaruk, Vladimir M., 507, 665 Shiro, Maria S., 1063 Shishkova, Anastasiya V., 938 Shizuko, Kato, 1535 Shkalenko, Anna V., 1081, 1146 Shkarovskiy, Sergey, 1687 Shobonova, Lyubov Y., 238 Shor, Dmitriy M., 1240

1765 Shor, Inna M., 1240 Shramchenko, Tamara B., 490 Sidorov, Anton, 1526 Silina, Svetlana, 1544 Skiter, Natalia N., 641 Skrynnikova, Inna V., 181, 625 Slobodchikova, Inna V., 1406 Smirnova, Diana Sh., 1070 Smirnova, Valentina G., 1432 Smirnova, Zhanna V., 344, 352 Smotrova, Elena E., 641 Sokolnikova, Irina V., 1481 Sokolov, Alexey A., 1159 Sokolov, Yu. V., 1274 Sokolovskaia, Irina E., 866 Soldatova, Natalia, 1687 Solntseva, Oxana G., 744 Solodovnikov, Denis A., 1704 Solovyova, Natalya A., 507, 1176 Soltakhanov, Anzor U., 1481 Somkin, Igor’, 410 Sorokina, Natalya Yu., 1185 Sozinova, Anastasia A., 1722 Sozinova, Anastasiya A., 426 Starostin, Vasiliy, 761 Starostina, Elena S., 1240 Starovoytova, Irina E., 938 Stepanov, Alexei A., 20 Strelnikov, Irina A., 28 Sumarokova, Ekaterina, 1535 Suponitskiy, Vladislav L., 1632 Surkova, Liudmila E., 881 Suvalova, Tatiana V., 475 Suyazova, Svetlana A., 918 Svetlov, Andrey V., 220 Sybachin, Sergey A., 1481 T Talalaeva, Natalya S., 66 Talalova, Larissa N., 1507 Tarasova, Valentina N., 538 Tashimkhanova, Dybys S., 1424 Tatenko, Galina I., 1563 Telpov, Roman E., 769 Terekhova, Anna E., 1369 Terekhova, Nina V., 819 Tereliansky, Pavel V., 11, 56, 1413 Tian, Jiamin, 1507 Timkina, Tatyana A., 1322 Timofeeva, Tatyana S., 92 Tinkov, Sergey A., 1738 Tinkova, Elena V., 1738 Tinyakova, Viktoriya I., 930, 1381 Titor, Svetlana E., 11, 1389

1766 Tokarev, Boris, 1687 Tokareva, Svetlana B., 625 Trachenko, Marina, 418 Trukhlyaeva, Anna A., 1573 Tsunaeva, Yuliya O., 1440 Tymchuk, Yuliya A., 1146 U Ugnich, Ekaterina A., 1659 Usacheva, Irina V., 152, 777 Usacheva, Nadezhda Yu., 152 Usenkov, Ivan A., 567 V van der Voort, Ekatetina, 1746 Vasiliev, Evgeniy S., 691 Vasilieva, Ekaterina N., 691 Vasilyev, Alexander F., 307 Vasyukov, Vitalii F., 1306 Vekhov, Vitalii B., 1280 Verevkina, Kseniya Yu., 258 Vikhodtseva, Elena A., 1340 Vishnevezkaya, Natalia A., 336 Vlasuk, Irina V., 92 Volgin, Oleg S., 947 Volkova, Anna V., 777 Volkova, Irina D., 1092

Author Index Volochkov, Ilia V., 866 Volodina, Anastasiya, 418 Y Yakhtin, Vasily A., 955 Yakimets, Andrey L., 307 Yakovleva, Ekaterina V., 1596 Yashin, Nikolay S., 379 Yashin, Sergey N., 238, 1045 Yashina, Marina N., 379 Yashina, Nadezhda I., 1045 Yatsyshen, Valeriy V., 247, 258 Z Zamyatina, Natalia A., 744 Zaporotskov, Pavel A., 288, 297 Zaporotskova, Irina V., 288, 297 Zatrudina, Rimma Sh., 202 Zaytsev, Oleg A., 1195, 1266 Zhernakova, Marina B., 1678 Zhilkin, Oleg N., 434 Zhilkina, Anna N., 434 Zhukov, Vadim A., 475 Zolotareva, Olga A., 599 Zolotovskiy, Vladimir A., 85, 753 Zubach, Anatoliy V., 404